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INDENTURE
between
RELIANCE AUTO RECEIVABLES CORPORATION
and
XXXXXX TRUST AND SAVINGS BANK
as Trustee
Dated as of November 20, 1996
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Table of Contents
Page
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.1. Definitions............................................ 3
SECTION 1.2. Rules of Construction.................................. 9
ARTICLE II
The Notes
SECTION 2.1. Form................................................... 10
SECTION 2.2. Execution, Authentication and Delivery................. 10
SECTION 2.3. Temporary Notes........................................ 11
SECTION 2.4. Registration; Registration of Transfer and Exchange.... 11
SECTION 2.5. Mutilated, Destroyed, Lost or Stolen Notes............. 13
SECTION 2.6. Persons Deemed Owners.................................. 14
SECTION 2.7. Payment of Principal and Interest; Defaulted Interest.. 14
SECTION 2.8. Cancellation........................................... 15
SECTION 2.9. Release of Collateral.................................. 15
SECTION 2.10. Book-Entry Notes....................................... 16
SECTION 2.11. Notices to Clearing Agency............................. 17
SECTION 2.12. Definitive Notes....................................... 17
SECTION 2.13. Certain Transfer Restrictions.......................... 17
SECTION 2.14. Legending of Notes..................................... 19
SECTION 2.15. Conditions to Issuance of Notes........................ 20
SECTION 2.16. Custody of the Receivable Files........................ 21
ARTICLE III
Covenants
SECTION 3.1. Payment of Principal and Interest...................... 21
SECTION 3.2. Maintenance of Office or Agency........................ 22
SECTION 3.3. Money for Payments To Be Held in Trust................. 22
SECTION 3.4. Existence.............................................. 24
SECTION 3.5. Protection of the Trust Estate......................... 24
SECTION 3.6. Opinions as to the Trust Estate........................ 25
SECTION 3.7. Performance of Obligations; Servicing of Receivables... 26
SECTION 3.8. Negative Covenants..................................... 27
SECTION 3.9. Annual Statement as to Compliance...................... 28
Page
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain Terms.... 28
SECTION 3.11. Successor or Transferee................................ 30
SECTION 3.12. No Other Business...................................... 31
SECTION 3.13. No Borrowing........................................... 31
SECTION 3.14. Servicer's Obligations; Related Documents.............. 31
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities...... 31
SECTION 3.16. Capital Expenditures................................... 31
SECTION 3.17. Notice of Events of Default............................ 31
SECTION 3.18. Further Instruments and Acts........................... 32
SECTION 3.19. Compliance with Laws................................... 32
SECTION 3.20. Tax Treatment.......................................... 32
SECTION 3.21. Investment Company Act................................. 32
SECTION 3.22. Liens.................................................. 32
SECTION 3.23. Conduct of Business.................................... 32
SECTION 3.24. Representations and Warranties......................... 33
ARTICLE IV
Satisfaction and Discharge
SECTION 4.1. Satisfaction and Discharge of Indenture................ 36
SECTION 4.2. Payment of Moneys Held by Paying Agent................. 36
SECTION 4.3. Release of Trust Estate................................ 37
ARTICLE V
Remedies
SECTION 5.1. Events of Default...................................... 37
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment..... 38
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement
by Trustee; Authority of Controlling Party............. 40
SECTION 5.4. Remedies; Priorities................................... 42
SECTION 5.5. Optional Preservation of the Receivables............... 44
SECTION 5.6. Limitation of Suits.................................... 45
SECTION 5.7. Unconditional Rights of Noteholders To Receive
Principal and Interest................................. 45
SECTION 5.8. Restoration of Rights and Remedies..................... 46
SECTION 5.9. Rights and Remedies Cumulative......................... 46
SECTION 5.10. Delay or Omission Not a Waiver......................... 46
SECTION 5.11. Control by Noteholders................................. 46
SECTION 5.12. Waiver of Past Defaults................................ 47
SECTION 5.13. Undertaking for Costs.................................. 47
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SECTION 5.14. Waiver of Stay or Extension Laws....................... 48
SECTION 5.15. Action on Notes........................................ 48
SECTION 5.16. Performance and Enforcement of Certain Obligations..... 48
ARTICLE VI
The Trustee
SECTION 6.1. Duties of the Trustee.................................. 49
SECTION 6.2. Rights of Trustee...................................... 52
SECTION 6.3. Individual Rights of the Trustee....................... 53
SECTION 6.4. Trustee's Disclaimer................................... 53
SECTION 6.5. Notice of Defaults..................................... 53
SECTION 6.6. Reports by Trustee to the Holders...................... 53
SECTION 6.7. Compensation, Reimbursement and Indemnity.............. 54
SECTION 6.8. Replacement of the Trustee............................. 55
SECTION 6.9. Successor Trustee by Merger............................ 56
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee.......... 57
SECTION 6.11. Corporate Trustee Required; Eligibility................ 58
SECTION 6.12. Appointment and Powers................................. 59
SECTION 6.13. Limitation on Liability................................ 59
SECTION 6.14. Reliance upon Documents................................ 60
SECTION 6.15. Representations and Warranties of the Trustee.......... 60
SECTION 6.16. Waiver of Setoffs...................................... 61
ARTICLE VII
Noteholders' Lists and Reports
SECTION 7.1. Issuer To Furnish Trustee Names and Addresses of
Noteholders............................................ 61
SECTION 7.2. Preservation of Information; Communications to
Noteholders............................................ 61
SECTION 7.3. Reports by Issuer...................................... 62
ARTICLE VIII
Accounts, Disbursements and Releases
SECTION 8.1. Collection of Money.................................... 62
SECTION 8.2. Collection Account and Spread Account.................. 62
SECTION 8.3. General Provisions Regarding Accounts.................. 63
SECTION 8.4. Release of Trust Estate................................ 63
SECTION 8.5. Opinion of Counsel..................................... 64
SECTION 8.6. Purchase of Receivables................................ 64
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Page
ARTICLE IX
Supplemental Indentures
SECTION 9.1. Supplemental Indentures Without Consent of Noteholders. 65
SECTION 9.2. Supplemental Indentures With Consent of Noteholders.... 66
SECTION 9.3. Execution of Supplemental Indentures................... 68
SECTION 9.4. Effect of Supplemental Indenture....................... 68
SECTION 9.5. Reference in Notes to Supplemental Indentures.......... 68
ARTICLE X
Redemption of Notes
SECTION 10.1. Redemption............................................. 69
SECTION 10.2. Form of Redemption Notice.............................. 69
SECTION 10.3. Notes Payable on Redemption Date....................... 69
ARTICLE XI
Miscellaneous
SECTION 11.1. Compliance Certificates and Opinions, etc.............. 70
SECTION 11.2. Form of Documents Delivered to Trustee................. 71
SECTION 11.3. Acts of Noteholders.................................... 72
SECTION 11.4. Notices, etc., to the Trustee, Issuer and Rating
Agencies............................................... 73
SECTION 11.5. Notices to Noteholders; Waiver......................... 73
SECTION 11.6. [Reserved]............................................. 74
SECTION 11.7. Effect of Headings and Table of Contents............... 74
SECTION 11.8. Successors and Assigns................................. 74
SECTION 11.9. Severability........................................... 74
SECTION 11.10. Benefits of Indenture.................................. 74
SECTION 11.11. Legal Holidays......................................... 75
SECTION 11.12. Governing Law.......................................... 75
SECTION 11.13. Counterparts........................................... 75
SECTION 11.14. Recording of Indenture................................. 75
SECTION 11.15. Trust Obligation....................................... 75
SECTION 11.16. No Petition............................................ 76
SECTION 11.17. Inspection............................................. 76
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Page
EXHIBITS
EXHIBIT A Form of Note
EXHIBIT B Form of Note Depository Agreement
EXHIBIT C Form of Section 3.9 Officers' Certificate
EXHIBIT D Purchaser Representation Letter (Non-Rule 144A)
EXHIBIT E Purchaser Representation Letter (Rule 144A)
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INDENTURE, dated as of November 20, 1996, between RELIANCE AUTO RECEIVABLES
CORPORATION, a Delaware corporation (the "Issuer"), and XXXXXX TRUST AND SAVINGS
BANK, an Illinois banking corporation, as trustee and not in its individual
capacity (the "Trustee").
Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Holders of the Issuer's 6.10% Asset Backed
Notes, Series 1996-A (each, a "Note"; and collectively, the "Notes") and the
Note Insurer.
As security for the payment and performance by the Issuer of the Secured
Obligations (as defined below), the Issuer has agreed to assign the Indenture
Collateral (as defined below) as collateral to the Trustee on behalf of the
Noteholders and the Note Insurer.
MBIA Insurance Corporation (the "Note Insurer") has issued and delivered a
financial guaranty insurance policy, dated as of the Closing Date (such policy,
together with the related endorsements, the "Policy"), pursuant to which the
Note Insurer guarantees certain scheduled payments on the Notes.
As an inducement to the Note Insurer to issue and deliver the Policy, the
Issuer has executed and delivered the Insurance and Indemnity Agreement, dated
as of the Closing Date (as amended from time to time, the "Insurance
Agreement"), between the Note Insurer, the Trustee, the Backup Servicer, the
Issuer and Reliance Acceptance Corporation.
As an additional inducement to the Note Insurer to issue the Policy, and as
security for the performance by the Issuer of the Secured Obligations, the
Issuer has agreed to assign the Indenture Collateral as collateral to the
Trustee for the benefit of the Note Insurer.
GRANTING CLAUSE
The Issuer hereby Grants to the Trustee at the Closing Date, on behalf of
and for the benefit of the Secured Parties to secure the performance of the
Secured Obligations, all of the Issuer's right, title and interest in, to and
under the following, whether now existing or hereafter arising or acquired
(collectively, the "Indenture Collateral"):
(a) the Receivables, all monies paid or payable thereon or in respect
thereof thereunder on or after the Cutoff Date, including all Liquidation
Proceeds and recoveries received with respect to such Receivables;
(b) the security interests in the Financed Vehicles granted by Obligors
pursuant to the Receivables and any other interest of the Issuer in the Financed
Vehicles and other property (including the right to receive future Liquidation
Proceeds) that secures any of the Receivables and that has been acquired by or
on behalf of the Issuer pursuant to the liquidation of such Receivable;
(c) the Insurance Policies and any proceeds from any Insurance Policies
relating to the Receivables, the Obligors or the related Financed Vehicles,
including rebates of premiums, all Collateral Insurance and any Force-Placed
Insurance relating to the Receivables or the related Financed Vehicles;
(d) all funds on deposit from time to time in the Collection Account and
the Spread Account and all investments therein and proceeds thereof (including
all income thereon);
(e) the Pooling and Servicing Agreement, including the right to cause
Reliance or the Servicer to purchase Receivables from the Issuer under certain
circumstances;
(f) the rights of Reliance and any Originator against Dealers with respect
to the Receivables or the related Financed Vehicles under the Dealer Agreements
and Dealer Assignments as the same may relate to the Receivables or the related
Financed Vehicles;
(g) the Receivables Purchase Agreement and the Subservicing Agreement;
(h) all items contained in the Receivable File related to each Receivable
and any and all other documents that Reliance, any Originator or the Servicer
keeps on file in accordance with its customary procedures relating to the
Receivables, the Obligors or the related Financed Vehicles; and
(i) all proceeds and investments of any of the foregoing, 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.
The foregoing Grant is made in trust to secure the payment of the Secured
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Obligations.
The Trustee, as Trustee on behalf of the Holders and for the benefit of the
Note Insurer, acknowledges such Grant, accepts the trusts under this Indenture
in accordance with this Indenture and agrees to perform its duties required in
this Indenture to the end that the interests of the Holders of the Notes may be
adequately and effectively protected.
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.1. Definitions. (a) Except as otherwise specified herein or as
the context may otherwise require, the following terms have the respective
meanings set forth below for all purposes of this Indenture:
"Act" has the meaning specified in Section 11.3(a).
"Authorized Officer" means, with respect to the Issuer, any officer of the
Issuer who is authorized to act for the Issuer in matters relating to the Issuer
and who is identified on the list of Authorized Officers delivered by the Issuer
to the Trustee and the Note Insurer on the Closing Date (as such list may be
modified or supplemented by the Issuer from time to time thereafter).
"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.
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act that has been designated as the
"Clearing Agency" for purposes of this Indenture.
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
"Closing Date" means November 20, 1996.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
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"Commission" shall mean the Securities and Exchange Commission.
"Corporate Trust Office" means the principal office of the Trustee at which
at any particular time its corporate trust business shall be administered, which
office at the date of the execution of this Indenture is located at 000 Xxxx
Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000; or at such other address as the Trustee
may designate from time to time by notice to the Noteholders, the Note Insurer
and the Issuer, or the principal corporate trust office of any successor Trustee
(the address of which the successor Trustee shall notify the Noteholders, the
Note Insurer and the Issuer).
"Default" means any event or circumstance that is, or with notice or the
lapse of time or both would become, an Event of Default.
"Definitive Notes" shall mean definitive, fully registered Notes. The
Definitive Notes shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods (with or without steel engraved
borders), all as determined by the officers executing such Notes, as evidenced
by their execution of such Notes.
"Event of Default" has the meaning specified in Section 5.1.
"Eligible Account" means (i) A segregated account or accounts maintained
with a depository institution or trust company whose long-term unsecured debt
obligations are rated "A+" by Standard & Poor's and "A1" by Moody's, or (ii) a
segregated trust account or accounts maintained with a Federal or state
chartered depository institution that is acceptable to the Note Insurer and
subject to regulation regarding fiduciary funds on deposit substantially similar
to 12 C.F.R. Section 9.10(b), or (iii) a trust account at the Trustee's
Corporate Trust Office, provided that such account shall be a segregated account
at any time at which the Trustee's long-term unsecured debt obligations are
rated below "BBB" by Standard & Poor's and provided that such Trustee is
acceptable to the Note Insurer.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Grant" means mortgage, pledge, bargain, sell, warrant, alienate, remise,
release, convey, assign, transfer, create and xxxxx x Xxxx upon and a security
interest in and right of set-off against, deposit, set over and confirm pursuant
to this Indenture, and other forms of the verb "to Grant" shall have correlative
meanings. A Grant of the Indenture 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,
4
collect, receive and give receipt for principal and interest payments in respect
of the Indenture 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.
"Holder" means the Person in whose name a Note is registered on the Note
Register.
"Indenture" means this Indenture as amended or supplemented from time to
time in accordance with the terms hereof.
"Indenture Collateral" has the meaning specified in the Granting Clause of
this Indenture.
"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, Reliance 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, Reliance or any Affiliate of any of the
foregoing Persons and (c) is not connected with the Issuer, any such other
obligor, Reliance 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 Trustee and the Note Insurer under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.1, made by
an Independent appraiser or other expert duly licensed and of recognized
standing appointed by an Issuer Order, 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 Purchasers" means BA Securities, Inc. and First Chicago Capital
Markets, Inc.
"Issuer" means Reliance Auto Receivables Corporation until a permitted
successor replaces it and, thereafter, means such successor.
"Issuer Order" and "Issuer Request" means a written order or request,
respectively, signed in the name of the Issuer by any one of its Authorized
Officers and delivered to the Trustee.
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"Note" is defined in the recitals. Each Note shall be substantially in the
form of Exhibit A.
"Note Depository Agreement" means the agreement between the Issuer, the
Trustee and The Depository Trust Company, as the initial Clearing Agency, dated
as of the Closing Date, substantially in the form of Exhibit B.
"Note Interest Rate" means 6.10% per annum, calculated on the basis of a
360-day year consisting of twelve 30-day months.
"Note Majority" means, as of any date of determination, Holders of Notes
representing more than 50% of the Note Balance.
"Note Owner" means, with respect to a Book-Entry Note, the Person who is
the owner of such Book-Entry Note, as reflected on the books of the Clearing
Agency, or on the books of a Person maintaining an account with the Clearing
Agency (directly as a Clearing Agency Participant or as an indirect participant,
in each case in accordance with the rules of the Clearing Agency and such
Clearing Agency Participant, as applicable).
"Note Register" and "Note Registrar" have the respective meanings specified
in Section 2.4.
"Note Voting Amount" means Holders of Notes representing at least two-
thirds of the Note Balance.
"Noteholder" means a Holder.
"Officers' Certificate" means a certificate signed by any two Authorized
Officers of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.1, and delivered to
the Trustee and the Note Insurer.
"Opinion of Counsel" means one or more written opinions of counsel (who
may, except as otherwise expressly provided in this Indenture, be Independent
counsel to the Issuer), which counsel and opinion shall be reasonably
satisfactory to the Trustee and the Controlling Party, and which shall comply
with any applicable requirements of Section 11.1 and shall be in form and
substance reasonably satisfactory to the Trustee and the Controlling Party.
6
"Outstanding" means, as of the date of determination, all Notes theretofore
authenticated and delivered under this Indenture except:
(i) Notes theretofore cancelled by the Note Registrar or delivered to
the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent in trust for the Holders of such Notes (provided, however,
that if such Notes are to be redeemed, notice of such redemption has been
duly given pursuant to this Indenture); and
(iii) Notes in exchange for or in lieu of other Notes that have been
authenticated and delivered pursuant to this Indenture unless proof
satisfactory to the 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
Note Insurer has been paid as subrogee hereunder or reimbursed pursuant to the
Insurance Agreement as evidenced by a written notice from the Note Insurer
delivered to the Trustee, and the Note Insurer shall be deemed to be the Holder
of such Notes to the extent of any payments thereon made by the Note Insurer;
and provided, further, that in determining whether the Holders of the requisite
Note Balance have given any request, demand, authorization, direction, notice,
consent or waiver hereunder or under any Related Document, Notes owned by the
Issuer, any other obligor upon the Notes, Reliance or any Affiliate of any of
the foregoing Persons shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the 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 Trustee actually knows to
be so owned shall be so disregarded. Notes so owned that have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Notes and that the pledgee is not the Issuer, any other obligor upon the Notes,
Reliance or any Affiliate of any of the foregoing Persons.
"Paying Agent" means the Trustee or any other Person that meets the
eligibility standards for the Trustee specified in Section 6.11 and, so long as
no Insurer Default shall have occurred and be continuing, is consented to by the
Note Insurer and is authorized by the Issuer to make the payments to and
distributions from the Collection Account, including payment of principal of or
interest on the
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Notes on behalf of the Issuer.
"Pooling and Servicing Agreement" means the Pooling and Servicing
Agreement, dated as of November 20, 1996, between the Issuer, Reliance, in its
individual capacity and as Servicer, and Xxxxxx Trust and Savings Bank, as
Trustee and as Backup Servicer.
"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 2.5 in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
"Proceeding" means any suit in equity, action at law or other judicial or
administrative proceeding.
"Purchaser Representation Letter" means a letter substantially in the form
of Exhibit D or Exhibit E.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given prior notice thereof and that each of the
Rating Agencies shall have notified the Servicer, the Note Insurer, the 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.
"Redemption Date" means the Payment Date specified by the Servicer pursuant
to Section 10.1.
"Redemption Price" means the aggregate unpaid principal amount of the
Notes, plus accrued and unpaid interest thereon to but excluding the related
Redemption Date.
"Registered Holder" means the Person in whose name a Note is registered on
the Note Register on the applicable Record Date.
"Rule 144A" means Rule 144A under the Securities Act.
"Secured Obligations" means all amounts and obligations that the Issuer may
at any time owe under this Indenture or any other Related Document to or on
behalf of the Note Insurer or the Trustee for the benefit of the Noteholders and
the Note Insurer.
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"Secured Parties" means the Trustee on behalf of the Noteholders and the
Note Insurer.
"Securities Act" means the Securities Act of 1933, as amended.
"State" means any one of the 50 states of the United States of America or
the District of Columbia.
"Termination Date" means the latest of:
(i) the expiration of the Policy and the return of the Policy to the
Note Insurer for cancellation; and
(ii) the date of full and indefeasible payment and performance of all
Secured Obligations.
"Trust Estate" means all the 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 Note Insurer
(including all property and interests Granted to the Trustee), including all
proceeds thereof.
"Trustee" means Xxxxxx Trust and Savings Bank, not in its individual
capacity but solely as Trustee under this Indenture, or any successor Trustee
under this Indenture acceptable to the Note Insurer.
"Trustee Fee" has the meaning assigned to such term in Section 6.7.
(b) Except as otherwise specified herein or as the context may otherwise
require, the capitalized terms used but not defined herein have the respective
meanings set forth in the Pooling and Servicing Agreement.
SECTION 1.2. Rules of Construction. Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles
as in effect on the date hereof;
(iii) "or" is not exclusive;
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(iv) "including" means "including, without limitation,"; and
(v) words in the singular include the plural and words in the plural
include the singular.
ARTICLE II
The Notes
SECTION 2.1. Form. The Notes, together with the Trustee's certificate of
authentication, shall be in substantially the forms set forth in Exhibit A, 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.
Each Note shall be dated the date of its authentication. The terms of the
Notes set forth in Exhibit A are part of the terms of this Indenture.
SECTION 2.2. Execution, Authentication and Delivery. 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.
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.
The Trustee shall upon satisfaction of the conditions set forth in Section
2.15 authenticate and deliver Notes for original issue in an aggregate principal
amount of $126,060,667. The Note Balance at any time may not exceed such amount.
Each Note shall be dated the date of its authentication. The Notes shall be
issuable as registered Notes in the minimum denomination of $250,000 and in
integral multiples of $1,000 in excess thereof; provided, however, that one Note
may be issued in an additional amount equal to any remaining portion of the
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original Note Balance.
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
Trustee by the manual signature of one of its authorized signatories, and such
certificate of authentication shall be conclusive evidence, and the only
evidence, that such Note has been duly authenticated and delivered hereunder.
SECTION 2.3. Temporary Notes. Pending the preparation of Definitive Notes,
the Issuer may execute, and upon receipt of an Issuer Order, the Trustee shall
authenticate and deliver, temporary Notes that are printed, lithographed,
typewritten, mimeographed or otherwise produced, of the tenor of the Definitive
Notes in lieu of which they are issued and with such variations not inconsistent
with this Indenture as the officers executing such Notes may determine, as
evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer will cause Definitive Notes to be
prepared without unreasonable delay or initially issued as Book-Entry Notes in
accordance with Sections 2.10 and 2.12. After the preparation of Definitive
Notes, the temporary Notes shall be exchangeable for Definitive Notes upon
surrender of the temporary Notes at the office or agency of the Issuer to be
maintained as provided in Section 3.2, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Notes, the Issuer shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
like principal amount of Definitive Notes of authorized denominations. Until so
exchanged, the temporary Notes shall in all respects be entitled to the same
benefits under this Indenture as Definitive Notes.
SECTION 2.4. Registration; Registration of Transfer and Exchange. The
Issuer shall cause to be kept a register (the "Note Register") in which, subject
to such reasonable regulations as it may prescribe, the Issuer shall provide for
the registration of Notes and the registration of transfers of Notes. The
Trustee shall be the "Note Registrar" for the purpose of registering Notes and
transfers of Notes as herein provided. Upon any resignation of any Note
Registrar, the Issuer shall promptly appoint a successor acceptable to the Note
Insurer or, if it elects not to make such an appointment, assume the duties of
the Note Registrar.
If a Person other than the Trustee is appointed by the Issuer as the Note
Registrar, the Issuer will give the Trustee and the Note Insurer prompt written
notice of the appointment of such Note Registrar and of the location, and any
change in the location, of the Note Register, and the Trustee and the Note
Insurer
11
shall have the right to inspect the Note Register at all reasonable times, to
obtain copies thereof, and to rely upon a certificate executed on behalf of the
Note Registrar by an Executive Officer thereof as to the names and addresses of
the Holders of the Notes and the principal amounts and number of such Notes.
Upon surrender for registration of transfer of any Note at the office or
agency of the Issuer to be maintained as provided in Section 3.2, if the
requirements of Section 8-401(1) of the UCC are met, the Issuer shall execute,
the Trustee shall authenticate and the Noteholder shall obtain from the Trustee,
in the name of the designated transferee or transferees, one or more new Notes
in any authorized denominations of a like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other new Notes in
any authorized denominations of a like aggregate principal amount, upon
surrender of the Notes to be exchanged at such office or agency. Whenever any
Notes are so surrendered for exchange, if the requirements of Section 8-401(1)
of the UCC are met, the Issuer shall execute, the Trustee shall authenticate and
the Noteholder shall obtain from the Trustee, the Notes that the Noteholder
making the exchange is entitled to receive.
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.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument of
transfer in form satisfactory to the Trustee duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing, with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in the Securities Transfer Agent's 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.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Issuer or the Trustee may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of Notes,
other than exchanges pursuant to Section 2.3 or 9.5 not involving any transfer.
Notwithstanding anything else to the contrary contained herein, the
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obligation of the Issuer to pay the principal of and interest on the Notes is
not a general obligation of the Issuer, but is limited solely to the Trust
Estate pledged hereunder and the Policy.
SECTION 2.5. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Trustee, or the Trustee receives evidence
to its satisfaction of the destruction, loss or theft of any Note, and (ii)
there is delivered to the Trustee and the Note Insurer such security or
indemnity as may be required by the Note Insurer, the Trustee and the Issuer to
hold the Issuer, the Trustee and the Note Insurer, respectively, harmless, then,
in the absence of notice to the Issuer, the Note Registrar or the Trustee that
such Note has been acquired by a bona fide purchaser, and provided that the
requirements of Section 8-405 of the UCC are met, the Issuer shall execute, and
upon its request the 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 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 Note Insurer and the Trustee
shall be entitled to recover such replacement Note (or such payment) from the
Person to whom it was delivered or any Person taking such replacement Note from
such Person to whom such replacement Note was delivered (or payment made) 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 Trustee in
connection therewith.
Upon the issuance of any replacement Note under this Section 2.5, the
Issuer or the Trustee may require the payment by the Holder of such Note of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other reasonable expenses (including the fees and
expenses of the Trustee) connected therewith.
Every replacement Note issued pursuant to this Section 2.5 in replacement
of any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any
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and all other Notes duly issued hereunder.
The provisions of this Section 2.5 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 2.6. Persons Deemed Owners. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Trustee, the Note Insurer
and any agent of the Issuer, the Trustee or the Note Insurer may treat the
Person in whose name any Note is registered as of the preceding Record Date as
the owner of such Note for the purpose of receiving payments of principal of and
interest, if any, on such Note and for all other purposes whatsoever, whether or
not such Note be overdue, and none of the Issuer, the Note Insurer, the Trustee
nor any agent thereof shall be affected by notice to the contrary.
SECTION 2.7. Payment of Principal and Interest; Defaulted Interest. (a) The
Notes shall accrue interest at the Note Interest Rate, and such interest shall
be payable on each Payment Date as and to the extent provided in Section 4.5 of
the Pooling and Servicing Agreement and Section 3.1 of this Indenture. Any
installment of interest or principal, if any, payable on any Note that is
punctually paid or duly provided for by the Issuer on the applicable Payment
Date shall be paid to the Person in whose name such Note (or one or more
Predecessor Notes) is registered on the related Record Date by check mailed
first-class, postage prepaid, to such Person's address as it appears on the Note
Register on such Record Date. However, unless Definitive Notes have been issued
to Note Owners, with respect to Notes registered on each 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. Notwithstanding the above, the final
installment of principal payable with respect to the Notes (and except for the
Redemption Price for any Note called for redemption pursuant to Section 10.1)
shall be payable as provided in Section 2.7(b)(ii). The funds represented by any
such checks returned undelivered shall be held in accordance with Section 3.3.
(b)(i) The principal of each Note shall be payable in installments on each
Payment Date (including the Final Scheduled Payment Date) as and to the extent
provided in this Indenture and in Section 4.5 of the Pooling and Servicing
Agreement. Notwithstanding the foregoing (and subject to the provisions of
Sections 5.1 and 5.2), the entire Note Balance shall be due and payable, ratably
to all Noteholders, on the date on which an Event of Default shall have occurred
and be continuing if the Note Insurer has declared the Notes to be immediately
due and payable so long as an Insurer Default shall not have occurred and be
continuing,
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or 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 if the Trustee
or a Note Majority has declared the Notes to be immediately due and payable in
the manner provided in Section 5.2.
(ii) The 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 no later than five days 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 10.2.
(c) If the Issuer defaults in a payment of interest on the Notes, the
Issuer shall pay, in any lawful manner, defaulted interest (plus interest on
such defaulted interest to the extent lawful) at the Note Interest Rate from the
Payment Date for which such payment is in default. The Issuer shall pay such
defaulted interest to the Persons who are Noteholders in accordance with Section
4.5 of the Pooling and Servicing Agreement.
(d) Promptly following the date on which all principal of and interest on
the Notes has been paid in full, the Trustee shall, if the Note Insurer has paid
any amount in respect of the Notes under the Policy that has not been reimbursed
to it, deliver such surrendered Notes to the Note Insurer.
SECTION 2.8. Cancellation. Subject to Section 2.7(d), all Notes surrendered
for payment, registration of transfer, exchange or redemption shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by the Trustee. Subject to Section 2.7(d), the
Issuer may at any time deliver to the Trustee for cancellation any Notes
previously authenticated and delivered hereunder that the Issuer may have
acquired in any manner whatsoever, and all Notes so delivered shall be promptly
cancelled by the Trustee. No Notes shall be authenticated in lieu of or in
exchange for any Notes cancelled as provided in this Section except as expressly
permitted by this Indenture. Subject to Section 2.7(d), all cancelled Notes may
be held or disposed of by the Trustee in accordance with its standard retention
or disposal policy as in effect at the time.
SECTION 2.9. Release of Collateral. Subject to Section 11.1 and except
15
(i) in connection with the discharge, in the ordinary course of business, by the
Servicer of its servicing obligations under Article III of the Pooling and
Servicing Agreement or (ii) in accordance with Sections 2.4, 2.5, 3.4(c), 3.7
and 8.1 of the Pooling and Servicing Agreement, the Trustee shall release
property from the Lien of this Indenture only upon receipt of an Issuer Request
accompanied by an Officers' Certificate and an Opinion of Counsel and the
written consent of the Note Insurer and the Trustee (acting at the written
instruction of Holders representing the Note Voting Amount).
SECTION 2.10. Book-Entry Notes. The Notes, upon original issuance, shall be
issued in the form of typewritten Notes representing the Book-Entry Notes, to be
delivered to The Depository Trust Company (the initial Clearing Agency), or its
custodian, 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 shall 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:
(i) this Section 2.10 shall be in full force and effect;
(ii) the Note Registrar and the Trustee may deal with the Clearing
Agency for all purposes (including the payment of principal of and interest
on the Notes) as the authorized representative of the Note Owners;
(iii) to the extent that this Section 2.10 conflicts with any other
provisions of this Indenture, this Section 2.10 shall control;
(iv) the rights of Note Owners shall be exercised only through the
Clearing Agency and shall be limited to those established by law and
agreements between such Note Owners and the Clearing Agency and/or the
Clearing Agency Participants pursuant to the Note Depository Agreement.
Unless and until Definitive Notes are issued, the Clearing Agency will make
book-entry transfers among the Clearing Agency Participants and receive and
transmit payments of principal of and interest on the Notes to such
Clearing Agency Participants; and
(v) whenever this Indenture requires or permits actions to be taken
based upon instructions or directions of Holders of Notes evidencing a
specified percentage of the Note Balance, the Clearing Agency shall be
deemed to represent such percentage only to the extent that it has received
instructions to such effect from Note Owners and/or Clearing Agency
Participants owning or representing, respectively, such required percentage
16
of the beneficial interest in the Notes and has delivered such instructions to
the Trustee.
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 have been issued to Note Owners, the Trustee shall give
all such notices and communications to the Clearing Agency.
SECTION 2.12. Definitive Notes. If (i) the Servicer advises the Trustee and
the Note Insurer in writing that the Clearing Agency is no longer willing or
able to properly discharge its responsibilities with respect to the Notes, and
the Servicer is unable to locate a qualified successor, (ii) the Servicer at its
option advises the Trustee and the Note Insurer in writing that it elects to
terminate the book-entry system through the Clearing Agency or (iii) after the
occurrence of an Event of Default or a Servicer Termination Event, Note Owners
representing the Note Majority advise 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 has undertaken
to notify all Note Owners and the Trustee of the occurrence of any such event
and of the availability of Definitive Notes to Note Owners requesting the same.
Upon surrender to the Trustee of the typewritten Notes representing the Book-
Entry Notes by the Clearing Agency, accompanied by registration instructions,
the Issuer shall execute, and the Trustee shall authenticate, the Definitive
Notes in accordance with the instructions of the Clearing Agency. None of the
Issuer, the Note Registrar or the 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 Trustee shall recognize the Holders of the Definitive Notes as
Noteholders.
SECTION 2.13. Certain Transfer Restrictions. No Note or any interest
therein may be sold or transferred (including by pledge or hypothecation) unless
such sale or transfer is (i) pursuant to a valid registration under the
Securities Act and any applicable state securities or "Blue Sky" laws, (ii)
pursuant to Rule 144A or (iii) pursuant to another exemption from the
registration requirements of the Securities Act and subject to the receipt by
the Trustee and the Note Insurer of a certification by the transferee and an
opinion of counsel (satisfactory to the Issuer and the Trustee and the Note
Insurer) to the effect that the transfer is in compliance with the Securities
Act, and, in each case, in compliance with any applicable state securities or
"Blue Sky" laws. Prior to any sale or transfer of the Notes or any interest
therein described in clause (ii) above, each prospective purchaser of the Notes
shall be deemed to have represented and agreed as follows:
17
(1) It is a qualified institutional buyer as defined in Rule 144A and is
acquiring the Notes or any interest therein for its own institutional account or
for the account of a qualified institutional buyer.
(2) It is aware the sale is being made in reliance on Rule 144A and it is
not acquiring the Notes or any interest therein with a view to, or for resale in
connection with, a distribution that would constitute a public offering within
the meaning of the Securities Act or a violation of the Securities Act, and
that, if in the future it decides to resell, pledge or otherwise transfer any
Notes or any interest therein, such Notes or any interest therein may be resold,
pledged or transferred only (a) to a person who the seller reasonably believes
is a qualified institutional buyer (as defined in Rule 144A) that purchases for
its own account or for the account of a qualified institutional buyer to whom
notice is given that the resale, pledge or transfer is being made in reliance on
Rule 144A, or (b) pursuant to another exemption from registration under the
Securities Act, in each case in accordance with any applicable securities laws
of any state of the United States.
(3) It understands that the Notes will bear a legend substantially as set
forth in Section 2.14.
(4) It acknowledges that the Trustee, the Issuer, the Note Insurer, the
Initial Purchasers and their affiliates, and others will rely upon the truth and
accuracy of the foregoing acknowledgements, representations and agreements. If
it is acquiring any Notes or any interest therein for the account of one or more
qualified institutional buyers, it represents that it has sole investment
discretion with respect to each such account and that it has full power to make
the foregoing acknowledgements, representations and agreements on behalf of each
such account.
(5) It either (a) is not acquiring the Notes or any interest therein with
the assets of any "plan" subject to Section 4975 of the Code or Title I of the
Employee Income Security Act of 1974, as amended ("ERISA"), or (b) its purchase
and holding of the Notes or any interest therein will not result in a nonexempt
prohibited transaction under Section 406(a) of ERISA or Section 4975 of the
Code, or (c) its purchase and holding of the Notes meets the requirements for an
exemption under Department of Labor Prohibited Transaction Exemption 95-60.
Each purchaser of the Notes or any interest therein will be required to
execute or to have executed a Purchaser Representation Letter substantially in
the form of Exhibit D or E, or may deliver such other representations (or an
opinion of counsel) as may be approved by the Issuer, the Note Insurer or the
Initial Purchasers, to the effect that such transfer may be made pursuant to an
exemption from registration under the Securities Act and any applicable state
securities laws.
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In addition, such prospective purchaser shall be responsible for providing
additional information or certification, as shall be reasonably requested by the
Trustee, the Issuer, the Note Insurer or the Initial Purchasers, to support the
truth and accuracy of the foregoing acknowledgements, representations and
agreements, it being understood that such additional information is not intended
to create additional restrictions on the transfer of the Notes or any interest
therein. Neither the Issuer nor the Trustee is obligated to register the Notes
under the Securities Act or any state securities laws.
In determining compliance with the transfer restrictions contained in this
Section 2.13, the Trustee may rely upon a written opinion of counsel (which may
include in-house counsel of the transferor), the cost of obtaining which shall
be an expense of the Holder of the Note to be transferred (or the transferee
thereof).
Any Noteholder desiring to effect a transfer of any Note (or interest
therein) shall, and does hereby agree to indemnify the Trustee, the Servicer,
the Note Insurer and the Issuer against any liability, cost or expense
(including attorneys' fees) that may result if the transfer is not exempt from
registration or is not made in accordance with Federal and state laws.
SECTION 2.14. Legending of Notes. Each Note shall bear a legend in
substantially the following form:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES OR "BLUE SKY"
LAWS. THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES THAT THIS NOTE MAY
BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) SO LONG AS THIS NOTE
IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A") TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A PURCHASING
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER
TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (2) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR (3) IN RELIANCE ON ANOTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUBJECT TO THE
RECEIPT BY THE TRUSTEE AND THE NOTE INSURER OF A CERTIFICATION OF THE
TRANSFEREE AND AN
19
OPINION OF COUNSEL (SATISFACTORY TO THE ISSUER AND THE TRUSTEE AND THE NOTE
INSURER) TO THE EFFECT THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES.
SECTION 2.15. Conditions to Issuance of Notes. The Notes to be issued on
the Closing Date may be executed by the Issuer and delivered to the Trustee for
authentication, and thereupon, the same shall be authenticated and delivered by
the Trustee upon Issuer Order and upon receipt by the Trustee of the following:
(a) the Receivables Purchase Agreement and the Pooling and Servicing
Agreement with the related Schedule of Receivables attached thereto;
(b) evidence of the delivery of the original executed counterpart of each
Receivable and each Lien Certificate to the Custodians;
(c) corporate resolutions of each of the Issuer, the Servicer and Reliance
authorizing, as applicable, the execution, delivery and performance of the
Related Documents and the transactions contemplated hereby and by the other
Related Documents, certified by the secretary or an assistant secretary of the
Issuer, the Servicer or Reliance, as applicable;
(d) a copy of an officially certified document, dated not more than 30 days
prior to the Closing Date, evidencing the due organization and good standing of
each of the Issuer, the Servicer and Reliance in their respective states of
incorporation;
(e) copies of the certificate or articles of incorporation and by-laws of
each of the Issuer, the Servicer and Reliance, certified by the secretary or an
assistant secretary of the Issuer, the Servicer and Reliance, as applicable;
(f) (i) evidence of filing with the Secretary of State of the State (and
the relevant county, if required by the applicable state law) of each
Originator's chief executive office of UCC-1 financing statements executed by
each such Originator, as debtor, and naming Reliance as secured party, and the
Receivables and the Other Conveyed Property as collateral; (ii) evidence of
filing with the Secretary of State of the State (and with the relevant county,
if required by the applicable state law) of Reliance's chief executive office of
UCC-1 financing statements executed by Reliance, as debtor, and naming the
Issuer as secured party, and the Receivables and the Other Conveyed Property as
collateral; and (iii) evidence of filing with the Secretary of State of the
State (and with the relevant county, if required by the
20
applicable state law) of the Issuer's chief executive office of UCC-1 financing
statements executed by the Issuer, as debtor, and naming the Trustee for the
benefit of the Noteholders and the Note Insurer as secured parties, and the
Trust Estate as collateral;
(g) a certificate listing the Servicing Officers as of the Closing Date;
(h) a note guaranty insurance policy for the Notes being issued by the Note
Insurer on such date;
(i) evidence of the deposit of the Spread Account Initial Deposit into the
Spread Account;
(j) evidence of the deposit by the Issuer into the Collection Account of
any amounts paid on the Receivables since the Cutoff Date; and
(k) such other documents as the Trustee or the Note Insurer may reasonably
require.
SECTION 2.16. Custody of the Receivable Files. The Custodians, on behalf of
the Trustee, shall hold the Receivable Files pursuant to the Custodian
Agreement. Each Custodian shall hold each Receivable File for the benefit of
Noteholders and the Note Insurer, and maintain accurate records pertaining to
each Receivable File to maintain a current inventory thereof. Each Receivable
held by a Custodian shall be stamped with a legend stating "This contract has
been stamped to evidence that it has been sold to Reliance Auto Receivables
Corporation and is subject to a first perfected security interest of Xxxxxx
Trust and Savings Bank, as Trustee on behalf of the holders of Notes issued by
Reliance Auto Receivables Corporation and MBIA Insurance Corporation." Pursuant
to the Custodian Agreement, upon the written request of a Servicing Officer,
each Custodian shall perform such acts as reasonably requested by the Servicer
and otherwise cooperate with the Servicer in the enforcement of the Issuer's,
the Noteholders' and the Note Insurer's rights and remedies with respect to the
Receivables Files held by such Custodian.
ARTICLE III
Covenants
SECTION 3.1. Payment of Principal and Interest. The Issuer shall duly and
punctually pay the principal and interest, if any, on the Notes in accordance
21
with the terms of the Notes and this Indenture. Without limiting the foregoing,
the Issuer shall distribute (or cause to be distributed) the amounts on deposit
in the Collection Account and the Spread Account on each Payment Date as and to
the extent provided in Section 4.5 of the Pooling and Servicing Agreement or if
an Event of Default has occurred and the Notes have been declared due and
payable in accordance with the terms hereof and such acceleration has not been
rescinded, principal and interest on the Notes shall be payable in accordance
with Section 5.4(b). Amounts properly withheld under the Code or any applicable
State law 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 3.2. Maintenance of Office or Agency. The Trustee shall maintain in
the Borough of Manhattan, The City of New York, an office or agency where Notes
may be surrendered for registration of transfer or exchange, and where notices
and demands to or upon the Issuer in respect of the Notes and this Indenture may
be served. The Issuer hereby initially appoints the Trustee to serve as its
agent for the foregoing purposes. The Trustee will give prompt written notice to
the Issuer and the Note Insurer of the location, and of any change in the
location, of any such office or agency. If at any time the Trustee shall fail to
maintain any such office or agency or shall fail to furnish the Issuer 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 Trustee as its
agent to receive all such surrenders, notices and demands.
SECTION 3.3. Money for Payments To Be Held in Trust. As provided in Section
8.2(a), all payments of amounts due and payable with respect to any Notes that
are to be made from amounts withdrawn from the Collection Account pursuant to
Section 8.2(b) shall be made on behalf of the Issuer by the Trustee or by
another Paying Agent, and no amounts so withdrawn from the Collection Account
for payments of Notes shall be paid over to the Issuer, except as provided in
Section 4.5 of the Pooling and Servicing Agreement.
On or before each Payment Date (including the Final Scheduled 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 as and to the extent provided in Section 4.5 of the Pooling
and Servicing Agreement, such sum to be held in trust for the benefit of the
Persons entitled thereto and (unless the Paying Agent is the Trustee) shall
promptly notify the Trustee of its action or failure so to act.
The Issuer shall cause each Paying Agent (other than the Trustee) to
execute
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and deliver to the Trustee and the Note Insurer an instrument in which such
Paying Agent shall agree with the Trustee (and if the Trustee acts as Paying
Agent, it hereby so agrees), subject to the provisions of this Section 3.3, that
such Paying Agent shall:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and pay such sums to such Persons as herein provided;
(ii) give the Trustee and the Note 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 Trustee, forthwith pay to the Trustee all sums
so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to the
Trustee all sums held by it in trust for the payment of Notes if at any
time it ceases to meet the standards required to be met by a Paying Agent;
and
(v) comply with all requirements of the Code and any applicable State
law with respect to the withholding from any payments made by it on any
Notes of any applicable withholding taxes imposed thereon and with respect
to any applicable reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, by Issuer Order,
direct any Paying Agent to pay to the Trustee all sums held in trust by such
Paying Agent, such sums to be held by the Trustee upon the same trusts as those
upon which the sums were held by such Paying Agent; and upon such payment by any
Paying Agent to the Trustee, such Paying Agent shall be released from all
further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money held
by the Trustee or any Paying Agent in trust for the payment of any amount due
with respect to any Note and remaining unclaimed for two years after such amount
has become due and payable shall be discharged from such trust and upon Issuer
Request, with the consent of the Note Insurer, shall be deposited by the Trustee
in the Collection Account; and the Holder of such Note shall thereafter, as an
23
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 Trustee, the Note Insurer or such 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 Note Insurer with the
Trustee for the payment of principal or interest on the Notes, to the extent any
amounts are owing to the Note Insurer, such amounts shall be paid promptly to
the Note Insurer upon receipt of a written request by the Note Insurer to such
effect; and provided, further, that the Trustee or such Paying Agent, before
being required to make any such repayment, shall at the expense and direction of
the Issuer cause to be published at least 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 Trustee shall also adopt and employ,
at the expense of the Issuer, any other reasonable means of notification of such
repayment (including 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 Trustee or of any Paying Agent, at the last address of record for
each such Holder).
SECTION 3.4. Existence. The Issuer shall keep in full effect its existence,
rights and franchises as a corporation under the laws of the State of Delaware
and shall obtain and preserve its qualification to do business in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Indenture, the Notes, the Indenture
Collateral and each other instrument or agreement included in the Trust Estate
or to enforce its rights under the Receivables and with respect to the Financed
Vehicles.
SECTION 3.5. Protection of the Trust Estate. The Issuer intends the
security interest Granted pursuant to this Indenture in favor of the Secured
Parties to be prior to all other Liens in respect of the Trust Estate, and the
Issuer shall take all actions necessary to obtain and maintain, in favor of the
Trustee for the benefit of the Secured Parties, a first Lien on and a first
priority, perfected security interest in the Trust Estate. On or prior to the
Closing Date, the Issuer and Reliance shall file UCC-1 financing statements as
provided in Section 2.15(f). In addition, the Issuer shall from time to time
execute and deliver all such supplements and amendments hereto and all such
financing statements, continuation statements,
24
instruments of further assurance and other instruments, and shall take such
other action necessary or advisable to:
(i) Grant more effectively all or any portion of the Trust Estate;
(ii) maintain the Trust Estate free and clear of all prior Liens;
(iii) maintain or preserve the Lien and security interest (and the
priority thereof) in favor of the Trustee for the benefit of the Secured
Parties created by this Indenture or carry out more effectively the
purposes hereof;
(iv) perfect, publish notice of or protect the validity of any Grant
made or to be made by this Indenture;
(v) enforce any of the Indenture Collateral;
(vi) preserve and defend title to the Trust Estate and the rights of
the Trustee and the Noteholders in such Trust Estate against the claims of
all Persons; and
(vii) pay all taxes or assessments levied or assessed upon the Trust
Estate when due.
The Issuer hereby designates the Trustee as its agent and attorney-in-fact to
execute any financing statement, continuation statement, instrument of further
assurance or other instrument required to be executed to accomplish the
foregoing; provided, however, that the Trustee shall not be obligated to execute
such instruments except upon instruction from the Note Insurer, the Servicer or
the Issuer.
SECTION 3.6. Opinions as to the Trust Estate. (a) On the Closing Date, the
Issuer shall furnish to the Trustee and the Note Insurer an Opinion of Counsel
either stating that, in the opinion of such counsel, such action has been taken
with respect to the execution and filing of any financing statements and
continuation statements, as are necessary to perfect and make effective the
first priority Lien and security interest in the Indenture Collateral in favor
of the Trustee for the benefit of the Secured Parties created by this Indenture
and reciting the details of such action, or stating that, in the opinion of such
counsel, no such action is necessary to make such Lien and security interest
effective.
(b) On or before April 30 in each calendar year, commencing April 30, 1997,
the Issuer shall furnish to the Trustee and the Note Insurer an Opinion of
25
Counsel either stating that, in the opinion of such counsel, such action has
been taken with respect to the execution and filing of any financing statements
and continuation statements, as is necessary to maintain the first priority Lien
and security interest in the Indenture Collateral created by this Indenture and
reciting the details of such action, or stating that in the opinion of such
counsel no such action is necessary to maintain such Lien and security interest.
Such Opinion of Counsel shall also describe the execution and filing of any
financing statements and continuation statements, that will, in the opinion of
such counsel, be required to maintain the Lien and security interest of this
Indenture in the Indenture Collateral until April 30 in the following calendar
year.
SECTION 3.7. Performance of Obligations; Servicing of Receivables. (a) The
Issuer shall not take, or fail to take, any action and shall use its best
efforts not to permit any action to be taken by others that would release any
Person from any material covenants or obligations under any instrument or
agreement included in the Trust Estate or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any such instrument or agreement, except as
expressly provided in this Indenture, the Pooling and Servicing Agreement or
such other instrument or agreement.
(b) The Issuer may contract with other Persons reasonably acceptable to the
Controlling Party to assist it in performing its duties under this Indenture,
and any performance of such duties by a Person identified to the Trustee and the
Note Insurer in an Officers' Certificate of the Issuer shall be deemed to be
action taken by the Issuer; provided, however, that nothing in this Section
3.7(b) or any such contract shall be deemed to release or otherwise limit the
Issuer's obligations under the Notes or this Indenture. Pursuant to the Pooling
and Servicing Agreement, the Issuer has contracted with the Servicer to assist
the Issuer in performing its duties under the Notes and this Indenture.
(c) The Issuer shall punctually perform and observe all of its obligations
and agreements contained in this Indenture, the other Related Documents and in
the instruments and agreements included in the Trust Estate, including filing or
causing to be filed any UCC financing statements and continuation statements
required to be filed by this Indenture and the Pooling and Servicing Agreement
in accordance with and within the time periods provided for herein and therein.
(d) If notice of termination has been given to the Servicer of the
Servicer's rights and powers pursuant to Section 7.2 of the Pooling and
Servicing Agreement, the Backup Servicer shall be appointed as successor
Servicer in accordance with Section 7.3 of the Pooling and Servicing Agreement
(unless the Note Insurer shall
26
have exercised its option pursuant to Section 7.3(b) of the Pooling and
Servicing Agreement to appoint an alternative successor servicer).
(e) Upon any termination of the Servicer's rights and powers pursuant to
the Pooling and Servicing Agreement, the Issuer shall promptly notify the
Trustee. As soon as a successor Servicer is appointed by the Controlling Party,
the Issuer shall notify the Trustee of such appointment, specifying in such
notice the name and address of such successor Servicer.
(f) The Issuer agrees that it shall not waive timely performance or
observance by the Servicer, the Backup Servicer or Reliance of their respective
duties under Related Documents without prior consent of the Controlling Party or
if the effect thereof would adversely affect the Holders.
SECTION 3.8. Negative Covenants. So long as any Notes are Outstanding, the
Issuer shall not:
(i) except as expressly permitted by this Indenture or the Pooling
and Servicing Agreement, sell, transfer, exchange or otherwise dispose of
any of the properties or assets of the Issuer, including those included in
the Trust Estate;
(ii) claim any credit on, or make any deduction from the principal or
interest payable in respect of, the Notes (other than amounts properly
withheld from such payments under the Code or applicable State law) or
assert any claim against any present or former Noteholder by reason of the
payment of the taxes levied or assessed upon any part of the Trust Estate;
(iii) (A) permit the validity or effectiveness of this Indenture to
be impaired, or permit the Lien of this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit any Person
to be released from any covenants or obligations with respect to the Notes
under this Indenture except as may be expressly permitted hereby, (B)
permit any Lien, charge, excise, claim, security interest, mortgage or
other encumbrance (other than the Lien of this Indenture) to be created on
or extend to or otherwise arise upon or burden the Trust Estate or any part
thereof or any interest therein or the proceeds thereof (other than any
Liens which are junior to or are otherwise subordinated to the Lien in
favor of the Trustee (and to which the Trustee has consented in writing)
and tax Liens, mechanics' Liens and other Liens that arise by operation of
law, in each case on a Financed Vehicle and arising solely as a result of
an action or omission of the related Obligor), or (C) permit the Lien of
this Indenture
27
not to constitute a valid first priority (other than with respect to any
such tax Lien, mechanics' Lien or other Lien not considered a Lien)
security interest in the Trust Estate; or
(iv) agree to cause the Spread Account to secure or otherwise be
accessible by any class or series of notes issued by the Issuer (other than
the Notes) without the prior written consent of the Note Insurer and the
Holders of the Note Voting Amount and without prior written notice to the
Rating Agencies.
SECTION 3.9. Annual Statement as to Compliance. The Issuer shall deliver to
the Trustee and the Note Insurer, on or before April 30 of each year, commencing
April 30, 1997, an Officers' Certificate, substantially in the form of Exhibit
C, stating that:
(i) a review of the activities of the Issuer during such year and of
performance under this Indenture has been made under such Authorized
Officers' supervision; and
(ii) to the best of such Authorized Officers' knowledge, based on
such review, the Issuer has complied with all conditions and covenants
under this Indenture throughout such year or, if there has been a default
in the compliance of any such condition or covenant, specifying each such
default known to such Authorized Officers and the nature and status
thereof.
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain Terms. (a) The
Issuer shall not consolidate or merge with or into any other Person, unless:
(i) the Person (if other than the Issuer) formed by or surviving such
consolidation or merger shall be a Person organized and existing under the
laws of the United States of America or any State and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Trustee and the Note Insurer, in form satisfactory to the Trustee and the
Note Insurer, the due and punctual payment of the principal of and interest
on all Notes and the performance or observance of every agreement and
covenant of this Indenture on the part of the Issuer to be performed or
observed, all as provided herein;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
28
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Trustee) to the effect that such
transaction will not have any material adverse tax consequence to any
Noteholder;
(v) any action that 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 Trustee and the Note
Insurer an Officers' Certificate and an Opinion of Counsel each stating
that such consolidation or merger and such supplemental indenture comply
with this Section 3.10 and that all conditions precedent provided for in
this Section 3.10 relating to such transaction have been complied with
(including any filing required by the Exchange Act); and
(vii) until the Notes are paid in full and all amounts owing to the
Note Insurer under the Related Documents have been paid in full and if no
Insurer Default shall have occurred and be continuing, the Note Insurer in
its sole discretion has consented thereto in writing.
(b) The Issuer shall not convey or transfer all or substantially all of its
properties or assets, including those included in the Trust Estate, to any
Person, unless:
(i) the Person that acquires by conveyance or transfer the properties
and assets of the Issuer the conveyance or transfer of which is hereby
restricted shall: (A) be a United States citizen or a Person organized and
existing under the laws of the United States of America or any State, (B)
expressly assumes, by an indenture supplemental hereto, executed and
delivered to the Trustee and the Note Insurer, in form satisfactory to the
Trustee and the Note Insurer, the due and punctual payment of the principal
of and interest on all Notes and the performance or observance of every
agreement and covenant of this Indenture on the part of the Issuer to be
performed or observed, all as provided herein, (C) expressly agrees by
means of such supplemental indenture that all right, title and interest so
conveyed or transferred shall be subject and subordinate to the rights of
Holders of the Notes, and (D) unless otherwise provided in such
supplemental indenture, expressly agrees to indemnify, defend and hold
harmless the Issuer against and from any loss, liability or expense arising
29
under or related to this Indenture and the Notes;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Trustee and the Note Insurer) to the
effect that such transaction will not have any material adverse tax
consequence to any Noteholder;
(v) any action that 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 Trustee and the Note
Insurer an Officers' Certificate and an Opinion of Counsel each stating
that such conveyance or transfer and such supplemental indenture comply
with this Section 3.10 and that all conditions precedent provided for in
this Section 3.10 relating to such transaction have been complied with
(including any filing required by the Exchange Act); and
(vii) until the Notes are paid in full and all amounts owing to the
Note Insurer under the Related Documents have been paid in full and if no
Insurer Default shall have occurred and be continuing, the Note Insurer in
its sole discretion has consented thereto in writing.
SECTION 3.11. Successor or Transferee. (a) Upon any consolidation or merger
of the Issuer in accordance with Section 3.10(a), the Person formed by or
surviving such consolidation or merger (if other than the Issuer) shall succeed
to, and be substituted for, and may exercise every right and power of, the
Issuer under this Indenture with the same effect as if such Person had been
named as the Issuer herein.
(b) Upon a conveyance or transfer of all or substantially all the assets
and properties of the Issuer pursuant to Section 3.10(b), the Issuer shall be
released from every covenant and agreement of this Indenture to be observed or
performed on the part of the Issuer with respect to the Notes immediately upon
the delivery of written notice from the Issuer to the Trustee stating that the
Issuer is to be so released; provided, however, that notwithstanding the
foregoing, the Issuer shall not be released from any liability with respect to
covenants and agreements to be
30
observed or performed on the part of the Issuer prior to the date of such
release unless its successor explicitly undertakes to accept such liability.
SECTION 3.12. No Other Business. The Issuer shall not engage in any
business other than financing, purchasing, owning, selling and managing of the
Receivables in the manner contemplated by its certificate of incorporation, this
Indenture and the other Related Documents and activities incidental thereto.
SECTION 3.13. No Borrowing. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for (i) the Notes, (ii) obligations owing from time to time
to the Note Insurer under the Related Documents and (iii) any other indebtedness
permitted by the Related Documents. The proceeds of the Notes shall be used to
fund the Spread Account Initial Deposit and to pay the Issuer's organizational,
transactional and start up expenses. Net amounts remaining after such payments
shall be distributed by the Issuer to its stockholders. The Issuer shall incur
no additional borrowed money indebtedness other than the Notes unless (i) such
indebtedness is rated at least investment grade by the Rating Agencies, (ii)
each of the parties to the documentation related to such indebtedness shall have
signed documentation containing a provision substantially similar to Section
11.16, (iii) such indebtedness does not permit recourse to the Trust Estate and
(iv) the Rating Agencies shall have confirmed in writing to the Note Insurer at
the expense of Reliance or its Affiliates that the risk to the Note Insurer in
insuring the Notes will remain at least investment grade.
SECTION 3.14. Servicer's Obligations; Related Documents. The Issuer shall
(i) cause the Servicer to comply with the Pooling and Servicing Agreement and
(ii) enforce all of its rights under the Related Documents.
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities. Except as
expressly contemplated by the Pooling and Servicing Agreement or this Indenture,
the Issuer shall not make any loan or advance or credit to, or guarantee
(directly or indirectly or by an instrument having the effect of assuring
another's payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or own,
purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person.
SECTION 3.16. Capital Expenditures. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either
31
realty or personalty).
SECTION 3.17. Notice of Events of Default. The Issuer shall give the
Trustee, the Note Insurer and the Rating Agencies prompt written notice of each
Event of Default hereunder and each Default or breach on the part of the
Servicer, the Note Insurer or Reliance of their respective obligations under any
Related Document, in each case of which it becomes aware.
SECTION 3.18. Further Instruments and Acts. Upon request of the Trustee or
the Note Insurer, the Issuer shall execute and deliver such further instruments
and do such further acts as may be reasonably necessary or proper to carry out
more effectively the purpose of this Indenture.
SECTION 3.19. 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 any Related Document.
SECTION 3.20. Tax Treatment. The Issuer has structured this Indenture and
the Notes with the intention that the Notes will qualify under applicable
federal, state and local tax law as indebtedness of the Issuer. The Issuer and
each Holder agrees to treat, and take no action inconsistent with the treatment
of, the Notes (or any beneficial interest therein) as indebtedness for purposes
of federal, state and local income or franchise taxes and any other tax imposed
on or measured by income. Each Holder, by acquisition of a beneficial interest
in a Note, agrees to be bound by the provisions of this Section 3.20.
SECTION 3.21. Investment Company Act. The Issuer shall conduct its
operations in a manner that will not subject it to registration as an
"investment company" under the Investment Company Act of 1940, as amended.
SECTION 3.22. Liens. The Issuer shall not contract for, create, incur or
suffer to exist any Lien upon any of its property or assets, whether now owned
or hereafter acquired, except for any Lien created by any of the Related
Documents.
SECTION 3.23. Conduct of Business. The Issuer shall (a) conduct its
business solely in its own name through its duly authorized officers or agents
so as not to mislead others as to the identity of the Issuer with which those
others are concerned, and particularly shall use its best efforts to avoid the
appearance of conducting business on behalf of Reliance or any Affiliate thereof
or that the assets of the Issuer are available to pay the creditors of Reliance
or any Affiliate thereof; (b) maintain corporate records and books of account
separate from those of
32
Reliance or any Affiliate thereof; (c) maintain an arm's-length relationship
with Reliance and each Affiliate thereof, and the Issuer shall not hold itself
out as being liable for the debts of Reliance or any Affiliate thereof; (d) keep
its assets and its liabilities wholly separate from those of all other entities,
including Reliance or any Affiliate thereof, except as otherwise anticipated by
the Related Documents; (e) not maintain bank accounts or other depository
accounts to which Reliance or any Affiliate thereof or of the Issuer is an
account party, into which Reliance or any Affiliate thereof or of the Issuer
makes deposits or from which Reliance or any Affiliate thereof or of the Issuer
has the power to make withdrawals, except as otherwise permitted by Sections
3.2, 4.1 and 4.2 of the Pooling and Servicing Agreement; (f) shall obtain proper
authorization for all the Issuer's actions requiring such authorization; (g)
shall obtain proper authorization from its stockholders for all action requiring
approval of its stockholders; (h) shall pay operating expenses and liabilities
from the Issuer's own funds; (i) shall disclose in its annual financial
statements the effects of the Issuer's transactions under the Related Documents
in accordance with generally accepted accounting principles and shall disclose
that the assets of the Issuer are not available to pay creditors of Reliance or
any Originator; (j) shall continuously maintain the resolutions, agreements and
other instruments underlying the transactions described in the Related Documents
as official records; (k) shall insure that any consolidated financial statements
of Reliance have notes to the effect that the Issuer is a separate entity whose
creditors have a claim on its assets prior to those assets becoming available to
its equity holders; and (l) comply with the provisions of its Certificate of
Incorporation and by-laws and not amend, supplement or otherwise modify its
Certificate of Incorporation or by-laws except in accordance therewith.
SECTION 3.24. Representations and Warranties. The Issuer hereby makes the
following representations and warranties for the benefit of the Trustee, the
Note Insurer and the Noteholders on which the Trustee relies in accepting the
Trust Estate in trust and in authenticating the Notes. Such representations and
warranties are made as of the Closing Date and, except as specifically provided
herein, shall survive the transfer, grant and assignment of the Trust Estate to
the Trustee.
(a) Organization and Good Standing. The Issuer is a corporation duly
organized, validly existing and in good standing under the law of its state of
incorporation and each other state where the nature of its business requires it
to qualify, except to the extent that the failure to so qualify would not in the
aggregate materially adversely affect the ability of the Issuer to perform its
obligations under the Related Documents;
(b) Authorization. The Issuer has the power, authority and legal right to
execute, deliver and perform under the terms of the Related Documents and the
33
execution, delivery and performance of the Related Documents have been duly
authorized by the Issuer by all necessary corporate action;
(c) Binding Obligation. Each of (i) this Indenture, assuming due
authorization, execution and delivery by the Trustee, (ii) the Insurance
Agreement, assuming due authorization, execution and delivery by the Note
Insurer, the Trustee, the Backup Servicer, and the Servicer, and (iii) the
Pooling and Servicing Agreement, assuming due authorization, execution and
delivery by Reliance, the Backup Servicer, the Trustee and the Servicer,
constitutes a legal, valid and binding obligation of the Issuer, enforceable
against the Issuer in accordance with its terms except that (A) such enforcement
may be subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws (whether statutory, regulatory or decisional) now or hereafter in
effect relating to creditors' rights generally and (B) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
certain equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought, whether a proceeding at law or in equity;
(d) No Violation. The consummation of the transactions contemplated by the
fulfillment of the terms of the Related Documents will not conflict with, result
in any breach of any of the terms and provisions of or constitute (with or
without notice, lapse of time or both) a default under the organizational
documents or bylaws of the Issuer, or any material indenture, agreement,
mortgage, deed of trust or other instrument to which the Issuer is a party or by
which it is bound, or in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of such indenture, agreement, mortgage, deed of
trust or other such instrument, other than any Lien created or imposed pursuant
to the terms of the Related Documents, or violate any law or, to the best of the
Issuer's knowledge, any material order, rule or regulation applicable to the
Issuer of any court or of any Federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over the Issuer
or any of its properties;
(e) No Proceedings. There are no proceedings or investigations to which the
Issuer, or any of its Affiliates, is a party pending, or, to the knowledge of
the Issuer, threatened, before any court, regulatory body, administrative agency
or other tribunal or governmental instrumentality (A) asserting the invalidity
of the Related Documents, (B) seeking to prevent the issuance of any of the
Notes or the consummation of any of the transactions contemplated by the Related
Documents or (C) seeking any determination or ruling that would materially and
adversely affect the performance by the Issuer of its obligations under, or the
validity or enforceability of, the Related Documents.
34
(f) Approvals. All approvals, authorizations, consents, orders or other
actions of any Person, or of any court, governmental agency or body or official,
required in connection with the execution and delivery of the Related Documents
by the Issuer and with the valid and proper authorization, issuance and sale of
the Notes pursuant hereto (except approvals of state securities officials under
the blue sky laws) have been or will be taken or obtained on or prior to the
Closing Date.
(g) Place of Business. The Issuer's principal place of business and chief
executive office is located at 000 Xxxxx Xxxx 0000 Xxxx, Xxxxx 000, Xxx Xxxxxxx,
Xxxxx 00000.
(h) Transfer and Assignment. Upon the delivery to the Custodians of the
Receivables Files, the Trustee for the benefit of the Noteholders and the Note
Insurer shall have a first priority perfected security interest in the
Receivables, the Financed Vehicles, and in the proceeds thereof, except for
Liens permitted under the Related Documents and limited with respect to proceeds
to the extent set forth in Section 9-306 of the UCC as in effect in the
applicable jurisdiction. All filings (including UCC filings) and other actions
as are necessary in any jurisdiction to perfect the ownership or other interest
of the Trustee in the Trust Estate, including the transfer of the Receivables
Files and the payment of any fees, have been made.
(i) Parent of the Issuer. Reliance is the registered owner of all of the
issued and outstanding common stock of the Issuer, all of which common stock has
been validly issued, is fully paid and nonassessable.
(j) Pooling and Servicing Agreement. As of the Closing Date, the Issuer has
entered into the Pooling and Servicing Agreement with Reliance relating to its
acquisition of the Receivables and its security interest in the Financed
Vehicles, and the representations and warranties made by Reliance relating to
the Receivables and the Financed Vehicles have been validly assigned to and are
for the benefit of the Issuer, the Trustee, the Note Insurer and the
Noteholders.
(k) The Loan Contracts. The Issuer hereby restates and makes each of the
representations and warranties with respect to the Receivables and the Financed
Vehicles that are made by Reliance in Section 2.3(a) of the Pooling and
Servicing Agreement.
35
ARTICLE IV
Satisfaction and Discharge
SECTION 4.1. Satisfaction and Discharge of Indenture. This Indenture shall
cease to be of further effect with respect to the Notes except as to (i) rights
of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.2, 3.3 and 3.20, (v)
the rights, obligations and immunities of the Trustee hereunder (including the
rights of the Trustee under Section 6.7 and the obligations of the Trustee under
Section 4.2) and (vi) the rights of Noteholders and the Note Insurer as
beneficiaries hereof with respect to the property so deposited with the Trustee
payable to all or any of them, and the Trustee, on demand of and at the expense
of the Issuer, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture with respect to the Notes, when:
(A) 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 2.5 and (ii) Notes for whose payment money
has theretofore been deposited in trust or segregated and held in trust by
the Issuer and thereafter repaid to the Issuer or discharged from such
trust, as provided in Section 3.3) have been delivered to the Trustee for
cancellation and the Policy has expired and been returned to the Note
Insurer for cancellation;
(B) the Issuer has paid or caused to be paid all amounts owed to the
Note Insurer and all other sums payable hereunder by the Issuer; and
(C) the Issuer has delivered to the Trustee and the Note Insurer an
Officers' Certificate, an Opinion of Counsel and (if required by the
Trustee or the Note Insurer) an Independent Certificate from a firm of
certified public accountants, each meeting the applicable requirements of
Section 11.1(a) and, subject to Section 11.2, each stating that all
conditions precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
SECTION 4.2. Payment of Moneys Held by Paying Agent. In connection with the
satisfaction and discharge of this Indenture with respect to the Notes, all
moneys then held by any Paying Agent other than the Trustee under this Indenture
with respect to such Notes shall, upon demand of the Issuer, be paid to the
Trustee to be held and applied according to Section 3.3 and Section 4.5 of the
Pooling and
36
Servicing Agreement, and thereupon such Paying Agent shall be released from all
further liability with respect to such moneys.
SECTION 4.3. Release of Trust Estate. The Trustee shall, on or after the
Termination Date, release any remaining portion of the Trust Estate from the
Lien created by this Indenture. Subject to Section 2.9, the Trustee shall
release property from the Lien created by this Indenture pursuant to this
Section 4.3 only upon receipt of a written request of the Issuer accompanied by
an Officer's Certificate. The Trustee shall surrender the Policy to the Note
Insurer upon the payment of the Notes in full.
ARTICLE V
Remedies
SECTION 5.1. Events of Default. "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 Governmental Authority):
(i) default in the payment of any interest on any Note when the same
becomes due and payable, and such default shall continue for a period of
five Business Days;
(ii) default in the payment of the principal of any Note when the
same becomes due and payable;
(iii) 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 5.1 specifically dealt with) or in any Related Document, or
any representation or warranty of the Issuer made in this Indenture or in
any Related Document 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 have a material adverse effect on the interests of the
Noteholders or the Note Insurer and shall continue or not be cured, or the
circumstance or condition in respect of which such misrepresentation or
warranty was incorrect shall not have been eliminated or otherwise cured,
for a period of 30 days after there shall have been given, by registered or
37
certified mail, to the Issuer and the Note Insurer by the Trustee or to the
Issuer, the Note Insurer and the Trustee by the Holders of at least 25% of
the Note Balance, 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;
(iv) the filing of a petition for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial
part of its property in an involuntary case under any applicable Federal or
State bankruptcy, insolvency or other similar law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Issuer or for any substantial part
of its property, or ordering the winding-up or liquidation of the affairs
of the Issuer and such petition shall remain unstayed and in effect for a
period of 60 consecutive days;
(v) the commencement by the Issuer of a voluntary case under any
applicable Federal or State bankruptcy, insolvency or other similar law now
or hereafter in effect, or the consent by the Issuer to the entry of an
order for relief in an involuntary case under any such law, or the consent
by the Issuer to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
of the Issuer or for any substantial part of its property, 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; or
(vi) the failure to pay the Note Balance of the Notes on the Final
Scheduled Payment Date.
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment. If an
Insurer Default shall not have occurred and be continuing and an Event of
Default shall have occurred and be continuing, then the Note Insurer may declare
all the Notes to be immediately due and payable, by a notice in writing to the
Issuer (and to the Trustee), and upon any such declaration, the Note Balance,
together with accrued and unpaid interest thereon through the date of
acceleration, shall become immediately due and payable. If an Insurer Default
shall have occurred and be continuing and an Event of Default shall have
occurred and be continuing, the Trustee in its discretion may, or if so
requested in writing by Note Voting Amount shall, declare by written notice to
the Issuer that the Notes become, whereupon they shall become, immediately due
and payable, together with accrued and unpaid interest thereon. In the event of
an acceleration of the Notes by operation of this Section 5.2, the Trustee shall
continue to be entitled to make
38
claims under the Policy pursuant to Sections 5.4 and 5.5 of the Pooling and
Servicing Agreement for payments on the Notes. Payments under the Policy
following acceleration of the Notes shall be applied by the Trustee to pay
interest and principal on the Notes according to clauses FIFTH and SIXTH of
Section 5.4(b).
If the Notes are accelerated due to an Event of Default, the Note Insurer
shall have the right (in addition to its obligation to pay 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 the Notes, in whole or
in part, on any date or dates following such acceleration as the Note Insurer,
in its sole discretion, shall elect. In no event may the Note Insurer make
distributions with respect to the Notes later than required by the Note
Insurer's obligation to make payments on the Notes in accordance with the
Policy.
At any time after such declaration of acceleration of maturity has been
made by the Trustee and before a judgment or decree for payment of the money due
has been obtained by the Trustee as hereinafter in this Article V provided, the
Note Voting Amount, by written notice to the Issuer and the Trustee, may rescind
and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the 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, together with interest thereon,
by the Trustee or the Note Insurer hereunder or by the Note Insurer
under the Insurance Agreement or the Policy and the reasonable
compensation, expenses, disbursements and advances of the Trustee and
the Note Insurer and their agents and counsel incurred in connection
with the enforcement hereof to the date of such payment or deposit;
and
(ii) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such acceleration,
have been cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any right
39
consequent thereto.
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
Trustee; Authority of Controlling Party. (a) The Issuer covenants that if the
Notes are accelerated following the occurrence of an Event of Default, the
Issuer will, upon demand of the Trustee, pay to it as and to the extent provided
in Section 4.5 of the Pooling and Servicing Agreement, for the benefit of the
Holders of Notes, the whole amount then due and payable on such Notes for
principal and interest, with interest upon the overdue principal at the Note
Interest Rate, and, to the extent payment at such rate of interest shall be
legally enforceable, upon overdue installments of interest, at the Note 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 Trustee and its agents
and counsel.
(b) Each Secured Party hereby irrevocably and unconditionally appoints the
Controlling Party as the true and lawful attorney in fact of such Secured Party
for so long as such Secured Party is not the Controlling Party, with full power
of substitution, to execute, acknowledge and deliver any notice, document,
certificate, paper, pleading or instrument and to do in the name of the
Controlling Party as well as in the name, place and stead of such Secured Party
such acts, things and deeds for or on behalf of and in the name of such Secured
Party under this Indenture (including under Section 5.4) and under the Related
Documents which such Secured Party could or might do or which may be necessary,
desirable or convenient to effect the purposes contemplated hereunder and under
the Related Documents and 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
Trust Estate.
(c) If an Event of Default occurs and is continuing, the Trustee may at the
direction of the Controlling Party, as more particularly provided in Section
5.4, proceed to protect and enforce its rights and the rights of the
Noteholders, by such appropriate Proceedings as the Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy or
legal or equitable right vested in the Trustee by this Indenture or by law.
(d) If there shall be pending, relative to the Issuer or any other obligor
upon the Notes or any Person having or claiming an ownership interest in the
Trust Estate, Proceedings under Title 11 of the United States Code or any other
applicable Federal or State bankruptcy, insolvency or other similar law, or in
case
40
a receiver, assignee, 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 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 Trustee shall have made any demand
pursuant to this Section 5.3, shall be entitled and empowered, by intervention
in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes and to file
such other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for reasonable
compensation to the Trustee and each predecessor Trustee, and their
respective agents, attorneys and counsel, and for reimbursement of all
expenses and liabilities incurred, and all advances made, by the Trustee
and each predecessor Trustee, except as a result of negligence or bad
faith), the Note Insurer and the Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law or regulations, to vote on
behalf of the Holders of the Notes in any election of a trustee, a standby
trustee or any Person performing similar functions in any such Proceedings;
(iii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute all amounts received with
respect to the claims of the Noteholders and of the Trustee on their
behalf; and
(iv) to file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee or
the Holders of Notes allowed in any Proceedings relative to the Issuer, its
creditors and its property;
and any trustee, receiver, liquidator, assignee, custodian, sequestrator or
other similar official in any such Proceeding is hereby authorized by each of
such Noteholders to make payments to the Trustee, and, if the Trustee shall
consent to the making of payments directly to such Noteholders, to pay to the
Trustee such amounts as shall be sufficient to cover reasonable compensation to
the Trustee, each predecessor Trustee and their respective agents, attorneys and
counsel, and all other expenses and liabilities incurred, and all advances made,
by the Trustee and each predecessor Trustee except as a result of negligence or
bad faith.
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(e) Nothing herein contained shall be deemed to authorize the 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
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.
(f) All rights of action and of asserting claims under this Indenture or
under any of the Notes may be enforced by the 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 Trustee
shall be brought in its own name and as trustee of an express trust, and any
recovery of judgment, subject to the payment of the expenses, disbursements and
compensation of the Trustee, each predecessor Trustee and their respective
agents and attorneys, shall be for the ratable benefit of the Holders of the
Notes and the Note Insurer.
(g) In any Proceedings brought by the Trustee or to which the Trustee shall
be a party (and also any Proceedings involving the interpretation of any
provision of this Indenture), the 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 5.4. Remedies; Priorities. (a) If an Event of Default shall have
occurred and be continuing, the Trustee, at the direction of the Controlling
Party, shall (subject to Section 5.5) exercise any one or more of the following
remedies, whether sequentially or concurrently:
(i) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Trust Estate;
(ii) exercise any remedies of a secured party under the UCC and take
any other appropriate action to protect and enforce the rights and remedies
of the Secured Parties;
(iii) sell the Trust Estate, or any portion thereof or rights or
interest therein, at one or more public or private sales called and
conducted in any manner permitted by law;
(iv) elect to have the Issuer maintain possession of the Receivables
and continue to apply collections on such Receivables as if there had been
no declaration of acceleration; and
42
(v) make demand upon the Servicer, by written notice, that the
Servicer deliver to the Trustee all Receivable Files;
provided, however, that, if the Trustee is the Controlling Party, the Trustee
may not sell or otherwise liquidate the Trust Estate following an Event of
Default, unless: (A) all the Noteholders consent thereto, (B) 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 together with any unpaid Reimbursement Amounts and (C) the Trustee
determines that the Trust Estate will not continue to provide sufficient funds
for the payment of principal of and interest on the Notes as they would have
become due if the Notes had not been declared due and payable, and the Trustee
provides prior written notice to the Rating Agencies and the Note Insurer and
obtains the consent of Holders of the Note Voting Amount. In determining such
sufficiency or insufficiency with respect to clauses (B) and (C) above, the
Trustee may, but need not, obtain and rely upon an opinion of an Independent
investment banking or accounting firm of national reputation as to the
feasibility of such proposed action and as to the sufficiency of the Trust
Estate for such purpose.
(b) If the Trustee collects any money or property pursuant to this Article
V (excluding any payments made under the Policy), it shall pay out such money or
property according to the priorities set forth below:
FIRST: To the payment to the Trustee of the Trustee Fee then due, and any
costs or expenses incurred by it in connection with enforcing the remedies
provided for in this Article V;
SECOND: If Reliance is no longer acting as the Servicer, to the payment to
the Servicer of the Total Servicing Fee then due;
THIRD: To the payment to the Backup Servicer of all accrued and unpaid
expenses up to $100,000 relating to the assumption of servicing responsibilities
by the Backup Servicer and of the Backup Servicing Fee then due and to the
Custodians (other than any Originator or Reliance) of the Custodian Fee then due
to the extent not paid by the Servicer;
FOURTH: To the payment to the Note Insurer of the Premium then due;
FIFTH: To the Noteholders for amounts due and unpaid on the Notes for
interest, ratably, without preference or priority of any kind;
SIXTH: To the Noteholders for amounts equal to the Note Balance,
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ratably, without preference or priority of any kind;
SEVENTH: To the payment to the Note Insurer of any Reimbursement Amounts
and any other amounts due from the Issuer under the Insurance Agreement;
EIGHTH: To reimburse the Note Insurer and the Noteholders for any costs or
expenses incurred in connection with any enforcement action with respect to this
Indenture or the Notes;
NINTH: To the payment to the Servicer of any other amounts due the Servicer
as expressly provided herein and in the Pooling and Servicing Agreement;
TENTH: To the payment to the Trustee, the Backup Servicer and the
Custodians, any other amounts due to the Trustee, the Backup Servicer or the
Custodians as expressly provided herein and in the Pooling and Servicing
Agreement (including any amounts due to the Backup Servicer or any other
successor Servicer, in either case when acting as Servicer, to cover
indemnification obligations of the Issuer);
ELEVENTH: To the payment to the Issuer of any surplus amounts.
The Trustee may fix a special record date and special payment date for any
payment to Noteholders pursuant to this Section. At least 15 days before such
special record date, the Trustee shall mail to each Noteholder and the Issuer a
notice that states the special record date, the special payment date and the
amount to be paid.
SECTION 5.5. Optional Preservation of the Receivables. If the Trustee is
the Controlling Party and if the Notes have been declared to be due and payable
under Section 5.2 following an Event of Default, and such declaration and its
consequences have not been rescinded and annulled, the Trustee may, but need
not, elect to retain possession of the Trust Estate and effect the collection
thereof rather than dispose of or liquidate the Trust Estate. It is the desire
of the parties hereto and the Noteholders that there be at all times sufficient
funds for the payment of principal of and interest on the Notes, and the Trustee
shall take such desire into account when determining whether or not to retain
possession of the Trust Estate. In determining whether to retain possession of
the Trust Estate and effect the collection thereof, the Trustee may, but need
not, obtain and rely upon an opinion of an Independent investment banking or
accounting firm of national reputation as to the feasibility of such proposed
action and as to the sufficiency of the Trust Estate for such purpose. Subject
to Section 5.11 and for purposes of effecting the
44
collection of the Trust Estate, the Trustee may (but shall not be required to)
reasonably exercise any judgment or take any action not otherwise inconsistent
with the terms hereof.
SECTION 5.6. Limitation of Suits. No Holder of any Note shall have any
right to institute any Proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless an Insurer Default has occurred and is continuing and:
(i) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
(ii) the Holder(s) of not less than 25% of the Note Balance have made
written request to the Trustee to institute such Proceeding in respect of
such Event of Default in its own name as Trustee hereunder;
(iii) such Holder(s) have offered to the Trustee indemnit satisfactory
to the Trustee against the costs, expenses and liabilities to be incurred
in complying with such request;
(iv) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute such Proceeding; and
(v) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Note Majority.
It being understood and intended that no one or more Holder(s) of Notes shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holder(s) of Notes or to obtain or to seek to obtain priority or
preference over any other Holder(s) or to enforce any right under this
Indenture, except in the manner herein provided.
If the Trustee shall receive conflicting or inconsistent requests and
indemnity from two or more groups of Noteholders, each representing less than a
Note Majority, the Trustee in its sole discretion may determine what action, if
any, shall be taken, notwithstanding any other provisions of this Indenture.
SECTION 5.7. Unconditional Rights of Noteholders To Receive Principal and
Interest. Notwithstanding any other provisions in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest, if any, on such Note on or after the
45
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 pursuant to Section 5.6, and such right
shall not be impaired without the consent of such Holder.
SECTION 5.8. 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 Controlling Party or to such
Noteholder, then and in every such case the Issuer, the Controlling Party 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 Controlling Party and the Noteholders
shall continue as though no such Proceeding had been instituted.
SECTION 5.9. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the 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 5.10. Delay or Omission Not a Waiver. No delay or omission of the
Controlling Party, the Trustee or any Holder of Notes to exercise any right or
remedy accruing upon any Default or Event of Default shall impair any such right
or remedy or constitute a waiver of any such Default or Event of Default or an
acquiescence therein. Every right and remedy given by this Article V or by law
to the Trustee, the Controlling Party or to the Noteholders may be exercised
from time to time, and as often as may be deemed expedient, by the Trustee, the
Controlling Party or by the Noteholders, as the case may be.
SECTION 5.11. Control by Noteholders. If the Trustee is the Controlling
Party, the Holders of the Note Voting Amount shall have the right to direct the
time, method and place of conducting any Proceeding for any remedy available to
the Trustee with respect to the Notes or exercising any trust or power conferred
on the Trustee; provided, however, that:
(i) such direction shall not be in conflict with any rule of law
or with this Indenture;
46
(ii) except as otherwise expressly provided in Section 5.4, any
direction to the Trustee to sell or liquidate the Trust Estate shall be by
all the Noteholders;
(iii) if the conditions set forth in Section 5.5 have been satisfied
and the Trustee elects to retain the Trust Estate pursuant to such Section,
then any direction to the Trustee by Holders of Notes representing less
than 100% of the Note Balance to sell or liquidate the Trust Estate shall
be of no force and effect; and
(iv) the Trustee may take any other action deemed proper by the
Trustee that is not inconsistent with such direction;
provided, however, that, subject to Section 6.1, the Trustee need not take any
action that it reasonably determines might involve it in liability or would
reasonably be expected to materially adversely affect the rights of any
Noteholder(s) not consenting to such action.
SECTION 5.12. Waiver of Past Defaults. The Note Insurer or, if an Insurer
Default has occurred and is continuing, the Holders of the Note Voting Amount
may waive any past Default or Event of Default and its consequences except a
Default (a) in payment of principal of or interest on any of the Notes or (b) in
respect of a covenant or provision hereof that cannot be modified or amended
without the consent of the Holder of each Note. In the case of any such waiver,
the Issuer, the Note Insurer, the Trustee and the Holders of the Notes shall be
restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other Default or Event of Default
or impair any right consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed to
have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereto.
SECTION 5.13. Undertaking for Costs. All parties to this Indenture agree,
and each Holder of any Note by such Holder's acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken, suffered or omitted by it as 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
47
attorney's fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 5.13 shall not apply to (a) any suit
instituted by the Trustee or the Note Insurer, (b) any suit instituted by any
Noteholder(s) holding in the aggregate more than 10% of the Note Balance or (c)
any suit instituted by any Noteholder for the enforcement of the payment of
principal of or interest on any Note on or after the respective due dates
expressed in such Note and in this Indenture (or, in the case of redemption, on
or after the Redemption Date).
SECTION 5.14. Waiver of Stay or Extension Laws. The Issuer covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead or in any manner whatsoever, claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture; and
the Issuer (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
SECTION 5.15. Action on Notes. The Trustee's right to seek and recover
judgment on the Notes or under this Indenture shall not be affected by the
seeking, obtaining or application of any other relief under or with respect to
the Notes or this Indenture. Neither the Lien of this Indenture nor any rights
or remedies of the Trustee, the Note Insurer or the Noteholders shall be
impaired by the recovery of any judgment by the Trustee against the Issuer or by
the levy of any execution under such judgment upon any portion of the Trust
Estate or upon any of the assets of the Issuer.
SECTION 5.16. Performance and Enforcement of Certain Obligations. (a)
Promptly following a request from the Trustee to do so (after the occurrence of
an Event of Default as otherwise required under this Article V or upon the
direction of the Controlling Party) and at the Issuer's expense, the Issuer
shall take all such lawful action as the Trustee or the Note Insurer may request
to compel or secure the performance and observance by Reliance and the Servicer,
as applicable, of each of their obligations to the Issuer under or in connection
with the Pooling and Servicing Agreement and any other Related Document in
accordance with the terms thereof, and to exercise any and all rights, remedies,
powers and privileges lawfully available to the Issuer under or in connection
with the Pooling and Servicing Agreement and any other Related Document to the
extent and in the manner directed by the Trustee, including the transmission of
notices of default on the part of Reliance or the Servicer thereunder and the
institution of legal or administrative actions or proceedings to compel or
secure performance by Reliance
48
or the Servicer of each of their obligations under the Pooling and Servicing
Agreement and any other Related Document.
(b) If an Event of Default has occurred and is continuing, the Trustee
shall upon the direction of the Controlling Party, or if the Trustee is the
Controlling Party, may, exercise all rights, remedies, powers, privileges and
claims of the Issuer against Reliance or the Servicer under or in connection
with the Pooling and Servicing Agreement and any other Related Document,
including the right or power to take any action to compel or secure performance
or observance by Reliance or the Servicer of each of their obligations to the
Issuer thereunder and to give any consent, request, notice, direction, approval,
extension or waiver under the Pooling and Servicing Agreement and any other
Related Document, and any right of the Issuer to take such action shall be
suspended.
(c) Promptly following a request from the Trustee to do so (after the
occurrence of an Event of Default as otherwise required under this Article V or
upon direction of the Controlling Party) and at the Issuer's expense, the Issuer
shall take all such lawful action as the Trustee may request to compel or secure
the performance and observance by (i) the Dealers of each of their respective
obligations to Reliance under or in connection with the Dealer Agreements in
accordance with the terms thereof, (ii) by the Originators under the Receivables
Purchase Agreement, the Subservicing Agreement and the Custodian Agreement and
(iii) by Reliance under or in connection with the Pooling and Servicing
Agreement and to exercise any and all rights, remedies, powers and privileges
lawfully available to the Issuer under or in connection with all such agreements
to the extent and in the manner directed by the Trustee, including the
transmission of notices of default on the part of Reliance thereunder and the
institution of legal or administrative actions or proceedings to compel or
secure performance (i) by the Dealers of each of their respective obligations
under the Dealer Agreements, (ii) by the Originators of each of their respective
obligations under the Receivables Purchase Agreement, the Subservicing Agreement
and the Custodian Agreement or (iii) by Reliance of each of its obligations
under the Pooling and Servicing Agreement.
ARTICLE VI
The Trustee
SECTION 6.1. Duties of the Trustee. (a) If an Event of Default has occurred
and is continuing, the Trustee shall exercise the rights and powers vested in it
by this Indenture and use the same degree of care and skill in their exercise as
49
a prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) Subject to Section 6.1(a):
(i) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture and its other Related
Documents and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the 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 Trustee and conforming to the requirements of this Indenture; provided,
however, in the case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished to the Trustee,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture and the
other Related Documents.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own wilful misconduct, except
that:
(i) this clause (c) does not limit the effect of clause (b) of this
Section;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts;
(iii) the 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 this Indenture;
(iv) the Trustee shall not be charged with knowledge of an Event of
Default or Servicer Termination Event unless a Responsible Officer obtains
actual knowledge of such event or the Trustee receives written notice of
such event from the Issuer, Reliance, the Note Insurer, the Servicer or
Holders owning Notes aggregating not less than 10% of the Note Balance; and
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(v) the Trustee shall have no duty to monitor the performance of the
Issuer, Reliance or the Servicer, nor shall it have any liability in
connection with malfeasance or nonfeasance by the Issuer, Reliance or the
Servicer. The Trustee shall have no liability in connection with compliance
of the Issuer, Reliance or the Servicer with statutory or regulatory
requirements related to the Receivables. The Trustee shall not make or be
deemed to have made any representations or warranties with respect to the
Receivables or the validity or sufficiency of any pledge or assignment of
the Receivables to the Trustee.
(d) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Issuer.
(e) Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law, this Indenture or the Pooling and
Servicing Agreement.
(f) No provision of this Indenture, including Section 6.13, shall require
the Trustee to expend or risk its own funds or otherwise incur or be subjected
to financial liability in the performance of any of its duties hereunder or in
the exercise of any of its rights or powers, if it shall have reasonable grounds
to believe that repayments of such funds or adequate indemnity satisfactory to
it against any loss, liability or expense is not reasonably assured to it;
provided that nothing contained in this clause (f) shall limit the effect of
clause (c).
(g) The Trustee shall, upon one Business Day's prior notice to the Trustee,
permit any representative of the Note Insurer or the Issuer, during the
Trustee's normal business hours, to examine all books of account, records,
reports and other papers of the Trustee relating to the Notes, to make copies
and extracts therefrom and to discuss the Trustee's affairs and actions, as such
affairs and actions relate to the Trustee's duties with respect to the Notes,
with the Trustee's officers and employees responsible for carrying out the
Trustee's duties with respect to the Notes. All expenses incurred by the Trustee
in connection with such examination shall be borne by the Issuer.
(h) In no event shall the Trustee be required to perform, or be responsible
for the manner of performance of, any of the obligations of the Servicer, or any
other party, under the Pooling and Servicing Agreement except that Xxxxxx Trust
and Savings Bank, solely in its capacity as Backup Servicer, shall perform and
be responsible for such obligations during such time, if any, as the Backup
Servicer shall be the successor to, and be vested with the rights, powers,
duties and privileges of the Servicer in accordance with the terms of the
Pooling and Servicing
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Agreement.
(i) The Trustee shall, and hereby agrees that it shall, perform all of the
obligations and duties required of it under the Pooling and Servicing Agreement.
(j) The Trustee shall, and hereby agrees that it shall, hold the Policy in
trust, and shall hold any proceeds of any claim on the Policy in trust solely
for the use and benefit of the Noteholders. The Trustee shall deliver to the
Rating Agencies notice of any change made to the Policy prior to the Termination
Date. For avoidance of doubt, unless the Rating Agency Condition is satisfied,
no modification shall be made to the Policy without the prior written consent of
the Holders of Notes.
(k) Without limiting the generality of this Section 6.1, the Trustee, in
its capacity as Trustee, shall have no duty, unless specifically set forth in
this Indenture or the Related Documents, (i) to see to any recording, filing or
depositing of this Indenture or any agreement referred to herein or any
financing statement evidencing a security interest in the Financed Vehicles, or
to see to the maintenance of any such recording or filing or depositing or to
any recording, refiling or redepositing of any thereof, (ii) to see to the
payment or discharge of any tax, assessment or other governmental charge or any
Lien or encumbrance of any kind owing with respect to, assessed or levied
against any part of the Trust Estate, (iii) to confirm or verify the contents of
any reports or certificates delivered to the Trustee pursuant to this Indenture
or the Pooling and Servicing Agreement believed by the Trustee to be genuine and
to have been signed or presented by the proper party or parties, or (iv) to
inspect the Financed Vehicles at any time or ascertain or inquire as to the
performance or observance of any of the Issuer's or the Servicer's
representations, warranties or covenants or the Servicer's duties and
obligations as Servicer.
SECTION 6.2. Rights of Trustee. (a) The Trustee may conclusively rely and
shall be fully protected in acting on any document reasonably believed by it to
be genuine and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in any such document.
(b) The Trustee shall not be liable for any action it takes or omits to
take in good faith in reliance on the Officers' Certificate or Opinion of
Counsel.
(c) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents, attorneys
or a custodian or nominee, and the Trustee shall not be responsible for any
misconduct or negligence on the part of, or for the supervision of, any such
agent,
52
attorney, custodian or nominee appointed with due care by it.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute wilful
misconduct, negligence or bad faith.
(e) The Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the Notes
shall be full and complete authorization and protection from liability in
respect to any action taken, omitted or suffered by it hereunder in good faith
and in accordance with the advice or opinion of such counsel.
(f) The Trustee shall not be required to make any initial or periodic
examination of any files or records related to the Receivables for the purpose
of establishing the presence or absence of defects, the compliance by the Issuer
with its representations and warranties or for any other purpose.
(g) If the Trustee is also acting as Paying Agent or Note Registrar
hereunder, the rights and protections afforded to the Trustee pursuant to this
Article VI shall also be afforded to such Paying Agent or Note Registrar.
SECTION 6.3. Individual Rights of the Trustee. The Trustee shall not, in
its individual capacity, but may in a fiduciary capacity, become the owner of
Notes. The Trustee may otherwise deal with the Issuer or its Affiliates with the
same rights it would have if it were not the Trustee. Any Paying Agent, Note
Registrar, co-registrar or co-paying agent may do the same with like rights.
However, the Trustee must comply with Sections 6.11 and 6.12.
SECTION 6.4. Trustee's Disclaimer. The Trustee shall not be responsible
for, and makes no representation as to the validity or adequacy of, this
Indenture, the Trust Estate or the Notes; shall not be accountable for the
Issuer's use of the proceeds from the Notes; and shall not be responsible for
any statement of the Issuer in this Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Trustee's
certificate of authentication.
SECTION 6.5. Notice of Defaults. If a Default, Event of Default,
Distribution Increase, Collateral Perfection Trigger or Servicer Termination
Event occurs and is continuing and is known to a Responsible Officer, the
Trustee shall mail to each Noteholder and the Note Insurer notice of the
Default, Event of Default, Distribution Increase, Collateral Perfection Trigger
or Servicer Termination Event within three Business Days after such Responsible
Officer has
53
knowledge of such Default, Event of Default, Distribution Increase, Collateral
Perfection Trigger or Servicer Termination Event. Except in the case of a
Default in payment of principal of or interest on any Note, the Trustee may
withhold such notice to the Noteholders if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice is in
the interests of Noteholders.
SECTION 6.6. Reports by Trustee to the Holders. The Trustee shall deliver
to each Noteholder such information as may be reasonably required to enable such
Holder to prepare its Federal and State income tax returns within a reasonable
period after the end of each calendar year.
SECTION 6.7. Compensation, Reimbursement and Indemnity. (a) Pursuant to
Section 4.5 of the Pooling and Servicing Agreement and Section 5.4(b), the
Issuer shall pay to the Trustee from time to time a monthly fee with respect to
each Collection Period for its services under, or in connection with, this
Indenture (the "Trustee Fee"), which shall be paid on each Payment Date pursuant
to priority second of Section 4.5 of the Pooling and Servicing Agreement and
shall equal the greater of (i) one-twelfth of 0.01% multiplied by the Note
Balance as of the first day of the related Collection Period and (ii) $500. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. Pursuant to the Pooling and Servicing Agreement,
the Servicer shall reimburse the Trustee for all reasonable out-of-pocket
expenses incurred or made by it, including costs of collection, in addition to
the Trustee Fee. Such expenses shall include securities transaction charges and
the reasonable compensation and expenses, disbursements and advances of the
Trustee's agents, counsel, accountants and experts but, with respect to
securities transaction charges, only to the extent such charges have not been
waived due to the Trustee's receipt of payment from any financial institution
with respect to certain eligible investments specified by the Servicer pursuant
to Section 4.1(c) of the Pooling and Servicing Agreement. If the Servicer fails
to pay the expenses of the Trustee described in the two preceding sentences, the
Issuer shall be obligated to pay such expenses solely from amounts payable to
the Issuer pursuant to Section 4.5(xi) of the Pooling and Servicing Agreement.
(b) The Issuer shall indemnify the Trustee and its officers, directors,
employees and agents against any and all loss, liability or expense (including
attorneys' fees) incurred by them in connection with the administration of this
trust and the performance of its duties hereunder, which indemnification shall
be paid solely from amounts payable to the Issuer pursuant to Section 4.5(xi) of
the Pooling and Servicing Agreement or, if applicable, shall be payable pursuant
to Section 4.5(x) of the Pooling and Servicing Agreement. The Trustee shall
notify the Issuer
54
promptly of any claim for which it may seek indemnity. Failure by the Trustee to
so notify the Issuer shall not relieve the Issuer of its obligations hereunder.
The Trustee may have separate counsel and the Issuer shall pay the fees and
expenses of such counsel solely from amounts payable to the Issuer pursuant to
Section 4.5(xi) of the Pooling and Servicing Agreement or, if applicable, shall
be payable pursuant to Section 4.5 (x) of the Pooling and Servicing Agreement.
The Issuer need not reimburse any expense or indemnify against any loss,
liability or expense incurred by the Trustee through the Trustee's own willful
misconduct, negligence or bad faith.
The Issuer's payment obligations to the Trustee pursuant to this Section
6.7 shall survive the discharge of this Indenture. When the Trustee incurs
expenses after the occurrence of an Event of Default specified in Section 5.1(v)
or (vi), 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 Related Documents, the Trustee agrees that the
obligations of the Issuer to the Trustee hereunder and under the Related
Documents shall be recourse to the Trust Estate only from amounts payable to the
Issuer pursuant to Section 4.5(xi) of the Pooling and Servicing Agreement and
specifically shall not be recourse to the other assets of the Issuer.
SECTION 6.8. Replacement of the Trustee. No resignation or removal of the
Trustee and no appointment of a successor Trustee shall become effective until
the acceptance of appointment by a successor Trustee acceptable to the Note
Insurer pursuant to this Section 6.8. Subject to the preceding sentence, the
Trustee may resign at any time by providing 60 days prior written notice to the
Issuer, the Note Insurer and the Noteholders or sooner if so required by law.
The Issuer may, with the consent of the Controlling Party, and, at the request
of the Controlling Party shall, remove the Trustee if:
(i) the Trustee fails to comply with Section 6.11;
(ii) the filing of a petition for relief by a court having
jurisdiction in the premises in respect of the Trustee, or any substantial
part of its property in an involuntary case under any applicable Federal or
State bankruptcy, insolvency or other similar law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Trustee or for any substantial part
of its property, or ordering the winding-up or liquidation of the affairs
of the Trustee and such petition shall remain unstayed and in effect for a
period of 60 consecutive days;
55
(iii) the commencement by the Trustee 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 Trustee to the entry of an
order for relief in an involuntary case under any such law, or the consent
by the Trustee to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
of the Trustee or for any substantial part of its property, or the making
by the Trustee of any general assignment for the benefit of creditors, or
the failure by the Trustee generally to pay its debts as such debts become
due, or the taking of action by the Trustee in furtherance of any of the
foregoing;
(iv) the Trustee otherwise becomes incapable of acting; or
(v) the Trustee has materially failed to perform any of its duties
hereunder or under any other Related Document or has materially breached
any representation and warranty made under the Related Documents.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason (the Trustee in such event being referred to herein as
the retiring Trustee), the Issuer shall promptly provide written notice of such
event to the Rating Agencies, the Note Insurer and the Noteholders and shall
appoint a successor Trustee acceptable to the Controlling Party. If the Issuer
fails to appoint such a successor Trustee, the Controlling Party may appoint a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee, the Note Insurer and to the Issuer. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Noteholders and the Note Insurer. The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor Trustee
and shall be paid all fees and expenses owed through the date of termination.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Controlling
Party, the Issuer or a Note Majority may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this Section,
the Issuer's obligations under Section 6.7 shall continue for the benefit of the
retiring Trustee. The retiring Trustee shall have no liability for any act or
omission by any successor Trustee.
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SECTION 6.9. Successor Trustee by Merger. If the 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 Trustee. The Trustee shall provide the Rating Agencies, the Note
Insurer and the Issuer prior written notice of any such transaction; provided,
however, that such corporation or banking association shall be otherwise
qualified and eligible under Section 6.11.
If at the time of any such succession by merger, conversion or
consolidation to the Trustee any of the Notes shall have been authenticated but
not delivered, any such successor to the 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 Trustee may authenticate such Notes either
in the name of any predecessor trustee hereunder or in the name of the successor
to the Trustee; and in all such cases such certificates of authentication shall
have the full force and effect to the same extent given to the certificate of
authentication of the Trustee anywhere in the Notes or in this Indenture.
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee. (a)
Notwithstanding any other provisions of this Indenture, at any time, for the
purpose of meeting any legal requirement of any jurisdiction in which any part
of the Trust Estate may at the time be located, the Trustee, with the consent of
the Controlling Party, shall have the power and may execute and deliver all
instruments to appoint one or more Person(s) to act as co-trustee(s), or
separate trustee(s), of all or any part of the Trust Estate, and to vest in such
Person(s), in such capacity and for the benefit of the Noteholders, such title
to the Trust Estate, or any part thereof, and, subject to the other provisions
of this Section, such powers, duties, obligations, rights and trusts as the
Trustee may consider necessary or desirable. No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a successor
trustee under Section 6.11 and no notice to Noteholders of the appointment of
any co-trustee or separate trustee shall be required under Section 6.8;
provided, however, that each co-trustee and separate trustee must be acceptable
to the Note Insurer.
(b) Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly
(it
57
being understood that such separate trustee or co-trustee is not authorized
to act separately without the Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any particular
act(s) are to be performed, the Trustee shall be incompetent or unqualified
to perform such act(s), in which event such rights, powers, duties and
obligations (including the holding of title to the Trust Estate or any
portion thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the direction
of the Trustee;
(ii) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) the Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Indenture and the conditions
of this Article VI. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the 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 Trustee. Every
such instrument shall be filed with the Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Trustee as its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Indenture on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
(e) The Trustee shall have no obligation to determine whether a co-trustee
or separate trustee is legally required in any jurisdiction in which any part of
the Trust Estate may be located.
SECTION 6.11. Corporate Trustee Required; Eligibility. There shall at all
times be a trustee hereunder which shall be a corporation or association
organized and doing business under the laws of the United States of America or
of
58
any state, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least $100,000,000, acceptable to the Note
Insurer, subject to supervision or examination by Federal or state authority and
having an office within the United States of America, and which shall have a
commercial paper or other short-term rating of the highest short-term rating
categories by each of the Rating Agencies, or otherwise acceptable to each of
the Rating Agencies. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purposes of this Section 6.11, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section 6.11, it shall resign immediately in the
manner and with the effect hereinafter specified in this Article VI.
SECTION 6.12. Appointment and Powers. Subject to the terms and conditions
hereof, each of the Secured Parties hereby appoints Xxxxxx Trust and Savings
Bank as Trustee with respect to the Indenture Collateral, and Xxxxxx Trust and
Savings Bank hereby accepts such appointment and agrees to act as the Trustee on
behalf of the Secured Parties with respect to the Indenture Collateral for the
Secured Parties, to maintain custody and possession of such Indenture Collateral
(except as otherwise provided hereunder) pursuant to the Pooling and Servicing
Agreement and the Custodian Agreement and to perform the other duties of the
Trustee in accordance with the provisions of this Indenture. Each Secured Party
hereby authorizes the 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 Trustee by
the terms hereof, together with such actions, rights, remedies, powers and
privileges as are reasonably incidental thereto. The 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, however, that the Trustee shall not be required to act
in accordance with any instructions for which it has not received indemnity
satisfactory to the Trustee. Receipt of such instructions shall not be a
condition to the exercise by the Trustee of its express duties hereunder, except
where this Indenture provides that the Trustee is permitted to act only
following and in accordance with such instructions.
SECTION 6.13. Limitation on Liability. Neither the Trustee nor any of its
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them hereunder or in connection herewith, except
that the Trustee shall be liable for its negligence (other than errors in
judgment), bad faith or willful misconduct; nor shall the Trustee be responsible
for the validity,
59
effectiveness, value, sufficiency or enforceability against the Issuer of this
Indenture or any of the Indenture Collateral (or any part thereof).
Notwithstanding any term or provision of this Indenture, the Trustee shall incur
no liability to the Issuer or the Secured Parties for any action taken or
omitted by the Trustee in connection with the Indenture Collateral, except for
the negligence or willful misconduct on the part of the Trustee and, further,
shall incur no liability to the Secured Parties except for negligence (other
than errors in judgment) or willful misconduct in carrying out its duties to the
Secured Parties. Subject to Section 6.14, the Trustee shall be protected and
shall incur no liability to any such 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 Trustee to be genuine and to have been duly executed by the appropriate
signatory, and (absent actual knowledge to the contrary) the Trustee shall not
be required to make any independent investigation with respect thereto. The
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 Related Documents. The Trustee may
consult with counsel, 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 advice of such
counsel selected by it with due care, which advice shall be confirmed in
writing. The Trustee shall not be under any obligation to exercise any of the
remedial rights or powers vested in it by this Indenture at the request or
direction of any of the Noteholders pursuant to this Indenture unless such
Noteholders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction.
SECTION 6.14. Reliance upon Documents. In the absence of bad faith, willful
misconduct or negligence on its part, the Trustee shall be entitled to rely on
any communication, instrument, paper or other document reasonably believed by it
to be genuine and correct and to have been signed or sent by the proper Person
or Persons and shall have no liability in acting, or omitting to act, where such
action or omission to act is in reasonable reliance upon any statement or
opinion contained in any such document or instrument.
SECTION 6.15. Representations and Warranties of the Trustee. The Trustee
represents and warrants to the Issuer and to each Secured Party as follows:
(a) Due Organization. The Trustee is an Illinois banking corporation duly
organized, validly existing and in good standing under the laws of Illinois, and
is duly authorized and licensed under applicable law to conduct its business as
60
presently conducted.
(b) Corporate Power. The Trustee has all requisite right, power and
authority to execute and deliver this Indenture and to perform all of its duties
as Trustee hereunder (whether performed by the Trustee or through co-trustees or
separate trustees appointed pursuant to Section 6.10).
(c) Due Authorization. The execution and delivery by the Trustee of this
Indenture and the other Related Documents to which it is a party, and the
performance by the 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 Trustee or the performance by the Trustee, of this
Indenture and such other Related Documents.
(d) Valid and Binding Indenture. The Trustee has duly executed and
delivered this Indenture and each other Related Document to which it is a party,
and each of this Indenture and each such other Related Document constitutes the
legal, valid and binding obligation of the Trustee, enforceable against the
Trustee in accordance with its respective 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 6.16. Waiver of Setoffs. The Trustee hereby expressly waives any
and all rights of setoff that the Trustee may otherwise at any time have under
applicable law with respect to the Collection Account and agrees that amounts in
the Collection Account shall at all times be held and applied solely in
accordance with the provisions hereof.
ARTICLE VII
Noteholders' Lists and Reports
SECTION 7.1. Issuer To Furnish Trustee Names and Addresses of Noteholders.
The Issuer will furnish or cause to be furnished to the 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 Trustee may reasonably
require, of the names and addresses of the Holders of Notes as of such Record
Date, and (b) at such other times as the Trustee may request in writing, within
30 days after receipt by the Issuer of any such request, a list of similar form
and
61
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 Trustee is the Note Registrar,
no such list shall be required to be furnished. The Trustee or, if the Trustee
is not the Note Registrar, the Issuer shall furnish to the Note Insurer at such
times as the Note Insurer may request a copy of the list.
SECTION 7.2. Preservation of Information; Communications to Noteholders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders of Notes contained in the
most recent list furnished to the Trustee as provided in Section 7.1 and the
names and addresses of Holders of Notes received by the Trustee in its capacity
as Note Registrar. The Trustee may destroy any list furnished to it as provided
in Section 7.1 upon receipt of a new list so furnished.
(b) Three or more Noteholders, or one or more Holder(s) of Notes evidencing
at least 25% of the Note Balance, may obtain a list of the names and addresses
of Holders of Notes of record as of the most recent Record Date in order to
communicate with other Noteholders with respect to their rights under this
Indenture or under the Notes.
SECTION 7.3. Reports by Issuer. (a) The Issuer shall supply to the Trustee
(and the Trustee shall transmit by mail to all Noteholders) such information
pertaining to the Issuer as may be necessary to afford Noteholders the ability
to sell or transfer the Notes pursuant to Rule 144A.
(b) Unless the Issuer otherwise determines after notice to the Servicer,
the Note Insurer and the Trustee, the fiscal year of the Issuer shall end on
December 31 of each year.
ARTICLE VIII
Accounts, Disbursements and Releases
SECTION 8.1. Collection of Money. Except as otherwise expressly provided
herein, the 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
Trustee pursuant to this Indenture. The Trustee shall apply all such money
received by it as provided in this Indenture. Except as otherwise expressly
provided in this Indenture, if any default occurs in the making of any payment
or performance under any agreement or instrument that is part of the Trust
Estate, the Trustee may
62
take such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate Proceedings. Any such
action shall be without prejudice to any right to claim a Default or Event of
Default under this Indenture and any right to proceed thereafter as provided in
Article V.
SECTION 8.2. Collection Account and Spread Account. (a) On or prior to the
Closing Date, the Issuer shall cause the Servicer to establish and maintain, in
the name of the Trustee, for the benefit of the Noteholders and the Note
Insurer, the Collection Account and the Spread Account as provided in Section
4.1 of the Pooling and Servicing Agreement.
(b) On each Payment Date and Redemption Date, the Trustee shall distribute
amounts on deposit in the Collection Account and the Spread Account to the
Persons and in the amounts and order of priority set forth in Section 4.5 of the
Pooling and Servicing Agreement.
SECTION 8.3. General Provisions Regarding Accounts. (a) So long as no
Default or Event of Default shall have occurred and be continuing, all or a
portion of the funds in the Collection Account and the Spread Account shall be
invested and reinvested by the Trustee in Eligible Investments in accordance
with Section 4.1(c) of the Pooling and Servicing Agreement.
(b) Subject to Section 6.1(c), the Trustee shall not in any way be held
liable for the selection of Eligible Investments or by reason of any
insufficiency in the Collection Account or the Spread Account resulting from any
loss on any Eligible Investment included therein, except for losses attributable
to the Trustee's failure to make payments on such Eligible Investments issued by
the Trustee, in its commercial capacity as principal obligor and not as trustee,
in accordance with their terms.
SECTION 8.4. Release of Trust Estate. (a) Subject to the payment of its
fees and expenses pursuant to Section 6.7, the Trustee, when required by this
Indenture, shall execute instruments to release property from the Lien of this
Indenture, or convey the Trustee's interest in the same, in a manner and under
circumstances that are not inconsistent with this Indenture and the Pooling and
Servicing Agreement. No party relying upon an instrument executed by the Trustee
as provided in this Article shall be bound to ascertain the Trustee's authority,
inquire into the satisfaction of any conditions precedent or see to the
application of any moneys.
(b) The Trustee shall, at such time as there are no Notes Outstanding and
all sums due to the Trustee pursuant to Section 6.7 and all Reimbursement
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Amounts due to the Note Insurer have been paid and all other Secured Obligations
have been paid in full, release any remaining portion of the Trust Estate that
secured the Notes from the Lien of this Indenture and release to the Issuer or
any other Person entitled thereto any funds then on deposit in the Collection
Account. The Trustee shall release property from the Lien of this Indenture
pursuant to this paragraph only upon receipt of an Issuer Request accompanied by
an Officers' Certificate and an Opinion of Counsel meeting the applicable
requirements of Section 11.1 and the written consent of the Controlling Party.
SECTION 8.5. Opinion of Counsel. The Trustee and the Note Insurer shall
receive at least seven days' notice when requested by the Issuer to take any
action pursuant to Section 8.4(a), accompanied by copies of any instruments
involved, and the Trustee shall also require, as a condition to such action, an
Opinion of Counsel delivered to the Trustee and the Note Insurer stating the
legal effect of any such action, outlining the steps required to complete the
same, and concluding that all conditions precedent to the taking of such action
have been complied with and such action will not materially and adversely impair
the security for the Notes or the rights of the Noteholders or the Note Insurer
in contravention of this Indenture; provided, however, that such Opinion of
Counsel shall not be required to express an opinion as to the fair value of the
Trust Estate. Counsel rendering any such opinion may rely, without independent
investigation, on the accuracy and validity of any certificate or other
instrument delivered to the Trustee in connection with any such action.
SECTION 8.6. Purchase of Receivables.
(a) If at any time the Issuer, the Note Insurer or the Trustee discovers or
is notified by the Servicer that any of the representations and warranties of
Reliance in the Pooling and Servicing Agreement were incorrect at the time as of
which such representations and warranties were made, then the Person discovering
such defect, omission, or circumstance shall promptly notify the Note Insurer
and the other parties hereto.
(b) In the event that any representation or warranty of Reliance set forth
in Section 2.3(a) of the Pooling and Servicing Agreement is incorrect and has a
material adverse effect on the interests of the Note Insurer or the Holders of
the Notes in any Receivable, then the Issuer shall require Reliance pursuant to
the Pooling and Servicing Agreement to eliminate or otherwise cure the
circumstance or condition which has caused such representation or warranty to be
incorrect by the second Accounting Date following Reliance's discovery or notice
thereof. If Reliance fails or Reliance or the Servicer is unable to cure such
circumstance or condition in accordance with the Pooling and Servicing
Agreement, or if a Lien
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Certificate with respect to a Financed Vehicle is not delivered to a Custodian
within 120 days after the Closing Date (or within 180 days after the Closing
Date with respect to Lien Certificates to be issued in the states of Indiana or
Nevada), then the Issuer shall require Reliance to purchase, pursuant to the
Pooling and Servicing Agreement, any Receivable as to which such representation
or warranty is incorrect or any Receivable as to which a Lien Certificate has
not been delivered to a Custodian, within the time specified in Section 2.6 of
the Pooling and Servicing Agreement. The proceeds of a purchase shall be
remitted by the Issuer to the Servicer for deposit by the Servicer in the
Collection Account pursuant to Section 3.2(d) of the Pooling Servicing
Agreement.
(c) If the Issuer fails to enforce the purchase or substitution obligation
of Reliance under the Pooling and Servicing Agreement, the Trustee is hereby
appointed attorney-in-fact to act on behalf of and in the name of the Issuer to
require such purchase.
ARTICLE IX
Supplemental Indentures
SECTION 9.1. Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Holders of Notes but with the prior written
consent of the Controlling Party and with prior written notice to the Rating
Agencies, the Issuer and the Trustee, when authorized by an Issuer Order, at any
time and from time to time, may enter into one or more indentures supplemental
hereto in form satisfactory to the Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at any time
subject to the Lien of this Indenture, or better to assure, convey and
confirm unto the 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;
(iii) to add to the covenants of the Issuer, for the benefit of the
Holders of Notes and the Note Insurer, or to surrender any right or power
herein conferred upon the Issuer;
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(iv) to convey, transfer, assign, mortgage or pledge any property to
or with the Trustee;
(v) to cure any ambiguity or to correct any provision herein or in any
supplemental indenture that may be inconsistent with any other provision
herein or in any supplemental indenture or to make any other provisions
with respect to matters or questions arising under this Indenture or in any
supplemental indenture; provided, however, that in the Opinion of Counsel
such action shall not materially adversely affect the interests of the
Holders of Notes; or
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Notes and to add to or
change any of the provisions of this Indenture as shall be necessary to
facilitate the administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Article VI.
The 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. If an Insurer Default has occurred
and is continuing, written consent of the Note Insurer shall be required prior
to the execution of such supplemental indenture or indentures unless such action
shall not, as evidenced by an Opinion of Counsel delivered to the Note Insurer
and the Trustee, adversely affect in any material respect the interests of the
Note Insurer.
(b) The Issuer and the Trustee, when authorized by an Issuer Order, may,
without the consent of the any of the Holders of Notes but with the consent of
the Controlling Party and with prior written notice to the Rating Agencies,
enter into an indenture or indentures supplemental hereto to cure any ambiguity,
to correct or supplement any provisions in this Indenture or 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 Notes under this Indenture; provided, however, that such action shall
not, as evidenced by an Opinion of Counsel, adversely affect in any material
respect the interests of any Noteholder or, if an Insurer Default has occurred
and is continuing, the Note Insurer.
SECTION 9.2. Supplemental Indentures With Consent of Noteholders. The
Issuer and the Trustee, when authorized by an Issuer Order, may, with prior
written notice to the Rating Agencies and with the prior written consent of the
Controlling Party and the Note Majority enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any
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manner or eliminating any of the provisions of this Indenture or of modifying in
any manner the rights of the Holders of Notes under this Indenture; provided,
however, that if an Insurer Default has occurred and is continuing, written
consent of the Note Insurer shall be required prior to the execution of such
supplemental indenture or indentures unless such action shall not, as evidenced
by an Opinion of Counsel delivered to the Note Insurer and the Trustee,
adversely affect in any material respect the interests of the Note Insurer;
provided further, that, subject to the express rights of the Note Insurer under
the Related Documents, including its rights to agree to certain modifications of
the Receivables pursuant to Section 3.2 of the Pooling and Servicing Agreement,
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
provisions of this Indenture relating to the application of collections on,
or the proceeds of the sale of, the Trust Estate to the payment of
principal of or interest on the Notes, or change any place of payment
where, or the coin or currency in which, any Note or the interest thereon
is payable, or impair the right to institute suit for the enforcement of
the provisions of this Indenture requiring the application of funds
available therefor, as provided in Article V, to the payment of any such
amount due on or after the respective due dates thereof (or, in the case of
redemption, on or after the Redemption Date);
(ii) reduce the percentage of the Note Balance, 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;
(iii) modify or alter the provisions of the proviso to the definition
of "Outstanding";
(iv) reduce the percentage of the Note Balance required to direct the
Trustee to direct the Issuer to sell or liquidate the Trust Estate pursuant
to Section 5.4 or 5.11;
(v) permit the creation of any Lien ranking prior to or on a parity
with the Lien of this Indenture with respect to any part of the Trust
Estate or, except as otherwise permitted or contemplated herein, terminate
the Lien of this Indenture on any property at any time subject hereto or
deprive
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any Holder of Notes of the security provided by the Lien of this Indenture;
or
(vi) become effective if the Rating Agency Condition in respect
thereof shall have not been satisfied.
It shall not be necessary for any Act of the Noteholders under this Section
9.2 to approve the particular form of any proposed supplemental indenture, but
it shall be sufficient if such Act shall approve the substance thereof. The
manner of obtaining such consents (and any other consents of Noteholders
provided for in this Indenture or in any other Related Document) and of
evidencing the authorization of the execution thereof by Noteholders shall be
subject to such reasonable requirements as the Trustee may provide.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to this Section 9.2, the 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 Trustee to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture.
SECTION 9.3. Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts created
by this Indenture, the Trustee shall be entitled to receive, and subject to
Sections 6.1 and 6.2, shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture that affects the Trustee's own
rights, duties, liabilities or immunities under this Indenture or otherwise.
SECTION 9.4. Effect of Supplemental Indenture. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and be deemed to be modified and amended in accordance therewith with respect
to the Notes affected thereby, and the respective rights, limitations of rights,
obligations, duties, liabilities and immunities under this Indenture of the
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.
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SECTION 9.5. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article may, and if required by the Trustee shall, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Issuer or the Trustee shall so determine, new
Notes so modified as to conform, in the opinion of the Trustee and the Issuer,
to any such supplemental indenture may be prepared and executed by the Issuer
and authenticated and delivered by the Trustee in exchange for Outstanding
Notes.
ARTICLE X
Redemption of Notes
SECTION 10.1. Redemption. On any Payment Date on which the Servicer
exercises its option to purchase the Receivables pursuant to Section 8.1 of the
Pooling and Servicing Agreement, the Notes are subject to redemption for a
purchase price equal to the Redemption Price. Pursuant to said Section 8.1, the
Servicer shall furnish notice of such redemption to the Issuer, the Trustee, the
Backup Servicer, the Rating Agencies and the Note Insurer not later than 10 days
prior to the Redemption Date and the Servicer shall deposit with the Trustee in
the Collection Account the aggregate Purchase Amounts for the Receivables on or
before the date of redemption.
SECTION 10.2. Form of Redemption Notice. Notice of redemption under Section
10.1 shall be given by the Trustee by first-class mail, postage prepaid, mailed
not less than 5 days prior to the applicable Redemption Date to each Holder of
Notes, at such Holder's address appearing in the Note Register, or if the Notes
are held at the Clearing Agency, then pursuant to the Clearing Agency's normal
notice requirements.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price; and
(iii) the place where such Notes are to be surrendered for payment of
the Redemption Price (which shall be the office or agency of the Issuer to
be maintained as provided in Section 3.2).
Notice of redemption of the Notes shall be given by the Trustee in the name
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and at the expense of the Issuer. Failure to give notice of redemption, or any
defect therein, to any Holder of any Note shall not impair or affect the
validity of the redemption of any other Note.
SECTION 10.3. Notes Payable on Redemption Date. The Notes or portions
thereof to be redeemed shall, following notice of redemption pursuant to this
Article X, become due and payable on the Redemption Date at the Redemption
Price.
If there are not sufficient funds in the Collection Account and the Spread
Account on the Payment Date on which the Notes are to be redeemed available to
pay the Redemption Price, the notice of redemption shall be deemed to have been
revoked and the Notes shall not be redeemed on the Redemption Date. Payments
will be made on such Payment Date in accordance with Section 4.5 of the Pooling
and Servicing Agreement as though no notice of redemption had been given and the
Notes shall continue to bear interest at the Note Interest Rate.
ARTICLE XI
Miscellaneous
SECTION 11.1. Compliance Certificates and Opinions, etc. (a) Upon any
application or request by the Issuer to the Trustee to take any action under
this Indenture, the Issuer shall furnish to the Trustee and the Note Insurer (i)
an Officers' 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, except that, in the
case of any such application or request as to which the furnishing of such
documents is specifically required by this Indenture, no additional certificate
or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(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;
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(iii) a statement that, in the opinion of each such signatory, such
signatory has made (or has caused to be made) such examination or
investigation as is necessary to enable such signatory to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(iv) a statement as to whether, in the opinion of each such signatory,
such condition or covenant has been complied with.
(b)(i) Prior to the deposit of any Indenture Collateral or other property
or securities with the Trustee that is to be made the basis for the release of
any property or securities subject to the Lien of this Indenture, the Issuer
shall, in addition to any obligation imposed in Section 11.1(a) or elsewhere in
this Indenture, furnish to the Trustee and the Note Insurer (so long as no
Insurer Default shall have occurred and be continuing) an Officers' Certificate
certifying or stating the opinion of each person signing such certificate as to
the fair value (within 90 days of such deposit) to the Issuer of the Indenture
Collateral or other property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the Trustee and the
Note Insurer an Officers' Certificate described in clause (i), the Issuer
shall also deliver to the Trustee and the Note Insurer an Independent
Certificate as to the same matters, if the fair value to the Issuer of the
Indenture Collateral or other property or securities to be so deposited and
of all other such Indenture Collateral or other property or securities made
the basis of any such withdrawal or release since the commencement of the
then-current fiscal year of the Issuer, as set forth in the certificates
delivered pursuant to clause (i) and this clause (ii), is 10% or more of
the Note Balance, but such a certificate need not be furnished with respect
to any Indenture Collateral or other property or securities so deposited if
the fair value thereof to the Issuer as set forth in the related Officers'
Certificate is less than $25,000 or less than one percent of the Note
Balance.
SECTION 11.2. Form of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more 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.
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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, opinion or representations
with respect to the matters upon which his certificate or opinion is based
is/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, Reliance or the Issuer, stating that the information with respect to
such factual matters is in the possession of the Servicer, Reliance or the
Issuer, as applicable, unless such Authorized Officer or counsel knows, or in
the exercise of reasonable care should know, that the certificate, opinion or
representations with respect to such matters is/are erroneous.
Where any Person is required or permitted to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
Whenever in this Indenture, in connection with any application, certificate
or report to the 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 Trustee's right to rely upon the truth and accuracy of any statement
or opinion contained in any such document as provided in Article VI.
SECTION 11.3. Acts of Noteholders. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Noteholders may be embodied in and evidenced by one or more
instrument(s) 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(s)
are delivered to the Trustee, and, where it is hereby expressly required, to the
Issuer. Such instrument(s) (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Noteholders
signing such instrument(s). Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any purpose of this
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Indenture and (subject to Section 6.1) conclusive in favor of the Trustee and
the Issuer, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved in any manner that the Trustee deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or Act by the Holder of any Notes shall bind the Holder of every Note issued
upon the registration thereof, in exchange therefor or in lieu thereof, in
respect of anything done, omitted or suffered to be done by the Trustee or the
Issuer in reliance thereon, whether or not notation of such action is made upon
such Note.
SECTION 11.4. Notices, etc., to the Trustee, Issuer and Rating Agencies.
Any request, demand, authorization, direction, notice, consent, waiver or Act of
Noteholders, or other documents provided or permitted by this Indenture, shall
be in writing and, if such request, demand, authorization, direction, notice,
consent, waiver or Act of Noteholders is to be made upon, given or furnished to
or filed with:
(a) the Trustee by any Noteholder or by the Issuer, shall be
sufficient for every purpose hereunder if made, given, furnished or filed
in writing to or with the Trustee at its Corporate Trust Office, or
(b) the Issuer by the Trustee or by any Noteholder, shall be
sufficient for every purpose hereunder if in writing and mailed, first-
class, postage prepaid, to the Issuer addressed to: Reliance Auto
Receivables Corporation, 000 Xxxxx Xxxx, 0000 Xxxx, Xxxxx 000, Xxx Xxxxxxx,
Xxxxx 00000, Attention: Xxxxxxx X. Xxxxxxx, Telecopy No.: (000) 000-0000,
with a copy to Xxxxx X. Xxxxxx, 000 Xxxxx Xxxxxxxx Xxxxxx, 00xx Xxxxx,
Xxxxxxx, Xxxxxxxx 00000, Telecopy No.: (000) 000-0000 or at any other
address previously furnished in writing to the Trustee by the Issuer. The
Issuer shall promptly transmit any notice received by it from the
Noteholders to the Trustee.
Notices required to be given to the Rating Agencies and the Note Insurer by
the Issuer or the Trustee shall be in writing, personally delivered or mailed by
certified mail, return receipt requested, to their respective addresses set
forth in Section 9.9 of the Pooling and Servicing Agreement.
SECTION 11.5. Notices to Noteholders; Waiver. Where this Indenture
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provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at his address as it appears on the Note Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. Any notice shall be deemed effective on the day following such
mailing. 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.
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 Trustee but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such a waiver.
In case, by reason of the suspension of regular mail service, it shall be
impractical to mail notice of any event to Noteholders when such notice is
required to be given pursuant to this Indenture, then any manner of giving such
notice as shall be satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies, failure to
give such notice shall not affect any other rights or obligations created
hereunder, and shall not under any circumstance constitute a Default or Event of
Default.
SECTION 11.6. [Reserved].
SECTION 11.7. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 11.8. Successors and Assigns. All covenants and agreements in this
Indenture and the Notes by the Issuer shall bind its successors and assigns,
whether so expressed or not. All agreements of the Trustee in this Indenture
shall bind its successors, co-trustees and agents of the Trustee.
SECTION 11.9. Severability. Any provision of this Indenture or the Notes
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without
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invalidating the remaining provisions hereof or of the Notes, as applicable, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
SECTION 11.10. Benefits of Indenture. The Note Insurer and its successors
and assigns shall be express third party beneficiaries to the provisions of this
Indenture, and shall be entitled to rely upon and directly to enforce such
provisions of this Indenture. Nothing in this Indenture or in the Notes, express
or implied, shall give to any Person, other than the parties hereto and their
successors hereunder, the Noteholders, any other party secured hereunder and any
other Person with an ownership interest in any part of the Trust Estate, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
The Note Insurer may disclaim any of its rights and powers under this Indenture
(in which case the 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 Trustee.
SECTION 11.11. Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next Business Day with the same force and effect as if
made on the date on which nominally due, and no interest shall accrue for the
period from and after any such nominal date.
SECTION 11.12. Governing Law. This Indenture shall be construed in
accordance with the laws of the State of New York, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
SECTION 11.13. Counterparts. This Indenture may be executed in any number
of counterparts, each of which when so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 11.14. Recording of Indenture. If this Indenture is subject to
recording in any 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 Trustee or any other counsel reasonably acceptable to the
Trustee and the Controlling Party) 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
Trustee under this Indenture.
SECTION 11.15. Trust Obligation. No recourse may be taken, directly
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or indirectly, with respect to the obligations of the Issuer or the Trustee on
the Notes or under this Indenture or any certificate or other writing delivered
in connection herewith or therewith, against (i) the Trustee in its individual
capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any
partner, owner, beneficiary, officer, director, employee or agent of (a) the
Trustee in its individual capacity, (b) any owner of a beneficial interest in
the Issuer or the Trustee or (c) of any successor or assign of the Trustee in
its individual capacity, except as any such Person may have expressly agreed (it
being understood that the 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 11.16. No Petition. The Trustee, by entering into this Indenture,
and each Noteholder, by accepting a Note, hereby covenant and agree that they
shall not at any time institute against the Issuer, or join in any institution
against 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 other Related Document. The foregoing shall
not limit the rights of the Trustee to file any claim in or otherwise take any
action with respect to any insolvency proceeding that was instituted against the
Issuer by any Person other than the Trustee.
SECTION 11.17. Inspection. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Trustee and the Note 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
Trustee and the Note Insurer shall and shall cause its representatives to hold
in confidence all such information; provided, however, that the foregoing shall
not be construed to prohibit (i) disclosure of any and all information that is
or becomes publicly known, or information obtained by the Trustee and the Note
Insurer from sources other than the Issuer, Reliance or the Servicer, (ii)
disclosure of any and all information (A) if required to do so by any applicable
statute, law, rule or regulation, (B) to any government agency or regulatory or
self-regulatory body having or claiming authority to regulate or oversee any
aspects of the Trustee's or the Note Insurer's business or that of its
Affiliates, (C) pursuant to any subpoena, civil investigative demand or similar
demand or request of any court, regulatory
76
authority, arbitrator or arbitration to which the Trustee or the Note Insurer,
such Noteholder or an Affiliate thereof or any officer, director, employee or
shareholder thereof is subject, (D) in any preliminary or final offering
circular, registration statement or contract or other document pertaining to the
transactions contemplated by the Indenture and approved in advance by the Issuer
or (E) to any Affiliate, independent or internal auditor, agent, employee or
attorney of the Trustee, the Note Insurer or such Noteholder having a need to
know the same; provided, however, that the Trustee, the Note Insurer or such
Noteholder advises such recipient of the confidential nature of the information
being disclosed and such recipient agrees to keep such information confidential,
(iii) any other disclosure authorized by the Issuer, Reliance or the Servicer or
(iv) disclosure to the other parties to the transactions contemplated by the
Related Documents and the Noteholders.
77
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed by their respective officers duly authorized as of the
day and year first above written.
RELIANCE AUTO RECEIVABLES
CORPORATION, as Issuer
By:________________________________
Xxxxxxx X. Xxxxxxx
Treasurer
XXXXXX TRUST AND SAVINGS BANK,
not in its individual capacity, but solely as
Trustee
By:________________________________
Name:
Title:
EXHIBIT A
to Indenture
FORM OF NOTES
-------------
REGISTERED $____________/1/
No. R-___ CUSIP NO. _____________
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.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES OR "BLUE SKY" LAWS.
THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES THAT THIS NOTE MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) SO LONG AS THIS NOTE IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER
-----------------
/1/Denominations of $250,000 and integral multiples of $1,000 in excess thereof.
THE SECURITIES ACT OR (3) IN RELIANCE ON ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUBJECT TO THE RECEIPT
BY THE TRUSTEE AND THE NOTE INSURER OF A CERTIFICATION OF THE TRANSFEREE
AND AN OPINION OF COUNSEL (SATISFACTORY TO THE TRUSTEE, THE ISSUER AND THE
NOTE INSURER) TO THE EFFECT THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES.
SECTION 2.13 AND SECTION 2.14 OF THE INDENTURE CONTAIN FURTHER RESTRICTIONS
ON THE TRANSFER AND RESALE OF THIS NOTE AND ANY INTEREST HEREIN. EACH
TRANSFEREE OF THIS NOTE, BY ACCEPTANCE HEREOF, IS DEEMED TO HAVE ACCEPTED
THIS NOTE, SUBJECT TO THE FOREGOING RESTRICTIONS ON TRANSFERABILITY. IN
ADDITION, EACH TRANSFEREE OF THIS NOTE, BY ACCEPTANCE HEREOF, IS DEEMED TO
HAVE MADE THE REPRESENTATIONS AND AGREEMENTS SET FORTH IN SECTION 2.13.
RELIANCE AUTO RECEIVABLES CORPORATION
6.10% ASSET BACKED NOTES, SERIES 1996-A
Reliance Auto Receivables Corporation, a Delaware corporation
(including any successor, the "Issuer"), for value received, hereby
promises to pay to CEDE & CO., or registered assigns, the principal sum of
__________________ DOLLARS ($___________), partially payable on each
Payment Date from the Collection Account in respect of principal on the
Notes pursuant to Section 3.1 of the Indenture and Section 4.5 of the
Pooling and Servicing Agreement; provided, however, that the entire unpaid
principal amount of this Note shall be due and payable on the earlier of
the Final Scheduled Payment Date and the Redemption Date, if any, pursuant
to Section 10.1 of the Indenture. 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 close of business on the day preceding such
Payment Date, subject to certain limitations contained in Section 3.1 of
the Indenture and Section 4.5 of the Pooling and Servicing Agreement.
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 the
then current Payment Date or, if no interest has yet been paid, from
November 20, 1996. Interest will be computed on the basis of a 360-day year
of twelve 30-day months. Such principal of and interest on this Note shall
be paid in the manner specified in the Indenture.
A-2
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 "Policy") issued by MBIA Insurance Corporation (the
"Note Insurer"), pursuant to which the Note Insurer has unconditionally
guaranteed payments of the Interest Distributable Amount and the
Noteholders' Principal Payment Amount on each Payment Date, all as more
fully set forth in the Indenture.
"Statement of Insurance" attached hereto.
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 Trustee by manual signature, this Note shall not be entitled to any
benefit under the Indenture referred to on the reverse hereof, or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Dated: November 20, 1996
RELIANCE AUTO RECEIVABLES CORPORATION
By:________________________________
Name:___________________________
Title:__________________________
A-3
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Dated: November 20, 1996
_________________________________,
not in its individual capacity but
solely as Trustee
By:______________________________
Authorized Signatory
A-4
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its 6.10% Asset Backed Notes, Series 1996-A (the "Notes"),
all issued under an Indenture dated as of November 20, 1996 (such
Indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and Xxxxxx Trust and Savings Bank, not in its individual
capacity but solely as trustee (the "Trustee", which term includes any
successor 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 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 not otherwise defined
herein and that are defined in the Indenture shall have the meanings
assigned to them in or pursuant to the Indenture.
The Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.
The Issuer shall pay interest on overdue installments of interest at
the Note Interest Rate to the extent lawful.
As provided in the Indenture, the Notes are subject to redemption
pursuant to Section 10.1 of the Indenture, in whole, but not in part, on
any Payment Date on which the Servicer (with the consent of the Note
Insurer under certain circumstances) exercises its option to purchase the
Receivables pursuant to Section 8.1 of the Pooling and Servicing Agreement.
Under Section 8.1 of the Pooling and Servicing Agreement, the Servicer has
an option to purchase the Receivables (with the consent of the Note Insurer
if a draw on the Policy has occurred or if such purchase would result in a
claim on the Policy or in any amount owing to the Note Insurer remaining
unpaid), on any Payment Date on or after the date on which the Note Balance
is less than or equal to 10% of the Note Balance on the Closing Date.
Each Noteholder or Note Owner, by acceptance of a Note, or, in the
case of a Note Owner, a beneficial interest in the Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect
to the obligations of the Issuer or the Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection
therewith, against (i) the 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 (a) the Trustee in its
individual capacity, (b) any holder of a beneficial interest in the Issuer
or the Trustee or of (c) any successor or assign of the Trustee in its
individual capacity,
A-5
except as any such Person may have expressly agreed and except that any
such partner, owner or beneficiary shall be fully liable, to the extent
provided by applicable law, for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any installment or call owing to
such entity.
It is the intent of the Issuer, the Servicer, the Noteholders and the
Note Owners that, for purposes of Federal and State income tax and any
other tax measured in whole or in part by income, the Notes will qualify as
indebtedness of the Issuer. The Noteholders, by acceptance of a Note, agree
to treat, and to take no action inconsistent with the treatment of, the
Notes for such tax purposes as indebtedness of the Issuer.
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 by accepting the benefits of the Indenture that such Noteholder will
not at any time institute against the Issuer, or join in any institution
against the Issuer of, any bankruptcy, reorganization or arrangement,
insolvency or liquidation proceedings under any United States Federal or
State bankruptcy or similar law in connection with any obligations relating
to the Notes, the Indenture or the Related Documents.
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 Related Documents, neither Xxxxxx Trust and Savings Bank,
in its individual capacity, any owner of a beneficial interest in the
Issuer, nor any of their respective partners, beneficiaries, agents,
officers, directors, employees, 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 Trustee for the sole
purposes of binding the interests of the Trustee in the assets of the
Issuer. The Holder of this Note by the acceptance hereof agrees that,
except as expressly provided in the Related Documents, in the case of an
Event of Default under the
A-6
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-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: _____________ _______________________________ *
Signature Guaranteed:
____________________________________________
Signatures must be guaranteed by an "eligible
guarantor institution" meeting the requirements of
the Note Registrar, which requirements include
membership or participation in STAMP or such other
"signature guarantee program" as may be determined
by the Note Registrar in addition to, or in
substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
_________________________
* 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-8
EXHIBIT C
to Indenture
FORM OF SECTION 3.9 OFFICERS' CERTIFICATE
-----------------------------------------
____________, 199_
_________________________
_________________________
_________________________
Attention:_______________
Pursuant to Section 3.9 of the Indenture, dated as of November 20,
1996 (the "Indenture"), between Reliance Auto Receivables Corporation (the
"Issuer") and Xxxxxx Trust and Savings Bank, as Trustee, the undersigned
hereby certify that:
(a) a review of the activities of the Issuer during the previous
fiscal year and of performance under the Indenture has been made under
the supervision of the undersigned; and
(b) to the best knowledge of the undersigned, based on such
review, the Issuer has complied with all conditions and covenants
under the Indenture throughout such year. [or, if there has been a
default in the compliance of any such condition or covenant, this
certificate is to specify each such default known to the undersigned
and the nature and status thereof]
RELIANCE AUTO RECEIVABLES
CORPORATION
By:________________________________
Name:___________________________
Title:__________________________
EXHIBIT D
to Indenture
Representation Letter
(Non-Rule 144A)
Xxxxxx Trust and Savings Bank
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Reliance Auto Receivables Corporation
000 Xxxxx Xxxx 0000 Xxxx
Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
BA Securities, Inc.
000 Xxxxx XxXxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
First Chicago Capital Markets, Inc.
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Re: Reliance Auto Receivables Corporation
_____% Asset Backed Notes, Series 1996-A
----------------------------------------
The undersigned purchaser ("Purchaser") understands that the purchase
of the above-referenced notes described on the Schedule attached hereto
(the "Notes") may be made only by institutions that are "Accredited
Investors" under Sections 501(a)(1), (2), (3) and (7) of Regulation D, as
promulgated under the Securities Act of 1933, as amended (the "1933 Act"),
which includes banks, savings and loan associations, registered brokers and
dealers, insurance companies, investment companies, and organizations
described in Section 501(c)(3) of the Internal Revenue Code, corporations,
business trusts and partnerships, not formed for the specific purpose of
acquiring the Notes offered, with total assets in excess of $5,000,000.
The undersigned represents on behalf of the Purchaser that the Purchaser is
an "Accredited Investor" within the meaning of such definition. Purchaser
is urged to review carefully the responses, representations and warranties
it is making herein.
Representations and Warranties
------------------------------
Purchaser makes the following representations and warranties in order
to permit the Trustee, Reliance Auto Receivables Corporation ("Reliance
Auto Receivables"), BA Securities, Inc. and First Chicago Capital Markets,
Inc. to determine its suitability as a purchaser of Notes and to determine
that the exemption from registration relied upon by Reliance Auto
Receivables under Section 4(2) of the 1933 Act is available to it.
1. The execution and delivery of this Representation Letter has been
duly authorized by the Purchaser by all necessary corporate action on its
part, including due authorization and approval by the Board of Directors or
other governing body of the purchaser.
2. The Purchaser understands that the Notes have not been and will
not be registered under the 1933 Act in reliance upon the exemption
provided in Section 4(2) of the 1933 Act or any other applicable exemption,
that the Notes have not and will not be registered or qualified under the
securities or "blue sky" laws of any jurisdiction, that the Notes (and any
interest therein) may be resold (which resale is not currently
contemplated) or otherwise transferred only if so registered or qualified
or if an exemption from registration or qualification is available, that
Reliance Auto Receivables is not required to register the Notes and that
any transfer must comply with Sections 2.13 and 2.14 of the Indenture
relating to the Notes.
3. The Purchaser will comply with all applicable federal and state
securities laws in connection with any subsequent resale of the Notes (or
any in interest therein).
4. The Purchaser is a sophisticated institutional investor and has
knowledge and experience in financial and business matters and is capable
of evaluating the merits and risks of its investment in the Notes (or any
interest therein) and is able to bear the economic risk of such investment.
The Purchaser has been given such information concerning the Notes, the
underlying retail installment contracts and Reliance Auto Receivables as it
has requested.
5. The Purchaser is acquiring the Notes (or any interest therein) as
principal for its own account (or for the account of one or more other
institutional investors for which it is acting as duly authorized fiduciary
or agent) for the purpose of investment and not with a view to or for sale
in connection with any distribution thereof, subject nevertheless to any
requirement of law that the disposition of the Purchaser's property will at
all times be and remain within its
D-2
control.
6. Neither the Purchaser nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of any Note, any interest
in any Note to, or solicited any offer to buy or accept a transfer, pledge
or other disposition of any Note or any interest in any Note with, any
person in any manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action, which would
constitute a distribution of the Notes under the 1933 Act or which would
render the disposition of any Note a violation of Section 5 of the 1933 Act
or any state securities law, require registration or qualification pursuant
thereto, nor will it act, nor has it authorized or will it authorize any
person to act, in such manner with respect to the Notes.
7. The Purchaser represents that it either (a) is not acquiring the
Notes or any interest therein with the assets of any "plan" subject to
Section 4975 of the Code or Title I of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or (b) its purchase and holding
of the Notes or any interest therein will not result in a nonexempt
prohibited transaction under Section 406(a) of ERISA or Section 4975 of the
Code, or (c) its purchase and holding of the Notes meets the requirements
for an exemption under Department of Labor Prohibited Transaction Exemption
95-60.
8. The Purchaser understands that there is no market, nor is there
any assurance that a market will develop, for the Notes and that the Issuer
does not have any obligation to make or facilitate any such market (or to
otherwise repurchase the Notes from the Purchaser) under any circumstances.
9. The Purchaser has consulted with its own legal counsel,
independent accountants and financial advisors to the extent it deems
necessary regarding the tax consequences to it of ownership of the Notes,
is aware that its taxable income with respect to the Notes in any
accounting period may not correspond to the cash flow (if any) from the
Notes for such period, and is not purchasing the Notes in reliance on any
representations of the Issuer or its counsel with respect to tax matters.
10. The Purchaser understands that such Note will bear a legend as
set forth in the form of Note included in the Indenture.
11. The Purchaser agrees that it will obtain from any purchaser of
the Notes (or any interest therein) from it substantially the same
representations, warranties and agreements contained in (i) the foregoing
paragraphs 1 through 10 and in this paragraph 11 or (ii) Exhibit E to the
Indenture.
D-3
The representations and warranties contained herein will be binding
upon the heirs, executors, administrators and other successors of the
undersigned. If there is more than one signatory hereto, the obligations,
representations, warranties and agreements of the undersigned are made
jointly and severally.
Executed at ______________________________________, this ______ day of
_____________, 199__.
________________________________
Purchaser's Name (Print)
By______________________________
Signature
Its_____________________________
________________________________
Address of Purchaser
________________________________
Purchaser's Taxpayer
Identification Number
D-4
EXHIBIT E
to Indenture
Representation Letter
(Rule 144A)
Xxxxxx Trust and Savings Bank
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Reliance Auto Receivables Corporation
000 Xxxxx Xxxx 0000 Xxxx
Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
BA Securities, Inc.
000 Xxxxx XxXxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
First Chicago Capital Markets, Inc.
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Re: Reliance Auto Receivables Corporation
_____% Asset Backed Notes, Series 1996-A
----------------------------------------
Dear Sirs:
___________________ (the "Purchaser") is today purchasing in a private
resale from Reliance Auto Receivables Corporation (the "Issuer") the above
captioned notes (the "Notes"), issued pursuant to the Indenture dated as of
November 20, 1996 between Reliance Auto Receivables Corporation, as issuer
(the "Company") and __________________________, as trustee (the "Trustee").
In connection with the purchase of the Notes, the Purchaser hereby
represents and warrants to you as follows:
1. The execution and delivery of this Representation Letter has been
duly authorized by the Purchaser by all necessary corporate action on its
part.
2. The Purchaser understands that the Notes have not been and will
not be registered under the Securities Act of 1933, as amended (the "1933
Act"), in reliance upon the exemption provided in Section 4(2) of the 1933
Act or any other applicable exemption, that the Notes have not and will not
be registered or qualified under the securities or "blue sky" laws of any
jurisdiction, that the Notes (and any interest therein) may be resold
(which resale is not currently contemplated) or otherwise transferred only
if so registered or qualified or if an exemption from registration or
qualification is available, that Reliance Auto Receivables Corporation is
not required to register the Notes and that any transfer must comply with
Sections 2.13 and 2.14 of the Indenture relating to the Notes.
3. The Purchaser is not acquiring the Notes (or any interest therein)
with a view to, or for resale in connection with, a distribution that would
constitute a public offering within the meaning of the 1933 Act or a
violation of the 1933 Act or any state securities law (subject to the
understanding that disposition of the Purchaser's property will remain at
all times within its control). The Purchaser is not an affiliate of the
Trustee, any custodian of the Notes or the Company or any affiliate
thereof.
4. The Purchaser agrees that if at some time it wishes to dispose of
or exchange any of the Notes (or any interest therein), it will not
transfer or exchange any of the Notes unless such transfer or exchange is
in accordance with the provisions of Sections 2.13 and 2.14 of the
Indenture.
5. The Purchaser is a qualified institutional buyer as defined in
Rule 144A of the 1933 Act and has completed either of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2; it is
aware that the sale to it is being made in reliance on Rule 144A; it is
acquiring the Notes (or any interest therein) for its own account or for
the account of a qualified institutional buyer, it understands that such
Notes (or any interest therein) may be resold, pledged or transferred only
(i) to a person who the Purchaser reasonably believes is a qualified
institutional buyer that purchases for its own account or for the account
of a qualified institutional buyer to whom notice is given that the resale,
pledge or transfer is being made in reliance on Rule 144A; or (ii) pursuant
to another exemption from registration under the 1933 Act.
6. Neither the Purchaser nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of any Note, any interest
in any Note to, or solicited any offer to buy or accept a transfer, pledge
or other disposition of any Note or any interest in any Note with, any
person in any manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action, which would
constitute a distribution of the Notes under the 1933 Act or which would
render the disposition of any Note a violation of Section 5 of the 1933 Act
or any state securities law, require
E-2
registration or qualification pursuant thereto, nor will it act, nor has it
authorized or will it authorize any person to act, in such manner with
respect to the Notes.
7. The Purchaser represents that it either (a) is not acquiring the
Notes or any interest therein with the assets of any "plan" subject to
Section 4975 of the Code or Title I of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or (b) its purchase and holding
of the Notes or any interest therein will not result in a nonexempt
prohibited transaction under Section 406(a) of ERISA or Section 4975 of the
Code, or (c) its purchase and holding of the Notes meets the requirements
for an exemption under Department of Labor Prohibited Transaction Exemption
95-60.
8. The Purchaser understands that there is no market, nor is there
any assurance that a market will develop, for the Notes and that the Issuer
does not have any obligation to make or facilitate any such market (or to
otherwise repurchase the Notes from the Purchaser) under any circumstances.
9. The Purchaser has consulted with its own legal counsel,
independent accountants and financial advisors to the extent it deems
necessary regarding the tax consequences to it of ownership of the Notes,
is aware that its taxable income with respect to the Notes in any
accounting period may not correspond to the cash flow (if any) from the
Notes for such period, and is not purchasing the Notes in reliance on any
representations of the Issuer or its counsel with respect to tax matters.
10. The Purchaser has reviewed the Confidential Offering Circular
(the "Offering Circular") dated November 14, 1996, with respect to the
Notes, and the agreements and other materials referred to therein, and has
had the opportunity to ask questions and receive answers concerning the
terms and conditions of the transactions contemplated by the Offering
Circular and to obtain additional information necessary to verify the
accuracy and completeness of any information furnished to the Purchaser or
to which the Purchaser had access.
11. The Purchaser hereby further agrees to be bound by all the terms
and conditions of the Notes as provided in the Indenture.
X-0
00. If the Purchaser sells any of the Notes (or any interest
therein), the Purchaser will obtain from any subsequent purchaser
representations substantially similar to those contained in (i) this
Representation Letter or (ii) Exhibit D to the Indenture.
Very truly yours,
Dated: By:
--------------- ---------------------
Name:
E-4
Annex I to Exhibit E
Qualified Institutional Buyer Status Under SEC Rule 144A
--------------------------------------------------------
(Buyers other than investment companies)
Xxxxxx Trust and Savings Bank
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Reliance Auto Receivables Corporation
000 Xxxxx Xxxx 0000 Xxxx
Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
BA Securities, Inc.
000 Xxxxx XxXxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
First Chicago Capital Markets, Inc.
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Re: Reliance Auto Receivables Corporation
_____% Asset Backed Notes, Series 1996-A
Name of Buyer: ______________________________ ("Buyer")
I hereby certify that as indicated below, I am the President, Chief
Financial Officer, Senior Vice President or other executive officer of
Buyer.
In connection with purchases by Buyer from time to time, I hereby
certify to you and, if you act as broker for one or more customers, to such
customers, that Buyer is a "qualified institutional buyer" as defined in
Rule 144A under the Securities Act of 1933, as amended ("Rule 144A"),
because (i) Buyer owned and/or invested on a discretionary basis
$_______/1/ in securities (except for the
---------------------------
/1/ Buyer must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Buyer is a dealer, and, in that case,
Buyer must own and/or invest on a discretionary basis at least $10,000,000
in securities.
excluded securities referred to below) as of the end of Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A) and
(ii) Buyer satisfies the criteria in the category marked below.
Corporation, etc. Buyer is a corporation (other than a bank, savings
and loan association or similar institution), Massachusetts or similar
business trust, partnership, or charitable organization described in
Section 501(c)(3) of the Internal Revenue Code.
Bank. Buyer (a) is a national bank or banking institution organized
under the laws of any State, territory or the District of Columbia,
the business of which is substantially confined to banking and is
supervised by the State or territorial banking commission or similar
official or is a "foreign bank or equivalent institution, and (b) has
an audited net worth of at least $25,000,000 as demonstrated in its
latest annual financial statements, a copy of which is attached
hereto.
Savings and Loan. Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead association
or similar institution, which is supervised and examined by a State or
Federal authority having supervision over any such institution or is a
foreign savings and loan association or equivalent institution and (b)
has an audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is attached
hereto.
Broker-dealer. Buyer is a dealer registered pursuant to Section 15 of
the Securities Exchange Act of 1934, as amended.
Insurance Company. Buyer is an insurance company whose primary and
predominant business activity is the writing of insurance or the
reinsuring of risks underwritten by insurance companies and which is
subject to supervision by the insurance commissioner or a similar
official or agency of a State, territory or the District of Columbia.
State or Local Plan. Buyer is a plan established and maintained by a
State, its political subdivisions, or any agency or instrumentality of
a State or its political subdivisions, for the benefit of its
employees.
ERISA Plan. Buyer is an employee benefit plan within the meaning of
Title I of the Employee Retirement Income Security Act of 1974, as
amended.
Investment Advisor. Buyer is an investment advisor registered under
the
2
Investment Advisers Act of 1940, as amended.
The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with Buyer (ii) securities that are part of
an unsold allotment to or subscription by Buyer (if Buyer is a dealer),
(iii) securities issued or guaranteed by the U.S. or any instrumentality
thereof, (iv) bank deposit notes and certificates of deposit, (v) loan
participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
For purposes of determining the aggregate of securities owned and/or
invested on a discretionary basis by Buyer, Buyer used the cost of such
securities to Buyer and did not include any of the securities referred to
in the preceding paragraph.
Further, in determining such aggregate amount, Buyer may have included
securities owned by subsidiaries of Buyer, but only if such subsidiaries
are consolidated with Buyer in its financial statements prepared in
accordance with generally accepted accounting principles and if the
investments of such subsidiaries are managed under Buyer's direction.
However, such securities were not included if Buyer is a majority-owned,
consolidated subsidiary of another enterprise and Buyer is not itself a
reporting company under the Securities Exchange Act of 1934, as amended.
Buyer acknowledges that it is familiar with Rule 144A and understands
that you and your customers (if you act as a broker for one or more
customers) are and will continue to rely on the statements made herein
because one or more sales by you for your own account or your customers
account to Buyer may be in reliance on Rule 144A.
Will Buyer be purchasing Rule 144A
securities only for Buyer's own account?
------- ------
Yes No
If the answer to this question is "no", Buyer agrees that, in
connection with any purchase of securities sold to Buyer for the account of
a third party (including any separate account) in reliance on Rule 144A,
buyer will only purchase for the account of a third party that at the time
is a "qualified institutional buyer" within the meaning of Rule 144A. In
addition, Buyer agrees that Buyer will not purchase securities for a third
party unless Buyer has obtained a current representation letter from such
third party or taken other appropriate steps contemplated by Rule 144A to
conclude that such third party independently meets the definition of
"qualified
3
institutional buyer" set forth in Rule 144A.
Buyer agrees to notify you of any changes in the information and
conclusions herein. Until such notice is given to you, Buyer's purchase of
securities from you, or through you from your customers, will constitute a
reaffirmation of the foregoing certifications and acknowledgments as of the
date of such purchase.
Further, if Buyer is a bank or savings and loan as provided above,
Buyer agrees that it will furnish you with updated annual financial
statements promptly after they become available.
Date: _________________ Very truly yours,
______________________________
Print Name of Buyer
By____________________________
Name:
Title:
4
Annex 2 to Exhibit E
Xxxxxx Trust and Savings Bank
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Reliance Auto Receivables Corporation
000 Xxxxx Xxxx 0000 Xxxx
Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
BA Securities, Inc.
000 Xxxxx XxXxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
First Chicago Capital Markets, Inc.
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Re: Reliance Auto Receivables Corporation
_____% Asset Backed Notes, Series 1996-A
----------------------------------------
Name of Buyer: ________________________________________
("Buyer")
Name of Investment Adviser: ___________________________
("Adviser")
I hereby certify that, as indicated below, I am the President, Chief
Financial Officer or Senior Vice President of Buyer or, if Buyer is a
"qualified institutional buyer" as defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because Buyer is part of
a Family of Investment Companies (as defined below), of Adviser.
In connection with purchases by Buyer from time to time, I hereby
certify to you and, if you act as broker for one or more customers, to such
customers, that Buyer is a "qualified institutional buyer" as defined in
Rule 144A because (i) Buyer is an investment company registered under the
Investment Company Act of 1940, as amended and (ii) as marked below, Buyer
alone, or Buyer's Family of Investment Companies, owned at least
$100,000,000 in securities (other than the excluded securities referred to
below) as of the end of Buyer's most recent fiscal year.
1
______ Buyer owned $__________ in securities (other than the excluded
securities referred to below) as of the end of Buyer's most
recent fiscal year (such amount being calculated in accordance
with Rule 144A).
______ Buyer is part of a Family of Investment Companies which owned
in the aggregate $_______ in securities (other than the excluded
securities referred to below) as of the end of Buyer's most
recent fiscal year (such amount being calculated in accordance
with Rule 144A).
For purposes of determining the amount of securities owned by Buyer or
Buyer's Family of Investment Companies, I used the cost of such securities.
The term "Family of Investment Companies" as used herein means two or
more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).
The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with Buyer or are part of Buyer's Family of
Investment Companies, (ii) securities issued or guaranteed by the U.S., or
any instrumentality thereof, (iii) bank deposit notes and certificates of
deposit, (iv) loan participations, (v) repurchase agreements, (vi)
securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
On behalf of Buyer, I acknowledge that Buyer is familiar with Rule
144A and understands that you and your customers (if you act as a broker
for one or more customers) are and will continue to rely on the statements
made herein because one or more sales to Buyer by you for your own account
or your customer's account will be in reliance on Rule 144A. In addition,
on behalf of Buyer, I agree that, in connection with any purchase of
securities sold by or through you in reliance on Rule 144A, Buyer will only
purchase for Buyer's own account.
Finally, on behalf of Buyer or Adviser (as appropriate), I also agree
to notify you of any changes in the information and conclusions herein.
Until such notice is given to you, Buyer's purchase from time to time of
securities from you,
2
or through you from your customers, will constitute a reaffirmation of the
foregoing certifications and acknowledgements by me as of the date of such
purchase.
Date: _________________ Very truly yours,
____________________________
Name:
Title:
On behalf of:
____________________________
Name of Buyer:
or
____________________________
Name of Adviser:
3
