FLAGSHIP AUTO RECEIVABLES OWNER TRUST 1999-2,
Issuer
XXXXXX TRUST AND SAVINGS BANK,
Indenture Trustee
and
FLAGSHIP CREDIT CORPORATION,
Servicer
--------------------------------------------
INDENTURE
Dated as of November 1, 1999
--------------------------------------------
$250,000,000 in aggregate principal amount of Asset-Backed Notes, Series 1999-2,
consisting of:
$117,000,000 of 6.420% Class A-1 Asset-Backed Notes
$60,000,000 of 6.705% Class A-2 Asset-Backed Notes
$43,000,000 of 6.835% Class A-3 Asset-Backed Notes
$30,000,000 of 6.900% Class A-4 Asset-Backed Notes
TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE ............................ 3
SECTION 1.01 Definitions ............................................... 3
SECTION 1.02 Other Definitional Provisions ............................. 19
ARTICLE II THE NOTES ............................................................ 20
SECTION 2.01 Form ...................................................... 20
SECTION 2.02 Execution, Authentication and Deliver ..................... 20
SECTION 2.03 Transfer and Registry; Exchange; Negotiability; Appointment
of Certificate Registrar ................................. 21
SECTION 2.04 Regulations With Respect to Exchanges and Transfers ....... 22
SECTION 2.05 Mutilated, Destroyed, Lost or Stolen Notes ................ 23
SECTION 2.06 Persons Deemed Owner ...................................... 24
SECTION 2.07 Payment of Principal and Interest; Defaulted Interest ..... 24
SECTION 2.08 Cancellation .............................................. 25
SECTION 2.09 Release of Collateral ..................................... 25
SECTION 2.10 Book-Entry Notes .......................................... 25
SECTION 2.11 Notices to Clearing Agency ................................ 26
SECTION 2.12 Definitive Notes .......................................... 26
ARTICLE III COVENANTS ........................................................... 27
SECTION 3.01 Payment of Principal and Interest ......................... 27
SECTION 3.02 Maintenance of Office or Agency ........................... 27
SECTION 3.03 Money for Payments to be Held in Trust .................... 27
SECTION 3.04 Existence ................................................. 29
SECTION 3.05 Protection of Series Pool ................................. 29
SECTION 3.06 [Reserved] ................................................ 30
SECTION 3.07 Performance of Obligations; Servicing of Auto Loans ....... 30
SECTION 3.08 Issuer May Only Consolidate on Certain Terms .............. 31
SECTION 3.09 Successor or Transferee ................................... 32
SECTION 3.10 No Other Business ......................................... 32
SECTION 3.11 No Borrowing .............................................. 32
SECTION 3.12 Servicer's Obligations .................................... 32
SECTION 3.13 Guarantees, Loans, Advances and Other Liabilities ......... 33
SECTION 3.14 Capital Expenditures ...................................... 33
SECTION 3.15 Compliance with Laws ...................................... 33
SECTION 3.16 Restricted Payments ....................................... 33
SECTION 3.17 Notices of Events of Default .............................. 33
SECTION 3.18 Further Instruments and Acts .............................. 33
SECTION 3.19 Amendments of Sales and Servicing Agreement ............... 34
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SECTION 3.20 Tax Characterization ...................................... 34
ARTICLE IV ACCOUNTS; PAYMENTS; STATEMENTS TO NOTEHOLDERS ........................ 34
SECTION 4.01 Establishment of Accounts ................................. 34
SECTION 4.02 Spread Account Initial Deposit ............................ 36
SECTION 4.03 Certain Reimbursements to the Servicer .................... 36
SECTION 4.04 Application of Collections ................................ 36
SECTION 4.05 Withdrawals from Spread Account ........................... 36
SECTION 4.06 Additional Deposits ....................................... 37
SECTION 4.07 Payments .................................................. 37
SECTION 4.08 Payments to Noteholders ................................... 39
SECTION 4.09 [Reserved ................................................. 39
SECTION 4.10 Statements to Noteholders ................................. 40
SECTION 4.11 Optional Deposits by the Insurer; Notice of Waivers ....... 41
ARTICLE V THE POLICY ............................................................ 41
SECTION 5.01 Claims Under Policy ....................................... 41
SECTION 5.02 Preference Claims ......................................... 43
SECTION 5.03 Surrender of Policy ....................................... 43
ARTICLE VI SATISFACTION AND DISCHARGE ........................................... 44
SECTION 6.01 Satisfaction and Discharge of Indenture ................... 44
SECTION 6.02 Application of Trust Money ................................ 44
SECTION 6.03 Repayment of Moneys Held by Note .......................... 45
ARTICLE VII REMEDIES ............................................................ 45
SECTION 7.01 Events of Default ......................................... 45
SECTION 7.02 Rights Upon Event of Default .............................. 47
SECTION 7.03 Collection of Indebtedness and Suits for Enforcement
by Indenture Trustee .................................... 48
SECTION 7.04 Remedies .................................................. 51
SECTION 7.05 [Reserved] ................................................ 52
SECTION 7.06 Priorities ................................................ 52
SECTION 7.07 Limitation of Suits ....................................... 53
SECTION 7.08 Unconditional Rights of Noteholders To Receive Principal
and Interest ........................................... 54
SECTION 7.09 Restoration of Rights and Remedies ........................ 54
SECTION 7.10 Rights and Remedies Cumulative ............................ 54
SECTION 7.11 Delay or Omission Not a Waiver ............................ 54
SECTION 7.12 Control by Noteholders .................................... 55
SECTION 7.13 Waiver of Defaults ........................................ 55
SECTION 7.14 Undertaking for Costs ..................................... 56
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SECTION 7.15 Waiver of Stay or Extension Laws ................................ 56
ARTICLE VIII THE INDENTURE TRUSTEE .................................................... 56
SECTION 8.01 Duties Of Indenture Trustee ..................................... 56
SECTION 8.02 Rights of Indenture Trustee ..................................... 58
SECTION 8.03 Individual Rights of Indenture Trustee .......................... 59
SECTION 8.04 Indenture Trustee's Disclaimer .................................. 60
SECTION 8.05 Notice of Defaults .............................................. 60
SECTION 8.06 Reports by Indenture Trustee to Holders ......................... 60
SECTION 8.07 Compensation and Indemnity ...................................... 60
SECTION 8.08 Replacement of Indenture Trustee ................................ 61
SECTION 8.09 Successor Indenture Trustee by a Merger ......................... 63
SECTION 8.10 Appointment of Co-Indenture Trustee or Separate Indenture Trustee 63
SECTION 8.11 Appointment and Powers .......................................... 64
SECTION 8.12 Performance of Duties ........................................... 65
SECTION 8.13 Limitation on Liability ......................................... 65
SECTION 8.14 Successor Indenture Trustee ..................................... 66
SECTION 8.15 Representations and Warranties of the Indenture Trustee ......... 67
SECTION 8.16 Waiver of Setoffs ............................................... 67
SECTION 8.17 Control by the Controlling Party ................................ 68
SECTION 8.18 Insurer as Controlling Party .................................... 68
SECTION 8.19 Eligibility and Disqualification of Indenture Trustee ........... 68
SECTION 8.20 Resignation or Removal of Indenture Trustee ..................... 69
SECTION 8.21 Preferential Collection of Claims Against Issuer ................ 69
ARTICLE X NOTEHOLDERS' LISTS AND REPORTS .............................................. 70
SECTION 9.01 Issuer To Furnish To Indenture Trustee Names and
Addresses of Noteholders .................................................. 70
SECTION 9.02 Preservation of Information; Communications to Noteholders ...... 70
ARTICLE X COLLECTION OF MONEY AND RELEASES OF SERIES POOL ............................. 70
SECTION 10.01 Collection of Money ............................................ 70
SECTION 10.02 Release of Series Pool ......................................... 71
ARTICLE XI SUPPLEMENTAL INDENTURES .................................................... 71
SECTION 11.01 Supplemental Indentures Without Consent of Noteholders ......... 71
SECTION 11.02 Supplemental Indentures with Consent of Noteholders ............ 72
SECTION 11.03 Execution of Supplemental Indentures ........................... 74
SECTION 11.04 Effect of Supplemental Indenture ............................... 74
SECTION 11.05 Reference in Notes to Supplemental Indentures .................. 74
ARTICLE XII REDEMPTION OF NOTES ....................................................... 75
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SECTION 12.01 Redemption ..................................................... 75
SECTION 12.02 Form of Redemption Notice ...................................... 75
SECTION 12.03 Notes Payable on Redemption Date ............................... 76
ARTICLE XIII MISCELLANEOUS ............................................................ 76
SECTION 13.01 Compliance Certificates and Opinions, etc ...................... 76
SECTION 13.02 Form of Documents Delivered to Indenture Trustee ............... 77
SECTION 13.03 Acts of Noteholders ............................................ 78
SECTION 13.04 Notices, etc., to Indenture Trustee, Issuer and Rating Agencies 79
SECTION 13.05 Notices to Noteholders Waiver .................................. 80
SECTION 13.06 Alternate Payment and Notice Provisions ........................ 81
SECTION 13.07 Effect of Headings and Table of Contents ....................... 81
SECTION 13.08 Successors and Assigns ......................................... 81
SECTION 13.09 Severability ................................................... 81
SECTION 13.10 Benefits of Indenture .......................................... 81
SECTION 13.11 Counterparts ................................................... 82
SECTION 13.12 Recording of Indenture ......................................... 82
SECTION 13.13 Issuer Obligation .............................................. 82
SECTION 13.14 No Petition .................................................... 82
SECTION 13.15 Inspection ..................................................... 83
SECTION 13.16 Legal Holidays ................................................. 83
SECTION 13.17 Governing Law .................................................. 83
SECTION 13.18 Conflict with Trust Indenture Act .............................. 83
SECTION 13.19 Limitation of Liability ........................................ 83
Exhibits
EXHIBIT A-1 Form of Class A-1 Note
EXHIBIT A-2 Form of Class A-2 Note
EXHIBIT A-3 Form of Class A-3 Note
EXHIBIT A-4 Form of Class A-4 Note
EXHIBIT B Form of Certificate of Authentication
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INDENTURE
This INDENTURE dated as of November 1, 1999, is among FLAGSHIP AUTO
RECEIVABLES OWNER TRUST 1999-2, as issuer (herein called the "Issuer"), XXXXXX
TRUST AND SAVINGS BANK, an Illinois banking corporation, as indenture trustee
(herein called the "Indenture Trustee"), and FLAGSHIP CREDIT CORPORATION, as
servicer (herein called the "Servicer").
RECITALS
The Issuer has duly authorized the issuance of $250,000,000 in aggregate
principal amount of its Asset-Backed Notes, Series 1999-2, consisting of
$117,000,000 aggregate principal amount of 6.420% Class A-1 Asset-Backed Notes
(the "Class A-1 Notes"), $60,000,000 aggregate principal amount of 6.705% Class
A-2 Asset-Backed Notes (the "Class A-2 Notes"), $43,000,000 aggregate principal
amount of 6.835% Class A-3 Asset-Backed Notes (the "Class A-3 Notes"), and
$30,000,000 aggregate principal amount of 6.900% Class A-4 Asset-Backed Notes
(the "Class A-4 Notes", together with the Class A-1 Notes, Class A-2 Notes, and
Class A-3 Notes, the "Notes"), of substantially the tenor hereinafter set forth,
and to provide therefor the Issuer has duly authorized the execution and
delivery of this Indenture. The Class A-1 Notes, the Class A-2 Notes, the Class
A-3 Notes and the Class A-4 Notes shall be entitled to payments of interest and
principal as set forth herein.
MBIA Insurance Corporation (the "Insurer") has issued and delivered a
financial guaranty insurance policy, dated the Closing Date (with endorsements,
the "Policy"), pursuant to which the Insurer guarantees Insured Payments, as
defined in the Policy.
As an inducement to the Insurer to issue and deliver the Policy, the Issuer
and the Insurer have executed and delivered the Insurance Agreement, dated as of
November 1, 1999 (as amended from time to time, the "Insurance Agreement") among
the Issuer, the Seller, the Depositor, the Owner Trustee, the Special Member,
the Insurer, Flagship Credit Corporation, Xxxxxx Trust and Savings Bank, as
Indenture Trustee and Collateral Agent, and Copelco Financial Services Group,
Inc., as Back-up Servicer.
As an additional inducement to the Insurer to issue the Policy, and as
security for the performance by the Issuer of the Insurer Secured Obligations
(as defined below) and as security for the performance by the Issuer of the
Indenture Trustee Secured Obligations, the Issuer has agreed to assign the
Collateral (as defined below) as collateral to the Indenture Trustee for the
benefit of the Issuer Secured Parties, as their respective interests may appear.
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing Date, for
the benefit of the Issuer Secured Parties,
(i) all right, title and interest of the Issuer in and to the Auto
Loans listed in Schedule A to the Owner Trust Purchase Agreement and all
monies received thereunder after the Cutoff Date and all Actual Recovery
Amounts received with respect to such Auto Loans after the Cutoff Date;
(ii) all right, title and interest of the Issuer in and to the
security interests in the Financed Vehicles granted by Obligors pursuant to
the Auto Loans and any other interest of the Issuer in such Financed
Vehicles, including, without limitation, the certificates of title and all
other evidence of ownership with respect to such Financed Vehicles;
(iii) all right, title and interest of the Issuer in and to any
proceeds from claims on any physical damage, credit life and credit
accident and health insurance policies or certificates relating to the
Financed Vehicles securing the Auto Loans or the Obligors thereunder;
(iv) all right, title and interest of the Issuer in and to certain
contracts, including certain third party contracts and dealer agreements;
(v) all right, title and interest of the Issuer in and to refunds for
the costs of extended service contracts with respect to Financed Vehicles
securing the Auto Loans, refunds of unearned premiums with respect to
credit life and credit accident and health insurance policies or
certificates covering an Obligor or Financed Vehicle or his or her
obligations with respect to a Financed Vehicle and any recourse to Dealers
for any of the foregoing;
(vi) the Loan File related to each Auto Loan;
(vii) all amounts and property from time to time held in or credited
to the Collection Account;
(viii) all present and future claims, demands, causes 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,
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;
(ix) the Issuer's rights and benefits, but none of its obligations or
burdens, under the Owner Trust Purchase Agreement, including, without
limitation, the rights of the Depositor under the Depositor Purchase
Agreement and the rights of the Seller under the Sales and Servicing
Agreement; and
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(x) all proceeds of the foregoing
(collectively, the "Collateral").
In addition, the Issuer shall cause the Policy to be issued for the benefit
of the Noteholders.
The foregoing Grant is made in trust to the Indenture Trustee, for the
benefit of the Holders of the Notes and for the benefit of the Insurer. The
Indenture Trustee hereby acknowledges such Xxxxx, accepts the trusts under this
Indenture in accordance with the provisions of this Indenture and agrees to
perform its duties as required in this Indenture to the best of its ability to
the end that the interests of such parties, recognizing the priorities of their
respective interests may be adequately and effectively protected.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions. Except as otherwise specified herein, the
following terms have the respective meanings set forth below for all purposes of
this Indenture and the definitions of such terms are equally applicable to both
the singular and plural forms of such terms and to each gender.
Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to them in the Sales and Servicing Agreement.
"Account Property" means the Accounts, all amounts and investments held
from time to time in any Account (whether in the form of deposit accounts,
Physical Property, book-entry securities, uncertificated securities or
otherwise), and all proceeds of the foregoing.
"Accounts" has the meaning assigned thereto in Section 4.01.
"Act" has the meaning specified in Section 13.03(a).
"Actual Recovery Amounts" with respect to a Charged-off Auto Loan, proceeds
from the sale of the related Financed Vehicle, proceeds of the related insurance
policy, proceeds from any dealer agreements and any other recoveries with
respect to such Charged-off Auto Loan and the related Financed Vehicle, net of
reasonable and customary out-of-pocket expenses incurred by the Servicer in
connection with collection, enforcement, or liquidation relative to the Auto
Loans and amounts so received that are required to be refunded to the Obligor on
such Auto Loan.
"Additional Noteholders' Principal Payment Amount" means, on each Payment
Date on which the outstanding principal balance of the Notes (after giving
effect to the payment of the Noteholders' Principal Payment Amount for such
Payment Date) exceeds the Notes Target Amount, the lesser of (a) an amount
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necessary to reduce the aggregate principal amount of the Notes to the Notes
Target Amount and (b) the amount of Available Funds remaining on deposit in the
Collection Account for such Payment Date after making the payments set forth in
Section 4.07(a)(i)-(viii).
"Affiliate" of any Person means any Person who directly or indirectly
controls, is controlled by, or is under direct or indirect common control with
such Person. For purposes of this definition of "Affiliate", the term "control"
(including the terms "controlling", "controlled by" and "under common control
with") means the possession, directly or indirectly, of the power to direct or
cause a direction of the management and policies of a Person, whether through
the ownership of voting securities, by contract or otherwise.
"Aggregate Principal Balance" means, with respect to any date of
determination, the sum of the Principal Balances for all Auto Loans (other than
(i) any Auto Loan that became a Charged-off Auto Loan prior to the end of the
related Collection Period and (ii) any Auto Loan that became a Purchased Auto
Loan prior to or as of the end of the related Collection Period) as of the date
of determination.
"Annual Trustee Expense Cap" means an amount of $50,000 in any twelve month
period from the Closing Date; provided that, in the event unpaid reasonable and
customary out-of-pocket expenses of the Indenture Trustee and Collateral Agent
in any such twelve month period are less than $50,000, the amount of the
difference between $50,000 and the amount of such expenses will be added to
increase the Annual Trustee Expense Cap for the immediately successive twelve
month period on a cumulative basis; provided, further, that for each twelve
month period beginning after the occurrence and during the continuance of an
Event of Default or a Servicer Termination Event (in such event, the Indenture
Trustee will consult with the Insurer in connection with such expenditures), the
Annual Trustee Expense Cap shall be $150,000.
"Authorized Officer" means, with respect to the Issuer and the Servicer,
any officer or agent acting pursuant to a power of attorney of the Owner Trustee
or the Servicer, as applicable, who is authorized to act for the Owner Trustee
or the Servicer, as applicable, in matters relating to the Issuer or the
Servicer, as applicable, and who is identified on the list of Authorized
Officers delivered by the Servicer to the Indenture Trustee and the Insurer on
the Closing Date (as such list may be modified or supplemented from time to time
thereafter).
"Auto Loans" has the meaning assigned to such term in the Sales and
Servicing Agreement.
"Available Funds" means, with respect to a Payment Date, will be the sum of
the following amounts with respect to the preceding Collection Period: (a) all
principal and interest payments on the Auto Loans; (b) all proceeds received
during the related Collection Period with respect to Auto Loans that became
Charged-off Auto Loans during such related Collection Period, net of the
reasonable and customary out-of-pocket expenses incurred by the Servicer in
connection with collection, enforcement or liquidation and any amounts required
by law to be remitted to the Obligor on such Charged-off Auto Loan; (c) proceeds
from Actual Recovery Amounts with respect to Charged-off Auto Loans; (d)
earnings on investments of funds in the Collection Account and the Spread
Account during the related Collection
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Period; and (e) the Purchase Amount deposited in the Collection Account for each
Auto Loan that was repurchased by the Originator, Flagship LLC or the Servicer,
as the case may be, as of the last day of the related Collection Period.
"Book-Entry Notes" means a beneficial interest in the Notes, ownership and
transfers of which shall be made through book entries by a Clearing Agency as
described in Section 2.10.
"Business Day" means any day other than a Saturday, Sunday or other day on
which the Insurer or commercial banking institutions are authorized or obligated
to remain closed in Philadelphia, Pennsylvania, New York, New York or such other
city where the corporate trust office of the Owner Trustee, Indenture Trustee or
the Insurer is then located.
"Charged-off Auto Loan" has the meaning assigned to such term in the Spread
Account Agreement.
"Class A-1 Final Scheduled Maturity Date" means the November 2002 Payment
Date.
"Class A-1 Interest Rate" means 6.420% per annum.
"Class A-1 Noteholders' Interest Carryover Shortfall" means, with respect
to any Payment Date, the excess of the Class A-1 Noteholders' Interest Payment
Amount for the preceding Payment Date over the amount that was actually
deposited in the Collection Account on such preceding Payment Date on account of
the Class A-1 Noteholders' Interest Payment Amount.
"Class A-1 Noteholders' Interest Payment Amount" means, with respect to any
Payment Date, the sum of the Class A-1 Noteholders' Monthly Interest Payment
Amount for such Payment Date and the Class A-1 Noteholders' Interest Carryover
Shortfall for such Payment Date, plus interest on such Class A-1 Noteholder's
Interest Carryover Shortfall, to the extent permitted by law, at the Class A-1
Interest Rate to, but excluding, the current Payment Date.
"Class A-1 Noteholders' Monthly Interest Payment Amount" means (a) for the
first Payment Date, an amount equal to the product of (i) the Class A-1 Interest
Rate, (ii) the initial outstanding principal amount of the Class A-1 Notes and
(iii) a fraction, the numerator of which is the number of days from and
including the Closing Date to but excluding the first Payment Date (assuming
that there are 30 days in each month of the year) and the denominator of which
is 360; and (b) for any Payment Date after the first Payment Date, an amount
equal to the product of (i) one-twelfth of the Class A-1 Interest Rate and (ii)
the outstanding principal amount of the Class A-1 Notes as of the close of the
preceding Payment Date (after giving effect to all payments on account of
principal on such preceding Payment Date).
"Class A-1 Notes" means the Class A-1 6.420% Asset-Backed Notes,
substantially in the form of Exhibit A-1.
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"Class A-2 Final Scheduled Maturity Date" means the January 2004 Payment
Date.
"Class A-2 Interest Rate" means 6.705% per annum.
"Class A-2 Noteholders' Interest Carryover Shortfall" means, with respect
to any Payment Date, the excess of the Class A-2 Noteholders' Interest Payment
Amount for the preceding Payment Date over the amount that was actually
deposited in the Collection Account on such preceding Payment Date on account of
the Class A-2 Noteholders' Interest Payment Amount.
"Class A-2 Noteholders' Interest Payment Amount" means, with respect to any
Payment Date, the sum of the Class A-2 Noteholders' Monthly Interest Payment
Amount for such Payment Date and the Class A-2 Noteholders' Interest Carryover
Shortfall for such Payment Date, plus interest on such Class A-2 Noteholder's
Interest Carryover Shortfall, to the extent permitted by law, at the Class A-2
Interest Rate to, but excluding, the current Payment Date.
"Class A-2 Noteholders' Monthly Interest Payment Amount" means (a) for the
first Payment Date, an amount equal to the product of (i) the Class A-2 Interest
Rate, (ii) the initial outstanding principal amount of the Class A-2 Notes and
(iii) a fraction, the numerator of which is the number of days from and
including the Closing Date to but excluding the first Payment Date (assuming
that there are 30 days in each month of the year) and the denominator of which
is 360; and (b) for any Payment Date after the first Payment Date, an amount
equal to the product of (i) one-twelfth of the Class A-2 Interest Rate and (ii)
the outstanding principal amount of the Class A-2 Notes as of the close of the
preceding Payment Date (after giving effect to all payments on account of
principal on such preceding Payment Date).
"Class A-2 Notes" means the Class A-2 6.705% Asset-Backed Notes,
substantially in the form of Exhibit A-2.
"Class A-3 Final Scheduled Maturity Date" means the November 2004 Payment
Date.
"Class A-3 Interest Rate" means 6.835% per annum.
"Class A-3 Noteholders' Interest Carryover Shortfall" means, with respect
to any Payment Date, the excess of the Class A-3 Noteholders' Interest Payment
Amount for the preceding Payment Date over the amount that was actually
deposited in the Collection Account on such preceding Payment Date on account of
the Class A-3 Noteholders' Interest Payment Amount.
"Class A-3 Noteholders' Interest Payment Amount" means, with respect to any
Payment Date, the sum of the Class A-3 Noteholders' Monthly Interest Payment
Amount for such Payment Date and the Class A-3 Noteholders' Interest Carryover
Shortfall for such Payment Date, plus interest on such Class A-3 Noteholder's
Interest Carryover Shortfall, to the extent permitted by law, at the Class A-3
Interest Rate to, but excluding, the current Payment Date.
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"Class A-3 Noteholders' Monthly Interest Payment Amount" means (a) for the
first Payment Date, an amount equal to the product of (i) the Class A-3 Interest
Rate, (ii) the initial outstanding principal amount of the Class A-3 Notes and
(iii) a fraction, the numerator of which is the number of days from and
including the Closing Date to but excluding the first Payment Date (assuming
that there are 30 days in each month of the year) and (ii) the denominator of
which is 360; and (b) for any Payment Date after the first Payment Date, an
amount equal to the product of (i) one-twelfth of the Class A-3 Interest Rate
and (ii) the outstanding principal amount of the Class A-3 Notes as of the close
of the preceding Payment Date (after giving effect to all payments on account of
principal on such preceding Payment Date).
"Class A-3 Notes" means the Class A-3 6.835% Asset-Backed Notes,
substantially in the form of Exhibit A-3.
"Class A-4 Final Scheduled Maturity Date" means the May 2006 Payment Date.
"Class A-4 Interest Rate" means 6.900% per annum.
"Class A-4 Noteholders' Interest Carryover Shortfall" means, with respect
to any Payment Date, the excess of the Class A-4 Noteholders' Interest Payment
Amount for the preceding Payment Date over the amount that was actually
deposited in the Collection Account on such preceding Payment Date on account of
the Class A-4 Noteholders' Interest Payment Amount.
"Class A-4 Noteholders' Interest Payment Amount" means, with respect to any
Payment Date, the sum of the Class A-4 Noteholders' Monthly Interest Payment
Amount for such Payment Date and the Class A-4 Noteholders' Interest Carryover
Shortfall for such Payment Date, plus interest on such Class A-4 Noteholder's
Interest Carryover Shortfall, to the extent permitted by law, at the Class A-4
Interest Rate to, but excluding, the current Payment Date.
"Class A-4 Noteholders' Monthly Interest Payment Amount" means (a) for the
first Payment Date, an amount equal to the product of (i) the Class A-4 Interest
Rate, (ii) the initial outstanding principal amount of the Class A-4 Notes and
(iii) a fraction, the numerator of which is the number of days from and
including the Closing Date to but excluding the first Payment Date (assuming
that there are 30 days in each month of the year) and the denominator of which
is 360; and (b) for any Payment Date after the first Payment Date, an amount
equal to the product of (i) one-twelfth of the Class A-4 Interest Rate and (ii)
the outstanding principal amount of the Class A-4 Notes as of the close of the
preceding Payment Date (after giving effect to all payments on account of
principal on such preceding Payment Date).
"Class A-4 Notes" means the Class A-4 6.900% Asset-Backed Notes,
substantially in the form of Exhibit A-4.
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"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act, or any successor provision thereto.
The initial Clearing Agency shall be The Depository Trust Company.
"Closing Date" means November 24, 1999.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
"Collateral" has the meaning specified in the Granting Clause of this
Indenture.
"Collateral Agent" means Xxxxxx Trust and Savings Bank in its capacity as
Collateral Agent under the Spread Account Agreement.
"Collection Account" means the account designated as such, established and
maintained pursuant to Section 4.01.
"Collection Period" means, with respect to each Payment Date, the preceding
calendar month. Any amount stated "as of the close of business on the last day
of a Collection Period" shall give effect to the following calculations as
determined as of the end of the day on such last day: (i) all applications of
collections, and (ii) all payments.
"Commission" means the United State Securities and Exchange Commission.
"Controlling Party" has the meaning assigned to it in Section 8.18 hereof.
"Corporate Trust Office" means 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 the execution of this Indenture is located
at 000 Xxxx Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention:
Indenture Trust Administration, or at such other address as the Indenture
Trustee may designate from time to time by notice to the Noteholders, the
Insurer, the Servicer and the Issuer, or the principal corporate trust office of
any successor Indenture Trustee (the address of which the successor Indenture
Trustee will notify the Noteholders, the Insurer and the Issuer).
"Cram Down Loss" means, with respect to an Auto Loan, if a court of
appropriate jurisdiction in an insolvency proceeding shall have issued an order
reducing the amount owed on an Auto Loan or otherwise modifying or restructuring
scheduled payments to be made on an Auto Loan, an amount equal to such reduction
in Principal Balance of such Auto Loan or the reduction in the net present value
(using as the discount rate the lower of the contract rate or the rate of
interest specified by the court in such order) of the Scheduled Payments as so
modified or restructured. A "Cram Down Loss" shall be deemed to have occurred on
the date such order is entered.
8
"Cutoff Date" has the meaning assigned to such term in the Sales and
Servicing Agreement.
"Default" means any occurrence that is, or with notice or the lapse of time
or both would become, an Event of Default.
"Deficiency Amount" means (a) for any Payment Date, any shortfall in the
sum of Available Funds plus amounts on deposit in the Spread Account to pay the
related Noteholders' Interest Payment Amount, and (b) on the related Final
Scheduled Maturity Date, any shortfall in the sum of Available Funds plus
amounts on deposit in the Spread Account to pay the outstanding principal amount
of the related Class of Notes (after taking into account all payments to be made
on such Payment Date).
"Deficiency Claim Amount" shall have the meaning set forth in Section
4.05(a).
"Deficiency Notice" shall have the meaning set forth in Section 4.05(a).
"Definitive Notes" shall mean those Notes issued in fully-registered
certificated form.
"Determination Date" means, with respect to any Payment Date, the fifth
Business Day preceding such Payment Date.
"Draw Date" means with respect to any Payment Date, the third Business Day
immediately preceding such Payment Date.
"Eligible Account" means (i) a segregated trust account that is maintained
with the corporate trust department of a depository institution acceptable to
the Insurer (so long as an Insurer Default shall not have occurred and be
continuing) or (ii) a segregated direct deposit account maintained with a
depository institution or trust company organized under the laws of the United
States of America, or any of the States thereof, or the District of Columbia,
having a certificate of deposit, short-term deposit or commercial paper rating
of at least "A-1+" by Standard & Poor's and "P-1" by Xxxxx'x and "D-1+" by DCR,
if rated by DCR and a long term rating of at least AA- by Standard & Poor's.
"Eligible Investments" mean book-entry securities, negotiable instruments
or securities represented by instruments in bearer or registered form which
evidence:
(a) direct obligations of, and obligations fully guaranteed as to the full
and timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of any
depository institution or trust company incorporated under the laws of the
United States of America or any State thereof and subject to supervision and
examination by Federal or State banking or depository institution authorities;
provided, however, that at the time of the investment or contractual commitment
to invest
9
therein, the commercial paper or other short-term unsecured debt obligations
(other than such obligations the rating of which is based on the credit of a
Person other than such depository institution or trust company) thereof shall be
rated "A-1+" by Standard & Poor's, "P-1" by Xxxxx'x and "D-1+" to the extent
rated by DCR;
(c) commercial paper (having original or remaining maturities of no more
than 270 days) that, at the time of the investment or contractual commitment to
invest therein, is rated "A-1+" by Standard & Poor's, "P-1" by Xxxxx'x and
"D-1+" to the extent rated by DCR;
(d) bankers' acceptances issued by any depository institution or trust
company referred to in clause (b) above;
(e) repurchase obligations with respect to any security that is a direct
obligation of, or fully guaranteed as to the full and timely payment by, the
United States of America or any agency or instrumentality thereof the
obligations of which are backed by the full faith and credit of the United
States of America, in either case entered into with (i) a depository institution
or trust company (acting as principal) described in clause (b) or (ii) a
depository institution or trust company whose commercial paper or other
short-term unsecured debt obligations are rated "A-1 +" by Standard & Poor's,
"P-1 " by Xxxxx'x and "D-1+" by DCR, to the extent rated by DCR and long-term
unsecured debt obligations are rated "AAA" by Standard & Poor's and "Aaa" by
Xxxxx'x;
(f) money market mutual funds registered under the Investment Company Act
of 1940, as amended, having a rating, at the time of such investment, from each
of the Rating Agencies in the highest investment category granted thereby; and
(g) master notes payable on demand or on a specified date not more than one
year after the date of issuance thereof having the highest short term credit
ratings from S&P or Xxxxx'x at the time of such investments;
(h) funding agreements or guaranteed investment contracts payable on demand
or on a specified date not more than one year after the date of issuance thereof
having the highest short term credit ratings from S&P or Xxxxx'x at the time of
such investments; and
(i) any other investment as may be acceptable to the Insurer, as evidenced
by a writing to that effect, as may from time to time be confirmed in writing to
the Indenture Trustee by the Insurer.
Any of the foregoing Eligible Investments may be purchased by or through the
Indenture Trustee or any of its Affiliates.
"Event of Default" has the meaning specified in Section 7.01.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Final Scheduled Maturity Date" means with respect to the Class A-1 Notes,
the Class A-1 Final Scheduled Maturity Date, with respect to the Class A-2
Notes, the Class A-2 Final Scheduled Maturity Date, with respect to the Class
A-3 Notes, the Class A-3 Final Scheduled Maturity Date, and with respect to the
Class A-4 Notes, the Class A-4 Final Scheduled Maturity Date.
"Grant" means to mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create, xxxxx x xxxx upon and a
security interest and right of set-off against, 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 moneys payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
proceedings in the name of the granting party or otherwise and generally to do
and receive anything that the granting party is or may be entitled to do or
receive thereunder or with respect thereto.
"Guaranty Agreement" means the Guaranty Agreement from Copelco, dated as of
November 1, 1999, as the same may be amended, supplemented or otherwise modified
from time to time in accordance with the terms thereof.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Note Register.
"Indebtedness" means, with respect to any Person at any time, (a)
indebtedness or liability of such Person for borrowed money whether or not
evidenced by bonds, debentures, notes or other instruments, or for the deferred
purchase price of property or services (including trade obligations); (b)
obligations of such Person as lessee under leases which should be, in accordance
with generally accepted accounting principles, recorded as capital leases; (c)
current liabilities of such Person in respect of unfunded vested benefits under
plans covered by Title IV of ERISA; (d) obligations issued for or liabilities
incurred on the account of such Person; (e) obligations or liabilities of such
Person arising under acceptance facilities; (f) obligations of such Person under
any guarantees, endorsements (other than for collection or deposit in the
ordinary course of business) and other contingent obligations to purchase, to
provide funds for payment, to supply funds to invest in any Person or otherwise
to assure a creditor against loss; (g) obligations of such Person secured by any
lien on property or assets of such Person, whether or not the obligations have
been assumed by such Person; or (h) obligations of such Person under any
interest rate or currency exchange agreement.
"Indenture" means this Indenture as amended, supplemented or otherwise
modified from time to time in accordance with its terms.
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"Indenture Trustee" means Xxxxxx Trust and Savings Bank, an Illinois
banking corporation, not in its individual capacity but solely as indenture
trustee under this Indenture, or any successor indenture trustee under this
Indenture.
"Indenture Trustee and Collateral Agent Fee" means the fee payable to the
Indenture Trustee and Collateral Agent on each Payment Date in accordance with
the fee schedule agreed upon by the Servicer and the Indenture Trustee (a copy
of which has been delivered to the Insurer) which shall compensate the Indenture
Trustee and Collateral Agent in its dual capacity as Indenture Trustee and
Collateral Agent.
"Indenture Trustee Secured Obligations" means all amounts and obligations
which the Issuer may at any time owe to or on behalf of the Indenture Trustee
for the benefit of the Noteholders under this Indenture or the Notes.
"Independent" means, when used with respect to any specified Person, that
the person (a) is in fact independent of the Issuer, any other obligor upon the
Notes, the Sellers 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 Sellers or any Affiliate of
any of the foregoing Persons and (c) is not connected with the Issuer, any such
other obligor, the Sellers or any Affiliate of any of the foregoing Persons as
an officer, employee, promoter, underwriter, trustee, partner, director or
Person performing similar functions.
"Independent Certificate" means a certificate or opinion to be delivered to
the Indenture Trustee and the Insurer under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 13.01, prepared
by an Independent appraiser or other expert appointed by an Issuer Order and
approved by the Insurer and the Indenture Trustee in the exercise of reasonable
care, and such opinion or certificate shall state that the signer has read the
definition of "Independent" in this Indenture and that the signer is Independent
within the meaning thereof.
"Initial Portfolio Balance" means the Aggregate Principal Balance included
in the Series Pool as of the Cut-off Date.
"Initial Spread Account Amount" shall have the meaning specified in the
Spread Account Agreement.
"Insurance Agreement Indenture Indicator" has the meaning set forth in the
Insurance Agreement.
"Insurance Agreement Indicator" has the meaning specified in the Insurance
Agreement.
"Insured Payments" has the meaning specified in the Policy.
"Insurer Default" has the meaning assigned to such term in the Insurance
Agreement.
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"Insurer Premium" means any monthly premium fees due and payable to the
Insurer pursuant to the Insurance Agreement.
"Insurer Secured Obligations" means all amounts and obligations which may
at any time be owed to or on behalf of the Insurer (or any agents, accountants
or attorneys for the Insurer) under this Indenture, the Insurance Agreement or
any other Transaction Document, regardless or whether such amounts are owed now
or in the future, whether liquidated or unliquidated, contingent or
noncontingent.
"Interest Rate" means, with respect to the (i) Class A-1 Notes, the Class
A-1 Interest Rate, (ii) Class A-2 Notes, the Class A-2 Interest Rate, (iii)
Class A-3 Notes, the Class A-3 Interest Rate, and (iv) Class A-4 Notes, the
Class A-4 Interest Rate.
"Investment Earnings" means, with respect to any Payment Date and any
Account and the Spread Account, the investment earnings on amounts on deposit in
such Account and in the Spread Account on such Payment Date.
"Issuer" means the party named as such in this Indenture until a successor
acceptable to the Insurer replaces it and, thereafter, means the successor and,
for purposes of any provision contained herein, each other obligor on the Notes.
"Issuer Order" and "Issuer Request" means a written order or request signed
in the name of the Issuer by any one of its Authorized Officers and delivered to
the Indenture Trustee.
"Issuer Property" or "Series Pool" means all money, instruments, rights and
other property that are subject or intended to be subject to the lien and
security interest of this Indenture for the benefit of the Noteholders and the
Insurer (including the Collateral and all property and interests Granted to the
Indenture Trustee), including all proceeds thereof.
"Issuer Secured Parties" means each of the Indenture Trustee, in respect of
the Indenture Trustee Secured Obligations, and the Insurer, in respect of the
Insurer Secured Obligations.
"Level I Portfolio Performance Indicator" has the meaning assigned to that
term in the Spread Account Agreement.
"LLC Agreement" has the meaning assigned to that term in the Sales and
Servicing Agreement.
"Net Losses" means, for any Collection Period, the amount, if any, by which
(a) the sum of (i) the Aggregate Principal Balance of all Auto Loans which
became Charged-off Auto Loans during the related Collection Period, plus accrued
and unpaid interest thereon to the end of the related Collection Period, plus
(ii) the aggregate of all Cram Down Losses that occurred during the related
Collection Period, exceeds (b)
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the Actual Recovery Amounts received during the related Collection Period in
respect of all Charged-off Auto Loans.
"Note" means a Class A-1 Note, Class A-2 Note, a Class A-3 Note or a Class
A-4 Note.
"Note Factor" means as of the close of business on any Payment Date, a
seven-digit decimal figure equal to the outstanding principal amount of the
Notes divided by the original outstanding principal amount of the Notes.
"Note Majority" means the Holders of Notes evidencing more than 50% of the
outstanding principal amount of the Notes.
"Note Owner" means, 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.
"Note Paying Agent" means the Indenture Trustee or any other Person that
meets the eligibility standards for the Indenture Trustee specified in Section
8.11 and is authorized by the Issuer to make the payments to and payments from
the Collection Account, including payment of principal of or interest on the
Notes on behalf of the Issuer.
"Note Register" and "Note Registrar" have the respective meanings specified
in Section 2.03.
"Noteholders' Interest Payment Amount" means, with respect to any Payment
Date, the sum of (i) the Class A-1 Noteholders' Interest Payment Amount for such
Payment Date, (ii) the Class A-2 Noteholders' Interest Payment Amount for such
Payment Date, (iii) the Class A-3 Noteholders' Interest Payment Amount for such
Payment Date and (iv) the Class A-4 Noteholders' Interest Payment Amount for
such Payment Date.
"Noteholders' Percentage" means, on any Payment Date, 89%; provided that
the "Noteholders' Percentage" will be 82% during the continuance of an uncured
Level I Portfolio Performance Indicator (provided that a Level I Portfolio
Performance Indicator shall be considered cured only if no Level I Portfolio
Performance Indicator had occurred or was continuing during any of the four
preceding Collection Periods) and will be zero percent upon the occurrence of an
Insurance Agreement Indicator.
"Noteholders' Principal Payment Amount" means, with respect to any Payment
Date, the lesser of (a) one hundred percent (100%) of the Principal Payment
Amount for such Payment Date or (b) an amount necessary to reduce the aggregate
principal amount of the Notes to the Notes Target Amount for such Payment Date.
Notwithstanding the foregoing, the "Noteholders' Principal Payment Amount" shall
be increased to the extent required such that all outstanding principal and
interest with respect to a class of Notes will be payable in full on the Final
Scheduled Maturity Date for such class of Notes.
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"Notes Target Amount" means, for any Payment Date, the product of the
Noteholders' Percentage for such Payment Date multiplied by the Outstanding
Portfolio Balance as of the end of the related Collection Period.
"Obligor" on an Auto Loan means the purchaser or co-purchasers of the
Financed Vehicle and any other Person who owes payments under the Auto Loan.
"Officer's Certificate" means a certificate signed by any Authorized
Officer of the Servicer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 13.01, and delivered to
the Indenture Trustee and the Insurer. 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.
"Opinion of Counsel" means one or more written opinions of counsel who may,
except as otherwise expressly provided in this Indenture, be employees of or
counsel to the Issuer and who shall be addressed to and satisfactory to the
Indenture Trustee and to the Insurer, and which shall comply with any applicable
requirements of Section 13.01, and shall be in form and substance satisfactory
to the Indenture Trustee and to the Insurer.
"Other Conveyed Property" has the meaning assigned to such term in the
Sales and Servicing Agreement.
"Outstanding" means, as of the date of determination, all Notes theretofore
authenticated and delivered under this Indenture except:
(i) Notes theretofore canceled by the Note Registrar or delivered to
the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Indenture Trustee
or any Note 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, satisfactory to the
Indenture Trustee); and
(iii) Notes in exchange for or in lieu of other Notes which have been
authenticated and delivered pursuant to this Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Notes are
held by a bona fide purchaser;
provided, however, that Notes which have been paid with proceeds of the Policy
shall continue to remain Outstanding for purposes of this Indenture until the
Insurer has been paid as subrogee hereunder or reimbursed pursuant to the
Insurance Agreement as evidenced by a written notice from the Insurer
15
delivered to the Indenture Trustee, and the Insurer shall be deemed to be the
Holder thereof to the extent of any payments thereon made by the Insurer;
provided, further, that in determining whether the Holders of the requisite
Outstanding Amount of the Notes have given any request, demand, authorization,
direction, notice, consent or waiver hereunder or under any Transaction
Document, Notes owned by the Issuer, any other obligor upon the Notes, either
Seller or any Affiliate of any of the foregoing Persons shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Indenture
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Notes that a
Responsible Officer of the Indenture Trustee either actually knows to be so
owned or has received written notice thereof shall be so disregarded. Notes so
owned that have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Indenture Trustee the pledgees
right so to act with respect to such Notes and that the pledgee is not the
Issuer, any other obligor upon the Notes, the Seller or any Affiliate of any of
the foregoing Persons.
"Outstanding Amount" means, with respect to any date of determination, the
aggregate principal amount of all Notes, or class of Notes, as applicable,
Outstanding at such date of determination.
"Outstanding Portfolio Balance" has the meaning assigned to such term in
the Sales and Servicing Agreement.
"Overcollateralization Amount" means, as of any Payment Date, the excess of
the Outstanding Portfolio Balance as of the end of the preceding Collection
Period over the outstanding principal balance of the notes (after giving effect
to all payments on the notes on such Payment Date).
"Owner Trust Purchase Agreement" means the Owner Trust Purchase Agreement
dated as of November 1, 1999, among the Issuer and the Depositor, as the same
may be modified supplemented or otherwise amended in accordance with the terms
thereof.
"Payment Date" has the meaning specified in the Notes.
"Policy" means the insurance policy issued by the Insurer with respect to
the Notes, including any endorsements thereto.
"Predecessor Note" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.05 in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost , destroyed or stolen Note.
"Preference Claim" shall have the meaning specified in Section 5.02(b).
"Principal Payment Amount" means, with respect to any Payment Date, the sum
of the following amounts (without duplication) (i) collections on Auto Loans
(other than Charged-off Auto Loans) allocable
16
to principal including full and partial prepayments; (ii) the portion of the
Purchase Amount deposited in the Collection Account allocable to principal of
each Auto Loan that was repurchased by the Originator or purchased by the
Servicer as of the last day of the preceding Collection Period (without
duplication of amounts referred to in clause (i) above); (iii) the Principal
Balance of each Auto Loan that first became a Charged-off Auto Loan during the
preceding Collection Period, other than Charged-off Auto Loans for which the
Originator has made substitutions of Substitute Auto Loans (without duplication
of the amounts included in clause (i) through (ii) above); (iv) the aggregate
amount of Cram Down Losses with respect to the Auto Loans that have occurred
during the preceding Collection Period (without duplication of amounts referred
to in clause (i) through (iii) above); and (v) following the acceleration of the
Notes pursuant to Section 7.02 hereof, the amount of money or property collected
pursuant to Section 7.04 hereof since the preceding Determination Date by the
Indenture Trustee or Controlling Party for payment pursuant to Section 4.07(a)
hereof.
"Proceeding" means any suit in equity, action at law or other judicial or
administrative proceeding.
"Rating Agency" means each of Xxxxx'x, Standard & Poor's and DCR, so long
as such Persons maintain a rating on the Notes; and if any of Xxxxx'x, Standard
& Poor's or DCR no longer maintains a rating on the Notes, such other nationally
recognized statistical rating organization selected by the Servicer and (so long
as an Insurer Default shall not have occurred and be continuing) acceptable to
the Insurer.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days' (or such shorter period as shall be
acceptable to each Rating Agency) prior notice thereof and that each of the
Rating Agencies shall have notified the Servicer, the Sellers, the Insurer, the
Indenture Trustee and the Issuer in writing that such action will not result in
a reduction or withdrawal of the then current rating of the Notes without regard
to the Policy.
"Record Date" means, with respect to a Payment Date, (i) in the case of
Book-Entry Notes, the close of business on the Business Day prior to such
Payment Date and (ii) in the case of Definitive Notes, the close of business on
the last day of the calendar month preceding such Payment Date; provided that in
the case of the initial Payment Date, the Record Date shall be the close of
business on the Closing Date.
"Redemption Date" means, in the case of a redemption of the Notes pursuant
to Section 12.01, the Payment Date specified by the Servicer or the Issuer
pursuant to Section 12.01.
"Redemption Price" means, in the case of a redemption of the Notes pursuant
to Section 12.01, an amount equal to the remaining unpaid principal amount of
the Notes plus accrued interest thereon through the Payment Date on which the
redemption will occur.
17
"Reimbursement Amounts" means any amounts due to the Insurer under the
terms of the Insurance Agreement payable pursuant to Section 4.07(a) hereof plus
the amounts paid by the Insurer under Section 4.11 hereof.
"Released Funds Principal Payment Amount" means for any Payment Date, the
lesser of (a) the amount by which the funds in the Spread Account (after giving
effect to all payments and withdrawals on that Payment Date) exceed the
Requisite Spread Account Amount and (b) the amount necessary (after giving
effect to the Noteholders' Principal Payment Amount and the Additional
Noteholders' Principal Payment Amount on that date) to reduce the Outstanding
Amount to the Notes Target Amount.
"Re-xxxxxxx Expenses" means any reasonable and nonrecurring fees and
expenses relating to reissuing or amending the certificates of title relative to
the Financed Vehicles to reflect the assignment of the Auto Loans to the Issuer
and the Issuer's pledge of its interest in the Auto Loans to the Indenture
Trustee.
"Requisite Spread Account Amount" will equal the Initial Spread Account
Amount on the Closing Date, and thereafter, as of any Determination Date, after
giving effect to all payments to be made on the related Payment Date, will be an
amount equal to the greater of (a) the lesser of (i) 3% of the Initial Portfolio
Balance and (ii) 5% of the Outstanding Portfolio Balance as of the end of the
preceding Collection Period, and (b) the greater of (i) 1% of the Initial
Portfolio Balance and (ii) an amount such that the sum of (A) the funds on
deposit in the Spread Account (after all payments and withdrawals from the
Spread Account on such Payment Date) and (B) the Overcollateralization Amount is
greater than 2% of the Initial Portfolio Balance.
"Responsible Officer" means, with respect to the Indenture Trustee, any
officer within the Corporate Trust Office of the Indenture Trustee, including
any Vice President, Assistant Vice President, Assistant Treasurer, Assistant
Secretary, or any other officer of the Indenture Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also, with respect to a particular matter, any other officer to whom such matter
is referred because of such officer's knowledge of and familiarity with the
particular subject.
"Sales and Servicing Agreement" means the Sales and Servicing Agreement
dated as of November 1, 1999, among the Issuer, the Seller, the Servicer, the
Indenture Trustee and the Back-Up Servicer, as the same may be amended or
supplemented from time to time.
"Scheduled Payment" has the meaning assigned to such term in the Sales and
Servicing Agreement.
"Seller" means Flagship Auto Loan Funding LLC 1999-II.
"Series Pool" or "Issuer Property" means 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
18
Noteholders and the Insurer (including the Collateral and all property and
interests Granted to the Indenture Trustee), including all proceeds thereof.
"Special Member" has the meaning assigned to such term in the LLC
Agreement.
"Spread Account" means the account designated as such, established and
maintained pursuant to Section 4.01.
"Spread Account Agreement" means the Spread Account Agreement dated as of
November 1, 1999 among the Insurer, the Issuer and the Indenture Trustee and
Collateral Agent, as the same may be modified, supplemented or otherwise amended
in accordance with the terms thereof.
"State" means any one of the 50 states of the United States of America or
the District of Columbia.
"Substitute Auto Loans" has the meaning assigned to such term in the Sales
and Servicing Agreement.
"Termination Date" means the latest of (i) the expiration of the Policy and
the return of the Policy to the Insurer for cancellation, (ii) the date on which
the Insurer shall have received payment and performance of all Insurer Secured
Obligations and (iii) the date on which the Indenture Trustee shall have
received payment and performance of all Indenture Trustee Secured Obligations.
"TIA" means the Trust Indenture Act of 1939, as amended.
"Transaction Documents" means this Indenture, the Sales and Servicing
Agreement, the Owner Trust Purchase Agreement, the Depositor Purchase Agreement,
the Trust Agreement, the Spread Account Agreement, the Insurance Agreement, the
Indemnification Agreement, the LLC Agreement, the Guaranty Agreement, the
Underwriting Agreement and other documents and certificates delivered in
connection therewith.
"UCC" means, unless the context otherwise requires, the Uniform Commercial
Code, as in effect in the relevant jurisdiction, as amended from time to time.
"Underwriting Agreement" means that agreement dated as of November 17, 1999
by and among Flagship, the Depositor and Prudential Securities Incorporated.
SECTION 1.02 Other Definitional Provisions. Unless the context otherwise
requires:
(i) All references in this instrument to designated "Articles,"
"Sections," "Subsections" and other subdivisions are to the designated
Articles, Sections, Subsections and other subdivisions of this instrument
as originally executed;
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(ii) The words "herein," "hereof," "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section, Subsection or other subdivision;
(iii) an accounting term not otherwise defined herein has the meaning
assigned to it in accordance with generally accepted accounting principles
as in effect from time to time;
(iv) "or" is not exclusive; and
(v) "including" means including without limitation.
ARTICLE II
THE NOTES
SECTION 2.01 Form.
(a) The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the
Class A-4 Notes, in each case together with the Indenture Trustee's certificate
of authentication, shall be in substantially the form set forth in Exhibits A-1,
A-2, A-3 and A-4, respectively, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may, consistently herewith,
be determined by the officers executing such Notes, as evidenced by their
execution of the Notes. Any portion of the text of any Note may be set forth on
the reverse thereof, with an appropriate reference thereto on the face of the
Note.
SECTION 2.02 Execution, Authentication and Deliver.
(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 facsimile.
(b) Notes bearing the manual or facsimile signature of individuals who were
at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
(c) The Indenture Trustee shall upon receipt of the Policy and Issuer Order
authenticate and deliver Class A-1 Notes for original issue in an aggregate
principal amount of $117,000,000, Class A-2 Notes for original issue in an
aggregate principal amount of $60,000,000, Class
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A-3 Notes for original issue in an aggregate principal amount of $43,000,000,
and Class A-4 Notes for original issue in an aggregate principal amount of
$30,000,000.
(d) At any time and from time to time after the execution and delivery of
this Indenture, the Issuer may deliver Notes executed by the Issuer for
authentication. Upon a written order from the Issuer (which order may be in the
form of an Officer's Certificate) the Indenture Trustee shall authenticate and
deliver such Notes as provided in this Indenture and not otherwise. 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 set forth in EXHIBIT B hereto executed
by the Indenture Trustee by the manual signature of an Authorized Officer of the
Indenture Trustee, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder.
(e) Each Note shall be dated the date of its authentication. The Notes
shall be issuable as registered Notes in the minimum denomination of $1,000 and
in integral multiples thereof (except for one Note of each class which may be
issued in a denomination other than an integral multiple of $1,000).
(f) 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 2.03 Transfer and Registry; Exchange; Negotiability; Appointment of
Certificate Registrar.
(a) Notes of each Class will be represented initially by beneficial
interests in single global instruments in definitive, fully registered form
without coupons deposited with a custodian for, and registered in the name of,
the Depository Trust Company ("DTC"). Beneficial interests in such global
instruments will trade in DTC's same day funds settlement system. Beneficial
interests in such global instruments will be shown on, and transfers thereof
will be effected only through, records maintained by DTC and its Participants,
which may include Cedel Bank, societe anonyme and the Euroclear System.
(b) (i) Each Note in registered and certificated form shall be transferable
only upon the books of the Issuer (the "Note Register"), which shall be kept for
that purpose at the office of the Person acting as registrar of the Issuer (the
"Note Registrar"). The Indenture Trustee is hereby designated as the initial
Note Registrar. Subject to the provisions in paragraph (c) of this Section 2.03,
the transfer of any Note may be effected on the books of Issuer by the Holder
thereof in person or by his attorney duly authorized in writing, upon surrender
thereof together with a written instrument of transfer satisfactory to the Note
Registrar duly executed by the Holder or its duly authorized attorney. Upon the
transfer of any
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such Note, the Issuer shall issue in the name of the transferee a new Note or
Notes of the same aggregate principal or notional amount, class, interest rate
and maturity as the surrendered Note.
(ii) At the option of the Holder, Notes may be exchanged for other Notes of
any authorized denominations, and of a like aggregate principal or notional
amount, class, interest rate and maturity, upon surrender of the Notes to be
exchanged at such office or agency. Whenever any Notes are so surrendered for
exchange, the Issuer shall execute, and the Indenture Trustee shall authenticate
and deliver, the Notes which the Noteholder making the exchange is entitled to
receive.
(iii) 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.
(iv) Notwithstanding any other provisions of this Indenture, a Global
Security may not be transferred as a whole except by DTC to a nominee of DTC or
by a nominee of DTC to DTC or another nominee of DTC or by DTC or any such
nominee to a successor Depositary or a nominee of such successor Depositary.
(v) Every Note presented or surrendered for registration of transfer or
exchange shall (if so required by the Issuer or the Indenture Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Indenture Trustee duly executed, by the
Holder thereof or his attorney duly authorized in writing.
(c) No Note (or any interest therein) may be Transferred (including,
without limitation, by pledge or hypothecation) except in accordance with the
following additional restrictions:
(i) No Transfer of a Note or any beneficial interest therein may be made to
any Person unless such Transfer is exempt from the registration requirements of
the 1933 Act and any applicable state securities and blue sky laws or is made in
accordance with said Act and state laws. The Holder of a Note desiring to effect
a Transfer of a Note shall indemnify the Owner Trustee in its individual
capacity, the Issuer, the Indenture Trustee, the Depositor, the Seller, the Note
Registrar, the Servicer, and the Originator against any liability that may
result if the Transfer is not so exempt or is not made in accordance with such
federal and state laws. Each Noteholder acquiring an interest in a Note shall
agree and shall be deemed to have agreed to treat the Notes as indebtedness for
federal, state and local income and franchise tax purposes.
(ii) No Note may be Transferred if, as a result of such Transfer, there
would be registered or record owners of Notes in denominations of less than the
minimum denominations set forth in Section 2.02 hereto.
SECTION 2.04 Regulations With Respect to Exchanges and Transfers.
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In all cases in which the privilege of exchanging or transferring Notes is
exercised, the Issuer and the Indenture Trustee shall authenticate and deliver
Notes in accordance with the provisions of this Indenture. For every such
exchange or registration of transfer of Notes, whether temporary or definitive,
the Issuer and the Indenture Trustee may require the payment of a sum sufficient
to cover any tax or other governmental charge required to be paid with respect
to such exchange or registration of transfer. Neither the Issuer nor the
Indenture Trustee shall be required to register the transfer of or exchange
Notes for a period beginning on the Record Date next preceding a Payment Date
and ending on such Payment Date.
SECTION 2.05 Mutilated, Destroyed, Lost or Stolen Notes.
(a) If (i) any mutilated Note is surrendered to the Indenture Trustee, or
the Indenture Trustee receives evidence to its satisfaction of the destruction,
loss or theft of any Note, and (ii) there is delivered to the Issuer, the Owner
Trustee in its individual capacity, the Indenture Trustee and the Insurer
(unless an Insurer Default shall have occurred and be continuing) such security
or indemnity as may be required by it to hold the Issuer, the Owner Trustee in
its individual capacity, the Indenture Trustee and the Insurer harmless, then,
in the absence of notice to the Issuer, the Note Registrar or the Indenture
Trustee that such Note has been acquired by a bona fide purchaser, and, provided
that the requirements of Section 8-405 and 8-406 of the UCC are met, the Issuer
shall execute, and upon request by the Issuer, the Indenture Trustee shall
authenticate and deliver in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a replacement Note; provided, however, that if
any such destroyed, lost or stolen Note, but not a mutilated Note, shall have
become, or within seven days shall be, due and payable or shall have been called
for redemption, instead of issuing a replacement Note, the Issuer may direct the
Indenture Trustee, in writing, to pay such destroyed, lost or stolen Note when
so due or payable or upon the Redemption Date without surrender thereof. If,
after the delivery of such replacement Note or payment of a destroyed, lost or
stolen Note pursuant to the proviso to the preceding sentence, a bona fide
purchaser of the original Note in lieu of which such replacement Note was
issued, presents for payment such original Note, the Issuer, the Indenture
Trustee and the Insurer shall be entitled to recover such replacement Note (or
such payment) from the Person to whom it was delivered or any Person taking such
replacement Note from such Person to whom such replacement Note was delivered or
any assignee of such Person, except a bona fide purchaser, and shall be entitled
to recover upon the security or indemnity provided therefor to the extent of any
loss, damage, cost or expense incurred by the Issuer or the Indenture Trustee in
connection therewith.
(b) Upon the issuance of any replacement Note under this Section, 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 in replacement
of any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the
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Issuer, whether or not the mutilated, destroyed, lost or stolen Note shall be at
any time enforceable by anyone, and shall be entitled to all the benefits of
this Indenture equally and proportionately with any and all other Notes duly
issued hereunder.
(d) The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.06 Persons Deemed Owner.
Prior to due presentment for registration of transfer of any Note, the
Issuer, the Indenture Trustee, the Insurer and any agent of the Issuer, the
Indenture Trustee or the Insurer may treat the Person in whose name any Note is
registered (as of the applicable Record Date) as the owner of such Note for the
purpose of receiving payments of principal of and interest, if any, on such
Note, for all other purposes whatsoever and whether or not such Note be overdue,
and none of the Issuer, the Insurer, the Owner Trustee, the Indenture Trustee
nor any agent of the Issuer, the Insurer or the Indenture Trustee shall be
affected by notice to the contrary.
SECTION 2.07 Payment of Principal and Interest; Defaulted Interest.
(a) The Notes shall accrue interest as provided therein in the forms of the
Class A-1 Note, the Class A-2 Note, the Class A-3 Note and the Class A-4 Note
set forth in Exhibits A-1, A-2, A-3 and A-4, respectively, and such interest
shall be payable on each Payment Date as specified therein. Any installment of
interest or principal, if any, payable on any Note which is punctually paid or
duly provided for by the Issuer on the applicable Payment Date shall be paid to
the Person in whose name such Note (or one or more Predecessor Notes) is
registered on the Record Date, by check mailed first-class, postage prepaid, to
such Person's address as it appears on the Note Register on such Record Date,
except that, unless Definitive Notes have been issued pursuant to Section 2.12,
with respect to Notes registered on the Record Date in the name of the nominee
of the Clearing Agency (initially, such nominee to be Cede & Co.), payment will
be made by wire transfer in immediately available funds to the account
designated by such nominee, except for the final installment of principal
payable with respect to such Note on a Payment Date or on the related Final
Scheduled Maturity Date (and except for the Redemption Price for any Note called
for redemption pursuant to Section 12.01, which shall be payable as provided
below). The funds represented by any such checks returned undelivered shall be
held in accordance with Section 3.03.
(b) The principal of each Note shall be payable in installments on each
Payment Date as provided in the forms of the Class A-1 Notes, the Class A-2
Notes, the Class A-3 Notes and the Class A-4 Notes set forth in Exhibits A-1,
A-2, A-3 and A-4, respectively. 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
in the manner and under the circumstances provided in Section 7.02. All
principal payments on each class of Notes shall be made pro
24
rata to the Noteholders of such class entitled thereto. Upon written notice from
the Issuer, 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 will be paid. Such notice shall be mailed or transmitted
by facsimile prior to such final Payment Date and shall specify that such final
installment will be payable only upon presentation and surrender of such Note
and shall specify the place where such Note may be presented and surrendered for
payment of such installment. Notices in connection with redemptions of Notes
shall be mailed to Noteholders as provided in Section 12.02.
(c) If the Issuer defaults in a payment of interest on the Notes, the
Issuer shall pay defaulted interest (plus interest on such defaulted interest to
the extent lawful) at the applicable Interest Rate in any lawful manner. The
Issuer may pay such defaulted interest to the Persons who are Noteholders on a
subsequent special record date, which date shall be at least five Business Days
prior to the payment date. The Issuer shall fix or cause to be fixed any such
special record date and payment date, and, at least 15 days before any such
special record date, the Issuer shall mail to each Noteholder, the Insurer and
the Indenture Trustee a notice that states the special record date, the payment
date and the amount of defaulted interest to be paid.
(d) Promptly following the date on which all principal of and interest on
the Notes has been paid in full and the Notes have been surrendered to the
Indenture Trustee, the Indenture Trustee shall, if the Insurer has paid any
amount in respect of the Notes under the Policy or otherwise which has not been
reimbursed to it, deliver such surrendered Notes to the Insurer.
SECTION 2.08 Cancellation.
Subject to Section 2.07(d), 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 canceled by the Indenture Trustee. Subject to Section 2.07(d), the
Issuer may at any time deliver to the Indenture Trustee for cancellation any
Notes previously authenticated and delivered hereunder which the Issuer may have
acquired in any manner whatsoever, and all Notes so delivered shall be promptly
canceled by the Indenture Trustee. No Notes shall be authenticated in lieu of or
in exchange for any Notes canceled as provided in this Section, except as
expressly permitted by this Indenture. Subject to Section 2.07(d), all canceled
Notes may be held or disposed of by the Indenture Trustee in accordance with its
standard retention or disposal policy as in effect at the time unless the Issuer
shall direct by an Issuer Order that they be destroyed or returned to it;
provided that such Issuer Order is timely and the Notes have not been previously
disposed of by the Indenture Trustee.
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SECTION 2.09 Release of Collateral.
The Indenture Trustee shall, on or after the Termination Date, release any
remaining portion of the Issuer Property from the lien created by this Indenture
and deposit in the Collection Account any funds then on deposit in any other
Account.
SECTION 2.10 Book-Entry Notes. The Book-Entry Notes, upon original
issuance, will be issued in the form of typewritten Notes and will be delivered
to the Indenture Trustee, as custodian for The Depository Trust Company, the
initial Clearing Agency, by, or on behalf of the Issuer. Such Notes shall
initially be registered on the Note Register in the name of Cede & Co., the
nominee of the initial Clearing Agency, and no Note Owner will receive a
Definitive Note representing such Note Owner's interest in such Note, except as
provided in Section 2.12. Unless and until Definitive Notes have been issued to
Note Owners pursuant to Section 2.12:
(a) the provisions of this Section shall be in full force and effect
as to the Notes represented by the Book-Entry Notes;
(b) the Note Registrar and 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 such Notes and the giving of
instructions or directions hereunder) as the sole Holder of such Notes, and
shall have no obligation to the Note Owners;
(c) to the extent that the provisions of this Section conflict with
any other provisions of this Indenture, the provisions of this Section
shall control;
(d) the rights of Note Owners shall be exercised only through the
Clearing Agency and shall be limited to those established by law and
agreements between such Note Owners and the Clearing Agency and/or the
Participants or Persons acting through Participants;
(e) the initial Clearing Agency will make book-entry transfers among
the Participants and receive and transmit payments of principal of and
interest on the Notes to such Participants; and
(f) whenever this Indenture requires or permits actions to be taken
based upon instructions or directions of Noteholders evidencing a specified
percentage interest of the Notes, 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 Participants or Persons
acting through Participants owning or representing, respectively, such
required percentage of the beneficial interest in the Book-Entry Notes and
has delivered such instructions to Indenture Trustee.
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SECTION 2.11 Notices to Clearing Agency. Whenever a notice or other
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Note Owners pursuant to Section
2.12, the Indenture Trustee shall give all such notices and communications
specified herein to be given to Holders of the Notes to the Clearing Agency, and
shall have no obligation to the Note Owners.
SECTION 2.12 Definitive Notes. If (a) the Servicer advises the Indenture
Trustee in writing that the Clearing Agency is no longer willing or able to
properly discharge its responsibili ties with respect to the Notes, and the
Indenture Trustee and the Servicer are unable to locate a qualified successor or
(b) after the occurrence of a Servicer Termination Event, Note Owners holding
Notes representing more than 662/3% of the Outstanding Amount of all 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 the Note Owners, then the Clearing Agency shall notify all
Note Owners and the Indenture Trustee of the occurrence of any such event and of
the availability of Definitive Notes to Note Owners requesting the same. Upon
surrender by the Clearing Agency to the Indenture Trustee of the typewritten
Book-Entry Notes and re- registration instructions, the Issuer shall execute and
the Indenture Trustee shall authenticate the Definitive Notes in exchange
therefor in accordance with the re-registration instructions of the Clearing
Agency. None of the Issuer, Note Registrar or 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.
ARTICLE III
COVENANTS
SECTION 3.01 Payment of Principal and Interest.
The Issuer will duly and punctually pay the principal of and interest on
the Notes in accordance with the terms of the Notes and this Indenture. Without
limiting the foregoing, the Issuer will cause to be paid on each Payment Date
all amounts deposited in the Collection Account pursuant to Section 4.07(a)
hereof. Amounts properly withheld under the Code by any Person from a payment to
any Noteholder of interest and/or principal shall be considered as having been
paid by the Issuer to such Noteholder for all purposes of this Indenture.
SECTION 3.02 Maintenance of Office or Agency.
The Issuer will maintain in Chicago, Illinois, an office or agency where
Notes may be surrendered for registration of transfer or exchange, and where
notices and demands to or upon the Issuer in respect of the Notes and this
Indenture may be served. The Issuer hereby initially appoints the Indenture
Trustee to serve as its agent for the foregoing purposes. The Issuer will give
prompt written notice to the Indenture
27
Trustee of the location, and of any change in the location, of any such office
or agency. If at any time the Issuer shall fail to maintain any such office or
agency or shall fail to furnish the Indenture Trustee with the address thereof,
such surrenders, notices and demands may be made or served at the Corporate
Trust Office, and the Issuer hereby appoints the Indenture Trustee as its agent
to receive all such surrenders, notices and demands.
SECTION 3.03 Money for Payments to be Held in Trust.
(a) On or before each Payment Date and Redemption Date, the Issuer shall
deposit or cause to be deposited in the Collection 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
Note Paying Agent is the Indenture Trustee) shall promptly notify the Indenture
Trustee, the Insurer and the Rating Agencies of its action or failure so to act.
(b) The Issuer shall cause each Note Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee and the Insurer an
instrument in which such Note Paying Agent shall agree with the Indenture
Trustee and the Insurer (provided that no Insurer Default shall have occurred
and is continuing) (and if the Indenture Trustee acts as Note Paying Agent, it
hereby so agrees), subject to the provisions of this Section, that such Note
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 and the Insurer 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 with the consent of the Insurer
(provided that no Insurer Default shall have occurred and is continuing),
forthwith pay to the Indenture Trustee all sums so held in trust by such
Note Paying Agent;
(iv) immediately resign as a Note 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 Note
Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith.
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(c) 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 Note Paying Agent to pay to the Indenture Trustee all sums held
in trust by such Note 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 Note
Paying Agent; and upon such a payment by any Note Paying Agent to the Indenture
Trustee, such Note Paying Agent shall be released from all further liability
with respect to such money.
(d) Subject to applicable laws with respect to the escheat of funds, any
money held by the Indenture Trustee or any Note Paying Agent in trust for the
payment of any amount due with respect to any Note and remaining unclaimed for
two years after such amount has become due and payable shall be discharged from
such trust and be paid to the Issuer on Issuer Request with the consent of the
Insurer (unless an Insurer Default shall have occurred and be continuing) and
shall be deposited by the Indenture Trustee in the Collection Account; 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, the Insurer or
such Note Paying Agent with respect to such trust money shall thereupon cease;
provided, however, that if such money or any portion thereof had been previously
deposited by the Insurer with the Indenture Trustee for the payment of principal
or interest on the Notes, to the extent any amounts are owing to the Insurer,
such amounts shall be paid promptly to the Insurer upon receipt of a written
request by the Insurer to such effect, and provided, further, that the Indenture
Trustee or such Note Paying Agent, before being required to make any such
repayment, shall at the expense of the Issuer cause to be published once, in a
newspaper published in the English language, customarily published on each
Business Day and of general circulation in the City of New York, notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Issuer. The Indenture
Trustee shall also adopt and employ, at the expense of the Issuer, any other
reasonable means of notification of such repayment (including, but not limited
to, mailing notice of such repayment to Holders whose Notes have been called but
have not been surrendered for redemption or whose right to or interest in moneys
due and payable but not claimed is determinable from the records of the
Indenture Trustee or of any Note Paying Agent, at the last address of record for
each such Holder).
SECTION 3.04 Existence.
Except as otherwise permitted by the provisions of Section 3.09, the Issuer
will keep in full effect its existence, rights and franchises as a trust
organized under the laws of the State of Delaware and will obtain and preserve
its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Series Pool.
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SECTION 3.05 Protection of Series Pool.
The Issuer intends the security interest Granted pursuant to this Indenture
in favor of the Issuer Secured Parties to be prior to all other liens in respect
of the Series Pool, and the Issuer shall take all actions necessary to obtain
and maintain, in favor of the Indenture Trustee, for the benefit of the Issuer
Secured Parties, a first lien on and a first priority, perfected security
interest in the Series Pool. The Issuer will from time to time prepare (or shall
cause to be prepared), execute and deliver all such supplements and amendments
hereto and all such financing statements, continuation statements, instruments
of further assurance and other instruments, and will take such other action
necessary or advisable to:
(i) grant more effectively all or any portion of the Series Pool;
(ii) maintain or preserve the lien and security interest (and the
priority thereof) in favor of the Indenture Trustee for the benefit of the
Issuer Secured Parties created by this Indenture or carry out more
effectively the purposes hereof;
(iii) perfect, publish notice of or protect the validity of any Grant
made or to be made by this Indenture;
(iv) enforce any of the Collateral;
(v) preserve and defend title to the Series Pool and the rights of the
Indenture Trustee and the Insurer in such Series Pool against the claims of
all persons and parties; and
(vi) pay all taxes or assessments levied or assessed upon the Series
Pool when due.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required by the Indenture Trustee or the Insurer pursuant to
this Section.
SECTION 3.06 [Reserved].
SECTION 3.07 Performance of Obligations; Servicing of Auto Loans.
(a) The Issuer will not take any action and will use its best efforts not
to permit any action to be taken by others that would release any Person from
any of such Person's material covenants or obligations under any instrument or
agreement included in the Series Pool or that would result in the amendment,
hypothecation, subordination, termination or discharge of or impair the validity
or effectiveness of, any such instrument or agreement, except as ordered by any
bankruptcy or other court or as expressly provided in this Indenture, the
Transaction Documents or such other instrument or agreement.
30
(b) The Issuer may contract with other Persons reasonably acceptable to the
Insurer (so long as no Insurer Default shall have occurred and be continuing) to
assist it in performing its duties under this Indenture, and any performance of
such duties by a Person identified to the Indenture Trustee and the Insurer 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 to assist the
Issuer in performing its duties under this Indenture, and performance of such
duties by the Servicer shall be deemed to be action taken by the Issuer.
(c) The Issuer will punctually perform and observe all of its obligations
and agreements contained in this Indenture, the Transaction Documents and in the
instruments and agreements included in the Series Pool, including but not
limited to preparing (or causing to be prepared) and filing (or causing to be
filed) all UCC financing statements and continuation statements required to be
filed by the terms of this Indenture and the Sales 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 Transaction Document or any provision
thereof without the consent of the Indenture Trustee or the Insurer and upon
notice to the Rating Agencies.
SECTION 3.08 Issuer May Only Consolidate on Certain Terms. The Issuer shall
not convey or transfer all or substantially all of its properties or assets,
including those included in the Series Pool, 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) expressly assume, by an indenture supplemental hereto,
executed and delivered to the Indenture Trustee, in form satisfactory to
the Indenture Trustee and the Insurer (so long as no Insurer Default shall
have occurred and be continuing), the due and punctual payment of the
principal of and interest on all Notes and the performance or observance of
every agreement and covenant of this Indenture and each of the Transaction
Documents on the part of the Issuer to be performed or observed, all as
provided herein, (B) expressly agree by means of such supplemental
indenture that all right, title and interest so conveyed or transferred
shall be subject and subordinate to the rights of Holders of the Notes and
the Insurer, (C) unless otherwise provided in such supplemental indenture,
expressly agree to indemnify, defend and hold harmless the Issuer against
and from any loss, liability or expense arising under or related to this
Indenture and the Notes and (D) expressly agree by means of such
supplemental indenture that such Person (or if a group of persons, then one
specified Person) shall prepare (or cause to be prepared) and 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;
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(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Indenture Trustee and the Insurer (so
long as no Insurer Default shall have occurred and be continuing)) to the
effect that such transaction will not have any material adverse tax
consequence to the Issuer, the Insurer or any Noteholder;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken;
(vi) the Issuer shall have delivered to the Indenture Trustee and the
Insurer an Officers' 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); and
(vii) so long as no Insurer Default shall have occurred and be
continuing, the Issuer shall have given the Insurer written notice of such
conveyance or transfer at least 20 Business Days prior to the consummation
of such action and shall have received the prior written approval of the
Insurer of such conveyance or transfer and the Issuer or the Person (if
other than the Issuer) formed by or surviving such conveyance or transfer
has a net worth, immediately after such conveyance or transfer, that is (a)
greater than zero and (b) not less than the net worth of the Issuer
immediately prior to giving effect to such consolidation or merger.
SECTION 3.09 Successor or Transferee.
(a) Upon any consolidation or merger of the Issuer, the Person formed by or
surviving such consolidation or merger (if other than the Issuer) shall succeed
to, and be substituted for, and may exercise every right and power of, the
Issuer under this Indenture with the same effect as if such Person had been
named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of the
Issuer pursuant to Section 3.08, the Issuer will be released from every covenant
and agreement of this Indenture to be observed or performed on the part of the
Issuer with respect to the Notes immediately upon the delivery of written notice
to the Indenture Trustee and the Insurer stating that the Issuer is to be so
released.
SECTION 3.10 No Other Business.
The Issuer shall not engage in any business other than financing,
purchasing, owning, selling and managing the Auto Loans in the manner
contemplated by this Indenture and the Transaction Documents and activities
incidental thereto.
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SECTION 3.11 No Borrowing.
The Issuer shall not issue, incur, assume, guarantee or otherwise become
liable, directly or indirectly, for any Indebtedness except for (i) the Notes
(ii) obligations owing from time to time to the Insurer under the Insurance
Agreement and (iii) any other Indebtedness permitted by or arising under the
Transaction Documents. The proceeds of the Notes shall be used exclusively to
fund the Issuer's purchase of the Auto Loans and the other assets specified in
the Sales and Servicing Agreement, to fund (on behalf of the Issuer) the Spread
Account and to pay the Issuer's organizational, transactional and start-up
expenses.
SECTION 3.12 Servicer's Obligations.
The Issuer shall cause the Servicer to comply with Sections 3.9, 3.10, 3.11
of the Sales and Servicing Agreement and Section 4.10 hereof.
SECTION 3.13 Guarantees, Loans, Advances and Other Liabilities.
Except as contemplated by the Transaction Documents, the Issuer shall not
make any loan or advance or credit to, or guarantee (directly or indirectly or
by an instrument having the effect of assuring another's payment or performance
on any obligation or capability of so doing or otherwise), endorse or otherwise
become contingently liable, directly or indirectly, in connection with the
obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or
agree contingently to do so) any stock, obligations, assets or securities of, or
any other interest in, or make any capital contribution to, any other Person.
SECTION 3.14 Capital Expenditures.
The Issuer shall not make any expenditure (by long-term or operating lease
or otherwise) for capital assets (either realty or personalty).
SECTION 3.15 Compliance with Laws. The Issuer shall comply with the
requirements of all applicable laws, the non-compliance with which would,
individually or in the aggregate, materially and adversely affect the ability of
the Issuer to perform its obligations under the Notes, this Indenture or any
Transaction Document.
SECTION 3.16 Restricted Payments.
The Issuer shall not, directly or indirectly, (i) pay any dividend or make
any payment (by reduction of capital or otherwise), whether in cash, property,
securities or a combination thereof, to 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
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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, payments to the Servicer, the Seller and the
Indenture Trustee as permitted by, and to the extent funds are available for
such purpose under, the Transaction Documents. The Issuer will not, directly or
indirectly, make payments to or payments from the Collection Account except in
accordance with the Sales and Servicing Agreement, this Indenture and the
Transaction Documents.
SECTION 3.17 Notices of Events of Default.
The Issuer agrees to give the Indenture Trustee, the Insurer and the Rating
Agencies prompt written notice of each Event of Default hereunder and each
default on the part of the Servicer or the Originator of their respective
obligations under the Sales and Servicing Agreement.
SECTION 3.18 Further Instruments and Acts.
Upon request of the Indenture Trustee or the Insurer, the Issuer will
execute and deliver such further instruments and do such further acts as may be
reasonably necessary or proper to carry out more effectively the purpose of this
Indenture.
SECTION 3.19 Amendments of Sales and Servicing Agreement.
The Issuer shall not agree to any amendment to Section 9.1 of the Sales and
Servicing Agreement to eliminate the requirements thereunder that the Indenture
Trustee or the Holders of the Notes consent to amendments thereto as provided
therein.
SECTION 3.20 Tax Characterization.
For purposes of federal income tax, state and local income tax franchise
tax and any other income taxes, the Issuer will treat the conveyance of the Auto
Loans and Other Conveyed Property as a contribution and the Notes as
indebtedness of the Issuer and hereby instructs the Indenture Trustee to treat
the Notes as indebtedness of the Issuer for federal and state tax reporting
purposes.
ARTICLE IV
ACCOUNTS; PAYMENTS; STATEMENTS TO NOTEHOLDERS
SECTION 4.01 Establishment of Accounts.
(a) (i) The Indenture Trustee, on behalf of the Noteholders and the
Insurer, shall establish and maintain in its own name an Eligible Account (the
"Collection Account"), bearing a designation
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clearly indicating that the funds deposited therein are held for the benefit of
the Indenture Trustee on behalf of the Noteholders and the Insurer.
(ii) The Issuer shall cause the Indenture Trustee and Collateral Agent to
establish and maintain an Eligible Account (the "Spread Account") with the
Indenture Trustee and Collateral Agent in the name of the Indenture Trustee and
Collateral Agent, bearing a designation clearly indicating that the funds
deposited therein are held in trust for the benefit of the Noteholders and the
Insurer.
(b) Funds on deposit in the Collection Account and the Spread Account
(collectively, the "Accounts") shall be invested by the Indenture Trustee (or
any custodian with respect to funds on deposit in any such account) in Eligible
Investments selected in writing by the Servicer (pursuant to standing
instructions or otherwise). All such Eligible Investments shall be held by or in
the name of the Indenture Trustee for the benefit of the Noteholders and the
Insurer, as applicable. Other than as permitted by the Rating Agencies and the
Insurer, funds on deposit in any Account shall be invested in Eligible
Investments that will mature (or be payable on demand) so that such funds will
be available at the close of business on the Business Day immediately preceding
the following Payment Date. Funds deposited in an Account on the day immediately
preceding a Payment Date upon the maturity of any Eligible Investments are not
required to be invested overnight. All Eligible Investments will be held to
maturity but prior to maturity if such liquidation would not result in a loss of
principal or interest.
(c) All investment earnings of moneys deposited in the Accounts shall be
deposited (or caused to be deposited) by the Indenture Trustee in the Collection
Account for payment pursuant to Section 4.07(a), and any loss resulting from
such investments shall be charged to such account. The Servicer will not direct
the Indenture Trustee to make any investment of any funds held in any of the
Accounts unless the security interest granted and perfected in such account to
the Indenture Trustee will continue to be perfected in such investment, in
either case without any further action by any Person.
(d) The Indenture Trustee shall not in any way be held liable by reason of
any insufficiency in any of the Accounts resulting from any loss on any Eligible
Investment included therein except for losses attributable to the Indenture
Trustee's negligence or bad faith or its failure to make payments on such
Eligible Investments issued by the Indenture Trustee, in its commercial capacity
as principal obligor and not as trustee, in accordance with their terms.
(e) If (i) the Servicer shall have failed to give investment directions for
any funds on deposit in the Accounts to the Indenture Trustee by 2:00 p.m.
Eastern Time (or such other time as may be agreed by the Issuer and Indenture
Trustee) on any Business Day; or (ii) an 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, or, if such Notes shall have been declared due and
payable following an Event of Default and amounts collected or receivable from
the Account Property are being applied as if there had not been such a
declaration; then the Indenture Trustee shall, to the fullest extent
practicable, invest and reinvest funds in the Accounts in one or more Eligible
Investments.
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(f) The Indenture Trustee shall possess all right, title and interest in
all funds on deposit from time to time in the Accounts and in all proceeds
thereof (including all Investment Earnings on the Accounts) and all such funds,
investments, proceeds and income shall be part of the Issuer Property. Except as
otherwise provided herein, the Accounts shall be under the sole dominion and
control of the Indenture Trustee for the benefit of the Noteholders and the
Insurer. If at any time any of the Accounts ceases to be an Eligible Account,
the Issuer with the consent of the Insurer shall within five Business Days cause
the Indenture Trustee to establish a new Account as an Eligible Account and to
transfer any cash and/or any investments to such new Account. The Servicer shall
promptly notify the Rating Agencies and the Insurer of any change in the
location of any of the aforementioned accounts. In connection with the
foregoing, the Servicer agrees that, in the event that any of the Accounts are
not accounts with the Indenture Trustee, the Servicer shall notify the Indenture
Trustee, the Insurer and the Rating Agencies in writing promptly upon any of
such Accounts ceasing to be an Eligible Account.
(g) With respect to the Account Property, the Indenture Trustee agrees
that: any Account Property that is held in deposit accounts shall be held solely
in Eligible Accounts; and, except as otherwise provided herein, each such
Eligible Account shall be subject to the exclusive custody and control of the
Indenture Trustee and the Indenture Trustee shall have sole signature authority
with respect thereto.
SECTION 4.02 Spread Account Initial Deposit.
On or prior to the Closing Date, the Issuer shall deposit an amount equal
to the Initial Spread Account Amount into the Spread Account which on the
Closing Date shall be $8,108,121.02.
SECTION 4.03 Certain Reimbursements to the Servicer.
The Servicer will be entitled to be reimbursed from amounts on deposit in
the Collection Account with respect to a Collection Period for amounts
previously deposited in the Collection Account but later determined by the
Servicer to have resulted from mistaken deposits or postings or checks returned
for insufficient funds. The amount to be reimbursed hereunder shall be paid to
the Servicer on the related Payment Date pursuant to Section 4.07(a)(ii)<-1-
95>upon certification by the Servicer of such amounts and the provision of such
information to the Indenture Trustee and the Insurer as may be necessary in the
opinion of the Insurer to verify the accuracy of such certification. In the
event that the Insurer has not received evidence satisfactory to it of the
Servicer's entitlement to reimbursement pursuant to this Section, the Insurer
shall (unless an Insurer Default shall have occurred and be continuing) give the
Indenture Trustee notice to such effect, following receipt of which the
Indenture Trustee shall not make a payment to the Servicer in respect of such
amount pursuant to Section 4.07(a), or if prior thereto the Servicer has been
reimbursed pursuant to Section 4.07(a), the Indenture Trustee shall withhold
such amounts from amounts otherwise distributable to the Servicer on the next
succeeding Payment Date.
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SECTION 4.04 Application of Collections.
All collections for each Collection Period with respect to each Auto Loan
(other than a Purchased Auto Loan) shall be applied as follows. The Servicer
shall apply payments by or on behalf of an Obligor to interest and principal in
accordance with the Simple Interest Method.
SECTION 4.05 Withdrawals from Spread Account.
(a) In the event that the Servicer's Certificate with respect to any
Determination Date shall state that the Available Funds with respect to such
Determination Date is insufficient to make the payments required to be made on
the related Payment Date pursuant to Sections 4.07(a)(i) through (vi) (such
deficiency being a "Deficiency Claim Amount"), then on the third Business Day
immediately preceding the related Payment Date, the Indenture Trustee shall
deliver to the Collateral Agent, the Insurer, and the Servicer, by hand
delivery, telex or facsimile transmission, a written notice (a "Deficiency
Notice") specifying the Deficiency Claim Amount for such Payment Date. Such
Deficiency Notice shall direct the Collateral Agent to remit such Deficiency
Claim Amount (to the extent of the funds available to be paid pursuant to the
Spread Account Agreement) to the Indenture Trustee for deposit in the Collection
Account and payment pursuant to Sections 4.07(a)(i) through (vi), as applicable.
(b) Any Deficiency Notice shall be delivered by 10:00 a.m., New York City
time, on the third Business Day preceding such Payment Date. The amounts
distributed by the Collateral Agent to the Indenture Trustee pursuant to a
Deficiency Notice shall be deposited by the Indenture Trustee into the
Collection Account pursuant to Section 4.06.
SECTION 4.06 Additional Deposits.
The Servicer shall deposit or cause to be deposited in the Collection
Account the aggregate Purchase Amount with respect to Purchased Auto Loans and
the Servicer shall deposit or cause to be deposited therein all amounts to be
paid under the Sales and Servicing Agreement. All such deposits shall be made,
in immediately available funds, on the Business Day preceding the Determination
Date. On or before the third Business Day preceding each Payment Date, the
Indenture Trustee shall remit to the Collection Account any amounts delivered to
the Indenture Trustee by the Collateral Agent pursuant to Section 4.05.
SECTION 4.07 Payments.
(a) On each Payment Date, the Indenture Trustee (based on the information
contained in the Servicer's Certificate delivered on the related Determination
Date) shall apply Available Funds in the Collection Account plus any amounts
deposited into the Collection Account from the Spread Account pursuant to
Section 4.05 hereof to make the following payments in the following order of
priority:
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(i) to the Indenture Trustee and Collateral Agent, (A) all amounts due
to the Indenture Trustee and Collateral Agent (other than fees) in respect
of the immediately prior Collection Period, together with all
reimbursements for such recurring items from prior Collection Periods
subject to the Annual Trustee Expense Cap and (B) the Indenture Trustee and
Collateral Agent Fee in respect of the immediately prior Collection Period
and all unpaid Indenture Trustee and Collateral Agent Fees from prior
Collection Periods;
(ii) to the Servicer, the Servicing Fee and all unpaid Servicing Fees;
(iii) to the Noteholders, pro rata, the Noteholders' Interest Payment
Amount;
(iv) to the Insurer, any Insurer Premium due and payable to the
Insurer;
(v) to the Noteholders, sequentially first to holders of the Class A-1
Notes until the Class A-1 Notes are paid in full, then to the holders of
the Class A-2 Notes until the Class A-2 Notes are paid in full, then to the
holders of the Class A-3 Notes until the Class A-3 Notes are paid in full
and thereafter to the holders of the Class A-4 Notes until the Class A-4
Notes are paid in full, the Noteholders' Principal Payment Amount;
(vi) to any successor servicer, the Indenture Trustee and the Insurer,
any reasonable and nonrecurring fees and expenses related to the transfer
of servicing and the appointment of a successor servicer or temporary
successor servicer in the event Copelco is not the successor servicer to
the extent not paid by the Servicer or by Copelco pursuant to the Guaranty
Agreement; provided that amounts paid pursuant to this clause (vi) shall
not exceed $100,000;
(vii) to the Insurer, any Reimbursement Amounts due under the terms of
the Insurance Agreement;
(viii) to the Indenture Trustee and Collateral Agent for deposit into
the Spread Account, the amount, if any, required to be deposited therein
necessary to maintain the Requisite Spread Account Amount;
(ix) to the Noteholders, sequentially first to holders of the Class
A-1 Notes until the Class A-1 Notes are paid in full, then to the holders
of the Class A-2 Notes until the Class A-2 Notes are paid in full, then to
the holders of the Class A-3 Notes until the Class A-3 Notes are paid in
full and thereafter to the holders of the Class A-4 Notes until the Class
A-4 Notes are paid in full, the Additional Noteholders' Principal Payment
Amount;
(x) to the payment of any Re-xxxxxxx Expenses, to the extent not paid
by the Servicer or by Copelco pursuant to the Guaranty Agreement;
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(xi) to any successor servicer, the Insurer, the Indenture Trustee and
Collateral Agent, any items payable to them that were not paid under
clauses (i) and (vi) above; and
(xii) to the holder(s) of the Certificates, the remaining balance, if
any, in the Collection Account;
provided, however, that, (A) following an acceleration of the Notes pursuant to
Section 7.02 of this Indenture, or (B) if an Insurer Default shall have occurred
and be continuing and an Event of Default pursuant to Sections 7.01(a)(i),
7.01(a)(ii), 7.01(a)(iv), 7.01(a)(v) or 7.01(a)(vi) of this Indenture shall have
occurred and be continuing, the Available Funds shall be paid pursuant to
Section 7.06(a) of this Indenture.
(b) On each Determination Date, to the extent that the Servicer's
Certificate indicates that the funds on deposit in the Spread Account are in
excess of the Requisite Spread Account Amount for such Payment Date, the
Indenture Trustee will withdraw such excess from the Spread Account and first
apply such amount to the payment of the Released Funds Principal Payment Amount
and thereafter will apply such amounts in accordance with the priorities set
forth under clauses (x) through (xii) of Section 4.07(a) above. The Released
Funds Principal Payment Amount will be paid to the Noteholders, sequentially
first to holders of the Class A-1 Notes until the Class A-1 Notes are paid in
full, then to the holders of the Class A-2 Notes until the Class A-2 Notes are
paid in full, then to the holders of the Class A-3 Notes until the Class A-3
Notes are paid in full and thereafter to the holders of the Class A-4 Notes
until the Class A-4 Notes are paid in full. Upon any such payment to the
Certificateholder(s) in accordance with this clause (b), the Noteholders and the
Insurer will have no further rights in, or claims to, such amounts.
(c) In the event that the Collection Account is maintained with an
institution other than the Indenture Trustee, the Issuer shall instruct and
cause the Note Paying Agent to make all deposits and payments pursuant to
Section 4.07(a) on the related Payment Date.
SECTION 4.08 Payments to Noteholders.
(a) On each Payment Date, the Indenture Trustee shall send to each
Noteholder the statement or statements provided to the Indenture Trustee by the
Servicer pursuant to Section 4.10 hereof on such Payment Date.
(b) In the event that any withholding tax is imposed on the Issuer's
payment (or allocations of income) to a Noteholder, such tax shall reduce the
amount otherwise payable to the Noteholder in accordance with this Section 4.08.
The Indenture Trustee is hereby authorized and directed to retain from amounts
otherwise distributable to the Noteholders sufficient funds for the payment of
any tax that is legally owed by the Issuer (but such authorization shall not
prevent the Indenture Trustee from contesting any such tax in appropriate
proceedings, and withholding payment of such tax, if permitted by
39
law, pending the outcome of such proceedings). The amount of any withholding tax
imposed with respect to a Noteholder shall be treated as cash distributed to
such Noteholder at the time it is withheld by the Issuer and remitted to the
appropriate taxing authority. If, after consultations with experienced counsel,
the Indenture Trustee determines that there is a reasonable likelihood that
withholding tax is payable with respect to a payment (such as a payment to a
non-US Noteholder), the Indenture Trustee may in its sole discretion withhold
such amounts in accordance with this clause (b). In the event that a Noteholder
wishes to apply for a refund of any such withholding tax, the Indenture Trustee
shall reasonably cooperate with such Noteholder in making such claim so long as
such Noteholder agrees to reimburse the Indenture Trustee for any out-of-pocket
expenses incurred.
(c) Payments required to be made to Noteholders on any Payment Date shall
be made to each Noteholder of record on the preceding Record Date either by wire
transfer, in immediately available funds, to the account of such Holder at a
bank or other entity having appropriate facilities therefor, if (i) such
Noteholder shall have provided to the Note Registrar appropriate written
instructions at least five Business Days prior to such Payment Date and such
Holder's Notes in the aggregate evidence a denomination of not less than
$1,000,000 or (ii) such Noteholder is the Seller, or an Affiliate thereof, or,
if not, by check mailed to such Noteholder at the address of such holder
appearing in the Note Register; provided, however, that, unless Definitive Notes
have been issued pursuant to Section 2.12 of this Indenture, 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. Notwithstanding the foregoing, the final payment in respect of any Note
(whether on the related Final Scheduled Maturity Date or otherwise) will be
payable only upon presentation and surrender of such Note at the office or
agency maintained for that purpose by the Note Registrar pursuant to Section
2.04 of this Indenture.
SECTION 4.09 [Reserved].
SECTION 4.10 Statements to Noteholders.
(a) On or prior to each Payment Date, the Servicer shall provide to the
Indenture Trustee (with a copy to the Insurer and the Rating Agencies) for the
Indenture Trustee to forward to each Noteholder of record a statement setting
forth at least the following information as to the Notes to the extent
applicable:
(i) the amount of such payment allocable to principal of the Class A-1
Notes, the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes,
respectively;
(ii) the amount of such payment allocable to interest on or with
respect to the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes,
the Class A-4 Notes, respectively;
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(iii) the Outstanding Portfolio Balance and the Note Factor for each
Class of Notes as of the close of business on the last day of the preceding
Collection Period;
(iv) the aggregate outstanding principal amount of each Class of Notes
after giving effect to payments allocated to principal reported under
clause (i) above;
(v) the amount of the Servicing Fee paid to the Servicer with respect
to the related Collection Period, the amount of any unpaid Servicing Fees
and the change in such amount from the prior Payment Date;
(vi) the amount paid to the Noteholders under the Policy or from the
Spread Account for such Payment Date;
(vii) the amount payable to the Insurer on such Payment Date;
(viii) the aggregate amount in the Spread Account and the change in
such amount from the previous Payment Date;
(ix) as of the end of the preceding Collection Period, the number of
Auto Loans and the aggregate principal amount scheduled to be paid thereon
for which the related Obligors are delinquent in making scheduled payments
thereon for [(a) at least one month, but not two months or more, (b) at
least two months, but not three months or more, (c) at least three months,
but not four months or more, and (d) four months or more];
(x) the number and the aggregate Purchase Amounts for Auto Loans, if
any, that were repurchased in such period;
(xi) the cumulative amount of Net Losses from the Initial Cutoff Date
to the last day of the related Collection Period;
(xii) the amount of any Indenture Trustee and Collateral Agent Fees
and all other amounts paid pursuant to Section 4.07(a)(i); and
(xiii) the calculation of the Level I Portfolio Performance Tests and
the Level II Portfolio Performance Tests.
(b) Within 60 days after the end of each calendar year, the Servicer shall
deliver to the Indenture Trustee a statement setting forth the amounts paid
during such preceding calendar year in respect of (i) principal of the Notes,
(ii) interest on the Notes and (iii) Servicing Fees. The Indenture Trustee shall
mail to each person who at any time during such preceding calendar year shall
have been a Noteholder of record and received any payment in respect of such
Notes.
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SECTION 4.11 Optional Deposits by the Insurer; Notice of Waivers.
(a) The Insurer shall at any time, and from time to time, with respect to a
Payment Date, have the option (but shall not be required, except as provided in
Section 5.01(a)) to deliver amounts to the Indenture Trustee for deposit into
the Collection Account for any of the following purposes: (i) to provide funds
in respect of the payment of fees or expenses of any provider of services to the
Issuer with respect to such Payment Date, (ii) to pay as a component of the
Principal Payment Amount to the extent that the principal balance of the Notes
as of the Determination Date preceding such Payment Date exceeds the
Noteholders' Percentage as of such Determination Date, or (iii) to include such
amount as part of the Available Funds for such Payment Date to the extent that
without such amount a draw would be required to be made on the Policy. Any
amounts so delivered by the Insurer shall be included in Reimbursement Amounts.
(b) If the Insurer waives the satisfaction of any of the events that might
trigger an event of default under the Insurance Agreement and so notifies the
Indenture Trustee in writing pursuant to Section 6.02 of the Insurance
Agreement, the Indenture Trustee shall notify the Rating Agencies of such
waiver.
ARTICLE V
THE POLICY
SECTION 5.01 Claims Under Policy.
(a) In the event that the Indenture Trustee has delivered a Deficiency
Notice with respect to any Determination Date pursuant to Section 4.05 hereof,
the Indenture Trustee shall on the related Draw Date determine whether the
application of funds in accordance with Section 4.07(a), together with any
amounts deposited by the Insurer pursuant to Section 4.11 and the application of
any Deficiency Claim Amount pursuant to Section 4.05 would result in a
Deficiency Amount on any Payment Date or the related Final Scheduled Maturity
Date, as applicable. If the Deficiency Amount for such Payment Date or on the
related Final Scheduled Maturity Date, as applicable, is greater than zero, the
Indenture Trustee shall furnish to the Insurer no later than 12:00 noon New York
City time on the related Draw Date a completed Notice of Claim (as defined in
clause (b) below) in the amount of the Deficiency Amount. Amounts paid by the
Insurer pursuant to a claim submitted under this Section 5.01, shall be
deposited by the Indenture Trustee into the Collection Account for payment to
Noteholders on the related Payment Date and shall remain uninvested.
(b) Any notice delivered by the Indenture Trustee to the Insurer pursuant
to Section 5.01 (a) shall specify the Deficiency Amount claimed under the Policy
and shall constitute a "Notice of Claim" (as defined in the Policy) under the
Policy. In accordance with the provisions of the Policy, the
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Insurer is required to pay to the Indenture Trustee the Deficiency Amount
properly claimed thereunder by 12:00 noon, New York City time, on the later of
(i) the second Business Day (as defined in the Policy) following receipt on a
Business Day of the Notice of Claim, and (ii) the applicable Payment Date. Any
payment made under the Policy by the Insurer shall be applied solely to the
payment of the Notes as set forth in the Policy, and for no other purpose.
(c) The Indenture Trustee shall (i) receive as attorney-in-fact of each
Noteholder any Deficiency Amount from the Insurer and (ii) deposit the same in
the Collection Account for payment to Noteholders. For the purposes of clause
(d) below, any and all Deficiency Amounts disbursed by the Indenture Trustee
from claims made under the Policy shall not be considered payment by the Issuer
with respect to such Notes, and shall not discharge the obligations of the
Issuer with respect thereto.
(d) The Insurer shall, to the extent it makes any payment with respect to
the Notes, become subrogated to the rights of the recipients of such payments to
the extent of such payments. Subject to and conditioned upon any payment with
respect to the Notes by or on behalf of the Insurer, the Indenture Trustee and
the Noteholders shall assign to the Insurer all rights to the payment of
interest or principal with respect to the Notes which are then due for payment
to the extent of all payments made by the Insurer, and the Insurer may exercise
any option, vote, right, power or the like with respect to the Notes to the
extent that it has made payment pursuant to the Policy. To evidence such
subrogation, the Note Registrar (as defined in this Indenture) shall note the
Insurer's rights as subrogee upon the register of Noteholders upon receipt from
the Insurer of proof of payment by the Insurer of any Insured Payment (as
defined in the Policy). The foregoing subrogation shall in all cases be subject
to the rights of the Noteholders to receive all Insured Payments (as defined in
the Policy) in respect of the Notes.
(e) The Indenture Trustee shall keep a complete and accurate record of all
funds deposited by the Insurer into the Collection Account and the allocation of
such funds to payment of interest on and principal paid in respect of any Note.
The Insurer shall have the right to inspect such records at reasonable times
upon one Business Day's prior notice to the Indenture Trustee.
(f) The Indenture Trustee shall be entitled to enforce on behalf of the
Noteholders the obligations of the Insurer under the Policy. Notwithstanding any
other provision of this Agreement or any Transaction Documents, the Noteholders
are not entitled to make any claims under the Policy or institute proceedings
directly against the Insurer.
SECTION 5.02 Preference Claims.
(a) In the event that the Indenture Trustee has received a certified copy
of an order of the appropriate court that any Insured Payment (as defined in the
Policy) paid on a Note has been avoided in whole or in part as a preference
payment under applicable bankruptcy law, the Indenture Trustee shall so notify
the Insurer, shall comply with the provisions of the Policy to obtain payment by
the Insurer of such avoided payment, and shall, at the time it provides notice
to the Insurer, notify Holders of
43
the Notes by mail that, in the event that any Noteholder's payment is so
recoverable, such Noteholder will be entitled to payment pursuant to the terms
of the Policy. The Indenture Trustee shall furnish to the Insurer its records
evidencing the payments of principal of and interest on the Notes, if any, which
have been made by the Indenture Trustee and subsequently recovered from
Noteholders, and the dates on which such payments were made. Pursuant to the
terms of the Policy, the Insurer will make such payment on behalf of the
Noteholder to the receiver or trustee in bankruptcy named in the final order of
the court exercising jurisdiction on behalf of the Noteholder and not to any
Noteholder directly (unless a Noteholder has returned principal or interest on
the Notes to such receiver or trustee in bankruptcy, in which case the Insurer
will make such payment to the Indenture Trustee for payment to such Noteholder
upon proof of such payment reasonably satisfactory to the Insurer).
(b) The Indenture Trustee shall promptly notify the Insurer of any
proceeding or the institution of any action (of which the Indenture Trustee has
actual knowledge) seeking the avoidance as a preferential transfer under
applicable bankruptcy, insolvency, receivership, rehabilitation or similar law
(a "Preference Claim") of any payment made with respect to the Notes. Each
Holder, by its purchase of Notes, and the Indenture Trustee hereby agrees that
so long as an Insurer Default shall not have occurred and be continuing, the
Insurer may at any time during the continuation of any proceeding relating to a
Preference Claim direct all matters relating to such Preference Claim,
including, without limitation, (i) the direction of any appeal of any order
relating to any Preference Claim and (ii) the posting of any surety, supersedeas
or performance bond pending any such appeal. In addition, and without limitation
of the foregoing, as set forth in Section 5.01(d), the Insurer shall be
subrogated to, and each Noteholder and the Indenture Trustee hereby delegate and
assign, to the fullest extent permitted by law, the rights of the Indenture
Trustee and each Noteholder in the conduct of any proceeding with respect to a
Preference Claim, including, without limitation, all rights of any party to an
adversary proceeding action with respect to any court order issued in connection
with any such Preference Claim.
SECTION 5.03 Surrender of Policy.
The Indenture Trustee shall surrender the Policy to the Insurer for
cancellation upon the expiration of the Policy in accordance with the terms
thereof.
ARTICLE VI
SATISFACTION AND DISCHARGE
SECTION 6.01 Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect with respect to the
Notes except as to (i) rights of registration of transfer and exchange, (ii)
substitution of mutilated, destroyed, lost or stolen Notes, (iii) rights of
Noteholders to receive payments of principal thereof and interest thereon, (iv)
Sections 3.03, 3.04, 3.05, 3.08, 3.10, 3.11, 3.13, 3.14, 3.15, 3.16, 3.18, 3.19
and 3.20, (v) the rights, obligations and immunities of the Indenture Trustee
hereunder (including the rights of the Indenture Trustee under Section
44
8.07 and the obligations of the Indenture Trustee under Section 6.02) and (vi)
the rights of Noteholders and the Insurer 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
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 2.05 and (ii) Notes for whose
payment money has theretofore been deposited in trust or segregated
and held in trust by the Issuer and thereafter repaid to the Issuer or
discharged from such trust, as provided in Section 3.03) have been
delivered to the Indenture Trustee for cancellation and the Policy has
expired and been returned to the Insurer for cancellation;
2) the Issuer has paid or caused to be paid all Insurer Secured
Obligations and all Indenture Trustee Secured Obligations; and
3) the Issuer has delivered to the Indenture Trustee and the Insurer an
Officer's Certificate and, an Opinion of Counsel stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with.
SECTION 6.02 Application of Trust Money.
All moneys deposited with the Indenture Trustee pursuant to Section 6.01
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 Note Paying Agent, as the Indenture Trustee may determine, to the
Holders of the particular Notes for the payment or redemption of which such
moneys have been deposited with the Indenture Trustee, of all sums due and to
become due thereon for principal and interest and to the Insurer for the payment
of any amounts due to it under the Transaction Documents; but such moneys need
not be segregated from other funds except to the extent required herein or in
the Sales and Servicing Agreement or required by law.
SECTION 6.03 Repayment of Moneys Held by Note.
In connection with the satisfaction and discharge of this Indenture with
respect to the Notes, all moneys then held by any Note 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 3.03 and thereupon such Note Paying
Agent shall be released from all further liability with respect to such moneys.
45
ARTICLE VII
REMEDIES
SECTION 7.01 Events of Default.
(a) "Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(i) so long as an Insurer Default shall have occurred and be
continuing, default in the payment of any interest on any Note when the
same becomes due and payable, and such default shall continue for a period
of five days (solely for purposes of this clause, a payment on the Notes
funded by the Insurer or the Collateral Agent pursuant to the Spread
Account Agreement shall be deemed to be a payment made by the Issuer); or
(ii) so long as an Insurer Default shall have occurred and be
continuing, default in the payment of the principal of or any installment
of the principal of any Note when the same becomes due and payable and such
default shall continue for a period of five days (solely for purposes of
this clause, a payment on the Notes funded by the Insurer or the Collateral
Agent pursuant to the Spread Account Agreement, shall be deemed to be a
payment made by the Issuer); or
(iii) so long as an Insurer Default shall not have occurred and be
continuing, an Insurance Agreement Indenture Indicator (other than clauses
(4) - (8) of the definition of Insurance Agreement Indicator or a Servicer
Termination Event arising from a breach of clauses (w) or (x)(2) (to the
extent relating to clauses (4)-(8) of the definition of Insurance Agreement
Indicator) of Section 5.4(a) or clause (y) of the proviso to Section 5.4(b)
of the Sales and Servicing Agreement) shall have occurred; provided,
however, that the occurrence of an Insurance Agreement Indenture Indicator
may not form the basis of an Event of Default unless the Insurer shall have
delivered to the Issuer and the Indenture Trustee and not rescinded a
written notice specifying that such Insurance Agreement Indenture Indicator
constitutes an Event of Default under the Indenture; or
(iv) so long as an Insurer Default shall have occurred and be
continuing, default in the observance or performance of any covenant or
agreement of the Issuer made in this Indenture (other than a covenant or
agreement, a default in the observance or performance of which is elsewhere
in this Section specifically dealt with), 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
46
been eliminated or otherwise cured, for a period of 30 days (or for such
longer period, not in excess of 90 days, as may be reasonably necessary to
remedy such default; provided that such default is capable of remedy within
90 days or less and the Servicer delivers an Officer's Certificate to the
Indenture Trustee to the effect that the Issuer has commenced, or will
promptly commence and diligently pursue, all reasonable efforts to remedy
such default) 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 at least 25% of the Outstanding Amount
of the Notes, 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
(v) so long as an Insurer Default shall have occurred and be
continuing, 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 Series Pool 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 Series Pool, or ordering the winding-up or liquidation of the
Issuer's affairs, which decree or order shall remain unstayed and in effect
for a period of 60 consecutive days; or
(vi) so long as an Insurer Default shall have occurred and be
continuing, 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 Series Pool, or the making
by the Issuer of any general assignment for the benefit of creditors, or
the failure by the Issuer generally to pay its debts as such debts become
due, or the taking of action by the Issuer in furtherance of any of the
foregoing.
(b) The Issuer shall deliver to the Indenture Trustee and the Insurer and
the Rating Agencies, within three days after obtaining knowledge of the
occurrence thereof, written notice in the form of an Officer's Certificate of
any event which with the giving of notice 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 7.02 Rights Upon Event of Default.
(a) If an Insurer Default shall not have occurred and be continuing and an
Event of Default shall have occurred, upon the written direction of the Insurer,
the Notes shall become immediately due and payable at par, together with accrued
interest thereon. If an Event of Default shall have occurred, the Controlling
Party may exercise any of the remedies specified in Section 7.04. In the event
of any acceleration of any Notes by operation of this Section 7.02, the
Indenture Trustee shall continue to be
47
entitled to make claims under the Policy pursuant to the Policy for Insured
Payments on the Notes. Payments under the Policy following acceleration of any
Notes shall be applied by the Indenture Trustee:
FIRST: to Noteholders for amounts due and unpaid on the Notes for
interest, ratably, without preference or priority of any kind, according to
the amounts due and payable on the Notes for interest; and
SECOND: for amounts due and unpaid on the Notes for principal, to the
Holders of the Notes, sequentially, first to pay principal of the Class A-1
Notes until the outstanding principal amount of the Class A-1 Notes has
been reduced to zero, then to pay principal of the Class A-2 Notes until
the outstanding principal amount of the Class A-2 Notes has been reduced to
zero, and then to pay principal of the Class A-3 Notes until the
outstanding principal amount of the Class A-3 Notes has been reduced to
zero, and then to pay principal of the Class A-4 Notes until the
outstanding principal amount of the Class A-4 Notes has been reduced to
zero.
(b) In the event any Notes are accelerated due to an Event of Default, the
Insurer shall have the right (in addition to its obligation to pay Insured
Payments on the Notes in accordance with the Policy), but not the obligation, to
make payments under the Policy or otherwise of interest and principal due on
such Notes, in whole or in part, on any date or dates following such
acceleration as the Insurer, in its sole discretion, shall elect.
(c) If an Insurer Default shall have occurred and an Event of Default shall
have occurred and be continuing, the Indenture Trustee in its discretion may, or
if so requested in writing by Holders holding Notes representing not less than a
majority of the Outstanding Amount of the Notes, declare by written notice to
the Issuer that the Notes become, whereupon they shall become, immediately due
and payable at par, together with accrued interest thereon.
(d) If an Insurer Default shall have occurred and be continuing, then at
any time after such declaration of acceleration of maturity has been made and
before a judgment or decree for payment of the money due has been obtained by
the Indenture Trustee as hereinafter in this Article VII provided, the Holders
of Notes representing a majority of the Outstanding Amount of the Notes, 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
all sums due to the Insurer under the Transaction Documents and the
reasonable
48
compensation, expenses, disbursements and advances of the Indenture
Trustee and the Insurer and their respective agents and counsel; 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 7.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
SECTION 7.03 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 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 and such default continues for a period of five days,
the Issuer will, upon demand of the Indenture Trustee, pay to it, 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 applicable Interest
Rate and in addition thereto such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee and its agents and
counsel.
(b) Each Issuer Secured Party hereby irrevocably and unconditionally
appoints the Indenture Trustee as the true and lawful attorney-in-fact of such
Issuer Secured Party for so long as such Issuer Secured Party is not the
Indenture Trustee, with full power of substitution, with the prior consent of
the Insurer (provided that no Insurer Default has occurred and is continuing) to
execute, acknowledge and deliver any notice, document, certificate, paper,
pleading or instrument and to do in the name of the Indenture Trustee as well as
in the name, place and stead of such Issuer Secured Party such acts, things and
deeds for or on behalf of and in the name of such Issuer Secured Party under
this Indenture (including specifically under Section 7.04) and under the
Transaction Documents which such Issuer Secured Party could or might do or which
may be necessary, desirable or convenient in the Indenture Trustee's discretion
with the consent of the Insurer (so long as an Insurer Default has not occurred
and is continuing) to effect the purposes contemplated hereunder and under the
Transaction Documents and, without limitation, following the occurrence of an
Event of Default, exercise full right, power and authority to take, or defer
from taking, any and all acts with respect to the administration, maintenance or
disposition of the Series Pool.
(c) If an Event of Default occurs, the Indenture Trustee may in its
discretion subject to the consent of the Controlling Party and shall, at the
direction of the Controlling Party (except as provided in Section 7.03(d)
below), proceed to protect and enforce its rights and the rights of the
Noteholders and the Insurer by such appropriate Proceedings as the Indenture
Trustee or the Controlling
49
Party 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) Notwithstanding anything to the contrary contained in this Indenture
(including without limitation Sections 7.04, 7.12 and 7.13) and regardless of
whether an Insurer Default shall have occurred and be continuing, if the Issuer
fails to perform its obligations under Section 12.01(b) hereof when and as due,
the Indenture Trustee may in its discretion (and with the consent of the
Controlling Party) proceed to protect and enforce its rights and the rights of
the Noteholders and the Insurer (provided that an Insurer Default has not
occurred and is continuing) by such appropriate proceedings as the Indenture
Trustee and the Insurer (provided that an Insurer Default has not occurred and
is continuing) shall deem most effective to protect and enforce any such rights,
whether for specific performance of any covenant or agreement in this Indenture
or in aid of the exercise of any power granted herein, or to enforce any other
proper remedy or legal or equitable right vested in the Indenture Trustee by
this Indenture or by law.
(e) 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
any of the property included in the Series Pool, 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 necessary or advisable in order to
have the claims of the Indenture Trustee and the Insurer (including any
claim for reasonable compensation to the Indenture Trustee and each
predecessor Indenture Trustee and the Insurer, and their respective agents,
attorneys and counsel, and for reimbursement of all expenses and
liabilities incurred, and all advances made, by the Indenture Trustee and
each predecessor Indenture Trustee and the Insurer, except as a result of
negligence, bad faith or willful misconduct) 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;
50
(iii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute all amounts received with
respect to the claims of the Noteholders and of the Indenture Trustee and
of the Insurer 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 or the Insurer 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 and the
Insurer 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 and the Insurer such amounts as
shall be sufficient to cover reasonable compensation to the Indenture Trustee
and the Insurer, each predecessor Indenture Trustee and their respective agents,
attorneys and counsel, and all other expenses and liabilities incurred, and all
advances made, by the Indenture Trustee and each predecessor Indenture Trustee
and the Insurer except as a result of negligence or bad faith.
(f) 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.
(g) All rights of action and of asserting claims under this Indenture, the
Spread Account Agreement 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 and the
Insurer.
(h) In any proceedings brought by the Indenture Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture or
the Spread Account Agreement), the Indenture Trustee shall be held to represent
all the Holders of the Notes, and it shall not be necessary to make any
Noteholder a party to any such proceedings.
SECTION 7.04 Remedies.
If an Event of Default shall have occurred, the Controlling Party may do
one or more of the following:
51
(i) institute or direct the Indenture Trustee to 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
moneys adjudged due;
(ii) institute or direct the Indenture Trustee to institute
Proceedings from time to time for the complete or partial foreclosure of
this Indenture with respect to the Auto Loans and Other Conveyed Property
included in the Series Pool;
(iii) exercise or direct the Indenture Trustee to exercise any
remedies of a secured party under the UCC and to take any other appropriate
action to protect and enforce the rights and remedies of the Indenture
Trustee and the Holders of the Notes and the Insurer; and
(iv) sell or direct the Indenture Trustee to sell the Series Pool 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; and:
(A) such Event of Default is of the type described in Section 7.01(i)
or (ii), or
(B) either
(x) the Holders of 100% of the Outstanding Amount of the Notes
consent thereto, or
(y) the proceeds of such sale or liquidation distributable to the
Noteholders are sufficient to discharge in full all amounts then
due and unpaid upon such Notes for principal and interest all
amounts due to the Insurer under the Transaction Documents, or
(z) the Indenture Trustee determines that the Trust estate will
not continue to provide sufficient funds for the payment of
principal 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 the Holders of 662/3% of
the Outstanding Amount of the Notes.
In determining such sufficiency or insufficiency with respect to clauses
(y) and (z), the Indenture Trustee may, but need not, obtain and rely upon an
opinion of an Independent investment banking or accounting firm of national
reputation acceptable to the Insurer (provided that an Insurer Default has not
occurred and is continuing) as to the feasibility of such proposed action and as
to the sufficiency of the Series Pool for such purpose.
52
SECTION 7.05 [Reserved]
SECTION 7.06 Priorities.
(a) Following (1) the acceleration of the Notes pursuant to Section 7.02 or
(2) if an Insurer Default shall have occurred and be continuing, the occurrence
of an Event of Default pursuant to Section 7.01(a)(i), 7.01(a)(ii), 7.01(a)(iv),
7.01(a)(v) or 7.01(a)(vi) of this Indenture, all Available Funds plus all
amounts in the Spread Account, including any money or property collected
pursuant to Section 7.04 of this Indenture shall be applied by the Indenture
Trustee on the related Payment Date in the following order of priority:
FIRST: amounts due and owing and required to be distributed to the
Servicer and Indenture Trustee and Collateral Agent, respectively, pursuant
to priorities (i) through (ii) of Section 4.07(a) hereof and not previously
distributed, in the order of such priorities and without preference or
priority of any kind within such priorities;
SECOND: to Noteholders for amounts due and unpaid on the Notes for
interest, ratably, without preference or priority of any kind, according to
the amounts due and payable on the Notes for interest;
THIRD: for amounts due and unpaid on the Notes for principal, to the
Holders of the Notes, sequentially, first to pay principal of the Class A-1
Notes until the outstanding principal amount of the Class A-1 Notes has
been reduced to zero, then to pay principal of the Class A-2 Notes until
the outstanding principal amount of the Class A-2 Notes has been reduced to
zero, and then to pay principal of the Class A-3 Notes until the
outstanding principal amount of the Class A-3 Notes has been reduced to
zero, and then to pay the principal of the Class A-4 Notes until the
outstanding principal balance of the Class A-4 Notes has been reduced to
zero;
FOURTH: to any successor servicer, the Indenture Trustee and the
Insurer, any reasonable and nonrecurring fees and expenses related to the
transfer of servicing and the appointment of a successor servicer or
temporary successor servicer in the event Copelco is not the successor
servicer, to the extent not paid by the Servicer or by Copelco pursuant to
the Guaranty Agreement provided that amounts paid pursuant to this clause
FOURTH shall not exceed $100,000;
FIFTH: amounts due and owing and required to be paid to the Insurer
pursuant to Section 4.07(a) hereof and not previously paid;
SIXTH: to the Indenture Trustee and Collateral Agent to be applied as
provided in the Spread Account Agreement;
53
SEVENTH: to the payment of any Re-xxxxxxx Expenses, to the extent not
paid by Copelco pursuant to the Guaranty Agreement;
EIGHTH, to any successor servicer, the Insurer, the Indenture Trustee
and Collateral Agent, any items payable to them that were not paid under
clauses FIRST and FOURTH above; and
NINTH, to the holder(s) of the Certificates, the remaining balance, if
any.
(b) The Indenture Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section. At least 15 days before such
record date the Issuer shall mail to each Noteholder, the Insurer and the
Indenture Trustee a notice that states such record date, the payment date and
the amount to be paid.
SECTION 7.07 Limitation of Suits.
No Holder of any Note shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless:
(i) such Holder has previously given written notice to the Indenture
Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Outstanding Amount of the
Notes have made written request to the Indenture Trustee to institute such
proceeding in respect of such Event of Default in its own name as Indenture
Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture Trustee
indemnity reasonably satisfactory to it against the costs, expenses and
liabilities to be incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such
proceedings;
(v) no direction inconsistent with such written request has been given
to the Indenture Trustee during such 60-day period by the Holders of a
majority of the Outstanding Amount of the Notes; and
(vi) an Insurer Default shall have occurred and be continuing;
it being 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
54
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.
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 Outstanding Amount of the Notes,
the Indenture Trustee in its sole discretion may determine what action, if any,
shall be taken, notwithstanding any other provisions of this Indenture.
SECTION 7.08 Unconditional Rights of Noteholders To Receive Principal and
Interest.
Notwithstanding any other provisions of 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 7.09 Restoration of Rights and Remedies.
If the Controlling Party or any Noteholder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason or has been determined adversely to the
Indenture Trustee, the Insurer or to such Noteholder, then and in every such
case the Issuer, the Indenture Trustee, the Insurer and the Noteholders shall,
subject to any determination in such Proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter all rights and
remedies of the Indenture Trustee, the Insurer and the Noteholders shall
continue as though no such proceeding had been instituted.
SECTION 7.10 Rights and Remedies Cumulative.
No right or remedy herein conferred upon or reserved to the Controlling
Party 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 7.11 Delay or Omission Not a Waiver.
No delay or omission of the Controlling Party or any Holder of any Note to
exercise any right or remedy accruing upon any Default or Event of Default shall
impair any such right or remedy or constitute a waiver of any such Default or
Event of Default or an acquiescence therein. Every right and remedy given
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by this Article VII or by law to the Indenture Trustee, the Insurer or to the
Noteholders may be exercised from time to time, and as often as may be deemed
expedient, by the Indenture Trustee, the Insurer or by the Noteholders, as the
case may be.
SECTION 7.12 Control by Noteholders.
If the Indenture Trustee is the Controlling Party, the Note Majority shall
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Indenture Trustee with respect to the Notes or
exercising any trust or power conferred on the Indenture Trustee; provided that:
(i) such direction shall not be in conflict with any rule of law or
with this Indenture;
(ii) subject to the express terms of Section 7.04, any direction to
the Indenture Trustee to sell or liquidate the Auto Loans and Other
Conveyed Property that comprise the Series Pool shall be by the Holders of
Notes representing not less than 100% of the Outstanding Amount of the
Notes;
(iii) if the conditions set forth in Section 7.04 have been satisfied
and the Indenture Trustee elects to retain the Auto Loans and Other
Conveyed Property that comprise the Series Pool pursuant to such Section,
then any direction to the Indenture Trustee by Holders of Notes
representing less than 100% of the Outstanding Amount of the Notes to sell
or liquidate the Auto Loans and Other Conveyed Property that comprise the
Series Pool shall be of no force and effect; and
(iv) the Indenture Trustee may take any other action deemed proper by
the Indenture Trustee that is not inconsistent with such direction;
provided, however, that, subject to Section 8.01, the Indenture Trustee need not
take any action that it determines might involve it in liability or might
materially adversely affect the rights of any Noteholders not consenting to such
action.
SECTION 7.13 Waiver of Defaults.
The Insurer or, if an Insurer Default shall have occurred and be
continuing, prior to the declaration of the acceleration of the maturity of the
Notes as provided in Section 7.04, the Note Majority may waive any past Default
or Event of Default and its consequences except a Default or Event of Default
(i) in payment of principal of or interest on any of the Notes or (ii) in
respect of a covenant or provision hereof which cannot be modified or amended
without the consent of the Holder of each Note. In the case of any such waiver,
the Issuer, the Indenture Trustee, the Insurer and the Holders of the Notes
shall be restored
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to their former positions and rights hereunder, respectively; but no such waiver
shall extend to any subsequent or other Default or Event of Default or impair
any right consequent thereto.
Upon any such waiver, such Default or Event of Default shall cease to exist
and be deemed to have been cured and not to have occurred, and any Event of
Default arising therefrom shall be deemed to have been cured and not to have
occurred, for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other Default or Event of Default or impair any right
consequent thereto.
SECTION 7.14 Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Note by such
Xxxxxx's acceptance thereof shall be deemed to have agreed, that any court may
in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Indenture Trustee for
any action taken, suffered or omitted by it as Indenture Trustee, the filing by
any party litigant in such suit of an undertaking to pay the costs of such suit,
and that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to (a) any suit
instituted by the Indenture Trustee or the Insurer, (b) any suit instituted by
any Noteholder, or group of Noteholders, in each case holding in the aggregate
more than 10% of the Outstanding Amount of the Notes 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 7.15 Waiver of Stay or Extension Laws.
The Issuer covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead or in any manner whatsoever, claim or
take the benefit or advantage of, any stay or extension law wherever enacted
including, but not limited to, filing a voluntary petition under Chapter 11 of
the Bankruptcy Code, 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 will not hinder, delay or impede the
execution of any power and any right of the Issuer to take such action shall be
suspended.
ARTICLE VIII
THE INDENTURE TRUSTEE
SECTION 8.01 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
the Transaction Documents and use the
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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 conforming to the
requirements of this Indenture; however, the Indenture Trustee shall
examine the certificates and opinions to determine whether or not they
conform on their face to the requirements of this Indenture.
(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;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is proved
that the Indenture Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Indenture Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 7.12.
(d) The Indenture Trustee shall not be liable for interest on any money
received by it except as the Indenture Trustee may agree in writing with the
Issuer.
(e) Money held in trust by the Indenture Trustee need not be segregated
from other funds except to the extent required by law or the terms of this
Indenture or the Sales and Servicing Agreement.
(f) No provision of this Indenture shall require the Indenture Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(g) The Indenture Trustee shall permit any representative of the Insurer,
during the Indenture Trustee's normal business hours, to examine all books of
account, records, reports and other
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papers of the Indenture Trustee relating to the Notes, to make copies and
extracts therefrom and to discuss the Indenture Trustee's affairs and actions,
as such affairs and actions relate to the Indenture Trustee's duties with
respect to the Notes, with the Indenture Trustee's officers and employees
responsible for carrying out the Indenture Trustee's duties with respect to the
Notes.
(h) The Indenture Trustee shall, and hereby agrees that it will, perform
all of the obligations and duties required of it under the Sales and Servicing
Agreement and the other Transaction Documents to which it is a party.
(i) The Indenture Trustee shall, and hereby agrees that it will, hold the
Policy in trust, and will hold any proceeds of any claim on the Policy in trust
solely for the use and benefit of the Noteholders.
(j) Except for actions expressly authorized by this Indenture, the
Indenture Trustee shall take no action reasonably likely to impair the security
interests created or existing under any Auto Loan or Financed Vehicle or other
Collateral or to impair the value of any Auto Loan or Financed Vehicle or other
Collateral.
(k) All information obtained by the Indenture Trustee regarding the
Obligors and the Auto Loans, whether upon the exercise of its rights under this
Indenture or otherwise, shall be maintained by the Indenture Trustee in
confidence and shall not be disclosed to any other Person, other than the
Indenture Trustee's attorneys, accountants and agents unless such disclosure is
required by this Indenture or any applicable law or regulation.
(l) Every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to Indenture Trustee shall be subject
to the provisions of this Section and to the provisions of the TIA.
SECTION 8.02 Rights of Indenture Trustee.
(a) Subject to Sections 8.01, the Indenture Trustee shall be protected and
shall incur no liability to the Issuer or any Issuer Secured Party in relying
upon the accuracy, acting in reliance upon the contents, and assuming the
genuineness of any notice, demand, certificate, signature, instrument or other
document reasonably believed by the Indenture Trustee to be genuine and to have
been duly executed by the appropriate signatory, and, except to the extent the
Indenture Trustee has actual knowledge to the contrary or as required pursuant
to Section 8.01 or Section 8.02(g) the Indenture Trustee shall not be required
to make any independent investigation with respect thereto.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate. Subject to Section 8.01(c), the Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on the Officer's Certificate.
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(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 Flagship Credit Corporation, or any other such agent, attorney,
custodian or nominee appointed with the prior consent of the Insurer (provided
that an Insurer Default has not occurred and is continuing).
(d) The Indenture Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Indenture Trustee's conduct does
not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel selected by it with
care, and the written advice or Opinion of Counsel with respect to legal matters
relating to this Indenture and the Notes shall be full and complete
authorization and protection from liability in respect to any action taken,
omitted or suffered by it hereunder in good faith and in accordance with the
advice or opinion of such counsel.
(f) The Indenture Trustee shall be under no obligation to institute,
conduct or defend any litigation under this Indenture or in relation to this
Indenture, at the request, order or direction of any of the Holders of Notes or
the Controlling Party, pursuant to the provisions of this Indenture, unless such
Holders of Notes or the Controlling Party shall have offered to the Indenture
Trustee reasonable security or indemnity against the costs, expenses and
liabilities that may be incurred therein or thereby; provided, however, that the
Indenture Trustee shall, upon the occurrence of an Event of Default (that has
not been cured), exercise the rights and powers vested in it by this Indenture
in accordance with Section 8.01.
(g) The Indenture Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so by the Insurer (so
long as no Insurer Default shall have occurred and be continuing) or (if an
Insurer Default shall have occurred and be continuing) by the Holders of Notes
evidencing not less than 25% of the Outstanding Amount thereof; provided,
however, that if the payment within a reasonable time to the Indenture Trustee
of the costs, expenses or liabilities likely to be incurred by it in the making
of such investigation is, in the opinion of the Indenture Trustee, not
reasonably assured to the Indenture Trustee by the security afforded to it by
the terms of this Indenture or the Sales and Servicing Agreement, the Indenture
Trustee may require reasonable indemnity against such cost, expense or liability
as a condition to so proceeding; the reasonable expense of every such
examination shall be paid by the Person making such request, or, if paid by the
Indenture Trustee, shall be reimbursed by the Person making such request upon
demand.
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SECTION 8.03 Individual Rights of Indenture Trustee.
The Indenture Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may otherwise deal with the Issuer or its
Affiliates with the same rights it would have if it were not the Indenture
Trustee. Any Note Paying Agent, Note Registrar, co-registrar or co-paying agent
may do the same with like rights. However, the Indenture Trustee must comply
with Sections 8.11.
SECTION 8.04 Indenture Trustee's Disclaimer.
The Indenture Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture, the Series
Pool, the Collateral or the Notes, it shall not be accountable for the Issuer's
use of the proceeds from the Notes, and it shall not be responsible for any
statement of the Issuer in the Indenture or in any document issued in connection
with the sale of the Notes or in the Notes other than the Indenture Trustee's
certificate of authentication.
SECTION 8.05 Notice of Defaults.
If an Event of Default occurs, and if it is either known by, or written
notice of the existence thereof has been delivered to, a Responsible Officer of
the Indenture Trustee, the Indenture Trustee shall mail to the Insurer, each
Noteholder and the Rating Agencies notice of the Default within 5 days after
such knowledge or notice occurs. Except in the case of a Default in payment of
principal of or interest on any Note (including payments pursuant to the
mandatory redemption provisions of such Note, if any), the Indenture Trustee may
withhold the notice to each Noteholder 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 8.06 Reports by Indenture Trustee to Holders.
The Indenture Trustee shall on behalf of the Issuer deliver to each
Noteholder such information as may be reasonably required to enable such Holder
to prepare its Federal and state income tax returns. If required by TIA ss.
313(a), within 60 days after each March 31, beginning with March 31, 2001,
Indenture Trustee shall mail to each Noteholder as required by TIA ss. 313(c) a
brief report dated as of such date that complies with TIA ss. 313(a). Indenture
Trustee also shall comply with TIA xx.xx. 313(b)(1) and 313(b)(2). A copy of
each report at the time of its mailing to Noteholders shall be filed by
Indenture Trustee with the Commission and each stock exchange, if any, on which
the Notes are listed. Issuer shall notify Indenture Trustee if and when the
Notes are listed on any stock exchange.
SECTION 8.07 Compensation and Indemnity.
(a) The Indenture Trustee shall receive from time to time compensation for
its services, including 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
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and expenses, disbursements and advances of the Indenture Trustee's agents,
counsel, accountants and experts.
(b) The Issuer shall pay such compensation and make such reimbursement on a
non-recourse basis by payment from Available Funds as provided in Section
4.07(a) of this Indenture. The Servicer shall also be obligated to pay such
amounts to the extent expressly provided for in this Indenture. The Indenture
Trustee shall seek payment for amounts set forth in Sections 4.07(a)(i),
4.07(a)(vi) and 4.07(a)(xi) of the Indenture from the Collection Account one
Payment Date before making demand therefor to the Servicer, and the Servicer
shall promptly but in any case no later than the first Determination Date that
follows more than five days after receipt of such demand, pay such amount,
unless it reasonably believes such amount will not be available from the
Collection Account on the next Payment Date, in which case it may make immediate
demand on the Issuer. The Indenture Trustee shall seek payment for amounts set
forth in this Section 8.07, first from the Servicer (subject to the same timing
requirements as are set forth in the previous sentence) and then from the
Issuer, as set forth herein. The Indenture Trustee shall notify the Issuer and
the Servicer promptly of any claim for which it may seek indemnity. Failure by
the Indenture Trustee to so notify the Issuer and the Servicer shall not relieve
the Servicer of its obligations under Article V of the Sales and Servicing
Agreement or the Indenture Trustee of its entitlement to withdraw. The Indenture
Trustee may have separate counsel and the Issuer shall or shall cause the
Servicer to pay the reasonable fees and expenses of such counsel. Neither the
Issuer nor the Servicer need reimburse any expense or indemnify against any
loss, liability or expense incurred by the Indenture Trustee through the
Indenture Trustee's own willful misconduct, negligence or bad faith.
(c) The Issuer's payment obligations to the Indenture Trustee pursuant to
this Section shall survive the discharge of this Indenture. When the Indenture
Trustee incurs expenses after the occurrence of an Event of Default specified in
Section 7.01(a)(v) or (vi) with respect to the Issuer, the expenses are intended
to constitute expenses of administration under Title 11 of the United States
Code or any other applicable Federal or state bankruptcy, insolvency or similar
law. Notwithstanding anything else set forth in this Indenture or the
Transaction Documents, the recourse of the Indenture Trustee hereunder and under
the Transaction Documents shall be to the Series Pool only in the priorities set
forth herein and specifically shall not be recourse to the assets of any
Noteholder. In addition, the Indenture Trustee agrees that its recourse to the
Issuer, the Series Pool, the Sellers and amounts held pursuant to the Spread
Account Agreement shall be limited to the right to receive the payments referred
to in Section 4.07(a) hereof.
SECTION 8.08 Replacement of Indenture Trustee.
(a) The Issuer may, with the consent of the Insurer, and at the request of
the Insurer (unless an Insurer Default shall have occurred and be continuing),
shall, remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 8.11;
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(ii) a court having jurisdiction in the premises in respect of the
Indenture Trustee in an involuntary case or proceeding under federal or
state banking or bankruptcy laws, as now or hereafter constituted, or any
other applicable federal or state bankruptcy, insolvency or other similar
law, shall have entered a decree or order granting relief or appointing a
receiver, liquidator, assignee, custodian, trustee, conservator,
sequestrator (or similar official) for the Indenture Trustee or for any
substantial part of the Indenture Trustee's property, or ordering the
winding-up or liquidation of the Indenture Trustee's affairs;
(iii) an involuntary case under the federal bankruptcy laws, as now or
hereafter in effect, or another present or future federal or state
bankruptcy, insolvency or similar law is commenced with respect to the
Indenture Trustee and such case is not dismissed within 60 days;
(iv) the Indenture Trustee commences a voluntary case under any
federal or state banking or bankruptcy laws, as now or hereafter
constituted, or any other applicable federal or state bankruptcy,
insolvency or other similar law, or consents to the appointment of or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
conservator or sequestrator (or other similar official) for the Indenture
Trustee or for any substantial part of the Indenture Trustee's property, or
makes any assignment for the benefit of creditors or fails generally to pay
its debts as such debts become due or takes any corporate action in
furtherances of any of the foregoing;
(v) the Indenture Trustee otherwise becomes incapable of acting; or
(vi) the Indenture Trustee materially breaches any covenants under any
Transaction Document to which it is a party.
(b) If the Indenture Trustee resigns pursuant to Section 8.20 or is removed
pursuant to the terms hereof or if a vacancy exists in the office of Indenture
Trustee for any reason (the Indenture Trustee in such event being referred to
herein as the retiring Indenture Trustee), the Issuer shall promptly appoint a
successor Indenture Trustee acceptable to the Insurer (so long as an Insurer
Default shall not have occurred and be continuing). If the Issuer fails to
promptly appoint such a successor Indenture Trustee, the Insurer may appoint a
successor Indenture Trustee.
(c) A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee, the Insurer (provided that no
Insurer Default shall have occurred and be continuing) and the Issuer,
whereupon, the resignation or removal of the retiring Indenture Trustee shall
become effective, and the successor Indenture Trustee shall have all the rights,
powers and duties of the retiring Indenture Trustee under this Indenture,
subject to satisfaction of the Rating Agency Condition. The successor Indenture
Trustee shall mail a notice of its succession to each Noteholder. The retiring
Indenture Trustee shall promptly transfer all property held by it as Indenture
Trustee to the successor Indenture Trustee.
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(d) If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Holders of a majority in outstanding Amount
of the Notes may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee acceptable to the Insurer (provided
that an Insurer Default shall not have occurred and be continuing).
(e) Any resignation or removal of the Indenture Trustee and appointment of
a successor Indenture Trustee pursuant to any of the provisions of this Section
shall not become effective until acceptance of appointment by the successor
Indenture Trustee pursuant to this Section 8.08.
SECTION 8.09 Successor Indenture Trustee by a 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 without any further act shall be the successor Indenture
Trustee; provided that, such successor is otherwise qualified to serve as
Indenture Trustee hereunder and is acceptable to the Insurer (provided that no
Insurer Default has occurred and is continuing). The Indenture Trustee shall
provide the Rating Agencies and the Insurer at least 30 days' prior written
notice of any such transaction.
(b) In case at the time such successor or successors to the Indenture
Trustee by merger, conversion or consolidation shall succeed to the trusts
created by this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the certificate
of authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee.
SECTION 8.10 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 of the property included in the Series Pool may at the time be located, the
Indenture Trustee with the consent of the Insurer (so long as an Insurer Default
shall not have occurred and be continuing) shall have the power and may execute
and deliver all instruments to appoint one or more Persons acceptable to the
Insurer (provided that no Insurer Default shall have occurred and be continuing)
to act as a co-indenture trustee or co-indenture trustees, or separate indenture
trustee or separate indenture trustees, of all or any part of the property
included in the Series Pool, and to vest in such Person or Persons, in such
capacity and for the benefit of the Noteholders and the Insurer, such title to
the Issuer, or any part hereof, and, subject to the other provisions of this
Section, such powers, duties, obligations, rights and trusts as the Indenture
Trustee and the Insurer may consider necessary or desirable. No co-indenture
trustee or separate indenture trustee hereunder shall be required
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to meet the terms of eligibility as a successor indenture trustee under Section
8.11 and no notice to Noteholders of the appointment of any co-indenture trustee
or separate indenture trustee shall be required under Section 8.08 hereof.
(b) Every separate indenture trustee and co-indenture 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 indenture trustee
or co-indenture trustee jointly (it being understood that such separate
indenture trustee or co-indenture trustee is not authorized to act
separately without the Indenture Trustee joining in such act), except to
the extent that under any law of any jurisdiction in which any particular
act or acts are to be performed the Indenture Trustee shall be incompetent
or unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations shall be exercised and performed singly by
such separate indenture trustee or co-indenture trustee, but solely at the
direction of the Indenture Trustee;
(ii) no indenture trustee hereunder shall be personally liable by
reason of any act or omission of any other indenture trustee hereunder,
including acts or omissions of predecessor or successor indenture trustees;
and
(iii) the Indenture Trustee with the prior consent of the Insurer may
at any time accept the resignation of or remove any separate indenture
trustee or co-indenture 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 indenture
trustees and co-indenture trustees, as effectively as if given to each of them.
Every instrument appointing any separate indenture trustee or co-indenture
trustee shall be in form and substance acceptable to the Insurer and shall refer
to this Agreement and the conditions of this Article VIII. Each separate
indenture trustee and co-indenture trustee, upon its acceptance of the trusts
conferred, shall be vested with the estates or property specified in its
instrument of appointment, either jointly with the Indenture Trustee or
separately, as may be provided therein, subject to all the provisions of this
Indenture, specifically including every provision of this Indenture relating to
the conduct of, affecting the liability of, or affording protection to, the
Indenture Trustee. Every such instrument shall be filed with the Indenture
Trustee with a copy to the Insurer.
(d) Any separate indenture trustee or co-indenture trustee may at any time
constitute the Indenture Trustee, its agent or attorney-in-fact with full power
and authority, to the extent not prohibited by law, to do any lawful act under
or in respect of this Indenture on its behalf and in its name. If any separate
indenture trustee or co-indenture trustee shall die, dissolve, become insolvent,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall invest in and
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be exercised by the Indenture Trustee, to the extent permitted by law, without
the appointment of a new or successor indenture trustee.
SECTION 8.11 Appointment and Powers.
Subject to the terms and conditions hereof, each of the Issuer Secured
Parties hereby appoints Xxxxxx Trust and Savings Bank as the Indenture Trustee
with respect to the Collateral and as paying agent with respect to the Notes
(the "Note Paying Agent"), and Xxxxxx Trust and Savings Bank hereby accepts such
appointment and agrees to act as Indenture Trustee with respect to the
Collateral for the Issuer Secured Parties, to maintain custody and possession of
such Collateral (except as otherwise provided hereunder) and to perform the
other duties of the Indenture Trustee in accordance with the provisions of this
Indenture and the other Transaction Documents. Each Issuer Secured Party hereby
authorizes the Indenture Trustee to take such action on its behalf, and to
exercise such rights, remedies, powers and privileges hereunder, as the
Controlling Party may direct and as are specifically authorized to be exercised
by the Indenture Trustee by the terms hereof, together with such actions,
rights, remedies, powers and privileges as are reasonably incidental thereto.
The Indenture Trustee shall act upon and in compliance with the written
instructions of the Controlling Party delivered pursuant to this Indenture
promptly following receipt of such written instructions; provided that the
Indenture Trustee shall not act in accordance with any instructions (i) which
are not authorized by, or in violation of the provisions of, this Indenture,
(ii) which are in violation of any applicable law, rule or regulation or (iii)
for which the Indenture Trustee has not received reasonable indemnity. Receipt
of such instructions shall not be a condition to the exercise by the Indenture
Trustee of its express duties hereunder, except where this Indenture provides
that the Indenture Trustee is permitted to act only following and in accordance
with such instructions.
SECTION 8.12 Performance of Duties.
The Indenture Trustee shall have no duties or responsibilities except those
expressly set forth in this Indenture and the other Transaction Documents to
which the Indenture Trustee is a party or as directed by the Controlling Party
in accordance with this Indenture. The Indenture Trustee shall not be required
to take any discretionary action hereunder except at the written direction and
with the indemnification of the Controlling Party and as provided in Section
7.12. The Indenture Trustee shall, and hereby agrees that it will, perform all
of the duties and obligations required of it under the other Transaction
Documents to which it is a party.
SECTION 8.13 Limitation on Liability.
Neither the Indenture Trustee nor any of its directors, officers or
employees shall be liable for any action taken or omitted to be taken by it or
them in good faith hereunder, or in connection herewith, except that the
Indenture Trustee shall be liable for its negligence, bad faith or willful
misconduct. Notwithstanding any term or provision of this Indenture, the
Indenture Trustee shall incur no liability to the Issuer or the Issuer Secured
Parties for any action taken or omitted by the Indenture Trustee in connection
with the
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Collateral, except for the negligence, bad faith or willful misconduct on the
part of the Indenture Trustee, and, further, shall incur no liability to the
Issuer Secured Parties except for negligence, bad faith or willful misconduct in
carrying out its duties to the Issuer Secured Parties. The Indenture Trustee
shall at all times be free independently to establish to its reasonable
satisfaction, but shall have no duty to independently verify, the existence or
nonexistence of facts that are a condition to the exercise or enforcement of any
right or remedy hereunder or under any of the Transaction Documents. The
Indenture Trustee may consult with counsel selected by it with due care, and
shall not be liable for any action taken or omitted to be taken by it hereunder
in good faith and in accordance with the written advice of such counsel. The
Indenture Trustee shall not be under any obligation to exercise any of the
remedial rights or powers vested in it by this Indenture or to follow any
direction from the Controlling Party unless it shall have received reasonable
security or indemnity satisfactory to the Indenture Trustee against the costs,
expenses and liabilities which might be incurred by it.
SECTION 8.14 Successor Indenture Trustee.
(a) Merger. Any Person into which the Indenture Trustee may be converted or
merged, or with which it may be consolidated, or to which it may sell or
transfer its trust business and assets as a whole or substantially as a whole,
or any Person resulting from any such conversion, merger, consolidation, sale or
transfer to which the Indenture Trustee is a party, shall (provided it is
otherwise qualified to serve as the Indenture Trustee hereunder and is
acceptable to the Insurer provided that no Insurer Default shall have occurred
and be continuing) be and become a successor Indenture Trustee hereunder and be
vested with all of the title to and interest in the Collateral and all of the
trusts, powers, descriptions, immunities, privileges and other matters as was
its predecessor without the execution or filing of any instrument or any further
act, deed or conveyance on the part of any of the parties hereto, anything
herein to the contrary notwithstanding, except to the extent, if any, that any
such action is necessary to perfect, or continue the perfection of, the security
interest of the Issuer Secured Parties in the Collateral; provided that any such
successor shall also be the successor Indenture Trustee under Section 8.09.
(b) Removal. The Indenture Trustee may be removed by the Controlling Party
at any time, with or without cause, by an instrument or concurrent instruments
in writing delivered to the Indenture Trustee, the other Issuer Secured Party
and the Issuer. A temporary successor may be removed at any time to allow a
successor Indenture Trustee to be appointed pursuant to subsection (c) below.
Any removal pursuant to the provisions of this subsection (b) shall take effect
only upon the effective date of the appointment of a successor Indenture Trustee
acceptable to the Insurer (provided that no Insurer Default shall have occurred
and be continuing) and the acceptance in writing by such successor Indenture
Trustee of such appointment and of its obligation to perform its duties
hereunder in accordance with the provisions hereof.
(c) Acceptance by Successor. The Controlling Party shall have the sole
right to appoint each successor Indenture Trustee. Every temporary or permanent
successor Indenture Trustee appointed hereunder shall execute, acknowledge and
deliver to its predecessor and to the Indenture
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Trustee, each Issuer Secured Party and the Issuer an instrument in writing
accepting such appointment hereunder and the relevant predecessor shall execute,
acknowledge and deliver such other documents and instruments as will effectuate
the delivery of all Collateral to the successor Indenture Trustee, whereupon
such successor, without any further act, deed or conveyance, shall become fully
vested with all the estates, properties, rights, powers, duties and obligations
of its predecessor. Such predecessor shall, nevertheless, on the written request
of either Issuer Secured Party or the Issuer, execute and deliver an instrument
transferring to such successor all the estates, properties, rights and powers of
such predecessor hereunder. In the event that any instrument in writing from the
Issuer or an Issuer Secured Party is reasonably required by a successor
Indenture Trustee to more fully and certainly vest in such successor the
estates, properties, rights, powers, duties and obligations vested or intended
to be vested hereunder in the Indenture Trustee, any and all such written
instruments shall at the request of the temporary or permanent successor
Indenture Trustee, be forthwith executed, acknowledged and delivered by the
Indenture Trustee or the Issuer, as the case may be. The designation of any
successor Indenture Trustee and the instrument or instruments removing any
Indenture Trustee and appointing a successor hereunder, together with all other
instruments provided for herein, shall be maintained with the records relating
to the Collateral and, to the extent required by applicable law, filed or
recorded by the successor Indenture Trustee in each place where such filing or
recording is necessary to effect the transfer of the Collateral to the successor
Indenture Trustee or to protect or continue the perfection of the security
interests granted hereunder.
SECTION 8.15 Representations and Warranties of the Indenture Trustee.
The Indenture Trustee represents and warrants to the Issuer and to each
Issuer Secured Party as follows:
(a) Due Organization. The Indenture Trustee is a banking corporation, duly
organized, validly existing and in good standing under the laws of the State of
Illinois and is duly authorized and licensed under applicable law to conduct its
business as presently conducted.
(b) Trust Power. The Indenture Trustee has all requisite right, power and
authority to execute and deliver this Indenture and to perform all of its duties
as Indenture Trustee hereunder.
(c) Due Authorization. The execution and delivery by the Indenture Trustee
of this Indenture and the other Transaction Documents to which it is a party,
and the performance by the Indenture Trustee of its duties hereunder and
thereunder, have been duly authorized by all necessary corporate proceedings and
no further approvals or filings, including any governmental approvals, are
required for the valid execution and delivery by the Indenture Trustee, or the
performance by the Indenture Trustee, of this Indenture and such other
Transaction Documents.
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(d) Xxxxx and Binding Indenture.
The Indenture Trustee has duly executed and delivered this Indenture and
each other Transaction Document to which it is a party, and each of this
Indenture and each such other Transaction Document constitutes the legal, valid
and binding obligation of the Indenture Trustee, enforceable against the
Indenture Trustee in accordance with its terms, except as (i) such
enforceability may be limited by bankruptcy, insolvency, reorganization and
similar laws relating to or affecting the enforcement of creditors' rights
generally and (ii) the availability of equitable remedies may be limited by
equitable principles of general applicability.
SECTION 8.16 Waiver of Setoffs.
The Indenture Trustee hereby expressly waives any and all rights of setoff
that the Indenture Trustee may otherwise at any time have under applicable law
with respect to any Account and agrees that amounts in the Accounts shall at all
times be held and applied solely in accordance with the provisions hereof.
SECTION 8.17 Control by the Controlling Party.
The Indenture Trustee shall comply with notices and instructions given by
the Issuer only if accompanied by the written consent of the Controlling Party,
except that if any Event of Default shall have occurred and be continuing, the
Indenture Trustee shall act upon and comply with notices and instructions given
by the Controlling Party alone in the place and stead of the Issuer.
SECTION 8.18 Insurer as Controlling Party.
Each Noteholder by purchase of the Notes held by it acknowledges that the
Indenture Trustee, as partial consideration of the issuance of the Policy, has
agreed that the Insurer shall have certain rights hereunder and shall be the
Controlling Party for so long as no Insurer Default shall have occurred and be
continuing. Unless otherwise provided herein, so long as an Insurer Default has
occurred and is continuing, any provision giving the Insurer the right to
direct, appoint or consent to, approve of, or take any action under this
Indenture shall be inoperative during the period of such Insurer Default and
such right shall instead vest in the Indenture Trustee acting, unless otherwise
specified, at the written direction of a Note Majority until such time as such
Insurer Default is no longer continuing. The Insurer may disclaim any of its
rights and powers under this Indenture (but not its duties and obligations under
the Policy) upon delivery of a written notice to the Indenture Trustee. Except
as otherwise provided herein, the Insurer may give or withhold any consent
hereunder in its sole and absolute discretion.
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SECTION 8.19 Eligibility and Disqualification of Indenture Trustee.
Indenture Trustee shall at all times satisfy the requirements of TIA ss.
310(a). The Indenture Trustee under this Indenture shall at all times be a bank,
organized and doing business under the laws of the United States of America or
any State thereof; authorized under such laws to exercise corporate trust
powers, shall be acceptable to the Insurer; having a combined capital and
surplus of at least $50,000,000 and subject to supervision or examination by
Federal or State authorities; and having a rating, both with respect to
long-term and short-term unsecured obligations, of not less than A and A-1,
respectively, by the Rating Agencies. If such corporation, banking association
or trust company publishes reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining authority,
then for the purpose of this Section 8.19, the combined capital and surplus of
such corporation, banking association or trust company shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. In case at any time the Indenture Trustee shall cease to be
eligible in accordance with the provisions of this Section 8.19, the Indenture
Trustee shall resign immediately in the manner and with the effect specified in
Section 8.20. Indenture Trustee shall comply with TIA ss. 310(b), including the
optional provision permitted by the second sentence of TIA ss. 310(b)(9),
provided that there shall be excluded from the operation of TIA ss. 310(b)(1)
any indenture or indentures under which other securities of Issuer are
outstanding if the requirements for such exclusion set forth in ss. 310(b)(1)
are met.
SECTION 8.20 Resignation or Removal of Indenture Trustee.
The Indenture Trustee may at any time resign and be discharged from the
trusts hereby created by giving 30 days' prior written notice thereof to the
Servicer and the Insurer. Upon receiving such notice of resignation, (a) the
Insurer (provided no Insurer Default has occurred and is continuing), or (b) if
an Insurer Default has occurred and is continuing, the Note Majority, the
Servicer shall promptly appoint a successor Indenture Trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
resigning Indenture Trustee and one copy to the successor Indenture Trustee;
provided that the consent of the Insurer shall be required. If no successor
Indenture Trustee shall have been so appointed and have accepted appointment
within 30 days after the giving of such notice of resignation, the resigning
Indenture Trustee may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee which satisfies the eligibility
requirements pursuant to Section 8.19. The Indenture Trustee may be removed at
any time by written demand of the Insurer delivered to the Indenture Trustee and
the Servicer, provided that, if an Insurer Default has occurred which is
continuing, such right of the Insurer shall be inoperative during the period of
such Insurer Default and shall instead vest in the Note Majority.
If at any time the Indenture Trustee shall cease to be eligible in
accordance with the provisions of Section 8.19 and shall fail to resign after
written request therefor by the Insurer or the Servicer, with the prior consent
of the Insurer, or if at any time the Indenture Trustee shall be legally unable
to act, or shall be adjudged bankrupt or insolvent, or a receiver, conservator
or liquidator of the Indenture Trustee or of its property shall be appointed, or
any public officer shall take charge or control of the Indenture Trustee or of
its property or affairs for the purpose of rehabilitation, conservation or
liquidation, or at request of the
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Insurer then the Servicer with the prior written consent of the Insurer may (and
at the instruction of the Insurer shall) remove the Indenture Trustee. If the
Servicer shall remove the Indenture Trustee under the authority of the
immediately preceding sentence, the Servicer, with the prior written consent of
the Insurer, shall promptly appoint a successor Indenture Trustee that meets the
eligibility requirements of Section 8.19 by written instrument, in duplicate,
one copy of which instrument shall be delivered to the Indenture Trustee so
removed and one copy to the successor Indenture Trustee, and pay all fees and
expenses owed to the outgoing Indenture Trustee.
Any resignation or removal of the Indenture Trustee and appointment of a
successor Indenture Trustee pursuant to any of the provisions of this Section
8.20 shall not become effective until acceptance of appointment by the successor
Indenture Trustee pursuant to Section 8.14 and payment of all fees and expenses
owed to the outgoing Indenture Trustee. The Servicer shall provide notice of
such resignation or removal of the Indenture Trustee to the Rating Agencies and
the Insurer.
SECTION 8.21 Preferential Collection of Claims Against Issuer. Indenture
Trustee shall comply with TIA ss. 311(a), while excluding any creditor
relationship listed in TIA ss. 311(b). An Indenture Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated.
ARTICLE IX
NOTEHOLDERS' LISTS AND REPORTS
SECTION 9.01 Issuer To Furnish To Indenture Trustee Names and Addresses of
Noteholders.
The Issuer will furnish or cause to be furnished to the Indenture Trustee
(a) not more than five days after the earlier of (i) each Record Date and (ii)
three months after the last Record Date, a list, in such form as the Indenture
Trustee may reasonably require, of the names and addresses of the Holders as of
such Record Date, (b) at such other times as the Indenture Trustee may request
in writing, within 30 days after receipt by the Issuer of any such request, a
list of similar form and content as of a date not more than 10 days prior to the
time such list is furnished; provided, however, that so long as the Indenture
Trustee is the Note Registrar, no such list shall be required to be furnished.
The Indenture Trustee or, if the Indenture Trustee is not the Note Registrar,
the Issuer shall furnish to the Insurer in writing on an annual basis on each
March 31 and at such other times as the Insurer may request a copy of such list.
SECTION 9.02 Preservation of Information; Communications to Noteholders.
The Indenture Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders contained in the most recent
list furnished to the Indenture Trustee as provided in Section 9.01 and the
names and addresses of Holders received by the Indenture Trustee in its
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capacity as Note Registrar. The Indenture Trustee may destroy any list furnished
to it as provided in such Section 9.01 upon receipt of a new list so furnished.
ARTICLE X
COLLECTION OF MONEY AND RELEASES OF SERIES POOL
SECTION 10.01 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 other Transaction Documents. The Indenture
Trustee shall apply all such money received by it as provided in this Indenture
and the other Transaction Documents. Except as otherwise expressly provided in
this Indenture or in the other Transaction Documents, if any default occurs in
the making of any payment or performance under any agreement or instrument that
is part of the Series Pool, the Indenture Trustee with the consent of the
Insurer (provided that an Insurer Default has not occurred and is continuing)
may or shall at the direction of the Insurer (provided that an Insurer Default
has not occurred and is continuing) 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 VII.
SECTION 10.02 Release of Series Pool.
(a) Subject to the payment of its fees and expenses pursuant to Section
8.07, the Indenture Trustee may, and when required by the provisions of this
Indenture shall, execute instruments to release property from the lien of this
Indenture only, in a manner and under circumstances that are authorized by the
provisions of this Indenture. No party relying upon an instrument executed by
the Indenture Trustee as provided in this Article X shall be bound to ascertain
the Indenture Trustee's authority, inquire into the satisfaction of any
conditions precedent or see to the application of any moneys.
(b) The Indenture Trustee shall, at such time as there are no Notes
Outstanding and all sums due the Indenture Trustee pursuant to Section 8.07 have
been paid and all amount due to the Insurer have been paid and the Policy has
been cancelled and returned to the Insurer, release any remaining portion of the
Series Pool 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 Accounts. The Indenture Trustee shall release the Auto Loans and Other
Conveyed Property included in the Series Pool from the lien of this Indenture
pursuant to this Section 10.02(b) only upon receipt of an Issuer Request
accompanied by an Officer's Certificate and an Opinion of Counsel and compliance
with the provisions of this Indenture.
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ARTICLE XI
SUPPLEMENTAL INDENTURES
SECTION 11.01 Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Holders of any Notes but with the consent of
the Insurer (unless an Insurer Default shall have occurred and be continuing)
and with prior notice to the Rating Agencies by the Issuer, the Issuer and the
Indenture Trustee, when authorized by an Issuer Order, at any time and from time
to time, may enter into one or more indentures supplemental hereto, in form and
substance satisfactory to the Indenture Trustee and the Insurer (provided that
an Insurer Default has not occurred and is continuing), 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 which 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 or in any supplemental indenture; provided that such action shall
not adversely affect the interests of the Holders of the Notes; or
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor indenture trustee with respect to the Notes and to
add to or change any of the provisions of this Indenture as shall be
necessary to facilitate the administration of the trusts hereunder by more
than one indenture trustee, pursuant to the requirements of Article VIII;
provided that, if an Insurer Default has occurred and is continuing, the
Insurer's prior written consent shall be required if such indenture
supplement would materially and adversely affect the interests of the
Insurer.
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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 not inconsistent with the foregoing.
SECTION 11.02 Supplemental Indentures with Consent of Noteholders.
(a) The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, also may, with prior notice to the Rating Agencies, with the consent of
the Insurer (unless an Insurer Default shall have occurred and be continuing)
and with the consent of Note Majority, by Act of such Holders delivered to the
Issuer, the Insurer and the Indenture Trustee, enter into an indenture or
indentures supplemental hereto in form and substance satisfactory to the
Indenture Trustee and the Insurer (provided that an Insurer Default has not
occurred and is continuing) 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, subject to the express rights of the Insurer
under the Transaction Documents, no such supplemental indenture shall, without
the consent of the Holder of each Outstanding Note affected thereby:
(i) change the date of payment of any installment of principal of or
interest on any Note, or reduce the principal amount thereof, the interest
rate thereon or the Redemption Price with respect thereto, change the
provision of this Indenture relating to the application of collections on,
or the proceeds of the sale of, the Series Pool to payment of principal of
or interest on the Notes, or change any place of payment where, or the coin
or currency in which, any Note or the interest thereon is payable;
(ii) impair the right to institute suit for the enforcement of the
provisions of this Indenture requiring the application of funds available
therefor, as provided in Article VII, to the payment of any such amount due
on the Notes on or after the respective due dates thereof (or, in the case
of redemption, on or after the Redemption Date);
(iii) reduce the percentage of the Outstanding Amount of the Notes,
the consent of the Holders of which is required for any such supplemental
indenture, or the consent of the Holders of which is required for any
waiver of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences provided for in this Indenture;
(iv) modify or alter the provisions of the proviso to the definition
of the term "Outstanding";
(v) reduce the percentage of the Outstanding Amount of the Notes
required to direct the Indenture Trustee to direct the Issuer to sell or
liquidate the Series Pool pursuant to Section 7.04;
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(vi) modify any provision of this Section except to increase any
percentage specified herein or to provide that certain additional
provisions of this Indenture or the Transaction Documents cannot be
modified or waived without the consent of the Holder of each Outstanding
Note affected thereby;
(vii) modify any of the provisions of this Indenture in such manner as
to affect the calculation of the amount of any payment of interest or
principal due on any Note on any Payment Date (including the calculation of
any of the individual components of such calculation) or as 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
(viii) permit the creation of any lien ranking prior to or on a parity
with the lien of this Indenture with respect to any part of the property
included in the Series Pool or, except as otherwise permitted or
contemplated herein or in any of the Transaction Documents, terminate the
lien of this Indenture on any property at any time subject hereto or
deprive the Holder of any Note of the security provided by the lien of this
Indenture; provided that, if an Insurer Default has occurred and is
continuing, the Insurer's prior written consent shall be required if such
indenture supplement would materially and adversely affect the interests of
the Insurer.
(b) It shall not be necessary for any Act of Noteholders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
(c) Promptly after the execution by the Issuer and the Indenture Trustee of
any supplemental indenture pursuant to this Section, the Indenture Trustee shall
mail to the 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 11.03 Execution of Supplemental Indentures.
In executing, or permitting the additional trusts created by, any
supplemental indenture permitted by this Article XI or the modifications thereby
of the trusts created by this Indenture, the Indenture Trustee shall and the
Insurer shall be entitled to receive, and subject to Sections 8.01 and 8.02,
shall be fully protected in relying upon, an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by this
Indenture. The Indenture Trustee may, but shall not be obligated to, enter into
any such supplemental indenture that affects the Indenture Trustee's own rights,
duties, liabilities or immunities under this Indenture or otherwise.
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SECTION 11.04 Effect of Supplemental Indenture.
Upon the execution of any supplemental indenture pursuant to the provisions
hereof, this Indenture shall be and be deemed to be modified and amended in
accordance therewith with respect to the Notes affected thereby, and 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 11.05 Reference in Notes to Supplemental Indentures.
Notes authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article XI may, and if required by the Issuer shall,
bear a notation in form approved by the Issuer as to any matter provided for in
such supplemental indenture. If the Issuer shall so determine, new Notes so
modified as to conform, in the opinion of the Issuer, to any such supplemental
indenture may be prepared and executed by the Issuer and authenticated and
delivered by the Indenture Trustee in exchange for Outstanding Notes.
ARTICLE XII
REDEMPTION OF NOTES
SECTION 12.01 Redemption. The Notes are subject to redemption in whole, but
not in part, at the direction of Flagship LLC pursuant to the Depositor Purchase
Agreement, on any Payment Date on which Flagship LLC exercises its option to
purchase the Auto Loans included in the Series Pool pursuant to said Depositor
Purchase Agreement, for a Note redemption price equal to the Redemption Price
plus all amounts due to the Insurer under the Transaction Documents; provided,
however, that the Issuer has available funds sufficient to pay the Redemption
Price. Flagship LLC or the Issuer shall furnish the Insurer and the Rating
Agencies prior written notice of such redemption. If the Notes are to be
redeemed pursuant to this Section 12.01, Flagship LLC or the Issuer shall
furnish written notice of such election to the Indenture Trustee and the Insurer
not later than 35 days prior to the Redemption Date and the Issuer shall deposit
with the Indenture Trustee in the Collection Account the Redemption Price of the
Notes to be redeemed plus all amounts due to the Insurer under the Transaction
Documents, whereupon all such Notes shall be due and payable on the Redemption
Date upon the furnishing of a notice complying with Section 12.02 to each Holder
of Notes.
SECTION 12.02 Form of Redemption Notice. Notice of redemption under Section
12.01 shall be given by the Indenture Trustee by facsimile or by first-class
mail, postage prepaid, transmitted or mailed prior to the applicable Redemption
Date to each Holder of Notes, as of the close of business on
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the Record Date preceding the applicable Redemption Date, at such Xxxxxx's
address appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) that the Record Date otherwise applicable to such Redemption
Date is not applicable and that payments shall be made only upon
presentation and surrender of such Notes and the place where such Notes are
to be surrendered for payment of the Redemption Price (which shall be the
office or agency of the Issuer to be maintained as provided in Section
3.02); and
(iv) that interest on the Notes shall cease to accrue on the
Redemption Date.
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 12.03 Notes Payable on Redemption Date.
The Notes to be redeemed shall, following notice of redemption as required
by Section 12.02 (in the case of redemption pursuant to Section 12.01), on the
Redemption Date become due and payable at the Redemption Price and (unless the
Issuer shall default in the payment of the Redemption Price) no interest shall
accrue on the Redemption Price for any period after the date to which accrued
interest is calculated for purposes of calculating the Redemption Price.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01 Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer to the Indenture Trustee
to take any action under any provision of this Indenture, the Issuer shall
furnish to the Indenture Trustee and to the Insurer (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 and (ii) an Opinion of
Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with.
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(b) Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or opinion has
read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such signatory
such condition or covenant has been complied with.
(c) (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 imposed in Section 13.01(a) or
elsewhere in this Indenture, furnish to the Indenture Trustee and the Insurer an
Officer's Certificate certifying or stating the opinion of each person signing
such certificate as to the fair value (on the date 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 and the Insurer an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause (i)
above, the Issuer shall also deliver to the Indenture Trustee and the
Insurer an Independent Certificate as to the same matters, if the fair
value to the Issuer of the securities to be so deposited and of all other
such securities made the basis of any such withdrawal or release since the
commencement of the then-current fiscal year of the Issuer, as set forth in
the certificates delivered pursuant to clause (i) above and this clause
(ii) is 10% or more of the Outstanding Amount of the Notes, but such a
certificate need not be furnished with respect to any securities so
deposited, if the fair value thereof to the Issuer as set forth in the
related Officer's Certificate is less than $25,000 or less than 1% percent
of the Outstanding Amount of the Notes.
(iii) Other than with respect to the release of any Purchased Auto
Loans or Charged-Off Auto Loans, whenever any property or securities are to
be released from the lien of this Indenture, the Issuer shall also furnish
to the Indenture Trustee and the Insurer an Officer's Certificate
certifying or stating the opinion of each person signing such certificate
as to the fair value (within 90 days of such release) of the property or
securities proposed to be released and stating that in the opinion of such
person the proposed release will not impair the security under this
Indenture in contravention of the provisions hereof.
78
(iv) Whenever the Issuer is required to furnish to the Indenture
Trustee and the Insurer an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause (iii)
above, the Issuer shall also furnish to the Indenture Trustee and the
Insurer an Independent Certificate as to the same matters if the fair value
of the property or securities and of all other property other than
Purchased Auto Loans and Defaulted Auto Loans, or securities released from
the lien of this Indenture since the commencement of the then current
calendar year, as set forth in the certificates required by clause (iii)
above and this clause (iv), equals 10% or more of the Outstanding Amount of
the Notes, but such certificate need not be furnished in the case of any
release of property or securities if the fair value thereof as set forth in
the related Officer's Certificate is less than $25,000 or less than 1
percent of the then Outstanding Amount of the Notes.
(v) Notwithstanding Section 2.09 or any provision of this Section, the
Issuer may (A) collect, liquidate, sell or otherwise dispose of the Auto
Loans as and to the extent permitted or required by the Transaction
Documents and (B) make cash payments out of the Trust Accounts as and to
the extent permitted or required by the Transaction Documents.
SECTION 13.02 Form of Documents Delivered to Indenture Trustee.
(a) In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
(b) Any certificate or opinion of an Authorized Officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his or her certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Servicer, the Originator or the Issuer, stating that the information with
respect to such factual matters is in the possession of the Servicer, the
Originator or the Issuer, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
(c) Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
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(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 VIII.
SECTION 13.03 Acts of Noteholders.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Noteholders
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Noteholders in person or by agents duly appointed
in writing; and except as herein otherwise expressly provided such action shall
become effective when such instrument or instruments are delivered to the
Indenture Trustee, and, where it is hereby expressly required, to the Issuer.
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Noteholders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 8.01) conclusive in favor of
the Indenture Trustee and the Issuer, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any person of any such instrument
or writing may be proved in any customary manner of the Indenture Trustee.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Notes shall bind the Holder of every Note
issued upon the registration thereof or in exchange therefor or in lieu thereof,
in respect of anything done, omitted or suffered to be done by the Indenture
Trustee or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Note.
SECTION 13.04 Notices, etc., to Indenture Trustee, Issuer and Rating
Agencies.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or Act of Noteholders or other documents provided or permitted by this Indenture
to be made upon, given or furnished to or filed with:
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(i) the Indenture Trustee by any Noteholder, the Insurer or by the
Issuer shall be sufficient for every purpose hereunder if personally
delivered, delivered by overnight courier or mailed certified mail, return
receipt requested and shall be deemed to have been duly given upon receipt
to the Indenture Trustee at its Corporate Trust Office;
(ii) the Issuer by the Indenture Trustee, the Insurer or by any
Noteholder shall be sufficient for every purpose hereunder if personally
delivered, delivered by overnight courier or mailed certified mail, return
receipt requested and shall deemed to have been duly given upon receipt to
the Issuer addressed to: Flagship Auto Receivables Owner Trust 1999-2 in
care of First Union National Bank, One Xxxxxx Square, 000 Xxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000, with a copy to the General Counsel of Flagship
Credit Corporation, 0 Xxxxxxxxxxxxx Xxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx
00000, or at such other address previously furnished in writing to the
Indenture Trustee and the Insurer by the Issuer. The Issuer shall promptly
transmit any notice received by it from the Noteholders to the Indenture
Trustee and the Insurer; or
(iii) the Insurer by the Issuer or the Indenture Trustee shall be
sufficient for any purpose hereunder if in writing and mailed by registered
mail or personally delivered or telecopied to the recipient as follows:
To the Insurer:
MBIA Insurance Corporation
000 Xxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attention: Insured Portfolio Management - Structured Finance
(Flagship Auto Receivables Owner Trust 1999-2)
Confirmation: (000) 000-0000
Telecopy Nos.:(000) 000-0000
(b) Notices required to be given to the Rating Agencies by the Issuer or
the Indenture Trustee shall be in writing, personally delivered, delivered by
overnight courier or mailed certified mail, return receipt requested to (i) in
the case of Moody's, at the following address: Xxxxx'x Investors Service, Inc.,
00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: ABS Monitoring Dept.;
(ii) in the case of S&P, at the following address: Standard & Poor's Ratings
Group, a Division of The McGraw Hill Companies, 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Asset-Backed Surveillance Department; or in the
case of DCR, at the following address: Duff & Xxxxxx Credit Rating Co., 00 Xxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Asset-Backed Monitoring
Group; or as to each of the foregoing, at such address as shall be designated by
written notice to other parties.
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SECTION 13.05 Notices to Noteholders Waiver.
(a) Where this Indenture provides for notice to Noteholders of any event,
such notice shall be sufficiently given (unless otherwise expressly provided
herein) 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 13.06 Alternate Payment and Notice Provisions.
(a) 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
Note Paying Agent to such Holder, that is different from the methods provided
for in this Indenture for such payments or notices, provided that such methods
are reasonable and consented to by the Indenture Trustee (which consent shall
not be unreasonably withheld). The Issuer will furnish to the Indenture Trustee
a copy of each such agreement and the Indenture Trustee will cause payments to
be made and notices to be given in accordance with such agreements.
SECTION 13.07 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.
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SECTION 13.08 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.
SECTION 13.09 Severability.
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 13.10 Benefits of Indenture.
The Insurer and its successors and assigns shall be a third-party
beneficiary to the provisions of this Indenture, and shall be entitled to rely
upon and directly to enforce such provisions of this Indenture so long as no
Insurer Default shall have occurred and be continuing. 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 Series Pool, any benefit or any legal or equitable right,
remedy or claim under this Indenture. The Insurer may disclaim any of its rights
and powers under this Indenture (in which case the Indenture Trustee may
exercise such right or power hereunder), but not its duties and obligations
under the Policy, upon delivery of a written notice to the Indenture Trustee.
SECTION 13.11 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 13.12 Recording of Indenture.
If this Indenture is subject to recording in any appropriate public
recording offices, such recording is to be effected by the Issuer and at its
expense accompanied by an Opinion of Counsel (which may be counsel to the
Indenture Trustee or any other counsel reasonably acceptable to the Indenture
Trustee and the Insurer) to the effect that such recording is necessary either
for the protection of the Noteholders or any other person secured hereunder or
for the enforcement of any right or remedy granted to the Indenture Trustee
under this Indenture or to the Collateral Agent under the Spread Account
Agreement.
83
SECTION 13.13 Issuer Obligation.
No recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Sellers, the Servicer 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 Originator, the Servicer or
the Indenture Trustee in its individual capacity, (ii) any owner of a legal or
beneficial interest in the Issuer or (iii) any affiliate, partner, owner,
beneficiary, agent, officer, director, employee or agent of the Originator, the
Servicer or the Indenture Trustee in its individual capacity, any holder of a
legal or beneficial interest in the Issuer, the Originator, the Servicer or the
Indenture Trustee or of any successor or assign of the Originator, the Servicer
or the Indenture Trustee in its individual capacity, except as any such Person
may have expressly agreed (it being understood that the Indenture Trustee has no
such obligations in its 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.
SECTION 13.14 No Petition.
The Indenture Trustee, by entering into this Indenture, and each
Noteholder, by accepting a Note or a beneficial interest therein, hereby
covenant and agree that they will not at any time institute against Flagship
LLC, the Depositor, the Special Member or the Issuer, or join in any insolvency
proceeding against Flagship LLC, the Depositor, the Special Member or the Issuer
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States Federal or state
bankruptcy or similar law in connection with any obligations relating to the
Notes, this Indenture or any of the Transaction Documents.
SECTION 13.15 Inspection.
The Issuer agrees that, on reasonable prior notice, it will permit any
representative of the Indenture Trustee or of the Insurer, during the Issuer's
normal business hours, to examine all the books of account, records, reports,
and other papers of the Issuer, to make copies and extracts therefrom, to cause
such books to be audited by independent certified public accountants, and to
discuss the Issuer's affairs, finances and accounts with the Issuer's officers,
employees, and independent certified public accountants, all at such reasonable
times and as often as may be reasonably requested. The Indenture Trustee 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.
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SECTION 13.16 Legal Holidays.
In any case where the date on which any payment is due shall not be a
Business Day, then (notwithstanding any other provision of the Notes or this
Indenture) payment need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the date on
which nominally due, and no interest shall accrue for the period from and after
any such nominal date.
SECTION 13.17 Governing Law.
THIS INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
SECTION 13.18 Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with another provision hereof that is required to
be included in this Indenture by any of the provisions of the Trust Indenture
Act, such required provision shall control.
SECTION 13.19 Limitation of Liability. Notwithstanding any other provision
herein or elsewhere, this Indenture has been executed and delivered by First
Union National Bank, not in its individual capacity, but solely in its capacity
as Owner Trustee of the Issuer, and in no event shall First Union National Bank
have any liability (except with respect to its own grossly negligent action or
failure to act) in respect of the representations, warranties, or obligations of
the Issuer or the Owner Trustee hereunder or under any other document, as to all
of which recourse shall be had solely to the assets of the Issuer, and for all
purposes of this Indenture and each other document, First Union National Bank
shall be entitled to the benefits of the Amended and Restated Trust Agreement of
the Issuer.
The provisions of TIA xx.xx. 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.
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IN WITNESS WHEREOF, the Issuer, the Servicer and the Indenture Trustee have
caused this Indenture to be duly executed by their respective officers, hereunto
duly authorized, all as of the day and year first above written.
FLAGSHIP AUTO RECEIVABLES OWNER
TRUST 1999-2, as Issuer
By: FIRST UNION NATIONAL BANK, not in
its individual capacity, but solely as Owner
Trustee
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
XXXXXX TRUST AND SAVINGS BANK,
as Indenture Trustee
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
FLAGSHIP CREDIT CORPORATION,
as Servicer
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
S-1
EXHIBIT A-1
[Form of Class A-1 Note]
REGISTERED $117,000,000
No. R-A-1
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. 33841F AA 8
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.
FLAGSHIP AUTO RECEIVABLES OWNER TRUST 1999-2
CLASS A-1 6.420% ASSET-BACKED NOTES
Flagship Auto Receivables Owner Trust 1999-2 (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of ONE HUNDRED SEVENTEEN MILLION DOLLARS
payable on each Payment Date in an amount equal to the aggregate amount, if any,
payable from the Note Distribution Account in respect of principal on the Class
A-1 Notes pursuant to Section 3.01 and Section 4.07 or 4.08 of the Indenture;
provided, however, that the entire unpaid principal amount of this Note shall be
due and payable on the November 2002 Payment Date (the "Class A-1 Final
Scheduled Maturity Date"). The Issuer will 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). Interest on this Note
A-1-1
will accrue for each Payment Date from the most recent Payment Date on which
interest has been paid to but excluding such current Payment Date; provided that
for the December 1999 Payment Date interest will accrue for the number of days
from and including November 24, 1999 to but excluding December 20, 1999.
Interest will be calculated 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.
The Notes are entitled to the benefits of a financial guaranty insurance
policy (the "Note Policy") issued by MBIA Insurance Corporation (the "Insurer"),
pursuant to which the Insurer has unconditionally guaranteed payments of the
Noteholders' Interest Payment Amount on each Payment Date and the Outstanding
Amount on the related Final Scheduled Maturity Date, all as more fully set forth
in the Indenture.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note shall
not be entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
A-1-2
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.
FLAGSHIP AUTO RECEIVABLES OWNER TRUST 1999-2
By: FIRST UNION NATIONAL BANK, not in its
individual capacity, but solely as Owner Trustee
By:
--------------------------------------------
Name:
Title:
A-1-3
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-1 6.420% Asset-Backed Notes (herein called the "Class
A-1 Notes"), all issued under an Indenture dated as of November 1, 1999 (such
indenture, as supplemented or amended, is herein called the "Indenture"), among
the Issuer, Flagship Credit Corporation, as Servicer (the "Servicer") and Xxxxxx
Trust and Savings Bank, as indenture trustee (the "Indenture Trustee", which
term includes any successor Indenture Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights and obligations thereunder of the Issuer, the
Indenture Trustee and the Holders of the Notes. The Notes are subject to all
terms of the Indenture. All terms used in this Note that are defined in the
Indenture, supplemented or amended, shall have the meanings assigned to them in
or pursuant to the Indenture, as so supplemented or amended.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class
A-4 Notes (together, 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 Class A-1 Notes will be payable on each Payment Date in an
amount described on the face hereof. "Payment Date" means the eighteenth day of
each month, or, if any such date is not a Business Day, the next succeeding
Business Day, commencing on December 20, 1999.
As described above, the entire unpaid principal amount of this Note shall
be due and payable on the earlier of the Class A-1 Final Scheduled Maturity Date
and the Redemption Date, if any, pursuant to Section 12. 01 of the Indenture.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable (i) on the date on which an Event of Default shall have
occurred and be continuing so long as an Insurer Default shall not have occurred
and be continuing or (ii) if an Insurer Default shall have occurred and be
continuing, 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 at
least 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 7.02 of the
Indenture. All principal payments on the Class A-1 Notes shall be made pro rata
to the Class A-1 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 Holder of this Note (or one or more Predecessor Notes) in 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
A-1-4
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 registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not rated 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
Holder hereof as of the Record Date preceding such Payment Date by notice mailed
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 Chicago, Illinois.
The Issuer shall pay interest on overdue installments of interest at the
Class A-1 Interest Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed pursuant to Section
12.01 of the Indenture, in whole, but not in part, at the option of the Seller
(with the consent of the Insurer under certain circumstances), on any Payment
Date on or after the date on which the Outstanding Amount is less than or equal
to 10% of the initial aggregate principal amount of the Notes.
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, (i) 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 his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar which requirements
include membership or participation in Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Exchange Act, and (ii) accompanied by such other
documents as the Indenture Trustee may require, 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 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 Seller, the Servicer, the Depositor, 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 or employee of the Issuer, the Seller, the Servicer,
the Depositor, the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Seller, the
Servicer, the Depositor, the Special Member, the Owner Trustee or the Indenture
Trustee or of any successor or assign of the Issuer, the Seller,
A-1-5
the Servicer, the Depositor, the Special Member, 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.
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 will not at any time
institute against the Issuer, the Seller, the Special Member or the Depositor or
join in any institution against the Issuer, the Seller, the Special Member or
the Depositor of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings, under any United States Federal
or state bankruptcy or similar law in connection with any obligations relating
to the Notes, the Indenture or the Transaction Documents.
Prior to the due presentment for registration of transfer of this Note, the
Issuer, the Indenture Trustee and the Insurer and any agent of the Issuer, the
Indenture Trustee or the Insurer 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 neither the Issuer, the Indenture Trustee nor any
such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Insurer and of the Holders of Notes
representing a majority of the Outstanding Amount of all Notes at the time
Outstanding. The Indenture also 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 of more Predecessor Notes) shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of Holders of the
Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the Issuer
under the Indenture.
A-1-6
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Indenture Trustee and the
Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as provided
in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the laws
of the State of New York, without reference to its conflict of law provisions,
and the obligations, rights and remedies of the parties hereunder and thereunder
shall be determined in accordance with such laws.
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 indenture or the Transaction Documents, neither the Owner
Trustee in its individual capacity, any owner of a beneficial interest in the
Issuer, nor any of their respective partners, beneficiaries, agents, officers,
directors, employees or successors or assigns shall be personally liable for,
nor shall recourse be had to any of them for, the payment of principal of or
interest on, or performance of, or omission to perform, any of the covenants,
obligations or indemnifications contained in this Note or the Indenture, it
being expressly understood that said covenants, obligations and indemnifications
have been made by the Owner Trustee for the sole purposes of binding the
interests of the Owner Trustee in the assets of the Issuer. The Holder of this
Note by the acceptance hereof agrees that except as expressly provided in the
Indenture or the Transaction Documents, in the case of an Event of Default under
the Indenture, the Holder shall have no claim against any of the foregoing for
any deficiency, loss or claim therefrom; provided, however, that nothing
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
A-1-7
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: (1)
------------------ ------------------------------
Signature Guaranteed:
--------
(1) NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
A-1-8
EXHIBIT A-2
[Form of Class A-2 Note]
REGISTERED $60,000,000
No. R-A-2
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. 33841F AB 6
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.
FLAGSHIP AUTO RECEIVABLES OWNER TRUST 1999-2
CLASS A-2 6.705% ASSET-BACKED NOTES
Flagship Auto Receivables Owner Trust 1999-2 (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of SIXTY MILLION DOLLARS payable on each
Payment Date in an amount equal to the aggregate amount, if any, payable from
the Note Distribution Account in respect of principal on the Class A-2 Notes
pursuant to Section 3.01 and Section 4.07 or 4.08 of the Indenture provided,
however, that the entire unpaid principal amount of this Note shall be due and
payable on the January 2004 Payment Date (the "Class A-2 Final Scheduled
Maturity Date"). The Issuer will 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). Interest on this Note will accrue for each
Payment Date from the most recent Payment Date on which interest has been paid
to but excluding such current Payment
A-2-1
Date; provided that for the December 1999 Payment Date interest will accrue for
the number of days from and including November 24, 1999 to but excluding
December 20, 1999 (assuming that there are 30 days in each month of the year).
Interest will be calculated 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.
The Notes are entitled to the benefits of a financial guaranty insurance
policy (the "Note Policy") issued by MBIA Insurance Corporation (the "Insurer"),
pursuant to which the Insurer has unconditionally guaranteed payments of the
Noteholders' Interest Payment Amount on each Payment Date and the Outstanding
Amount on the related Final Scheduled Maturity Date, all as more fully set forth
in the Indenture.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note shall
not be entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
A-2-2
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.
FLAGSHIP AUTO RECEIVABLES OWNER
TRUST 1999-2
By: FIRST UNION NATIONAL BANK, not in its
individual capacity, but solely as Owner Trustee
By:
-----------------------------------------
Name:
Title:
A-2-3
(REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-2 6.705% Asset-Backed Notes (herein called the "Class
A-2 Notes"), all issued under an Indenture dated as of November 1, 1999 (such
indenture, as supplemented or amended, is herein called the "Indenture"), among
the Issuer, Flagship Credit Corporation, as Servicer (the "Servicer") and Xxxxxx
Trust and Savings Bank, as indenture trustee (the "Indenture Trustee", which
term includes any successor Indenture Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights and obligations thereunder of the Issuer, the
Indenture Trustee and the Holders of the Notes. The Notes are subject to all
terms of the Indenture. All terms used in this Note that are defined in the
Indenture, as supplemented or amended, shall have the meanings assigned to them
in or pursuant to the Indenture, as so supplemented or amended.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class
A-4 Notes (together, 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 Class A-2 Notes will be payable on each Payment Date in an
amount described on the face hereof. "Payment Date" means the eighteenth day of
each month, or, if any such date is not a Business Day, the next succeeding
Business Day, commencing on December 20, 1999.
As described above, the entire unpaid principal amount of this Note shall
be due and payable on the earlier of the Class A-2 Final Scheduled Maturity Date
and the Redemption Date, if any, pursuant to Section 12.01 of the Indenture.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable (i) on the date on which an Event of Default shall have
occurred and be continuing so long as an Insurer Default shall not have occurred
and be continuing or (ii) if an Insurer Default shall have occurred and be
continuing, 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 at
least 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 7.02 of the
Indenture. All principal payments on the Class A-2 Notes shall be made pro rata
to the Class A-2 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 Holder of this Note (or one or more Predecessor Notes) in 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
A-2-4
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 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
Holder hereof as of the Record Date preceding such Payment Date by notice mailed
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 Chicago, Illinois.
The Issuer shall pay interest on overdue installments of interest at the
Class A-2 Interest Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed pursuant to Section
12.01 of the Indenture, in whole, but not in part, at the option of the Seller
(with the consent of the Insurer under certain circumstances), on any Payment
Date on or after the date on which the Outstanding Amount is less than or equal
to 10% of the initial aggregate principal amount of the Notes.
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, (i) 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 his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar which requirements
include membership or participation in Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Exchange Act, and (ii) accompanied by such other
documents as the Indenture Trustee may require, 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 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 Seller, the Servicer, the Depositor, 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 or employee of the Issuer, the Seller, the Servicer,
the Depositor, the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Seller,
A-2-5
the Servicer, the Depositor, the Special Member, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Issuer, the Seller, the
Servicer, the Depositor, the Special Member, 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.
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 will not at any time
institute against the Issuer, the Seller, the Special Member or the Depositor or
join in any institution against the Issuer, the Seller, the Special Member or
the Depositor of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings, under any United States Federal
or state bankruptcy or similar law in connection with any obligations relating
to the Notes, the Indenture or the Transaction Documents.
Prior to the due presentment for registration of transfer of this Note, the
Issuer, the Indenture Trustee and the Insurer and any agent of the Issuer, the
Indenture Trustee or the Insurer 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 neither the Issuer, the Indenture Trustee nor any
such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Insurer and of the Holders of Notes
representing a majority of the Outstanding Amount of all Notes at the time
Outstanding. The Indenture also 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.
A-2-6
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Indenture Trustee and the
Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as provided
in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the laws
of the State of New York, without reference to its conflict of law provisions,
and the obligations, rights and remedies of the parties hereunder and thereunder
shall be determined in accordance with such laws.
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 Indenture or the Transaction Documents, neither the Owner
Trustee in its individual capacity, any owner of a beneficial interest in the
Issuer, nor any of their respective partners, beneficiaries, agents, officers,
directors, employees or successors or assigns shall be personally liable for,
nor shall recourse be had to any of them for, the payment of principal of or
interest on, or performance of, or omission to perform, any of the covenants,
obligations or indemnifications contained in this Note or the Indenture, it
being expressly understood that said covenants, obligations and indemnifications
have been made by the Owner Trustee for the sole purposes of binding the
interests of the Owner Trustee in the assets of the Issuer. The Holder of this
Note by the acceptance hereof agrees that except as expressly provided in the
Indenture or the Transaction Documents, in the case of an Event of Default under
the Indenture, the Holder shall have no claim against any of the foregoing for
any deficiency, loss or claim therefrom; provided, however, that nothing
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
A-2-7
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: (2)
------------------ -----------------------------
Signature Guaranteed:
--------
(2) NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
A-2-8
EXHIBIT A-3
[Form of Class A-3 Note]
REGISTERED $43,000,000
No. R-A-3
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. 33841F AC 4
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.
FLAGSHIP AUTO RECEIVABLES OWNER TRUST 1999-2
CLASS A-3 6.835% ASSET-BACKED NOTES
Flagship Auto Receivables Owner Trust 1999-2 (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of FORTY THREE MILLION DOLLARS payable on
each Payment Date in an amount equal to the aggregate amount, if any, payable
from the Note Distribution Account in respect of principal on the Class A-3
Notes pursuant to Section 3.01 and Section 4.07 or 4.08 of the Indenture
provided, however, that the entire unpaid principal amount of this Note shall be
due and payable on the November 2004 Payment Date (the "Class A-3 Final
Scheduled Maturity Date"). The Issuer will 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). Interest on this Note will
accrue
A-3-1
for each Payment Date from the most recent Payment Date on which interest has
been paid to but excluding such current Payment; provided that for the December
1999 Payment Date interest will accrue for the number of days from and including
November 24, 1999 to but excluding December 20, 1999 (assuming that there are 30
days in each month of the year). Interest will be calculated 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.
The Notes are entitled to the benefits of a financial guaranty insurance
policy (the "Note Policy") issued by MBIA Insurance Corporation (the "Insurer"),
pursuant to which the Insurer has unconditionally guaranteed payments of the
Noteholders' Interest Payment Amount on each Payment Date and the Outstanding
Amount on the related Final Scheduled Maturity Date, all as more fully set forth
in the Indenture.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note shall
not be entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
A-3-2
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.
FLAGSHIP AUTO RECEIVABLES OWNER
TRUST 1999-2
By: FIRST UNION NATIONAL BANK, not in its
individual capacity, but solely as Owner Trustee
By:
--------------------------------------------
Name:
Title:
A-3-3
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-3 6.835% Asset-Backed Notes (herein called the "Class
A-3 Notes"), all issued under an Indenture dated as of March 1, 1999 (such
indenture, as supplemented or amended, is herein called the "Indenture"), among
the Issuer, Flagship Credit Corporation, as Servicer (the "Servicer") and Xxxxxx
Trust and Savings Bank, as indenture trustee (the "Indenture Trustee", which
term includes any successor Indenture Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights and obligations thereunder of the Issuer, the
Indenture Trustee and the Holders of the Notes. The Notes are subject to all
terms of the Indenture. All terms used in this Note that are defined in the
Indenture, as supplemented or amended, shall have the meanings assigned to them
in or pursuant to the Indenture, as so supplemented or amended.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class
A-4 Notes (together, 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 Class A-3 Notes will be payable on each Payment Date in an
amount described on the face hereof. "Payment Date" means the eighteenth day of
each month, or, if any such date is not a Business Day, the next succeeding
Business Day, commencing on December 20, 1999.
As described above, the entire unpaid principal amount of this Note shall
be due and payable on the earlier of the Class A-3 Final Scheduled Maturity Date
and the Redemption Date, if any, pursuant to Section 12.01 of the Indenture.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable (i) on the date on which an Event of Default shall have
occurred and be continuing so long as an Insurer Default shall not have occurred
and be continuing or (ii) if an Insurer Default shall have occurred and be
continuing, 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 at
least 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 7.02 of the
Indenture. All principal payments on the Class A-3 Notes shall be made pro rata
to the Class A-3 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 Holder of this Note (or one or more Predecessor Notes) in 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
A-3-4
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 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
Holder hereof as of the Record Date preceding such Payment Date by notice mailed
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 Chicago, Illinois.
The Issuer shall pay interest on overdue installments of interest at the
Class A-3 Interest Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed pursuant to Section
12.01 of the Indenture, in whole, but not in part, at the option of the Seller
(with the consent of the Insurer under certain circumstances), on any Payment
Date on or after the date on which the Outstanding Amount is less than or equal
to 10% of the initial aggregate principal amount of the Notes.
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, (i) 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 his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar which requirements
include membership or participation in Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Exchange Act, and (ii) accompanied by such other
documents as the Indenture Trustee may require, 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 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 Seller, the Servicer, the Depositor, 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 or employee of the Issuer, the Seller, the Servicer,
the Depositor, the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Seller, the
Servicer, the Depositor, the Special Member, the Owner Trustee or the Indenture
Trustee or of any successor or assign of the Issuer, the Seller,
A-3-5
the Servicer, the Depositor, the Special Member, 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.
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 will not at any time
institute against the Issuer, the Seller, the Special Member or the Depositor or
join in any institution against the Issuer, the Seller, the Special Member or
the Depositor of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings, under any United States Federal
or state bankruptcy or similar law in connection with any obligations relating
to the Notes, the Indenture or the Transaction Documents.
Prior to the due presentment for registration of transfer of this Note, the
Issuer, the Indenture Trustee and the Insurer and any agent of the Issuer, the
Indenture Trustee or the Insurer 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 neither the Issuer, the Indenture Trustee nor any
such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Insurer and of the Holders of Notes
representing a majority of the Outstanding Amount of all Notes at the time
Outstanding. The Indenture also 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.
A-3-6
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Indenture Trustee and the
Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as provided
in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the laws
of the State of New York, without reference to its conflict of law provisions,
and the obligations, rights and remedies of the parties hereunder and thereunder
shall be determined in accordance with such laws.
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 Indenture or the Transaction Documents, neither the Owner
Trustee in its individual capacity, any owner of a beneficial interest in the
Issuer, nor any of their respective partners, beneficiaries, agents, officers,
directors, employees or successors or assigns shall be personally liable for,
nor shall recourse be had to any of them for, the payment of principal of or
interest on, or performance of, or omission to perform, any of the covenants,
obligations or indemnifications contained in this Note or the Indenture, it
being expressly understood that said covenants, obligations and indemnifications
have been made by the Owner Trustee for the sole purposes of binding the
interests of the Owner Trustee in the assets of the Issuer. The Holder of this
Note by the acceptance hereof agrees that except as expressly provided in the
Indenture or the Transaction Documents, in the case of an Event of Default under
the Indenture, the Holder shall have no claim against any of the foregoing for
any deficiency, loss or claim therefrom; provided, however, that nothing
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
A-3-7
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: (3)
-------------------------- -------------------------------
Signature Guaranteed:
--------
(3) NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
A-3-8
EXHIBIT A-4
[Form of Class A-4 Note]
REGISTERED $30,000,000
No. R-A-4
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. 33841F AD 2
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.
FLAGSHIP AUTO RECEIVABLES OWNER TRUST 1999-2
CLASS A-4 6.900% ASSET-BACKED NOTES
Flagship Auto Receivables Owner Trust 1999-2 (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of [THIRTY MILLION DOLLARS] payable on
each Payment Date in an amount equal to the aggregate amount, if any, payable
from the Note Distribution Account in respect of principal on the Class A-4
Notes pursuant to Section 3.01 of the Indenture and Section 4.07 or 4.08 of the
Indenture, provided, however, that the entire unpaid principal amount of this
Note shall be due and payable on the May 2006 Payment Date (the "Class A-4 Final
Scheduled Maturity Date"). The Issuer will 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). Interest on this Note will
accrue for each Payment Date from the most recent Payment Date on which interest
has been paid to but excluding such
A-4-1
current Payment Date; provided that for the December 1999 Payment Date interest
will accrue for the number of days from and including November 24, 1999 to but
excluding December 20, 1999 (assuming that there are 30 days in each month of
the year). Interest will be calculated 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.
The Notes are entitled to the benefits of a financial guaranty insurance
policy (the "Note Policy") issued by MBIA Insurance Corporation (the "Insurer"),
pursuant to which the Insurer has unconditionally guaranteed payments of the
Noteholders' Interest Payment Amount on each Payment Date and the Outstanding
Amount on the related Final Scheduled Maturity Date, all as more fully set forth
in the Indenture.
Reference is made to the farther provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note shall
not be entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
A-4-2
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.
FLAGSHIP AUTO RECEIVABLES OWNER TRUST 1999-2
By: FIRST UNION NATIONAL BANK, not in its individual
capacity, but solely as Owner Trustee
By:
--------------------------------------------
Name:
Title:
A-4-3
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-4 6.900% Asset-Backed Notes (herein called the "Class
A-4 Notes"), all issued under an Indenture dated as of March 1, 1999 (such
indenture, as supplemented or amended, is herein called the "Indenture"), among
the Issuer, Flagship Credit Corporation, as Servicer (the "Servicer") and Xxxxxx
Trust and Savings Bank, as indenture trustee (the "Indenture Trustee", which
term includes any successor Indenture Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights and obligations thereunder of the Issuer, the
Indenture Trustee and the Holders of the Notes. The Notes are subject to all
terms of the Indenture. All terms used in this Note that are defined in the
Indenture, as supplemented or amended, shall have the meanings assigned to them
in or pursuant to the Indenture, as so supplemented or amended.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class
A-4 Notes (together, 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 Class A-4 Notes will be payable on each Payment Date in an
amount described on the face hereof. "Payment Date" means the eighteenth day of
each month, or, if any such date is not a Business Day, the next succeeding
Business Day, commencing on December 20, 1999.
As described above, the entire unpaid principal amount of this Note shall
be due and payable on the earlier of the Class A-4 Final Scheduled Maturity Date
and the Redemption Date, if any, pursuant to Section 12.01 of the Indenture.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable (i) on the date on which an Event of Default shall have
occurred and be continuing so long as an Insurer Default shall not have occurred
and be continuing or (ii) if an Insurer Default shall have occurred and be
continuing, 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 at
least 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 7.02 of the
Indenture. All principal payments on the Class A-4 Notes shall be made pro rata
to the Class A-4 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 Holder of this Note (or one or more Predecessor Notes) in 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
A-4-4
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 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
Holder hereof as of the Record Date preceding such Payment Date by notice mailed
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 Chicago, Illinois.
The Issuer shall pay interest on overdue installments of interest at the
Class A-4 Interest Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed pursuant to Section
12.01 of the Indenture, in whole, but not in part, at the option of the Seller
(with the consent of the Insurer under certain circumstances), on any Payment
Date on or after the date on which the Outstanding Amount is less than or equal
to 10% of the initial aggregate amount of the Notes.
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, (i) 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 his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar which requirements
include membership or participation in Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Exchange Act, and (ii) accompanied by such other
documents as the Indenture Trustee may require, 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 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 Seller, the Servicer, the Depositor, 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 or employee of the Issuer, the Seller, the Servicer,
the Depositor, the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Seller, the
Servicer, the Depositor, the Special Member, the Owner Trustee or the Indenture
Trustee or of any successor or assign of the Issuer, the Seller,
A-4-5
the Servicer, the Depositor, the Special Member, 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.
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 will not at any time
institute against the Issuer, the Seller, the Special Member or the Depositor or
join in any institution against the Issuer, the Seller, the Special Member or
the Depositor of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings, under any United States Federal
or state bankruptcy or similar law in connection with any obligations relating
to the Notes, the Indenture or the Transaction Documents.
Prior to the due presentment for registration of transfer of this Note, the
Issuer, the Indenture Trustee and the Insurer and any agent of the Issuer, the
Indenture Trustee or the Insurer 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 neither the Issuer, the Indenture Trustee nor any
such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Insurer and of the Holders of Notes
representing a majority of the Outstanding Amount of all Notes at the time
Outstanding. The Indenture also 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.
A-4-6
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Indenture Trustee and the
Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as provided
in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the laws
of the State of New York, without reference to its conflict of law provisions,
and the obligations, rights and remedies of the parties hereunder and thereunder
shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall after 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 Indenture or the Transaction Documents, neither the Owner
Trustee in its individual capacity, any owner of a beneficial interest in the
Issuer, nor any of their respective partners, beneficiaries, agents, officers,
directors, employees or successors or assigns shall be personally liable for,
nor shall recourse be had to any of them for, the payment of principal of or
interest on, or performance of, or omission to perform, any of the covenants,
obligations or indemnifications contained in this Note or the Indenture, it
being expressly understood that said covenants, obligations and indemnifications
have been made by the Owner Trustee for the sole purposes of binding the
interests of the Owner Trustee in the assets of the Issuer. The Holder of this
Note by the acceptance hereof agrees that except as expressly provided in the
Indenture or the Transaction Documents, in the case of an Event of Default under
the Indenture, the Holder shall have no claim against any of the foregoing for
any deficiency, loss or claim therefrom; provided, however, that nothing
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
A-4-7
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: (4)
-------------------------- -----------------------------
Signature Guaranteed:
--------
(4) NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
A-4-8
EXHIBIT B
CERTIFICATE OF AUTHENTICATION
This is one of the Class Notes referred to in the within-mentioned
Indenture.
Date: November 24, 1999
XXXXXX TRUST AND SAVINGS BANK,
as Indenture Trustee
By:
------------------------------------
Name:
Title:
B-1
EXHIBIT C
DOCUMENT RELEASE FORM
__________, 199__
Xxxxxx Trust and Savings Bank
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Re: Indenture dated as of November 1, 1999 by and among Flagship Auto
Receivables Owner Trust 1999-2, Xxxxxx Trust and Savings Bank and
Flagship Credit Corporation (the "Indenture")
---------------------------------------------
Ladies & Gentlemen:
In connection with the servicing and administration of the pool of Loans
held by you as Indenture Trustee for the Noteholders under the Indenture, we
request the release, and acknowledge receipt of the (Loan Files [specify
documents]) for the Loan described below, for the reason indicated.
Borrower's Name, Address & Zip Code
Borrower's Loan Number:
Reason for Requesting Documents (check one)
______ Loan Repurchased or Substituted
______ Loan Paid in Full
______ Loan Liquidated
______ Loan in Foreclosure
______ Other, including release of collateral contemplated by the Servicing
______ Agreement or in Loan Documents (explain):
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
If the Loan is being paid in full or liquidated, and if all or part of the
Loan File was previously released to us, please release to us our previous
receipt on file with you, as well as any additional documents in your possession
relating to the above specified Loan.
C-1
If the Loan is in Foreclosure the box "Other (explain)" above is checked,
upon our return of all of the above documents to you as Indenture Trustee,
please acknowledge your receipt by signing in the space indicated below and
returning this form.
SERVICER:
FLAGSHIP CREDIT CORPORATION
By
------------------------------------
Name:
Title:
Documents Receipt Acknowledged:
XXXXXX TRUST AND SAVINGS BANK,
as Indenture Trustee
By
-------------------------------------
Name:
Title:
C-2
