Exhibit 4.2
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FORM OF INDENTURE
between
USAA AUTO OWNER TRUST 200_-[ ]
as Issuer
and
[INDENTURE TRUSTEE]
as Indenture Trustee
Dated as of [Closing Date]
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Table of Contents
Page
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ARTICLE I
DEFINITIONS, USAGE AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions and Usage...........................................2
SECTION 1.2. Incorporation by Reference of Trust Indenture Act...............2
ARTICLE II
THE NOTES
SECTION 2.1. Form...........................................................2
SECTION 2.2. Execution, Authentication and Delivery.........................3
SECTION 2.3. Temporary Notes................................................4
SECTION 2.4. Tax Treatment..................................................4
SECTION 2.5. Registration; Registration of Transfer and Exchange............4
SECTION 2.6. Mutilated, Destroyed, Lost or Stolen Notes.....................5
SECTION 2.7. Persons Deemed Owners..........................................6
SECTION 2.8. Payment of Principal and Interest; Defaulted Interest..........7
SECTION 2.9. Cancellation...................................................8
SECTION 2.10. Release of Collateral..........................................8
SECTION 2.11. Book-Entry Notes...............................................8
SECTION 2.12. Notices to Clearing Agency.....................................9
SECTION 2.13. Definitive Notes...............................................9
SECTION 2.14. Authenticating Agents.........................................10
ARTICLE III
COVENANTS
SECTION 3.1. Payment of Principal and Interest.............................10
SECTION 3.2. Maintenance of Office or Agency...............................11
SECTION 3.3. Money for Payments To Be Held in Trust........................11
SECTION 3.4. Existence.....................................................12
SECTION 3.5. Protection of Indenture Trust Estate..........................13
SECTION 3.6. Opinions as to Indenture Trust Estate.........................14
SECTION 3.7. Performance of Obligations; Servicing of Receivables..........15
SECTION 3.8. Negative Covenants............................................17
SECTION 3.9. Annual Statement as to Compliance.............................17
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain Terms...........18
SECTION 3.11. Successor or Transferee.......................................19
SECTION 3.12. No Other Business.............................................20
SECTION 3.13. No Borrowing..................................................20
SECTION 3.14. Servicer's Obligations........................................20
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities.............20
SECTION 3.16. Capital Expenditures..........................................20
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SECTION 3.17. Further Instruments and Acts..................................20
SECTION 3.18. Restricted Payments...........................................20
SECTION 3.19. Notice of Events of Default...................................20
SECTION 3.20. Removal of Administrator......................................21
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture.......................21
SECTION 4.2. Application of Trust Money....................................22
SECTION 4.3. Repayment of Monies Held by Note Paying Agent.................22
ARTICLE V
REMEDIES
SECTION 5.1. Events of Default.............................................22
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment............24
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee.............................................24
SECTION 5.4. Remedies; Priorities..........................................26
SECTION 5.5. Optional Preservation of the Receivables......................29
SECTION 5.6. Limitation of Suits...........................................30
SECTION 5.7. Unconditional Rights of Noteholders To Receive Principal
and Interest..................................................30
SECTION 5.8. Restoration of Rights and Remedies............................31
SECTION 5.9. Rights and Remedies Cumulative................................31
SECTION 5.10. Delay or Omission Not a Waiver................................31
SECTION 5.11. Control by Noteholders........................................31
SECTION 5.12. Waiver of Past Defaults.......................................32
SECTION 5.13. Undertaking for Costs.........................................32
SECTION 5.14. Waiver of Stay or Extension Laws..............................32
SECTION 5.15. Action on Notes...............................................33
SECTION 5.16. Performance and Enforcement of Certain Obligations............33
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.1. Duties of Indenture Trustee...................................33
SECTION 6.2. Rights of Indenture Trustee...................................35
SECTION 6.3. Individual Rights of Indenture Trustee........................36
SECTION 6.4. Indenture Trustee's Disclaimer................................36
SECTION 6.5. Notice of Defaults; Insolvency or Dissolution of Depositor
or the Seller.................................................36
SECTION 6.6. Reports by Indenture Trustee to Noteholders...................37
SECTION 6.7. Compensation and Indemnity....................................37
SECTION 6.8. Replacement of Indenture Trustee..............................37
SECTION 6.9. Successor Indenture Trustee by Merger.........................38
SECTION 6.10. Appointment of Co-Indenture Trustee or Separate Indenture
Trustee.......................................................39
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SECTION 6.11. Eligibility; Disqualification.................................40
SECTION 6.12. Preferential Collection of Claims Against Issuer..............40
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.1. Issuer To Furnish Indenture Trustee Names and Addresses of
Noteholders...................................................40
SECTION 7.2. Preservation of Information; Communications to Noteholders....41
SECTION 7.3. Reports by Issuer.............................................41
SECTION 7.4. Reports by Indenture Trustee..................................41
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1. Collection of Money...........................................42
SECTION 8.2. Trust Accounts................................................42
SECTION 8.3. General Provisions Regarding Accounts.........................46
SECTION 8.4. Release of Indenture Trust Estate.............................46
SECTION 8.5. Opinion of Counsel............................................47
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures Without Consent of Noteholders........47
SECTION 9.2. Supplemental Indentures with Consent of Noteholders...........49
SECTION 9.3. Execution of Supplemental Indentures..........................50
SECTION 9.4. Effect of Supplemental Indenture..............................51
SECTION 9.5. Conformity with Trust Indenture Act...........................51
SECTION 9.6. Reference in Notes to Supplemental Indentures.................51
ARTICLE X
PREPAYMENT
SECTION 10.1. Prepayment....................................................51
SECTION 10.2. Form of Prepayment Notice.....................................52
SECTION 10.3. Notes Payable on Prepayment Date..............................52
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Compliance Certificates and Opinions, etc.....................52
SECTION 11.2. Form of Documents Delivered to Indenture Trustee..............54
SECTION 11.3. Acts of Noteholders...........................................55
SECTION 11.4. Notices, etc., to Indenture Trustee, Issuer and
Rating Agencies...............................................55
SECTION 11.5. Notices to Noteholders; Waiver................................56
SECTION 11.6. Alternate Payment and Notice Provisions.......................57
SECTION 11.7. Conflict with Trust Indenture Act.............................57
SECTION 11.8. Effect of Headings and Table of Contents......................57
SECTION 11.9. Successors and Assigns........................................57
SECTION 11.10. Separability..................................................57
SECTION 11.11. Benefits of Indenture.........................................57
SECTION 11.12. Legal Holidays................................................57
SECTION 11.13. GOVERNING LAW.................................................58
SECTION 11.14. Counterparts..................................................58
SECTION 11.15. Recording of Indenture........................................58
SECTION 11.16. Trust Obligation..............................................58
SECTION 11.17. No Petition...................................................58
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SECTION 11.18. Subordination Agreement.......................................59
SECTION 11.19. No Recourse...................................................59
SECTION 11.20. Inspection....................................................59
EXHIBIT A-1 FORM OF CLASS A-1 NOTE.....................................A-1-1
EXHIBIT A-2 FORM OF CLASS A-2 NOTE.....................................A-2-1
EXHIBIT A-3 FORM OF CLASS A-3 NOTE.....................................A-3-1
EXHIBIT A-4 FORM OF CLASS A-4 NOTE.....................................A-4-1
SCHEDULE A Schedule of Receivables.....................................SA-1
APPENDIX A Definitions and Usage.......................................AA-1
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INDENTURE, dated as of [Closing Date], (as from time to time amended,
supplemented or otherwise modified and in effect, this "Indenture") between USAA
AUTO OWNER TRUST 200_-[ ], a Delaware business trust, as Issuer, and [INDENTURE
TRUSTEE], a [ ], as trustee and not in its individual capacity (in such
capacity, the "Indenture Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the holders of the Issuer's Class [A-1] [ ]%
Asset Backed Notes (the "Class [A-1] Notes"), Class [A-2] [ ]% Asset Backed
Notes (the "Class [A-2] Notes"), Class [A-3] [ ]% Asset Backed Notes (the "Class
[A-3] Notes") and Class [A-4] [ ]% Asset Backed Notes (the "Class [A-4] Notes"
and, together with the Class [A-1] Notes, the Class [A-2] Notes and the Class
[A-3] Notes, the "Notes"):
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing Date,
as Indenture Trustee for the benefit of the Noteholders, all of the Issuer's
right, title and interest in, to and under, whether now owned or existing or
hereafter acquired or arising, (a) the Receivables; (b) monies received
thereunder on or after the Cut-off Date; (c) the security interests in the
Financed Vehicles granted by Obligors pursuant to the Receivables and any other
interest of the Issuer in the Financed Vehicles; (d) rights to receive proceeds
with respect to the Receivables from claims on any theft, physical damage,
credit life, credit disability, or other insurance policies covering Financed
Vehicles or Obligors; (e) all of the rights to the Receivable Files; (f) the
Trust Accounts [the Certificate Interest Distribution Account, the Credit
Principal Distribution Account] and all amounts, securities, investments and
other property deposited in or credited to any of the foregoing, all securities
entitlements related to the foregoing and all proceeds thereof; (g) the Sale and
Servicing Agreement; (h) payments and proceeds with respect to the Receivables
held by the Servicer; (i) all property (including the right to receive
Liquidation Proceeds) securing a Receivable (other than a Receivable purchased
by the Servicer or repurchased by the Seller); (j) rebates of premiums and other
amounts relating to insurance policies and other items financed under the
Receivables in effect as of the Cut-off Date; and (k) all present and future
claims, demands, causes of action and choses in action in respect of any or all
of the foregoing and all payments on or under and all proceeds of every kind and
nature whatsoever in respect of any or all of the foregoing, including all
proceeds of the conversion thereof, voluntary or involuntary, into cash or other
liquid property, all cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, insurance
proceeds, condemnation awards, rights to payment of any and every kind and other
forms of obligations and receivables, instruments and other property which at
any time constitute all or part of or are included in the proceeds of any of the
foregoing (collectively, the "Collateral").
The foregoing Grant is made in trust to secure the payment of principal
of and interest on, and any other amounts owing in respect of, the Notes,
equally and ratably without prejudice, priority or distinction, except as
provided in the Indenture, and to secure compliance with the provisions of this
Indenture, all as provided in this Indenture.
The Indenture Trustee, as Indenture Trustee on behalf of the
Noteholders, acknowledges such Grant, accepts the trusts under this Indenture in
accordance with the provisions of this Indenture and agrees to perform its
duties required in this Indenture to the best of its ability to the end that the
interests of the Noteholders may be adequately and effectively protected.
ARTICLE I
DEFINITIONS, USAGE AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions and Usage. Except as otherwise specified
herein or as the context may otherwise require, capitalized terms used but not
otherwise defined herein are defined in Appendix A hereto, which also contains
rules as to usage that shall be applicable herein.
SECTION 1.2. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"indenture securities" shall mean the Notes.
"indenture security holder" shall mean a Noteholder.
"indenture to be qualified" shall mean this Indenture.
"indenture trustee" or "institutional trustee" shall mean the Indenture
Trustee.
"obligor" on the indenture securities shall mean the Issuer and any
other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined in the TIA,
defined by TIA reference to another statute or defined by Commission rule have
the meaning assigned to them by such definitions.
ARTICLE II
THE NOTES
SECTION 2.1. Form. (a) The Class [A-1] Notes, the Class [A-2] Notes,
the Class [A-3] Notes and the Class [A-4] Notes, together with the Indenture
Trustee's certificates of authentication, shall be in substantially the form set
forth in Exhibit X-0, Xxxxxxx X-0, Exhibit A-3 and Exhibit A-4, respectively,
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture, and may have such letters,
numbers or other marks of identification and such legends or endorsements placed
thereon as may, consistently herewith, be determined by the officers executing
such Notes, as evidenced by
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their execution thereof. Any portion of the text of any Note may be set
forth on the reverse thereof, with an appropriate reference thereto on the face
of the Note.
(b) The definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without steel
engraved borders), all as determined by the officers executing such Notes, as
evidenced by their execution of such Notes.
(a) Each Note shall be dated the date of its authentication. The terms
of the Notes set forth in Exhibit X-0, Xxxxxxx X-0, Exhibit A-3 and Exhibit A-4
are part of the terms of this Indenture and are incorporated herein by
reference.
SECTION 2.2. Execution, Authentication and Delivery. (a) The Notes
shall be executed on behalf of the Issuer by any of its Authorized Officers.
The esignature of any such Authorized Officer on the Notes may be manual or
facsimile.
(b) Notes bearing the manual or facsimile signature of individuals who
were at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
(c) The Indenture Trustee shall, upon Issuer Order, authenticate and
deliver the Notes for original issue in the Classes and initial aggregate
principal amounts as set in the table below.
Initial Aggregate
Class Principal Amount
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[Class A-1 Notes $
Class A-2 Notes $
Class A-3 Notes $
Class A-4 Notes] $
The aggregate principal amount of Class [A-1] Notes, Class [A-2] Notes,
Class [A-3] Notes and Class [A-4] Notes, Outstanding at any time may not exceed
those respective amounts except as provided in Section 2.6.
(d) The Class [A-1], Class [A-2], Class [A-3] and Class [A-4] Notes
shall be issuable as Book-Entry Notes in minimum denominations of $1,000 and in
integral multiples of $1,000 in excess thereof.
(e) No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder.
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SECTION 2.3. Temporary Notes. (a) Pending the preparation of definitive
Notes, the Issuer may execute, and upon receipt of an Issuer Order the Indenture
Trustee shall authenticate and deliver, temporary Notes that are printed,
lithographed, typewritten, mimeographed or otherwise produced, substantially of
the tenor of the definitive Notes in lieu of which they are issued and with such
variations not inconsistent with the terms of this Indenture as the officers
executing the temporary Notes may determine, as evidenced by their execution of
such temporary Notes.
If temporary Notes are issued, the Issuer shall cause definitive Notes
to be prepared without unreasonable delay. After the preparation of definitive
Notes, the temporary Notes shall be exchangeable for definitive Notes upon
surrender of the temporary Notes at the office or agency of the Issuer to be
maintained as provided in Section 3.2, without charge to the Noteholder. Upon
surrender for cancellation of any one or more temporary Notes, the Issuer shall
execute, and the Indenture Trustee shall authenticate and deliver in exchange
therefor, a like principal amount of definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as Notes.
SECTION 2.4. Tax Treatment. The Issuer has entered into this Indenture,
and the Notes shall be issued, with the intention that, for federal, State and
local income and franchise tax purposes, the Notes shall qualify as indebtedness
of the Issuer secured by the Indenture Trust Estate. The Issuer, by entering
into this Indenture, and each Noteholder, by its acceptance of a Note (and each
Note Owner by its acceptance of an interest in the applicable Book-Entry Note),
agree to treat the Notes for federal, State and local income and franchise tax
purposes as indebtedness of the Issuer.
SECTION 2.5. Registration; Registration of Transfer and Exchange. (a)
The Issuer shall cause to be kept a register (the "Note Register") in which,
subject to such reasonable regulations as it may prescribe, the Issuer shall
provide for the registration of Notes and the registration of transfers of
Notes. The Indenture Trustee initially shall be the "Note Registrar" for the
purpose of registering Notes and transfers of Notes as herein provided. Upon any
resignation of any Note Registrar, the Issuer shall promptly appoint a successor
or, if it elects not to make such an appointment, assume the duties of Note
Registrar. If a Person other than the Indenture Trustee is appointed by the
Issuer as Note Registrar, (i) the Issuer shall give the Indenture Trustee prompt
written notice of the appointment of such Note Registrar and of the location,
and any change in the location, of the Note Register, (ii) the Indenture Trustee
shall have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof, and (iii) the Indenture Trustee shall have the right to
rely upon a certificate executed on behalf of the Note Registrar by an Executive
Officer thereof as to the names and addresses of the Noteholders and the
principal amounts and number of such Notes.
(f) 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, an Authorized Officer
of the Issuer shall execute, and the Indenture Trustee
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shall authenticate and the Noteholder shall obtain from the Indenture Trustee,
in the name of the designated transferee or transferees, one or more new Notes
of the same Class in any authorized denomination, of a like aggregate principal
amount.
(g) At the option of the Noteholder, Notes may be exchanged for other
Notes of the same Class in any authorized denominations, of a like aggregate
principal amount, upon surrender of the Notes to be exchanged at such office or
agency. Whenever any Notes are so surrendered for exchange, if the requirements
of Section 8-401(1) of the UCC are met, the Issuer shall execute, the Indenture
Trustee shall authenticate, and the Noteholder shall obtain from the Indenture
Trustee, the Notes which the Noteholder making such exchange is entitled to
receive.
(h) 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.
(i) Every Note presented or surrendered for registration of transfer or
exchange shall be (i) duly endorsed by, or be accompanied by a written
instrument of transfer in form satisfactory to the Indenture Trustee duly
executed by, the Noteholder thereof or such Noteholder's attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar and (ii) accompanied
by such other documents or evidence as the Indenture Trustee may require.
(j) No service charge shall be made to a Noteholder for any
registration of transfer or exchange of Notes, but the Note Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Notes, other than exchanges pursuant to Section 2.3 or 9.6 not
involving any transfer.
(k) The preceding provisions of this Section 2.5 notwithstanding, the
Issuer shall not be required to make and the Note Registrar need not register
transfers or exchanges of Notes selected for redemption or of any Note for a
period of fifteen (15) days preceding the Payment Date for any payment with
respect to such Note.
(l) No Note may be purchased with plan assets of a Plan if the Issuer,
the Seller, the Servicer, the Owner Trustee, the Indenture Trustee, any
Underwriter or any of their respective affiliates (i) has investment or
administrative discretion with respect to those plan assets; (ii) has authority
or responsibility to give, or regularly gives, investment advice with respect to
such plan assets, for a fee and pursuant to an agreement or understanding that
the advice will serve as a primary basis of investment decisions with respect to
those plan assets, and will be based on the particular investment needs for the
Plan, or (iii) is an employer maintaining or contributing to the Plan.
SECTION 2.6. Mutilated, Destroyed, Lost or Stolen Notes. (a) If (i) any
mutilated Note is surrendered to the Indenture Trustee or the Note Registrar, or
the Indenture Trustee receives evidence to its satisfaction of the destruction,
loss or theft of any Note, and (ii) there is
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delivered to the Indenture Trustee such security or indemnity as may be
required by it to hold the Issuer and the Indenture Trustee harmless, then, in
the absence of notice to the Issuer, the Note Registrar or the Indenture Trustee
that such Note has been acquired by a protected purchaser, as defined in Section
8-303 of the UCC, and provided that the requirements of Section 8-405 of the UCC
are met, the Issuer shall execute, and upon Issuer Request the Indenture Trustee
shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Note, a replacement Note of the same Class;
provided, however, that if any such destroyed, lost or stolen Note, but not a
mutilated Note, shall have become or within seven (7) days shall be due and
payable, or shall have been called for redemption, instead of issuing a
replacement Note, the Issuer may pay such destroyed, lost or stolen Note when so
due or payable or upon the Prepayment 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 protected purchaser of
the original Note in lieu of which such replacement Note was issued presents for
payment such original Note, the Issuer and the Indenture Trustee shall be
entitled to recover such replacement Note (or such payment) from the Person to
whom it was delivered or any Person taking such replacement Note from such
Person to whom such replacement Note was delivered or any assignee of such
Person, except a protected purchaser, and shall be entitled to recover upon the
security or indemnity provided therefor to the extent of any loss, damage, cost
or expense incurred by the Issuer or the Indenture Trustee in connection
therewith.
(b) Upon the issuance of any replacement Note under this Section 2.6,
the Issuer may require the payment by the Noteholder of such Note of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other reasonable expenses (including the fees and
expenses of the Indenture Trustee) connected therewith.
(c) Every replacement Note issued pursuant to this Section 2.6 in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
(d) The provisions of this Section 2.6 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.7. Persons Deemed Owners. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and any
agent of the Issuer or the Indenture Trustee may treat the Person in whose name
any Note is registered (as of the day of determination) as the owner of such
Note for the purpose of receiving payments of principal of and interest, if any,
on such Note and for all other purposes whatsoever, whether or not such Note be
overdue, and none of the Issuer, the Indenture Trustee or any agent of the
Issuer or the Indenture Trustee shall be affected by notice to the contrary.
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SECTION 2.8. Payment of Principal and Interest; Defaulted Interest. (a)
The Class [A-1] Notes, the Class [A-2] Notes, the Class [A-3] Notes and the
Class [A-4] Notes shall accrue interest at the Class [A-1] Rate, the Class [A-2]
Rate, the Class [A-3] Rate and the Class [A-4] Rate, respectively, as set forth
in Exhibit X-0, Xxxxxxx X-0, Exhibit A-3 and Exhibit A-4, respectively, and such
interest shall be due and payable on each Payment Date as specified therein,
subject to Section 3.1. Any installment of interest or principal, if any,
payable on any Note that is punctually paid or duly provided for by the Issuer
on the applicable Payment Date shall be paid to the Person in whose name such
Note (or one or more Predecessor Notes) is registered on the Record Date either
by wire transfer in immediately available funds, to the account of such
Noteholder at a bank or other entity having appropriate facilities therefor, if
such Noteholder shall have provided to the Note Registrar appropriate written
instructions at least five (5) Business Days prior to such Payment Date and such
Noteholder's Notes in the aggregate evidence a denomination of not less than
$1,000,000, or, if not, by check mailed first-class postage prepaid to such
Person's address as it appears on the Note Register on such Record Date;
provided that, unless Definitive Notes have been issued to Note Owners pursuant
to Section 2.13, with respect to Notes registered on the Record Date in the name
of the nominee of the Clearing Agency (initially, such nominee to be Cede &
Co.), payment shall be made by wire transfer in immediately available funds to
the account designated by such nominee, and except for the final installment of
principal payable with respect to such Note on a Payment Date, Prepayment Date
or the applicable Final Scheduled Payment Date, which shall be payable as
provided below. The funds represented by any such checks returned undelivered
shall be held in accordance with Section 3.3.
(b) The principal of each Note shall be payable in installments on each
Payment Date as provided in the forms of Notes set forth in Exhibit A-1, Exhibit
X-0, Xxxxxxx X-0 and Exhibit A-4 hereto. Notwithstanding the foregoing, the
entire unpaid principal amount of each Class of Notes shall be due and payable,
if not previously paid, on the date on which an Event of Default shall have
occurred and be continuing, if the Indenture Trustee or the Noteholders of Notes
evidencing not less than a majority of the principal amount of the Notes have
declared the Notes to be immediately due and payable in the manner provided in
Section 5.2. All principal payments on each Class of Notes shall be made pro
rata to the Noteholders of such Class entitled thereto. The Indenture Trustee
shall notify the Person in whose name a Note is registered at the close of
business on the Record Date preceding the Payment Date on which the Issuer
expects that the final installment of principal of and interest on such Note
shall be paid. Such notice shall be mailed or transmitted by facsimile prior to
such final Payment Date and shall specify that such final installment shall be
payable only upon presentation and surrender of such Note and shall specify the
place where such Note may be presented and surrendered for payment of such
installment. Notices in connection with redemption of Notes shall be mailed to
Noteholders as provided in Section 10.2.
(c) If the Issuer defaults in a payment of interest on the Notes, the
Issuer shall pay defaulted interest (plus interest on such defaulted interest to
the extent lawful) at the applicable Note Interest Rate on the Payment Date
following such default. The Issuer shall pay such
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defaulted interest to the Persons who are Noteholders on the Record
Date for such following Payment Date.
SECTION 2.9. Cancellation. All Notes surrendered for payment,
registration of transfer or exchange shall, if surrendered to any Person other
than the Indenture Trustee, be delivered to the Indenture Trustee and shall be
promptly cancelled by the Indenture Trustee. The Issuer may at any time deliver
to the Indenture Trustee for cancellation any Notes previously authenticated and
delivered hereunder which the Issuer may have acquired in any manner whatsoever,
and all Notes so delivered shall be promptly cancelled by the Indenture Trustee.
No Notes shall be authenticated in lieu of or in exchange for any Notes
cancelled as provided in this Section 2.9, except as expressly permitted by this
Indenture. All cancelled Notes may be held or disposed of by the Indenture
Trustee in accordance with its standard retention or disposal policy as in
effect at the time unless the Issuer shall direct by an Issuer Order that they
be destroyed or returned to it and so long as such Issuer Order is timely and
the Notes have not been previously disposed of by the Indenture Trustee.
SECTION 2.10. Release of Collateral. Subject to Section 11.1 and the
terms of the Basic Documents, the Indenture Trustee shall release property from
the lien of this Indenture only upon receipt of an Issuer Request accompanied by
an Officer's Certificate, an Opinion of Counsel and Independent Certificates in
accordance with TIA Sections 314(c) and 314(d)(1) or an Opinion of Counsel in
lieu of such Independent Certificates to the effect that the TIA does not
require any such Independent Certificates. If the Commission shall issue an
exemptive order under TIA Section 304(d) modifying the Issuer's obligations
under TIA Sections 314(c) and 314(d)(1), subject to Section 11.1 and the terms
of the Basic Documents, the Indenture Trustee shall release property from the
lien of this Indenture in accordance with the conditions and procedures set
forth in such exemptive order.
SECTION 2.11. Book-Entry Notes. The Notes, upon original issuance,
shall be issued in the form of typewritten Notes representing the Book-Entry
Notes, to be delivered to The Depository Trust Company, the initial Clearing
Agency, by, or on behalf of, the Issuer. The Book-Entry Notes shall be
registered initially on the Note Register in the name of Cede & Co., the nominee
of the initial Clearing Agency, and no Note Owner thereof shall receive a
Definitive Note (as defined below) representing such Note Owner's interest in
such Note, except as provided in Section 2.13. Unless and until definitive,
fully registered Notes (the "Definitive Notes") have been issued to such Note
Owners pursuant to Section 2.13:
(i) the provisions of this Section 2.11 shall be in full force and
effect;
(ii) the Note Registrar and the Indenture Trustee shall be entitled to
deal with the Clearing Agency for all purposes of this Indenture (including
the payment of principal of and interest on the Book-Entry Notes and the
giving of instructions or directions hereunder) as the sole Noteholder, and
shall have no obligation to the Note Owners;
8
(iii) to the extent that the provisions of this Section 2.11 conflict
with any other provisions of this Indenture, the provisions of this Section
2.11 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 Security Depository Agreement.
Unless and until Definitive Notes are issued to Note Owners pursuant to
Section 2.13, the initial Clearing Agency shall make book-entry transfers
among the Clearing Agency Participants and receive and transmit payments of
principal of and interest on the Book-Entry Notes to such Clearing Agency
Participants; and
(v) whenever this Indenture requires or permits actions to be taken
based upon instructions or directions of Noteholders of Notes evidencing a
specified percentage of the principal amount of the Notes Outstanding (or
any Class thereof) the Clearing Agency shall be deemed to represent such
percentage only to the extent that it has received instructions to such
effect from Note Owners and/or Clearing Agency Participants owning or
representing, respectively, such required percentage of the beneficial
interest of the Notes Outstanding (or Class thereof) and has delivered such
instructions to the Indenture Trustee.
SECTION 2.12. Notices to Clearing Agency. Whenever a notice or other
communication to the Noteholders of Book-Entry Notes is required under this
Indenture, unless and until Definitive Notes shall have been issued to the Note
Owners pursuant to Section 2.13, the Indenture Trustee shall give all such
notices and communications specified herein to be given to Noteholders of
Book-Entry Notes to the Clearing Agency, and shall have no obligation to such
Note Owners.
SECTION 2.13. Definitive Notes. With respect to any Class or Classes of
Book-Entry Notes, if (i) the Administrator advises the Indenture Trustee in
writing that the Clearing Agency is no longer willing or able to properly
discharge its responsibilities with respect to such Class of Book-Entry Notes
and the Administrator is unable to locate a qualified successor, (ii) the
Administrator, at its option, advises the Indenture Trustee in writing that it
elects to terminate the book-entry system through the Clearing Agency or (iii)
after the occurrence of an Event of Default or an Event of Servicing
Termination, Note Owners of such Class of Book- Entry Notes evidencing
beneficial interests aggregating not less than a majority of the principal
amount of such Class advise the Indenture Trustee and the Clearing Agency in
writing that the continuation of a book-entry system through the Clearing Agency
is no longer in the best interests of such Class of Note Owners, then the
Clearing Agency shall notify all Note Owners of such Class and the Indenture
Trustee of the occurrence of such event and of the availability of Definitive
Notes to the Note Owners of the applicable Class requesting the same. Upon
surrender to the Indenture Trustee of the typewritten Notes representing the
Book-Entry Notes by the Clearing Agency, accompanied by registration
instructions, the Issuer shall execute and the Indenture Trustee shall
authenticate the Definitive Notes in accordance with the instructions of the
Clearing Agency.
9
None of the Issuer, the Note Registrar or the Indenture Trustee shall be
liable for any delay in delivery of such instructions and may conclusively
rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Notes to Note Owners, the Indenture Trustee
shall recognize the holders of such Definitive Notes as Noteholders.
SECTION 2.14. Authenticating Agents. (a) The Indenture Trustee may
appoint one or more Persons (each, an "Authenticating Agent") with power to act
on its behalf and subject to its direction in the authentication of Notes in
connection with issuance, transfers and exchanges under Sections 2.2, 2.3, 2.5,
2.6 and 9.6, as fully to all intents and purposes as though each such
Authenticating Agent had been expressly authorized by those Sections to
authenticate such Notes. For all purposes of this Indenture, the authentication
of Notes by an Authenticating Agent pursuant to this Section 2.14 shall be
deemed to be the authentication of Notes "by the Indenture Trustee."
(b) Any corporation into which any Authenticating Agent may be merged
or converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of any Authenticating Agent, shall be the successor
of such Authenticating Agent hereunder, without the execution or filing of any
further act on the part of the parties hereto or such Authenticating Agent or
such successor corporation.
(c) Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Indenture Trustee and the Owner Trustee. The
Indenture Trustee may at any time terminate the agency of any Authenticating
Agent by giving written notice of termination to such Authenticating Agent and
the Owner Trustee. Upon receiving such notice of resignation or upon such a
termination, the Indenture Trustee may appoint a successor Authenticating Agent
and shall give written notice of any such appointment to the Owner Trustee.
(d) The Administrator agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services. The provisions of
Sections 2.9 and 6.4 shall be applicable to any Authenticating Agent.
ARTICLE III
COVENANTS
SECTION 3.1. Payment of Principal and Interest. The Issuer shall duly
and punctually pay the principal of and interest, if any, on the Notes in
accordance with the terms of the Notes and this Indenture. Without limiting the
foregoing on each Payment Date the Issuer shall cause to be paid pursuant to
Section 8.2(d) all amounts on deposit in the Collection Account and the
Principal Distribution Account with respect to the Collection Period preceding
such Payment Date and deposited therein pursuant to the Sale and Servicing
Agreement. Amounts properly withheld under the Code by any Person from a payment
to any Noteholder of
10
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 Issuer shall maintain
in the Borough of Manhattan, The City of New York, an office or agency where
Notes may be surrendered for registration of transfer or exchange, and where
notices and demands to or upon the Issuer in respect of the Notes and this
Indenture may be served. The Issuer hereby initially appoints the Indenture
Trustee to serve as its agent for the foregoing purposes. The Issuer shall give
prompt written notice to the Indenture Trustee of the location, and of any
change in the location, of any such office or agency. If, at any time, the
Issuer shall fail to maintain any such office or agency or shall fail to furnish
the Indenture Trustee with the address thereof, such surrenders, notices and
demands may be made or served at the Corporate Trust Office, and the Issuer
hereby appoints the Indenture Trustee as its agent to receive all such
surrenders, notices and demands.
SECTION 3.3. Money for Payments To Be Held in Trust. (a) As provided in
Sections 8.2 and 5.4(b), all payments of amounts due and payable with respect to
any Notes that are to be made from amounts withdrawn from the Trust Accounts
shall be made on behalf of the Issuer by the Indenture Trustee or by another
Note Paying Agent, and no amounts so withdrawn from the Trust Accounts for
payments of Notes shall be paid over to the Issuer, except as provided in this
Section 3.3.
(b) On or before the Business Day preceding each Payment Date and
Prepayment Date, the Issuer shall deposit or cause to be deposited in the
Collection Account an aggregate sum sufficient to pay the amounts then becoming
due under the Notes, such sum to be held in trust for the benefit of the Persons
entitled thereto, and (unless the Note Paying Agent is the Indenture Trustee)
shall promptly notify the Indenture Trustee of its action or failure so to act.
(c) The Issuer shall cause each Note Paying Agent other than the
Indenture Trustee to execute and deliver to the Indenture Trustee an instrument
in which such Note Paying Agent shall agree with the Indenture Trustee (and if
the Indenture Trustee acts as Note Paying Agent, it hereby so agrees), subject
to the provisions of this Section 3.3, that such Note Paying Agent shall:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and pay such sums to such Persons as herein provided;
(ii) give the Indenture Trustee 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;
11
(iii) at any time during the continuance of any such default, upon the
written request of the Indenture Trustee, forthwith pay to the Indenture
Trustee all sums so held in trust by such Note Paying Agent;
(iv) immediately resign as a Note Paying Agent and forthwith pay to
the Indenture Trustee all sums held by it in trust for the payment of Notes
if at any time it ceases to meet the standards required to be met by a Note
Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code and any State or local
tax law with respect to the withholding from any payments made by it on any
Notes of any applicable withholding taxes imposed thereon and with respect
to any applicable reporting requirements in connection therewith.
(d) The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Note Paying Agent to pay to the Indenture Trustee all sums held
in trust by such Note Paying Agent, such sums to be held by the Indenture
Trustee upon the same trusts as those upon which the sums were held by such Note
Paying Agent; and upon such payment by any Note Paying Agent to the Indenture
Trustee, such Note Paying Agent shall be released from all further liability
with respect to such money.
(e) Subject to applicable laws with respect to escheat of funds, any
money held by the Indenture Trustee or any Note Paying Agent in trust for the
payment of any amount due with respect to any Note and remaining unclaimed for
two (2) years after such amount has become due and payable shall be discharged
from such trust and be paid to the Issuer on Issuer Request; and the Noteholder
of such Note shall thereafter, as an unsecured general creditor, look only to
the Issuer for payment thereof (but only to the extent of the amounts so paid to
the Issuer), and all liability of the Indenture Trustee or such Note Paying
Agent with respect to such trust money shall thereupon cease; provided, however,
that the Indenture Trustee or such Note Paying Agent, before being required to
make any such repayment, shall at the expense and direction of the Issuer cause
to be published once, in a newspaper published in the English language,
customarily published on each Business Day and of general circulation in The
City of New York, notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than thirty (30) days from the
date of such publication, any unclaimed balance of such money then remaining
shall be repaid to the Issuer. The Indenture Trustee shall also adopt and
employ, at the expense and direction of the Issuer, any other reasonable means
of notification of such repayment (including, but not limited to, mailing notice
of such repayment to Noteholders whose Notes have been called but have not been
surrendered for redemption or whose right to or interest in monies due and
payable but not claimed is determinable from the records of the Indenture
Trustee or of any Note Paying Agent, at the last address of record for each such
Noteholder).
SECTION 3.4. Existence. The Issuer shall keep in full effect its
existence, rights and franchises as a business trust under the laws of the State
of Delaware (unless it becomes, or any
12
successor Issuer hereunder is or becomes, organized under the laws of
any other State or of the United States of America, in which case the Issuer
shall keep in full effect its existence, rights and franchises under the laws of
such other jurisdiction) and shall obtain and preserve its qualification to do
business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Indenture, the
Notes, the Collateral and each other instrument or agreement included in the
Indenture Trust Estate.
SECTION 3.5. Protection of Indenture Trust Estate. (a) The Issuer shall
from time to time execute and deliver all such supplements and amendments hereto
and all such financing statements, continuation statements, instruments of
further assurance and other instruments, and shall take such other action
necessary or advisable to:
(i) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively the
purposes hereof;
(ii) perfect, publish notice of or protect the validity of any Grant
made or to be made by this Indenture;
(iii) enforce any of the Collateral; or
(iv) preserve and defend title to the Indenture Trust Estate and the
rights of the Indenture Trustee and the Noteholders in such Indenture Trust
Estate against the claims of all Persons.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required to be executed pursuant to this Section 3.5 that has
been prepared by the Servicer and delivered to the Indenture Trustee for
execution; provided, however, that the Indenture Trustee shall be under no
obligation to file any such financing statement, continuation statement or other
instrument required to be executed pursuant to this Section 3.5.
(b) The Issuer hereby represents and warrants that, as to the
Collateral pledged to the Indenture Trustee for the benefit of the Noteholders,
on the Closing Date:
(i) the Indenture creates a valid and continuing security interest
(as defined in the applicable UCC) in the Collateral that is in existence
in favor of the Indenture Trustee, which security interest is prior to all
other liens, and is enforceable as such as against creditors of and
purchasers from the Issuer;
(ii) the Receivables constitute "tangible chattel paper" under the
applicable UCC;
(iii) the Issuer owns and has good and marketable title to such
Collateral free and clear of any liens, claims or encumbrances of any
Person, other than the interest Granted under this Indenture;
13
(iv) the Issuer has acquired its ownership in such Collateral in good
faith without notice of any adverse claim;
(v) the Trust Accounts are not in the name of any person other than
the Indenture Trustee and the Issuer has not consented to the bank
maintaining the Trust Accounts to comply with the instructions of any
person other than the Indenture Trustee;
(vi) the Issuer has not assigned, pledged, sold, granted a security
interest in or otherwise conveyed any interest in such Collateral (or, if
any such interest has been assigned, pledged or otherwise encumbered, it
has been released) other than interests Granted pursuant to this Indenture;
(vii) the Issuer has caused or will have caused, within ten days after
the Closing Date, the filing of all appropriate financing statements in the
proper filing office in the appropriate jurisdiction under the applicable
law in order to perfect the security interest Granted hereunder in the
Receivables;
(viii) other than its Granting hereunder, the Issuer has not Granted
such Collateral, the Issuer has not authorized the filing of and is not
aware of any financing statements against the Issuer that include a
description of such Collateral other than the financing statement in favor
of the Indenture Trustee, and the Issuer is not aware of any judgment or
tax lien filing against it; and
(ix) the information relating to such Collateral set forth in the
Schedule of Receivables (attached hereto as Schedule A) is correct.
SECTION 3.6. Opinions as to Indenture Trust Estate. (a) On the Closing
Date, the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel
either stating that, in the opinion of such counsel, such action has been taken
with respect to the recording and filing of this Indenture, any indentures
supplemental hereto, and any other requisite documents, and with respect to the
execution and filing of any financing statements and continuation statements, as
are necessary to perfect and make effective the lien and security interest of
this Indenture and reciting the details of such action, or stating that, in the
opinion of such counsel, no such action is necessary to make such lien and
security interest effective.
(b) On or before April 30 in each calendar year, beginning on April 30,
200_, the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel
either stating that, in the opinion of such counsel, such action has been taken
with respect to the recording, filing, re-recording and refiling of this
Indenture, any indentures supplemental hereto and any other requisite documents
and with respect to the execution and filing of any financing statements and
continuation statements and any other action that may be required by law as is
necessary to maintain the lien and security interest created by this Indenture
and reciting the details of such action or stating that in the opinion of such
counsel no such action is necessary to maintain such lien and security interest.
Such Opinion of Counsel shall also describe the recording, filing, re-recording
and refiling of this Indenture, any indentures supplemental hereto and any other
14
requisite documents and the execution and filing of any financing statements and
continuation statements that shall, in the opinion of such counsel, be required
to maintain the lien and security interest of this Indenture until April 30 in
the following calendar year.
SECTION 3.7. Performance of Obligations; Servicing of Receivables. (a)
The Issuer shall not take any action and shall use its best efforts not to
permit any action to be taken by others that would release any Person from any
of such Person's material covenants or obligations under any instrument or
agreement included in the Indenture Trust Estate or that would result in the
amendment, hypothecation, subordination, termination or discharge of, or impair
the validity or effectiveness of, any such instrument or agreement, except as
expressly provided in this Indenture and the other Basic Documents.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee in an Officer's Certificate of
the Issuer shall be deemed to be action taken by the Issuer. Initially, the
Issuer has contracted with the Servicer and the Administrator to assist the
Issuer in performing its duties under this Indenture.
(c) The Issuer shall punctually perform and observe all of its
obligations and agreements contained in this Indenture, the other Basic
Documents and in the instruments and agreements included in the Indenture Trust
Estate, including, but not limited to, filing or causing to be filed all
financing statements and continuation statements required to be filed under the
UCC by the terms of this Indenture and the Sale and Servicing Agreement in
accordance with and within the time periods provided for herein and therein.
Except as otherwise expressly provided therein, the Issuer shall not waive,
amend, modify, supplement or terminate any Basic Document or any provision
thereof without the consent of the Indenture Trustee and the Noteholders of
Notes evidencing not less than a majority of the principal amount of each Class
of Notes then Outstanding, voting separately.
(d) If the Issuer shall have knowledge of the occurrence of an Event of
Servicing Termination under the Sale and Servicing Agreement, the Issuer shall
promptly notify the Indenture Trustee and the Rating Agencies thereof and shall
specify in such notice the action, if any, the Issuer is taking in respect of
such default. If an Event of Servicing Termination shall arise from the failure
of the Servicer to perform any of its duties or obligations under the Sale and
Servicing Agreement with respect to the Receivables, the Issuer shall take all
reasonable steps available to it to remedy such failure.
(e) As promptly as possible after the giving of notice of termination
to the Servicer of the Servicer's rights and powers pursuant to Section 7.1 of
the Sale and Servicing Agreement or the Servicer's resignation in accordance
with the terms of the Sale and Servicing Agreement, the Issuer shall appoint a
Successor Servicer meeting the requirements of the Sale and Servicing Agreement,
and such Successor Servicer shall accept its appointment by a written assumption
in a form acceptable to the Indenture Trustee. In the event that a Successor
Servicer has not been appointed at the time when the Servicer ceases to act as
Servicer, the Indenture Trustee without further action shall automatically be
appointed the Successor Servicer. If the Indenture Trustee
15
shall be legally unable to act as Successor Servicer, it may appoint, or
petition a court of competent jurisdiction to appoint, a Successor Servicer. The
Indenture Trustee may resign as the Servicer by giving written notice of such
resignation to the Issuer and in such event shall be released from such duties
and obligations, such release not to be effective until the date a new servicer
enters into a servicing agreement with the Issuer as provided below. Upon
delivery of any such notice to the Issuer, the Issuer shall obtain a new
servicer as the Successor Servicer under the Sale and Servicing Agreement. Any
Successor Servicer (other than the Indenture Trustee) shall (i) be an
established institution having a net worth of not less than $100,000,000 and
whose regular business shall include the servicing of automotive receivables and
whose appointment as Successor Servicer satisfies the Rating Agency Condition
and (ii) enter into a servicing agreement with the Issuer having substantially
the same provisions as the provisions of the Sale and Servicing Agreement
applicable to the Servicer. If, within thirty (30) days after the delivery of
the notice referred to above, the Issuer shall not have obtained such a new
servicer, the Indenture Trustee may appoint, or may petition a court of
competent jurisdiction to appoint, a Successor Servicer. In connection with any
such appointment, the Indenture Trustee may make such arrangements for the
compensation of such successor as it and such successor shall agree, subject to
the limitations set forth below and in the Sale and Servicing Agreement, and, in
accordance with Section 7.2 of the Sale and Servicing Agreement, the Issuer
shall enter into an agreement with such successor for the servicing of the
Receivables (such agreement to be in form and substance satisfactory to the
Indenture Trustee). Notwithstanding anything herein or in the Sale and Servicing
Agreement to the contrary, in no event shall the Indenture Trustee be liable for
any Servicing Fee or for any differential in the amount of the Servicing Fee
paid hereunder and the amount necessary to induce any Successor Servicer to act
as Successor Servicer under the Basic Documents and the transactions set forth
or provided for therein. If the Indenture Trustee shall succeed to the
Servicer's duties as servicer of the Receivables as provided herein, it shall do
so in its individual capacity and not in its capacity as Indenture Trustee and,
accordingly, the provisions of Article VI hereof shall be inapplicable to the
Indenture Trustee in its duties as the successor to the Servicer and the
servicing of the Receivables. In case the Indenture Trustee shall become
successor to the Servicer under the Sale and Servicing Agreement, the Indenture
Trustee shall be entitled to appoint as Servicer any one of its Affiliates;
provided that the Indenture Trustee, in its capacity as the Servicer, shall be
fully liable for the actions and omissions of such Affiliate in such capacity as
Successor Servicer.
(f) Upon any termination of the Servicer's rights and powers pursuant
to the Sale and Servicing Agreement, the Issuer shall promptly notify the
Indenture Trustee. As soon as a Successor Servicer is appointed by the Issuer,
the Issuer shall notify the Indenture Trustee of such appointment, specifying in
such notice the name and address of such Successor Servicer.
(g) Without derogating from the absolute nature of the assignment
granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Issuer hereby agrees that it shall not, without
the prior written consent of the Indenture Trustee or the Noteholders of Notes
evidencing not less than a majority in principal amount of the Notes
Outstanding, amend, modify, waive, supplement, terminate or surrender, or agree
to any amendment, modification, supplement, termination, waiver or surrender of,
the terms of any
16
Collateral (except to the extent otherwise provided in the Sale and Servicing
Agreement or the other Basic Documents).
SECTION 3.8. Negative Covenants. So long as any Notes are Outstanding,
the Issuer shall not:
(i) except as expressly permitted by this Indenture, the Trust
Agreement or the Sale and Servicing Agreement, sell, transfer, exchange or
otherwise dispose of any of the properties or assets of the Issuer,
including those included in the Indenture Trust Estate, unless directed to
do so by the Indenture Trustee;
(ii) claim any credit on, or make any deduction from the principal or
interest payable in respect of, the Notes (other than amounts properly
withheld from such payments under the Code) or assert any claim against any
present or former Noteholder by reason of the payment of the taxes levied
or assessed upon the Trust or the Indenture Trust Estate;
(iii) dissolve or liquidate in whole or in part; or
(iv) (A) permit the validity or effectiveness of this Indenture to be
impaired, or permit the lien of this Indenture to be amended, hypothecated,
subordinated, terminated or discharged, or permit any Person to be released
from any covenants or obligations with respect to the Notes under this
Indenture except as may be expressly permitted hereby, (B) permit any lien,
charge, excise, claim, security interest, mortgage or other encumbrance
(other than the lien of this Indenture) to be created on or extend to or
otherwise arise upon or burden the assets of the Issuer, including those
included in the Indenture Trust Estate, or any part thereof or any interest
therein or the proceeds thereof (other than tax liens, mechanics' liens and
other liens that arise by operation of law, in each case on any of the
Financed Vehicles and arising solely as a result of an action or omission
of the related Obligor) or (C) permit the lien of this Indenture not to
constitute a valid first priority (other than with respect to any such tax,
mechanics' or other lien) security interest in the Indenture Trust Estate.
SECTION 3.9. Annual Statement as to Compliance. The Issuer shall
deliver to the Indenture Trustee, within 120 days after the end of each calendar
year, an Officer's Certificate stating, as to the Authorized Officer signing
such Officer's Certificate, that:
(i) a review of the activities of the Issuer during such year and of
its performance under this Indenture has been made under such Authorized
Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based on such
review, the Issuer has complied in all material respects with all
conditions and covenants under this Indenture throughout such year, or, if
there has been a default in any material respect
17
in its compliance with any such condition or covenant, specifying each
such default known to such Authorized Officer and the nature and status
thereof.
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain Terms.
(a) The Issuer shall not consolidate or merge with or into any other Person,
unless:
(i) the Person (if other than the Issuer) formed by or surviving such
consolidation or merger shall be a Person organized and existing under the
laws of the United States of America or any State and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Indenture Trustee, in form satisfactory to the Indenture Trustee, the due
and punctual payment of the principal of and interest on all Notes and the
performance or observance of every agreement and covenant of this Indenture
on the part of the Issuer to be performed or observed, all as provided
herein;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Indenture Trustee) to the effect that
such transaction will not have any material adverse tax consequence to the
Issuer, any Noteholder or any Certificateholder;
(v) any action that is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation or merger and such supplemental indenture comply with this
Article III and that all conditions precedent herein provided for relating
to such transaction have been complied with (including any filing required
by the Exchange Act).
(b) Other than as specifically contemplated by the Basic Documents, the
Issuer shall not convey or transfer any of its properties or assets, including
those included in the Indenture Trust Estate, to any Person, unless:
(i) the Person that acquires by conveyance or transfer the properties
and assets of the Issuer the conveyance or transfer of which is hereby
restricted shall (A) be a United States citizen or a Person organized and
existing under the laws of the United States of America or any State, (B)
expressly assumes, by an indenture supplemental hereto, executed and
delivered to the Indenture Trustee, in form satisfactory to the Indenture
Trustee, the due and punctual payment of the principal of and interest on
all Notes and the performance or observance of every agreement and covenant
of this
18
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 Noteholders, (D) unless
otherwise provided in such supplemental indenture, expressly agrees to
indemnify, defend and hold harmless the Issuer against and from any loss,
liability or expense arising under or related to this Indenture and the
Notes, and (E) expressly agrees by means of such supplemental indenture
that such Person (or if a group of Persons, then one specified Person)
shall make all filings, if any, with the Commission (and any other
appropriate Person) required by the Exchange Act in connection with the
Notes;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Indenture Trustee) to the effect that
such transaction will not have any material adverse tax consequence to the
Issuer, any Noteholder or any Certificateholder;
(v) any action that is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
conveyance or transfer and such supplemental indenture comply with this
Article III and that all conditions precedent herein provided for relating
to such transaction have been complied with (including any filing required
by the Exchange Act).
SECTION 3.11. Successor or Transferee. (a) Upon any consolidation or
merger of the Issuer in accordance with Section 3.10(a), the Person formed by or
surviving such consolidation or merger (if other than the Issuer) shall succeed
to, and be substituted for, and may exercise every right and power of, the
Issuer under this Indenture with the same effect as if such Person had been
named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 3.10(b), the Issuer shall be released from every
covenant and agreement of this Indenture to be observed or performed on the part
of the Issuer with respect to the Notes immediately upon the delivery of written
notice to the Indenture Trustee stating that the Issuer is to be so released.
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SECTION 3.12. No Other Business. The Issuer shall not engage in any
business other than financing, acquiring, owning and pledging the Receivables in
the manner contemplated by this Indenture and the Basic Documents and activities
incidental thereto.
SECTION 3.13. No Borrowing. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes and the Certificates.
SECTION 3.14. Servicer's Obligations. The Issuer shall cause the
Servicer to comply with the Sale and Servicing Agreement, including Sections
3.9, 3.10, 3.11, 3.12, 3.13 and 4.9 and Article VI thereof.
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities. Except
as contemplated by this Indenture and the other Basic Documents, the Issuer
shall not make any loan or advance or credit to, or guarantee (directly or
indirectly or by an instrument having the effect of assuring another's payment
or performance on any obligation or capability of so doing or otherwise),
endorse or otherwise become contingently liable, directly or indirectly, in
connection with the obligations, stocks or dividends of, or own, purchase,
repurchase or acquire (or agree contingently to do so) any stock, obligations,
assets or securities of, or any other interest in, or make any capital
contribution to, any other Person.
SECTION 3.16. Capital Expenditures. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
SECTION 3.17. Further Instruments and Acts. Upon request of the
Indenture Trustee, the Issuer shall execute and deliver such further instruments
and do such further acts as may be reasonably necessary or proper to carry out
more effectively the purpose of this Indenture.
SECTION 3.18. Restricted Payments. The Issuer shall not, directly or
indirectly, (i) make any distribution (by reduction of capital or otherwise),
whether in cash, property, securities or a combination thereof, to the Owner
Trustee or any owner of a beneficial interest in the Issuer or otherwise with
respect to any ownership or equity interest or security in or of the Issuer or
to the Servicer or the Administrator, (ii) redeem, purchase, retire or otherwise
acquire for value any such ownership or equity interest or security or (iii) set
aside or otherwise segregate any amounts for any such purpose; provided,
however, that the Issuer may make, or cause to be made, (x) payments to the
Servicer, the Administrator, the Owner Trustee, the Indenture Trustee, the
Noteholders and the Certificateholders as contemplated by, and to the extent
funds are available for such purpose under, this Indenture and the other Basic
Documents and (y) payments to the Indenture Trustee pursuant to Section 2(a)(ii)
of the Administration Agreement. The Issuer shall not, directly or indirectly,
make payments to or distributions from the Collection Account or the Principal
Distribution Account except in accordance with this Indenture and the other
Basic Documents.
SECTION 3.19. Notice of Events of Default. The Issuer shall give the
Indenture Trustee and the Rating Agencies prompt written notice of each Event of
Default hereunder and
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of each default on the part of any party to the Sale and Servicing Agreement
with respect to any of the provisions thereof.
SECTION 3.20. Removal of Administrator. For so long as any Notes
are Outstanding, the Issuer shall not remove the Administrator without cause
unless the Rating Agency Condition shall have been satisfied in connection
therewith.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect with respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.3, 3.4, 3.5, 3.8,
3.10, 3.12 and 3.13, (v) the rights, obligations and immunities of the Indenture
Trustee hereunder (including the rights of the Indenture Trustee under Section
6.7 and the obligations of the Indenture Trustee under Section 4.3), and (vi)
the rights of Noteholders as beneficiaries hereof with respect to the property
so deposited with the Indenture Trustee payable to all or any of them, and the
Indenture Trustee, on demand of and at the expense of the Issuer, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture
with respect to the Notes, when:
(A) either:
(1) all Notes theretofore authenticated and delivered
(other than (i) Notes that have been destroyed, lost
or stolen and that have been replaced or paid as
provided in Section 2.6 and (ii) Notes for whose
payment money has theretofore been deposited in trust
or segregated and held in trust by the Issuer and
thereafter repaid to the Issuer or discharged from
such trust, as provided in Section 3.3) have been
delivered to the Indenture Trustee for cancellation;
or
(2) all Notes not theretofore delivered to the
Indenture Trustee for cancellation have become due and
payable and the Issuer has irrevocably deposited or
caused to be irrevocably deposited with the Indenture
Trustee cash or direct obligations of or obligations
guaranteed by the United States of America (which will
mature prior to the date such amounts are payable), in
trust for such purpose, in an amount sufficient without
reinvestment to pay and discharge the entire indebtedness
on such Notes not theretofore delivered to the Indenture
Trustee for cancellation when due to the applicable Final
Scheduled Payment Date or Prepayment Date (if Notes shall
have been called for prepayment pursuant to Section 10.1),
as the case may be, and all fees due and payable to the
Indenture Trustee;
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(B) the Issuer has paid or caused to be paid all other
sums payable hereunder and under any of the other Basic
Documents by the Issuer;
(C) the Issuer has delivered to the Indenture Trustee an
Officer's Certificate, an Opinion of Counsel and (if required by
the TIA or the Indenture Trustee) an Independent Certificate from
a firm of certified public accountants, each meeting the
applicable requirements of Section 11.1(a) and, subject to
Section 11.2, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this
Indenture have been complied with; and
(D) the Issuer has delivered to the Indenture Trustee an
Opinion of Counsel to the effect that the satisfaction and
discharge of the Notes pursuant to this Section 4.1 will not
cause any Noteholder to be treated as having sold or exchanged
any of its Notes for purposes of Section 1001 of the Code.
Upon the satisfaction and discharge of the Indenture pursuant to this
Section 4.1, at the request of the Owner Trustee, the Indenture Trustee shall
deliver to the Owner Trustee a certificate of a Trustee Officer stating that all
Noteholders have been paid in full and stating whether, to the best knowledge of
such Trustee Officer, any claims remain against the Issuer in respect of the
Indenture and the Notes.
SECTION 4.2. Application of Trust Money. All monies deposited with the
Indenture Trustee pursuant to Section 4.1 shall be held in trust and applied by
it, in accordance with the provisions of the Notes and this Indenture, to the
payment, either directly or through any Note Paying Agent, as the Indenture
Trustee may determine, to the Noteholders of the particular Notes for the
payment or redemption of which such monies have been deposited with the
Indenture Trustee, of all sums due and to become due thereon for principal and
interest, but such monies need not be segregated from other funds except to the
extent required herein or in the Sale and Servicing Agreement or required by
law.
SECTION 4.3. Repayment of Monies Held by Note Paying Agent. In
connection with the satisfaction and discharge of this Indenture with respect to
the Notes, all monies then held by any Note Paying Agent other than the
Indenture Trustee under the provisions of this Indenture with respect to such
Notes shall, upon demand of the Issuer, be paid to the Indenture Trustee to be
held and applied according to Section 3.3 and thereupon such Note Paying Agent
shall be released from all further liability with respect to such monies.
ARTICLE V
REMEDIES
SECTION 5.1. Events of Default. "Event of Default," wherever used herein,
means the occurrence of any one of the following events (whatever the reason for
such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to
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any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body):
(i) default in the payment of any interest on any Note when the same
becomes due and payable on a Payment Date, and such default shall continue
for a period of five (5) days or more; or
(ii) default in the payment of the principal of or any installment of
the principal of any Note when the same becomes due and payable; or
(iii) default in the observance or performance of any 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) that materially and adversely
affects the Noteholders and such default shall continue for a period of
sixty (60) days, after there shall have been given, by registered or
certified mail, to the Issuer by the Indenture Trustee or to the Issuer and
the Indenture Trustee by the holders of Notes evidencing not less than 25%
of the principal amount of the Notes, a written notice specifying such
default and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; or
(iv) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial
part of the Indenture Trust Estate in an involuntary case under any
applicable federal or State bankruptcy, insolvency or other similar law now
or hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Issuer or for
any substantial part of the Indenture Trust Estate, or ordering the
winding-up or liquidation of the Issuer's affairs, and such decree or order
shall remain unstayed and in effect for a period of sixty (60) consecutive
days; or
(v) the commencement by the Issuer of a voluntary case under any
applicable federal or State bankruptcy, insolvency or other similar law now
or hereafter in effect, or the consent by the Issuer to the entry of an
order for relief in an involuntary case under any such law, or the consent
by the Issuer to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
of the Issuer or for any substantial part of the Indenture Trust Estate, or
the making by the Issuer of any general assignment for the benefit of
creditors, or the failure by the Issuer generally to pay its debts as such
debts become due, or the taking of any action by the Issuer in furtherance
of any of the foregoing.
The Issuer shall deliver to the Indenture Trustee, within five (5) days after
the occurrence thereof, written notice in the form of an Officer's Certificate
of any event which with the giving of notice and the lapse of time would become
an Event of Default under clause (iii) above, its status and what action the
Issuer is taking or proposes to take with respect thereto.
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SECTION 5.2. Acceleration of Maturity; Rescission and Annulment. (a) If
an Event of Default should occur and be continuing, then and in every such case
the Indenture Trustee or the holders of Notes evidencing not less than a
majority of the principal amount of the Notes may declare all the Notes to be
immediately due and payable, by a notice in writing to the Issuer (and to the
Indenture Trustee if given by Noteholders), and upon any such declaration the
unpaid principal amount of such Notes, together with accrued and unpaid interest
thereon through the date of acceleration, shall become immediately due and
payable.
(b) At any time after a declaration of acceleration of maturity has
been made and before a judgment or decree for payment of the amount due has been
obtained by the Indenture Trustee as hereinafter provided in this Article V, the
holders of Notes evidencing not less than a majority of the principal amount of
the Notes, by written notice to the Issuer and the Indenture Trustee, may
rescind and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture Trustee a
sum sufficient to pay:
(A) all payments of principal of and interest on all Notes and
all other amounts that would then be due hereunder or upon such Notes
if the Event of Default giving rise to such acceleration had not
occurred; and
(B) all sums paid or advanced by the Indenture Trustee hereunder
and the reasonable compensation, expenses, disbursements and advances
of the Indenture Trustee and its agents and counsel; and
(ii) all Events of Default, other than the nonpayment of the principal
of the Notes that has become due solely by such acceleration, have been
cured or waived as provided in Section 5.12. No such rescission shall
affect any subsequent default or impair any right consequent thereto.
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee. (a) The Issuer covenants that if (i) there is an Event of
Default relating to the nonpayment of any interest on any Note when the same
becomes due and payable, and such Event of Default continues for a period of
five (5) days, or (ii) there is an Event of Default relating to the nonpayment
in the payment of the principal of or any installment of the principal of any
Note when the same becomes due and payable, the Issuer shall, upon demand of the
Indenture Trustee, pay to the Indenture Trustee, for the benefit of the
Noteholders, the whole amount then due and payable on such Notes for principal
and interest, with interest upon the overdue principal and, to the extent
payment at such rate of interest shall be legally enforceable, upon overdue
installments of interest at the applicable Note Interest Rate borne by the Notes
and in addition thereto such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee and its agents,
attorneys and counsel.
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(b) In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee, in its own name and as trustee of an express
trust, may institute a Proceeding for the collection of the sums so due and
unpaid, and may prosecute such Proceeding to judgment or final decree, and may
enforce the same against the Issuer or other obligor upon such Notes and collect
in the manner provided by law out of the property of the Issuer or other obligor
upon such Notes, wherever situated, the monies adjudged or decreed to be
payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee, as more particularly provided in Section 5.4, in its discretion, may
proceed to protect and enforce its rights and the rights of the Noteholders, by
such appropriate Proceedings as the Indenture Trustee shall deem most effective
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy or legal or
equitable right vested in the Indenture Trustee by this Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Indenture Trust Estate, Proceedings under Title 11 of the United States Code
or any other applicable federal or State bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial Proceedings relative to the Issuer
or other obligor upon the Notes, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, irrespective of whether the
principal of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section 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 Indenture Trustee (including any claim for
reasonable compensation to the Indenture Trustee and each predecessor
Indenture Trustee, and their respective agents, attorneys and counsel, and
for reimbursement of all expenses and liabilities incurred, and all
advances and disbursements made, by the Indenture Trustee and each
predecessor Indenture Trustee, except as a result of negligence or bad
faith) and of the Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote on
behalf of the Noteholders in any election of a trustee, a standby trustee
or Person performing similar functions in any such Proceedings;
(iii) to collect and receive any monies or other property payable or
deliverable on any such claims and to pay all amounts received with respect
to the claims of the Noteholders and of the Indenture Trustee on their
behalf; and
25
(iv) to file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Indenture
Trustee or the Noteholders allowed in any judicial proceedings relative to
the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee and, in the event that the Indenture Trustee
shall consent to the making of payments directly to such Noteholders, to pay to
the Indenture Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Indenture Trustee, each predecessor Indenture Trustee and
their respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances and disbursements made, by the Indenture
Trustee and each predecessor Indenture Trustee, except as a result of negligence
or bad faith, and any other amounts due the Indenture Trustee pursuant to
Section 6.7.
(e) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Noteholder or to authorize
the Indenture Trustee to vote in respect of the claim of any Noteholder in any
such proceeding except, as aforesaid, to vote for the election of a trustee in
bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture,
or under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such action or Proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents, attorneys and counsel, shall be
for the ratable benefit of the Noteholders in respect of which such judgment has
been recovered.
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Noteholders, and it shall not be necessary to make any
Noteholder a party to any such Proceedings.
SECTION 5.4. Remedies; Priorities. (a) If an Event of Default shall
have occurred and be continuing, the Indenture Trustee may, or at the direction
of Noteholders of Notes evidencing not less than a majority of the principal
amount of the Notes shall, do one or more of the following (subject to Section
5.5):
(i) institute Proceedings in its own name and as trustee of an express
trust for the collection of all amounts then payable on the Notes or under
this Indenture with respect thereto, whether by declaration or otherwise,
enforce any judgment obtained, and collect from the Issuer and any other
obligor upon such Notes monies adjudged due;
26
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Indenture Trust
Estate;
(iii) exercise any remedies of a secured party under the UCC and take
any other appropriate action to protect and enforce the rights and remedies
of the Indenture Trustee and the Noteholders; and
(iv) sell the Indenture 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;
provided, however, the Indenture Trustee may not sell or otherwise liquidate the
Indenture Trust Estate unless:
(A) the holders of Notes evidencing 100% of the principal
amount of the Notes (excluding Notes held by the Seller, the Servicer
or any of their Affiliates) consent thereto; or
(B) the proceeds of such sale or liquidation are sufficient to
pay in full the principal of and the accrued interest on the
Outstanding Notes; or
(C) if the Event of Default is of the type described in Section
5.1(i) or (ii), the Indenture Trustee-
(1) determines (but shall have no obligation to make such
determination) that the Indenture 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
(2) the Indenture Trustee obtains the consent of holders of
Notes evidencing not less than 66 2/3% of the principal amount of
the Notes; or
(D) with respect to an Event of Default described in Section
5.1(iii):
(1) the holders of all Outstanding Notes and the
Certificateholders of all outstanding Certificates consent
thereto; or
(2) the proceeds of such sale or liquidation are sufficient
to pay in full the principal of and accrued interest on the
Outstanding Notes and outstanding Certificates.
In determining such sufficiency or insufficiency with respect to
clauses (C)(1) and (D)(2) above, the Indenture Trustee may, but need not, obtain
and rely upon an opinion of an
27
Independent investment banking or accounting firm of national reputation as to
the feasibility of such proposed action and as to the sufficiency of the
Indenture Trust Estate for such purpose.
(b) Notwithstanding the provisions of Section 8.2 of this Agreement or
Section 4.6 of the Sale and Servicing Agreement, if the Indenture Trustee
collects any money or property pursuant to this Article V, it shall pay out the
money or property in the following order of priority:
(i) first, to the Indenture Trustee and the Owner Trustee for all
amounts due for fees, expenses and indemnification under Section 6.7 of
this Agreement and Article VII of the Trust Agreement, respectively, and
not previously paid;
(ii) second, to the Servicer for due and unpaid Servicing Fees;
(iii) third, if an Event of Default specified in Section 5.1(i), (ii),
(iv) or (v) has occurred, in the following order of priority:
(A) first, to the Noteholders, interest due and payable on the
Class [A] Notes (including interest at the applicable Note Interest
Rate on any overdue interest, to the extent lawful), provided that if
there are not sufficient funds available to pay the entire amount of
interest due and payable on the Class [A] Notes, the amounts available
shall be applied to the payment of such interest on the Class [A]
Notes on a pro rata basis;
(B) second, to the holders of the Class [A-1] Notes in reduction
of principal until the principal amount of the Class [A-1] Notes has
been paid in full and then to the holders of the Class [A-2] Notes,
the Class [A-3] Notes and the Class [A-4] Notes on a pro rata basis in
reduction of principal until the principal amount of such Class [A]
Notes has been paid in full; and
(C) third, to the Certificate Distribution Account, the sum of
(x) accrued and unpaid interest on the Class [B] Certificates
(together with interest at the Class [B] Rate on any overdue interest,
to the extent lawful) and (y) the outstanding Certificate Balance;
(iv) fourth, if the only Event of Default that has occurred is the
Event of Default specified in Section 5.1(iii), in the following order of
priority:
(A) to the Class [A] Noteholders, accrued and unpaid interest on
the Class [A] Notes (together with interest on overdue interest at the
applicable Note Interest Rate, to the extent lawful) provided that if
there are not sufficient funds available to pay the entire amount of
such interest, the amounts available shall be applied to the payment
of such interest on the Class [A] Notes on a pro rata basis;
28
(B) to the Noteholders, the Priority Note Principal Payment, if
any, to be distributed in the same manner as described under Section
8.2(d) of this Agreement;
(C) to the Certificate Distribution Account, accrued and unpaid
interest on the Class B Certificates (together with interest at the
Class B Rate on any overdue interest, to the extent lawful);
(D) to the holders of the Class [A-1] Notes in reduction of
principal until the principal amount of the Class [A-1] Notes has been
paid in full and then to the holders of the Class [A-2] Notes, the
Class [A-3] Notes and the Class [A-4] Notes on a pro rata basis in
reduction of principal until the principal amount of such Class [A]
Notes has been paid in full; and
(E) to the Certificate Distribution Account for distribution to
Class [B] Certificateholders in reduction of the Certificate Balance
until the Certificate Balance is reduced to zero.
(v) fifth, to the Seller, any money or property remaining after
payment in full of the amounts described in clauses (i)-(iv) of this
Section 5.4(b).
The Indenture Trustee may fix a record date and payment date for any payment to
Noteholders pursuant to this Section 5.4. At least fifteen (15) days before such
record date, the Indenture Trustee shall mail to each Noteholder a notice that
states the record date, the payment date and the amount to be paid.
(c) Upon a sale or other liquidation of the Receivables in the manner
set forth in Section 5.4(a), the Indenture Trustee shall provide reasonable
prior notice of such sale or liquidation to each Noteholder and
Certificateholder. A Noteholder or Certificateholder may submit a bid with
respect to such sale.
SECTION 5.5. Optional Preservation of the Receivables. If the Notes
have been declared to be due and payable under Section 5.2 following an Event of
Default, and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may, but need not, elect to maintain possession
of the Indenture Trust Estate and apply proceeds as if there had been no
declaration of acceleration; provided, however, that funds on deposit in the
Collection Account at the time the Indenture Trustee makes such election or
deposited therein during the Collection Period in which such election is made
(including funds, if any, deposited therein from the Reserve Account) shall be
applied in accordance with such declaration of acceleration in the manner
specified in Section 4.6(c) of the Sale and Servicing Agreement. It is the
desire of the parties hereto and the Noteholders that there be at all times
sufficient funds for the payment of principal of and interest on the Notes, and
the Indenture Trustee shall take such desire into account when determining
whether or not to maintain possession of the Indenture Trust Estate. In
determining whether to maintain possession of the Indenture Trust Estate, the
Indenture Trustee may, but need not, obtain and rely upon an opinion
29
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 Indenture Trust Estate for such purpose.
SECTION 5.6. Limitation of Suits. No Noteholder shall have any right to
institute any Proceeding, judicial or otherwise, with respect to this Indenture
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:
(a) such Noteholder has previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(b) the holders of Notes evidencing not less than 25% of the principal
amount of the Notes have made written request to the Indenture Trustee to
institute such Proceeding in respect of such Event of Default in its own name as
Indenture Trustee hereunder;
(c) such Noteholder or Noteholders have offered to the Indenture
Trustee reasonable indemnity against the costs, expenses and liabilities to be
incurred in complying with such request;
(d) the Indenture Trustee for sixty (60) days after its receipt of such
notice, request and offer of indemnity has failed to institute such Proceedings;
and
(e) no direction inconsistent with such written request has been given
to the Indenture Trustee during such sixty-day period by the Noteholders of
Notes evidencing not less than a majority of the principal amount of the Notes.
It is understood and intended that no one or more Noteholders shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Noteholders or to obtain or to seek to obtain priority or preference over
any other Noteholders or to enforce any right under this Indenture, except in
the manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Noteholders, each
evidencing less than a majority of the principal amount of the Notes, the
Indenture Trustee shall act at the direction of the group of Noteholders
representing the greater principal amount of the Notes. If the Indenture Trustee
receives conflicting or inconsistent requests and indemnity from two or more
groups of Noteholders representing an equal principal amount of the Notes, the
Indenture Trustee in its sole discretion may determine what action, if any,
shall be taken, notwithstanding any other provisions of this Indenture.
SECTION 5.7. Unconditional Rights of Noteholders To Receive Principal
and Interest. Notwithstanding any other provisions in this Indenture, any
Noteholder shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest, if any, on its Note on or after the
respective due dates thereof expressed in such Note or in this
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Indenture (or, in the case of prepayment pursuant to Article X, on or
after the Prepayment Date) and to institute suit for the enforcement of any such
payment, and such right shall not be impaired without the consent of such
Noteholder.
SECTION 5.8. Restoration of Rights and Remedies. If the Indenture
Trustee or any Noteholder has instituted any Proceeding to enforce any right or
remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee and the Noteholders shall continue as though no such Proceeding had been
instituted.
SECTION 5.9. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Indenture Trustee or to the Noteholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.10. Delay or Omission Not a Waiver. No delay or omission of
the Indenture Trustee or any Noteholder to exercise any right or remedy accruing
upon any Default or Event of Default shall impair any such right or remedy or
constitute a waiver of any such Default or Event of Default or any acquiescence
therein. Every right and remedy given by this Article V or by law to the
Indenture Trustee or to the Noteholders may be exercised from time to time, and
as often as may be deemed expedient, by the Indenture Trustee or by the
Noteholders, as the case may be.
SECTION 5.11. Control by Noteholders. The Noteholders of Notes
evidencing not less than a majority of the principal amount of the Notes
Outstanding shall have the right, subject to Section 6.2(f), to direct the time,
method and place of conducting any Proceeding for any remedy available to the
Indenture Trustee with respect to the Notes or exercising any trust or power
conferred on the Indenture Trustee; provided that:
(a) such direction shall not be in conflict with any rule of law or
with this Indenture;
(b) subject to the express terms of Section 5.4, any direction to the
Indenture Trustee to sell or liquidate the Indenture Trust Estate shall be by
holders of Notes evidencing not less than 100% of the principal amount of the
Notes Outstanding;
(c) if the conditions set forth in Section 5.5 have been satisfied and
the Indenture Trustee elects to retain the Indenture Trust Estate pursuant to
such Section 5.5, then any direction to the Indenture Trustee by Noteholders of
Notes evidencing less than 100% of the principal
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amount of the Notes Outstanding to sell or liquidate the Indenture
Trust Estate shall be of no force and effect; and
(d) the Indenture Trustee may take any other action deemed proper by
the Indenture Trustee that is not inconsistent with such direction.
Notwithstanding the rights of Noteholders set forth in this Section 5.11,
subject to Section 6.1, the Indenture Trustee need not take any action that it
determines might involve it in costs or expenses for which it would not be
adequately indemnified or expose it to personal liability or might materially
adversely affect or unduly prejudice the rights of any Noteholders not
consenting to such action.
SECTION 5.12. Waiver of Past Defaults. Prior to the declaration of the
acceleration of the maturity of the Notes as provided in Section 5.2, the
holders of Notes evidencing not less than a majority of the principal amount of
the Notes Outstanding may waive any past Default or Event of Default and its
consequences except a Default (a) in the payment of principal of or interest on
any of the Notes or (b) in respect of a covenant or provision hereof that cannot
be amended, supplemented or modified without the consent of each Noteholder. In
the case of any such waiver, the Issuer, the Indenture Trustee and the
Noteholders shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other Default
or impair any right consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereto.
SECTION 5.13. Undertaking for Costs. All parties to this Indenture
agree, and each Noteholder by such Noteholder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.13 shall not apply to (a) any suit instituted by
the Indenture Trustee, (b) any suit instituted by any Noteholder or group of
Noteholders, in each case holding in the aggregate more than 10% of the
principal amount of the Notes Outstanding or (c) any suit instituted by any
Noteholder for the enforcement of the payment of principal of or interest on any
Note on or after the respective due dates expressed in such Note and in this
Indenture.
SECTION 5.14. Waiver of Stay or Extension Laws. The Issuer covenants
(to the extent that it may lawfully do so) that it shall not at any time insist
upon, or plead or in any manner whatsoever, claim or take the benefit or
advantage of, any stay or extension law
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wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture, and the Issuer (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it shall not hinder, delay or
impede the execution of any power herein granted to the Indenture Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
SECTION 5.15. Action on Notes. The Indenture Trustee's right to seek
recover judgment on the Notes or under this Indenture shall not be affected by
and the seeking, obtaining or application of any other relief under or with
respect to this Indenture. Neither the lien of this Indenture nor any rights or
remedies of the Indenture Trustee or the Noteholders shall be impaired by the
recovery of any judgment by the Indenture Trustee against the Issuer or by the
levy of any execution under such judgment upon any portion of the Indenture
Trust Estate or upon any of the assets of the Issuer. Any money or property
collected by the Indenture Trustee shall be applied in accordance with Section
5.4(b).
SECTION 5.16. Performance and Enforcement of Certain Obligations. (a)
Promptly following a request from the Indenture Trustee to do so, and at the
Administrator's expense, the Issuer shall take all such lawful action as the
Indenture Trustee may request to compel or secure the performance and observance
by the Seller and the Servicer, as applicable, of each of their obligations to
the Issuer under or in connection with the Sale and Servicing Agreement and to
exercise any and all rights, remedies, powers and privileges lawfully available
to the Issuer under or in connection with the Sale and Servicing Agreement, to
the extent and in the manner directed by the Indenture Trustee, including the
transmission of notices of default on the part of the Seller or the Servicer
thereunder and the institution of legal or administrative actions or proceedings
to compel or secure performance by the Seller or the Servicer of each of their
obligations under the Sale and Servicing Agreement.
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and at the direction (which direction shall be in writing
or by telephone, confirmed in writing promptly thereafter) of the Noteholders of
Notes evidencing not less than a majority of the principal amount of the Notes
shall, exercise all rights, remedies, powers, privileges and claims of the
Issuer against the Seller or the Servicer under or in connection with the Sale
and Servicing Agreement, including the right or power to take any action to
compel or secure performance or observance by the Seller, the Servicer or the
Bank, as the case may be, of each of their obligations to the Issuer thereunder
and to give any consent, request, notice, direction, approval, extension, or
waiver under the Sale and Servicing Agreement and any right of the Issuer to
take such action shall be suspended.
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.1. Duties of Indenture Trustee. (a) If an Event of Default
has occurred and is continuing, the Indenture Trustee shall exercise the rights
and powers vested in it by this
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Indenture and use the same degree of care and skill in their exercise
as a prudent Person would exercise or use under the circumstances in the conduct
of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and, if required by the terms
of this Indenture, conforming to the requirements of this Indenture;
provided, however, that the Indenture Trustee shall examine the
certificates and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section 6.1;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Trustee Officer unless it is proved that
the Indenture Trustee was negligent in ascertaining the pertinent facts;
(iii) the Indenture Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.11; and
(iv) the Indenture Trustee shall have no duty (A) to see to any
recording, filing, or depositing of this Indenture or any agreement
referred to herein or any financing statement or continuation statement
evidencing a security interest, or to see to the maintenance of any such
recording or filing or depositing or to any re-recording, refiling or
redepositing of any thereof, (B) to see to any insurance, (C) to see to the
payment or discharge of any tax, assessment, or other governmental charge
or any lien or encumbrance of any kind owing with respect to, assessed or
levied against, any part of the Trust Estate other than from funds
available in the Collection Account, (D) except as otherwise set forth in
Section 6.1(b)(ii), to confirm or verify the contents of any reports or
certificates of the Servicer delivered to the Indenture Trustee pursuant to
this Indenture believed by the Indenture Trustee to be genuine and to have
been signed or presented by the proper party or parties.
(d) The Indenture Trustee shall not be liable for interest on any money
received by it except as the Indenture Trustee may agree in writing with the
Issuer.
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(e) Money held in trust by the Indenture Trustee need not be segregated
from other funds except to the extent required by law or the terms of this
Indenture or the Sale and Servicing Agreement.
(f) No provision of this Indenture shall require the Indenture Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it, and none of the provisions contained in this Indenture
shall in any event require the Indenture Trustee to perform, or be responsible
for the manner of performance of, any of the obligations of the Servicer under
this Indenture except during such time, if any, as the Indenture Trustee shall
be the successor to, and be vested with the rights, duties, powers and
privileges of the Servicer in accordance with the terms of this Indenture.
(g) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section 6.1 and to the provisions of
the TIA.
(h) The Indenture Trustee shall not be charged with knowledge of any
Event of Default unless either (1) a Trustee Officer shall have actual knowledge
of such Event of Default or (2) written notice of such Event of Default shall
have been given to the Indenture Trustee in accordance with the provisions of
this Indenture.
SECTION 6.2. Rights of Indenture Trustee. (a) The Indenture Trustee may
rely and shall be protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
Person. The Indenture Trustee need not investigate any fact or matters stated in
any such document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel. The Indenture Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on an Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed with
due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that such action or omission by the
Indenture Trustee does not constitute willful misconduct, negligence or bad
faith.
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(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Notes shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.
(f) The Indenture Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture or to institute, conduct
or defend any litigation hereunder or in relation hereto or to honor the request
or direction of any of the Noteholders pursuant to this Indenture unless such
Noteholders shall have offered to the Indenture Trustee reasonable security or
indemnity against the reasonable costs, expenses, disbursements, advances and
liabilities which might be incurred by it, its agents and its counsel in
compliance with such request or direction.
(g) Any request or direction of the Issuer mentioned herein shall be
sufficiently evidenced by an Issuer Request.
(h) The right of the Indenture Trustee to perform any discretionary act
enumerated in this Indenture shall not be construed as a duty, and the Indenture
Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of such act.
(i) The Indenture Trustee shall not be required to give any bond or
surety in respect of the execution of the Trust Estate created hereby or the
powers granted hereunder.
SECTION 6.3. Individual Rights of Indenture Trustee. The Indenture
Trustee, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with the Issuer or its Affiliates with
the same rights it would have if it were not Indenture Trustee. Any Note Paying
Agent, Note Registrar, co-registrar or co-paying agent hereunder may do the same
with like rights.
SECTION 6.4. Indenture Trustee's Disclaimer. The Indenture Trustee (i)
shall not be responsible for, and makes no representation as to, the validity or
adequacy of this Indenture or the Notes and (ii) shall not be accountable for
the Issuer's use of the proceeds from the Notes, or responsible for any
statement of the Issuer in this Indenture or in any document issued in
connection with the sale of the Notes or in the Notes (all of which shall be
taken as statements of the Issuer) other than the Indenture Trustee's
certificate of authentication.
SECTION 6.5. Notice of Defaults; Insolvency or Dissolution of Depositor
or the Seller. If a Default occurs and is continuing and if it is known to a
Trustee Officer of the Indenture Trustee, the Indenture Trustee shall mail to
each Noteholder notice of such Default within ninety (90) days after it occurs.
Except in the case of a Default in payment of principal of or interest on any
Note (including payments pursuant to the mandatory redemption provisions of such
Note), the Indenture Trustee may withhold the notice if and so long as a
committee of its Trustee Officers in good faith determines that withholding the
notice is in the interests of Noteholders.
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SECTION 6.6. Reports by Indenture Trustee to Noteholders. Upon delivery
to the Indenture Trustee by the Servicer of such information prepared by the
Servicer pursuant to Section 3.9 of the Sale and Servicing Agreement as may be
required to enable each Noteholder to prepare its federal and State income tax
returns, the Indenture Trustee shall deliver such information to the
Noteholders.
SECTION 6.7. Compensation and Indemnity. (a) The Issuer shall cause the
Administrator to pay to the Indenture Trustee from time to time reasonable
compensation for its services. The Indenture Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Issuer
shall cause the Administrator to reimburse the Indenture Trustee for all
reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, in addition to the compensation for its services. Such expenses
shall include the reasonable compensation and expenses, disbursements and
advances of the Indenture Trustee's agents, counsel, accountants and experts.
The Issuer shall cause the Administrator to indemnify the Indenture Trustee for,
and to hold it harmless against, any and all loss, liability or expense
(including attorneys' fees) incurred by it in connection with the administration
of this trust and the performance of its duties hereunder, including the costs
and expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder. The
Indenture Trustee shall notify the Issuer and the Administrator promptly of any
claim for which it may seek indemnity. Failure by the Indenture Trustee to so
notify the Issuer and the Administrator shall not relieve the Issuer or the
Administrator of its obligations hereunder. The Issuer shall cause the
Administrator to defend any such claim, and the Indenture Trustee may have
separate counsel and the Issuer shall cause the Administrator to pay the fees
and expenses of such counsel. Neither the Issuer nor the Administrator need
reimburse any expense or indemnity against any loss, liability or expense
incurred by the Indenture Trustee through the Indenture Trustee's own willful
misconduct, negligence or bad faith.
(b) The Issuer's payment obligations to the Indenture Trustee pursuant
to this Section 6.7 shall survive the resignation or removal of the Indenture
Trustee and the discharge of this Indenture. When the Indenture Trustee incurs
expenses after the occurrence of a Default specified in Section 5.1(iv) or (v)
with respect to the Issuer, the expenses are intended to constitute expenses of
administration under Title 11 of the United States Code or any other applicable
federal or State bankruptcy, insolvency or similar law.
SECTION 6.8. Replacement of Indenture Trustee. (a) No resignation or
removal of the Indenture Trustee, and no appointment of a successor Indenture
Trustee, shall become effective until the acceptance of appointment by the
successor Indenture Trustee pursuant to this Section 6.8 and payment in full of
all sums due to the Indenture Trustee pursuant to Section 6.7. The Indenture
Trustee may resign at any time by so notifying the Issuer. The holders of Notes
evidencing not less than a majority in principal amount of the Notes may remove
the Indenture Trustee without cause by so notifying the Indenture Trustee and
the Issuer and may appoint a successor Indenture Trustee. The Administrator
shall remove the Indenture Trustee if:
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(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) an Insolvency Event occurs with respect to the Indenture Trustee;
(iii) a receiver or other public officer takes charge of the Indenture
Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists in the
office of Indenture Trustee for any reason (the Indenture Trustee in such event
being referred to herein as the retiring Indenture Trustee), the Administrator
shall promptly appoint a successor Indenture Trustee.
(b) Any successor Indenture Trustee shall deliver a written acceptance
of its appointment to the retiring Indenture Trustee and to the Issuer.
Thereupon, if all sums due the retiring Indenture Trustee pursuant to Section
6.7 have been paid in full, the resignation or removal of the retiring Indenture
Trustee shall become effective, and the successor Indenture Trustee shall have
all the rights, powers and duties of the Indenture Trustee under this Indenture.
The successor Indenture Trustee shall mail a notice of its succession to
Noteholders. If all sums due the retiring Indenture Trustee pursuant to Section
6.7 have been paid in full, the retiring Indenture Trustee shall promptly
transfer all property held by it as Indenture Trustee to the successor Indenture
Trustee.
(c) If a successor Indenture Trustee does not take office within sixty
(60) days after the retiring Indenture Trustee resigns or is removed, the
retiring Indenture Trustee, the Issuer or the holders of Notes evidencing not
less than a majority in principal amount of the Notes may petition any court of
competent jurisdiction for the appointment of a successor Indenture Trustee. If
the Indenture Trustee fails to comply with Section 6.11, any Noteholder who has
been a bona fide Noteholder for at least six (6) months may petition any court
of competent jurisdiction for the removal of the Indenture Trustee and the
appointment of a successor Indenture Trustee.
(d) Notwithstanding the replacement of the Indenture Trustee pursuant
to this Section 6.8, the obligations of the Issuer and the Administrator under
Section 6.7 shall continue for the benefit of the retiring Indenture Trustee.
SECTION 6.9. Successor Indenture Trustee by Merger. (a) If the
Indenture Trustee consolidates with, merges or converts into, or transfers all
or substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation or banking association without any further act shall be the
successor Indenture Trustee; provided that such corporation or banking
association shall be otherwise qualified and eligible under Section 6.11. The
Indenture Trustee shall provide the Rating Agencies with written notice of any
such transaction.
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(b) In case at the time such successor or successors by merger,
conversion or consolidation to the Indenture Trustee shall succeed to the trusts
created by this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the certificate
of authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee. In all such cases such certificates shall
have the full force which it is provided anywhere in the Notes or in this
Indenture that the certificate of the Indenture Trustee shall have.
SECTION 6.10. Appointment of Co-Indenture Trustee or Separate Indenture
Trustee. (a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Indenture Trust Estate may at the time be located, the
Indenture Trustee shall have the power and may execute and deliver an instrument
to appoint one or more Persons to act as a co-trustee or co-trustees, or
separate trustee or separate trustees, of all or any part of the Trust, and to
vest in such Person or Persons, in such capacity and for the benefit of the
Noteholders, such title to the Indenture Trust Estate, or any part hereof, and,
subject to the other provisions of this Section 6.10, such powers, duties,
obligations, rights and trusts as the Indenture Trustee may consider necessary
or desirable. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 6.11 and no
notice to Noteholders of the appointment of any co-trustee or separate trustee
shall be required under Section 6.8.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Indenture Trustee shall be conferred or imposed upon and exercised
or performed by the Indenture Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee shall not be authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed
the Indenture Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Indenture Trust Estate or any
portion thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the direction
of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of any
act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the resignation of
or remove any separate trustee or co-trustee.
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(c) Any notice, request or other writing given to the Indenture Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Indenture and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 6.11. Eligibility; Disqualification. (a) The Indenture Trustee
shall at all times satisfy the requirements of TIA Section 310(a). The Indenture
Trustee or its parent shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of condition
and shall have a long-term debt rating of investment grade by each of the Rating
Agencies or shall otherwise be acceptable to each of the Rating Agencies. The
Indenture Trustee shall comply with TIA Section 310(b).
SECTION 6.12. Preferential Collection of Claims Against Issuer. The
Indenture Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). An Indenture Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.1. Issuer To Furnish Indenture Trustee Names and Addresses of
Noteholders. The Issuer shall furnish or cause to be furnished to the Indenture
Trustee (a) not more than five (5) days after each Record Date, a list, in such
form as the Indenture Trustee may reasonably require, of the names and addresses
of the Noteholders as of such Record Date and (b) at such other times as the
Indenture Trustee may request in writing, within thirty (30) days after receipt
by the Issuer of any such request, a list of similar form and content as of a
date not more than ten (10) days prior to the time such list is furnished;
provided, however, that (i) so long as the Indenture Trustee is the Note
Registrar, no such list shall be required to be furnished and (ii) no such list
shall be required to be furnished with respect to Noteholders of Book-Entry
Notes.
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SECTION 7.2. Preservation of Information; Communications to
Noteholders. (a) The Indenture Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of the Noteholders contained
in the most recent list furnished to the Indenture Trustee as provided in
Section 7.1 and the names and addresses of Noteholders received by the
Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee may
destroy any list furnished to it as provided in such Section 7.1 upon receipt
of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA Section 312(b) with
other Noteholders with respect to their rights under this Indenture or under the
Notes. Upon receipt by the Indenture Trustee of any request by three or more
Noteholders or by one or more holders of Notes evidencing not less than 25% of
the Notes Outstanding to receive a copy of the current list of Noteholders
(whether or not made pursuant to TIA Section 312(b)), the Indenture Trustee
shall promptly notify the Administrator thereof by providing to the
Administrator a copy of such request and a copy of the list of Noteholders
produced in response thereto.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall
have the protection of TIA Section 312(c).
SECTION 7.3 Reports by Issuer. (a) The Issuer shall:
(i) file with the Indenture Trustee, within fifteen (15) days after
the Issuer is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) that the Issuer may be
required to file with the Commission pursuant to Section 13 or 15(d) of
the Exchange Act;
(ii) file with the Indenture Trustee and the Commission in accordance
with the rules and regulations prescribed from time to time by the
Commission such additional information, documents and reports with respect
to compliance by the Issuer with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee
shall transmit by mail to all Noteholders described in TIA Section 313(c))
such summaries of any information, documents and reports required to be
filed by the Issuer pursuant to clauses (i) and (ii) of this Section
7.3(a) and by rules and regulations prescribed from time to time by the
Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall correspond to the calendar year.
SECTION 7.4 Reports by Indenture Trustee. (a) If required by TIA
Section 313(a), within sixty (60) days after each May 15, beginning with May
15, 200_, the Indenture Trustee shall mail to each Noteholder as required by
TIA Section 313(c) a brief report dated as of such
41
date that complies with TIA Section 313(a). The Indenture Trustee also shall
comply with TIA Section 313(b).
(b) A copy of each report at the time of its mailing to Noteholders
shall be filed by the Indenture Trustee with the Commission and each stock
exchange, if any, on which the Notes are listed. The Issuer shall notify the
Indenture Trustee if and when the Notes are listed on any stock exchange.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1 Collection of Money. Except as otherwise expressly
provided herein, the Indenture Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable to
or receivable by the Indenture Trustee pursuant to this Indenture and the Sale
and Servicing Agreement. The Indenture Trustee shall apply all such money
received by it as provided in this Indenture and the Sale and Servicing
Agreement. Except as otherwise expressly provided in this Indenture, if any
default occurs in the making of any payment or performance under any agreement
or instrument that is part of the Indenture Trust Estate, the Indenture Trustee
may take such action as may be appropriate to enforce such payment or
performance, including the institution and prosecution of appropriate
Proceedings. Any such action shall be without prejudice to any right to claim a
Default or Event of Default under this Indenture and any right to proceed
thereafter as provided in Article V.
SECTION 8.2 Trust Accounts. (a) On or prior to the Closing Date,
the Issuer shall cause the Servicer to establish and maintain the Trust
Accounts as provided in Sections 4.1 and 4.7 of the Sale and Servicing
Agreement.
(b) On or before each Payment Date, the Servicer shall deposit all
Available Collections with respect to the Collection Period preceding such
Payment Date in the Collection Account as provided in Sections 4.2, 4.3, 4.4
and 4.5 of the Sale and Servicing Agreement. On or before each Payment Date,
all amounts required to be withdrawn from the Reserve Account and deposited in
the Collection Account pursuant to Section 4.5 of the Sale and Servicing
Agreement shall be withdrawn by the Indenture Trustee from the Reserve Account
and deposited to the Collection Account.
(c) On each Payment Date, the Indenture Trustee (based on the
information contained in the Servicer's Certificate delivered on or before the
related Determination Date pursuant to Section 3.9 of the Sale and Servicing
Agreement) shall make the following withdrawals from the Collection Account and
make deposits, distributions and payments, to the extent of Available Funds for
such Payment Date (plus funds, if any, deposited therein from the Reserve
Account), in the following order of priority:
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[(i) first, to the Servicer, the Servicing Fee and all unpaid
Servicing Fees from prior Collection Periods;
(ii) second, to the Noteholders, the Accrued Class A Note Interest
for such Payment Date; provided that if there are not sufficient funds
available to pay the entire amount of the Accrued Class A Note Interest,
the amounts available shall be applied to the payment of such interest on
the Class A Notes on a pro rata basis;
(iii) third, to the Noteholders, the Priority Note Principal Payment
for such Payment Date, if any, to be distributed in the same priority as
described under Section 8.2(d) of this Agreement ;
(iv) fourth, to the Certificate Distribution Account, the Accrued
Class B Certificate Interest for such Payment Date;
(v) fifth, to the Principal Distribution Account, the Regular
Principal Distribution Amount (less any amounts distributed under clause
(iii) above) for such Payment Date;
(vi) sixth, to the Principal Distribution Account, on any Final
Scheduled Payment Date for any Class of Notes, the amount necessary to
reduce the remaining principal amount of such Class of Notes to zero after
giving to the amount, if any, to be applied on such Payment Date to the
principal of such Class of Notes from funds deposited pursuant to clause
(v) above;
(vii) seventh, to the Reserve Account, the amount, if any, required
to reinstate the amount in the Reserve Account up to the Specified Reserve
Balance for such Payment Date;
(viii) eighth, to the Indenture Trustee and the Owner Trustee, all
amounts for fees, expenses and indemnification due under Section 6.7 of
this Agreement and Article VII of the Trust Agreement, respectively, and
not previously paid; and
(ix) ninth, to the Seller, any funds remaining on deposit in the
Collection Account with respect to the Collection Period preceding such
Payment Date.
Notwithstanding the foregoing in this Section 8.2(c),
(A) if the Notes have been accelerated after an Event of Default
specified in Section 5.1(iii), then the Indenture Trustee shall
instead apply Available Funds in the following order of priority:
(1) to the Indenture Trustee and the Owner Trustee, all
amounts for fees, expenses and indemnification due under Section
6.7 of
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this Agreement and Article VII of the Trust Agreement,
respectively, and not previously paid;
(2) to the Servicer, the Servicing Fee and all unpaid
Servicing Fees from prior Collection Periods;
(3) to the Noteholders, the Accrued Class A Note Interest
for such Payment Date; provided that if there are not sufficient
funds available to pay the entire amount of the Accrued Class A
Note Interest, the amounts available shall be applied to the
payment of such interest on the Class A Notes on a pro rata
basis;
(4) to the Noteholders, the Priority Note Principal
Payment, for such Payment Date, if any, to be distributed in the
same priority as described under Section 8.2(d) of this
Agreement;
(5) the Certificate Distribution Account, the Accrued Class
B Certificate Interest for such Payment Date;
(6) to the Principal Distribution Account, until the
principal amount of the Notes has been paid in full;
(7) to the Certificate Distribution Account, the
Certificate Balance of the Class B Certificates;
(8) to the Seller, any remaining Available Funds for such
Payment Date; and
(B) if the Notes have been accelerated after an Event of Default
specified in Section 5.1(i), (ii), (iv) or (v), then the Indenture
Trustee shall instead apply Available Funds in the following order of
priority:
(1) to the Indenture Trustee and the Owner Trustee, all
amounts due for fees, expenses and indemnification under Section
6.7 of this Agreement and Article VII of the Trust Agreement,
respectively, and not previously paid;
(2) to the Servicer, the Servicing Fee and all unpaid
Servicing Fees from prior Collection Periods;
(3) to the Noteholders, the Accrued Class A Note Interest
for such Payment Date; provided that if there are not sufficient
funds available to pay the entire amount of the Accrued Class A
Note Interest, the amounts available shall be applied to the
payment of such interest on the Class A Notes on a pro rata
basis;
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(4) to the Principal Distribution Account, until the
principal amount of the Notes has been paid in full;
(5) to the Certificate Distribution Account, the sum of the
Accrued Class B Certificate Interest for such Payment Date and
the Certificate Balance of the Class B Certificates;
(6) to the Seller, any remaining Available Funds for such
Payment Date.
(d) On each Payment Date, the Indenture Trustee (based on the
information contained in the Servicer's Certificate delivered on or
before the related Determination Date pursuant to Section 3.9 of the
Sale and Servicing Agreement) shall withdraw the funds deposited in
the Principal Distribution Account on such Payment Date and make
distributions and payments in the following order of priority:
(i) first, to the holders of the Class [A-1] Notes on a pro
rata basis in reduction of principal until the principal amount
of the Class [A-1] Notes has been paid in full;
(ii) second, to the holders of the Class [A-2] Notes on a
pro rata basis in reduction of principal until the principal
amount of the Class [A-2] Notes has been paid in full;
(iii) third, to the holders of the Class [A-3] Notes on a
pro rata basis in reduction of principal until the Class [A-3]
Notes have been paid in full;
(iv) fourth, to the holders of the Class [A-4] Notes on a
pro rata basis in reduction of principal until the principal
amount of the Class [A-4] Notes have been paid in full; and
(v) fifth, to the Certificate Distribution Account in
reduction of the Certificate Balance of the Class [B]
Certificates until the Certificate Balance of the Class [B]
Certificates has been reduced to zero.
Any funds remaining on deposit in the Principal Distribution Account shall be
paid to the Seller.
Notwithstanding the foregoing in this Section 8.2(d), if the Notes
have been accelerated after an Event of Default, then the Indenture Trustee
shall withdraw the funds deposited in the Principal Distribution Account on
each Payment Date and pay them, first, to the holders of the Class [A-1] Notes
until the principal amount of the Class [A-1] Notes have been paid in full and
then to the holders of the Class [A-2] Notes, Class [A-3] Notes and Class [A-4]
Notes on a pro rata basis in reduction of principal until the principal amount
of such Notes has been paid in full.]
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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 Reserve Account shall
be invested by the Indenture Trustee at the written direction of the Servicer,
in the case of the Collection Account, and at the written direction of the
Seller, in the case of the Reserve Account, in Permitted Investments as
provided in Sections 4.1 and 4.7 of the Sale and Servicing Agreement. All
income or other gain (net of losses and investment expenses) from investments
of monies deposited in the Collection Account shall be withdrawn by the
Indenture Trustee from such accounts and distributed as provided in Section 4.1
of the Sale and Servicing Agreement. Amounts in the Reserve Account (including
net income and gain) shall be applied as provided in Section 4.7 of the Sale
and Servicing Agreement. The Servicer or the Seller as applicable, shall not
direct the Indenture Trustee to make any investment of any funds or to sell any
investment held in any of the Trust Accounts unless the security interest
Granted and perfected in such account will continue to be perfected in such
investment or the proceeds of such sale, in either case without any further
action by any Person, and, in connection with any direction to the Indenture
Trustee to make any such investment or sale, if requested by the Indenture
Trustee, the Issuer shall deliver to the Indenture Trustee an Opinion of
Counsel, acceptable to the Indenture Trustee, to such effect.
(b) Subject to Section 6.1(c), the Indenture Trustee shall not in any
way be held liable by reason of any insufficiency in any of the Trust Accounts
resulting from any loss on any Permitted Investment included therein, except
for losses attributable to the Indenture Trustee's failure to make payments on
such Permitted Investments issued by the Indenture Trustee, in its commercial
capacity as principal obligor and not as trustee, in accordance with their
terms.
(c) If (i) the Servicer or the Seller, as applicable, shall have
failed to give investment directions for any funds on deposit in the Collection
Account or the Reserve Account to the Indenture Trustee or (ii) to the
knowledge of a Trustee Officer of the Indenture Trustee, a Default or Event of
Default shall have occurred and be continuing with respect to the Notes but the
Notes shall not have been declared due and payable pursuant to Section 5.2 or
(iii) if such Notes shall have been declared due and payable following an Event
of Default, amounts collected or receivable from the Indenture Trust Estate are
being applied in accordance with Section 5.4 as if there had not been such a
declaration, then the Indenture Trustee shall, to the fullest extent
practicable, invest and reinvest funds in the Collection Account or the Reserve
Account, as the case may be, in the JPMorgan Funds.
SECTION 8.4 Release of Indenture Trust Estate. (a) Subject to
the payment of its fees and expenses pursuant to Section 6.7, the Indenture
Trustee may, and when required by the provisions of this Indenture shall,
execute instruments to release property from the lien of this Indenture, or
convey the Indenture Trustee's interest in the same, in a manner and under
circumstances that are not inconsistent with the provisions of this Indenture.
No party relying upon an instrument executed by the Indenture Trustee as
provided in this Article VIII shall be bound to ascertain the Indenture
Trustee's authority, inquire into the satisfaction of any conditions precedent
or see to the application of any monies.
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(b) The Indenture Trustee shall, at such time as there are no Notes
Outstanding and all sums due the Indenture Trustee pursuant to Section 6.7 have
been paid in full, release any remaining portion of the Indenture Trust Estate
that secured the Notes from the lien of this Indenture and release to the
Issuer or any other Person entitled thereto any funds then on deposit in the
Trust Accounts. The Indenture Trustee shall release property from the lien of
this Indenture pursuant to this Section 8.4(b) only upon receipt of an Issuer
Request accompanied by an Officer's Certificate, an Opinion of Counsel and (if
required by the TIA) Independent Certificates in accordance with TIA Sections
314(c) and 314(d)(1) meeting the applicable requirements of Section 11.1.
(c) Each Noteholder or Note Owner, by its acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, acknowledges that
from time to time the Indenture Trustee shall release the lien of this
Indenture on any Receivable to be sold to (i) the Seller in accordance with
Section 2.3 of the Sale and Servicing Agreement and (ii) to the Servicer in
accordance with Section 3.7 of the Sale and Servicing Agreement.
SECTION 8.5 Opinion of Counsel. The Indenture Trustee shall
receive at least seven (7) days' notice when requested by the Issuer to take
any action pursuant to Section 8.4(a), accompanied by copies of any instruments
involved, and the Indenture Trustee shall also require, except in connection
with any action contemplated by Section 8.4(c), as a condition to such action,
an Opinion of Counsel, in form and substance satisfactory to the Indenture
Trustee, stating the legal effect of any such action, outlining the steps
required to complete the same, and concluding that all conditions precedent to
the taking of such action have been complied with and such action will not
materially and adversely impair the security for the Notes or the rights of the
Noteholders in contravention of the provisions of this Indenture; provided,
however, that such Opinion of Counsel shall not be required to express an
opinion as to the fair value of the Indenture 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 Indenture
Trustee in connection with any such action.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Noteholders but with prior notice to the Rating
Agencies, the Issuer and the Indenture Trustee, when authorized by an Issuer
Order, at any time and from time to time, may enter into one or more indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at any time
subject to the lien of this Indenture, or better to assure, convey and
confirm unto the Indenture Trustee any property subject or required to be
subjected to the lien of this Indenture, or to subject to the lien of this
Indenture additional property;
47
(ii) to evidence the succession, in compliance with the applicable
provisions hereof, of another Person to the Issuer, and the assumption by
any such successor of the covenants of the Issuer herein and in the Notes
contained;
(iii) to add to the covenants of the Issuer, for the benefit of the
Noteholders, or to surrender any right or power herein conferred upon the
Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property to
or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any provision
herein or in any supplemental indenture 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 under any supplemental indenture which shall not be
inconsistent with the provisions of the Indenture; provided that such
action shall not materially adversely affect the interests of the
Noteholders;
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Notes and to add to
or change any of the provisions of this Indenture as shall be necessary to
facilitate the administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Article VI; or
(vii) to modify, eliminate or add to the provisions of this Indenture
to such extent as shall be necessary to affect the qualification of this
Indenture under the TIA or under any similar federal statute hereafter
enacted and to add to this Indenture such other provisions as may be
expressly required by the TIA.
With respect to (iv) above, prior to the execution of such
supplemental indenture, the Rating Agency Condition shall have been satisfied.
The Indenture Trustee is hereby authorized to join in the execution of
any such supplemental indenture and to make any further appropriate agreements
and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, may, also without the consent of any of the Noteholders but with prior
notice to the Rating Agencies, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner (other than the modifications set forth in Section 9.2)
the rights of the Noteholders under this Indenture; provided, however, that (i)
such action shall not, as evidenced by an Opinion of Counsel, adversely affect
in any material respect the interests of any Noteholder, (ii) the Rating Agency
Condition shall have been satisfied with respect to such action and (iii) such
action shall not, as evidenced by an Opinion of Counsel, cause the Issuer to be
characterized for federal or any then Applicable Tax State income tax purposes
as an association taxable as a corporation or otherwise have any material
adverse impact on the federal
48
or any then Applicable Tax State income taxation of any Notes Outstanding or
outstanding Certificates or any Noteholder or Certificateholder.
SECTION 9.2 Supplemental Indentures with Consent of Noteholders.
The Issuer and the Indenture Trustee, when authorized by an Issuer Order, also
may, with prior notice to the Rating Agencies, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to, or
changing in any manner or eliminating any of the provisions of, this Indenture
or modifying in any manner the rights of the Noteholders under this Indenture;
provided, however, that (i) the Rating Agency Condition shall have been
satisfied with respect to such action and (ii) such action shall not, as
evidenced by an Opinion of Counsel, cause the Issuer to be characterized for
federal or any then Applicable Tax State income tax purposes as an association
taxable as a corporation or otherwise have any material adverse impact on the
federal or any then Applicable Tax State income taxation of any Notes
Outstanding or outstanding Certificates or any Noteholder or Certificateholder,
and (iii) (x) such action shall not, as evidenced by an Opinion of Counsel,
adversely affect in any material respect the interests of any Noteholder, with
respect to supplemental indentures relating to matters other than those
specified in clause (y) below or (y) the Noteholders of each Outstanding Note
affected thereby shall have consented thereto, with respect to any supplemental
indenture which would:
(i) modify or alter provisions of this Section 9.2;
(ii) change the Final Scheduled Payment Date or the date of payment
of any installment of principal of or interest on any Note, or reduce the
principal amount thereof, the interest rate thereon or the Prepayment
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 Indenture Trust Estate to payment of principal of or interest on
the Notes, or change any place of payment where, or the coin or currency
in which, any Note or the interest thereon is payable, or impair the right
to institute suit for the enforcement of the provisions of this Indenture
requiring the application of funds available therefor, as provided in
Article V, to the payment of any such amount due on the Notes on or after
the respective due dates thereof (or, in the case of redemption, on or
after the Prepayment Date);
(iii) reduce the percentage of the principal amount of the Notes
Outstanding, the consent of the Noteholders of which is required for any
such supplemental indenture, or the consent of the Noteholders of which is
required for any waiver of compliance with certain provisions of this
Indenture or certain Defaults or Events of Default hereunder and their
consequences provided for in this Indenture;
(iv) modify or alter the provisions of the proviso to the definition
of the term "Outstanding";
(v) reduce the percentage of the principal amount of the Notes
Outstanding required to direct or consent to a sale or liquidation by the
Indenture Trustee of the Indenture Trust Estate pursuant to Section 5.4 if
the proceeds of such sale or liquidation
49
would be insufficient to pay the principal amount and accrued but unpaid
interest on the Notes and/or the Certificates, as applicable;
(vi) modify any provision of this Indenture specifying a percentage
of the aggregate principal amount of the Notes necessary to amend this
Indenture or the other Basic Documents except to increase any percentage
specified herein or to provide that certain additional provisions of this
Indenture or the other Basic Documents cannot be modified or waived
without the consent of the holder of each Outstanding Note affected
thereby;
(vii) modify any of the provisions of this Indenture in such manner
as to affect the calculation of the amount of any payment of interest or
principal due on any Note on any Payment Date (including the calculation
of any of the individual components of such calculation) or to affect the
rights of the Noteholders to the benefit of any provisions for the
mandatory redemption of the Notes contained herein; or
(viii) permit the creation of any lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the
Indenture Trust Estate or, except as otherwise permitted or contemplated
herein, terminate the lien of this Indenture on any such collateral at any
time subject hereto or deprive any Noteholder of the security provided by
the lien of this Indenture.
The Indenture Trustee may in its discretion or upon receipt of an Opinion of
Counsel determine whether or not any Notes would be affected by any supplemental
indenture and any such determination shall be conclusive upon the Noteholders of
all Notes, whether theretofore or thereafter authenticated and delivered
hereunder. The Indenture Trustee shall not be liable for any such determination
made in good faith.
It shall not be necessary for any Act of Noteholders under this
Section 9.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
Promptly after the execution by the Issuer and the Indenture Trustee
of any supplemental indenture pursuant to this Section 9.2, the Indenture
Trustee shall mail to the Noteholders of the Notes to which such amendment or
supplemental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Indenture Trustee
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
SECTION 9.3 Execution of Supplemental Indentures. In executing,
or permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.1 and 6.2, shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture and that all conditions precedent to
the execution and delivery of
50
such supplemental indenture have been satisfied. The Indenture Trustee may, but
shall not be obligated to, enter into any such supplemental indenture that
affects the Indenture Trustee's own rights, duties, liabilities or immunities
under this Indenture or otherwise.
SECTION 9.4 Effect of Supplemental Indenture. Upon the execution
of any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and shall be deemed to be modified and amended in accordance therewith
with respect to the Notes affected thereby, and the respective rights,
limitations of rights, obligations, duties, liabilities and immunities under
this Indenture of the Indenture Trustee, the Issuer and the Noteholders shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
SECTION 9.5 Conformity with Trust Indenture Act. Every amendment
of this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as then
in effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.
SECTION 9.6 Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee
shall, bear a notation in form approved by the Indenture Trustee as to any
matter provided for in such supplemental indenture. If the Issuer or the
Indenture Trustee shall so determine, new Notes so modified as to conform, in
the opinion of the Indenture Trustee and the Issuer, to any such supplemental
indenture may be prepared and executed by the Issuer and authenticated and
delivered by the Indenture Trustee in exchange for Outstanding Notes.
ARTICLE X
PREPAYMENT
SECTION 10.1 Prepayment. The Class A Notes are subject to
prepayment on any Payment Date on which the Servicer exercises its option to
purchase the assets of the Issuer pursuant to Section 8.1 of the Sale and
Servicing Agreement, and the amount paid by the Servicer shall be treated as
collections of Receivables and applied to pay the unpaid principal amount of
the Notes and the Certificate Balance of the Certificates plus accrued and
unpaid interest thereon. If the Notes are to be prepaid pursuant to this
Section 10.1, the Servicer or the Issuer shall furnish notice of such election
to the Indenture Trustee and the Rating Agencies not later than forty (40) days
prior to the Prepayment Date (and the Indenture Trustee shall promptly furnish
notice to the Noteholders) and the Servicer or the Issuer shall deposit by
10:00 a.m. (New York City time) on the Prepayment Date with the Indenture
Trustee in the Collection Account the Prepayment Price of the Notes, whereupon
all Notes shall be due and payable on the Prepayment Date.
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SECTION 10.2 Form of Prepayment Notice. Notice of prepayment under
Section 10.1 shall be given by the Indenture Trustee by first-class mail,
postage prepaid, or by facsimile mailed or transmitted promptly following
receipt of notice from the Issuer or Servicer pursuant to Section 10.1, but not
later than thirty (30) days prior to the applicable Prepayment Date, to each
Noteholder as of the close of business on the Record Date preceding the
applicable Prepayment Date, at such Noteholder's address or facsimile number
appearing in the Note Register.
All notices of prepayment shall state:
(i) the Prepayment Date;
(ii) the Prepayment Price;
(iii) the place where such Notes are to be surrendered for payment of
the Prepayment Price (which shall be the office or agency of the Issuer to
be maintained as provided in Section 3.2); and
(iv) that on the Prepayment Date, the Prepayment Price will become
due and payable upon each such Note and that interest thereon shall cease
to accrue for and after said date.
Notice of prepayment of the Notes shall be given by the Indenture Trustee in
the name and at the expense of the Issuer. Failure to give notice of
prepayment, or any defect therein, to any Noteholder shall not impair or affect
the validity of the prepayment of any other Note.
SECTION 10.3 Notes Payable on Prepayment Date. The Notes shall,
following notice of prepayment as required by Section 10.2, shall on the
Prepayment Date become due and payable at the Prepayment Price and (unless the
Issuer shall default in the payment of the Prepayment Price) no interest shall
accrue on the Prepayment Price for any period after the date to which accrued
interest is calculated for purposes of calculating the Prepayment Price.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Compliance Certificates and Opinions, etc. (a) Upon
any application or request by the Issuer to the Indenture Trustee to take any
action under any provision of this Indenture, the Issuer shall furnish to the
Indenture Trustee (i) an Officer's Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with, (ii) an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with and (iii) (if required by the TIA) an Independent Certificate
from a firm of certified public accountants meeting the applicable requirements
of this Section 11.1, except that, in the case of any such application or
request as to
52
which the furnishing of such documents is specifically required by any
provision of this Indenture, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(A) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
(B) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(C) a statement that, in the opinion of each such signatory,
such signatory has made such examination or investigation as is
necessary to enable such signatory to express an informed opinion as
to whether or not such covenant or condition has been complied with;
and
(D) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture,
the Issuer shall, in addition to any obligation imposed in Section 11.1(a) or
elsewhere in this Indenture, furnish to the Indenture Trustee an Officer's
Certificate certifying or stating the opinion of each person signing such
certificate as to the fair value (within ninety (90) days of such deposit) to
the Issuer of the Collateral or other property or securities to be so
deposited.
(ii) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of any
signer thereof as to the matters described in clause (i) above, the Issuer
shall also deliver to the Indenture Trustee an Independent Certificate as
to the same matters, if the fair value to the Issuer of the securities to
be so deposited and of all other such securities made the basis of any
such withdrawal or release since the commencement of the then-current
fiscal year of the Issuer, as set forth in the certificates delivered
pursuant to clause (i) above and this clause (ii), is ten percent (10%) or
more of the principal amount of the Notes Outstanding, but such a
certificate need not be furnished with respect to any securities so
deposited, if the fair value thereof to the Issuer as set forth in the
related Officer's Certificate is less than $25,000 or less than one
percent (1%) of the principal amount of the Notes Outstanding.
(iii) any property or securities are to be released from the lien of
this Indenture, the Issuer shall also furnish to the Indenture Trustee an
Officer's Certificate certifying or stating the opinion of each person
signing such certificate as to the fair value (within
53
ninety (90) days of such release) of the property or securities proposed
to be released and stating that in the opinion of such person the proposed
release will not impair the security under this Indenture in contravention
of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of any
signer thereof as to the matters described in clause (iii) above, the
Issuer shall also furnish to the Indenture Trustee an Independent
Certificate as to the same matters if the fair value of the property or
securities and of all other property, other than property as contemplated
by clause (v) below or securities released from the lien of this Indenture
since the commencement of the then-current calendar year, as set forth in
the certificates required by clause (iii) above and this clause (iv),
equals ten percent (10%) or more of the principal amount of the Notes
Outstanding, but such certificate need not be furnished in the case of any
release of property or securities if the fair value thereof as set forth
in the related Officer's Certificate is less than $25,000 or less than one
percent (1%) of the principal amount of the Notes Outstanding.
(v) Notwithstanding Section 2.10 or any other provisions of this
Section 11.1, the Issuer may, without compliance with the requirements of
the other provisions of this Section 11.1, (A) collect, liquidate, sell or
otherwise dispose of Receivables and Financed Vehicles as and to the
extent permitted or required by the Basic Documents and (B) make cash
payments out of the Trust Accounts as and to the extent permitted or
required by the Basic Documents.
SECTION 11.2 Form of Documents Delivered to Indenture Trustee. (a) In
any case where several matters are required to be certified by, or covered by
an opinion of, any specified Person, it is not necessary that all such matters
be certified by, or covered by the opinion of, only one such Person, or that
they be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.
(b) Any certificate or opinion of an Authorized Officer of the Issuer
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which such officer's
certificate or opinion is based are erroneous. Any such certificate of an
Authorized Officer or opinion of counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Servicer, the Seller, the Administrator or the
Issuer, stating that the information with respect to such factual matters is in
the possession of the Servicer, the Seller, the Administrator or the Issuer, or
in the exercise of reasonable care should know, that the certificate or opinion
or representations with respect to such matters are erroneous.
54
(c) Where any Person is required to make, give or execute two or more
applications, requests, comments, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
(d) Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of
the facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.
SECTION 11.3 Acts of Noteholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders in person or by agents duly appointed in writing; and except
as herein otherwise expressly provided such action shall become effective when
such instrument or instruments are delivered to the Indenture Trustee, and,
where it is hereby expressly required, to the Issuer. Such instrument or
instruments (and the action embodied herein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Noteholders signing such instrument
or instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 6.1) conclusive in favor of the Indenture Trustee and
the Issuer, if made in the manner provided in this Section 11.3.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Noteholder of any Notes shall bind the Noteholder
of every Note issued upon the registration thereof or in exchange therefor or
in lieu thereof, in respect of anything done, omitted or suffered to be done by
the Indenture Trustee or the Issuer in reliance thereon, whether or not
notation of such action is made upon such Note.
SECTION 11.4 Notices, etc., to Indenture Trustee, Issuer and Rating
Agencies. Any request, demand, authorization, direction, notice, consent,
waiver or Act of Noteholders or other documents provided or permitted by this
Indenture shall be in writing and if such request, demand, authorization,
direction, notice, consent, waiver or Act of Noteholders is to be made upon,
given or furnished to or filed with:
55
(i) the Indenture Trustee by any Noteholder, the Servicer, the
Administrator or the Issuer shall be sufficient for every purpose
hereunder if made, given, furnished or filed in writing to or with the
Indenture Trustee at its Corporate Trust office; or
(ii) the Issuer by the Indenture Trustee or by any Noteholder shall
be sufficient for every purpose hereunder if in writing and mailed
first-class, postage prepaid to the Issuer addressed to: USAA Auto Owner
Trust 200_-_, in care of [ ,
], with
a copy to the Administrator at 00000 XxXxxxxxx Xxxxxxx, Xxx Xxxxxxx, XX
00000, Attention: Secretary, or at any other address previously furnished
in writing to the Indenture Trustee by the Issuer or the Administrator.
The Issuer shall promptly transmit any notice received by it from the
Noteholders to the Indenture Trustee.
Notices required to be given to the Rating Agencies by the Issuer, the
Indenture Trustee or the Owner Trustee shall be in writing, personally
delivered, telecopied or mailed by certified mail, return receipt requested, to
[(i) in the case of Moody's, at the following address: Xxxxx'x Investors
Service, Inc., ABS Monitoring Department, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 and (ii) in case of Standard & Poor's, at the following address: Standard
& Poor's Ratings Services, a division of The McGraw--Hill Companies, Inc., 00
Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Asset Backed
Surveillance Department.]
SECTION 11.5 Notices to Noteholders; Waiver. (a) Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at his address as it appears on the Note Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner
herein provided shall conclusively be presumed to have been duly given.
(b) Where this Indenture provides for notice in any manner, such
notice may be waived in writing by any Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
(c) In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed
to be a sufficient giving of such notice.
56
(d) Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute a Default or
Event of Default.
SECTION 11.6 Alternate Payment and Notice Provisions. Notwithstanding
any provision of this Indenture or any of the Notes to the contrary, the Issuer
may enter into any agreement with any Noteholder providing for a method of
payment, or notice by the Indenture Trustee or any Note Paying Agent to such
Noteholder, that is different from the methods provided for in this Indenture
for such payments or notices. The Issuer shall furnish to the Indenture Trustee
a copy of each such agreement and the Indenture Trustee shall cause payments to
be made and notices to be given in accordance with such agreements.
SECTION 11.7 Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required or deemed to be included in this Indenture by any of the provisions of
the Trust Indenture Act, such required or deemed provision shall control.
The provisions of TIA Sections 310 through 317 that impose duties on
any Person (including the provisions automatically deemed included herein
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
SECTION 11.8 Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 11.9 Successors and Assigns. All covenants and agreements in
this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee
in this Indenture shall bind its successors, co-trustees and agents.
SECTION 11.10 Separability. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity,
legality, and enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
SECTION 11.11 Benefits of Indenture. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the Noteholders, and any other party
secured hereunder, and any other Person with an ownership interest in any part
of the Indenture Trust Estate, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
SECTION 11.12 Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such
date, but may be made on the next succeeding
57
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 11.13 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.
SECTION 11.14 Counterparts. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 11.15 Recording of Indenture. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which shall be counsel reasonably acceptable to the Indenture Trustee) to the
effect that such recording is necessary either for the protection of the
Noteholders or any other Person secured hereunder or for the enforcement of any
right or remedy granted to the Indenture Trustee under this Indenture.
SECTION 11.16 Trust Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or any certificate
or other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in their individual capacities, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in their individual capacities, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee
or of any successor or assign of the Indenture Trustee or the Owner Trustee in
their individual capacities, except as any such Person may have expressly
agreed (it being understood that the Indenture Trustee and the Owner Trustee
have no such obligations in their individual capacities), and except that any
such partner, owner or beneficiary shall be fully liable, to the extent
provided by applicable law, for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any installment or call owing to such
entity. For all purposes of this Indenture, in the performance of any duties or
obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and
entitled to the benefits of, the terms and provisions of Article VI and VII of
the Trust Agreement.
SECTION 11.17 No Petition. The Indenture Trustee, by entering into
this Indenture, and each Noteholder or Note Owner, by accepting a Note or, in
the case of a Note Owner, a beneficial interest in a Note, hereby covenant and
agree that prior to the end of the period that is one year and one day after
there has been paid in full all debt issued by any securitization vehicle in
respect of which the Seller holds any interest, they will not institute against
the Issuer, or join in, or assist or encourage others to institute 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 of the other Basic
Documents.
58
SECTION 11.18 Subordination Agreement. Each Class A Noteholder, by
accepting a Class A Note, hereby covenants and agrees that, to the extent it
is deemed to have any interest in any assets of the Seller or the Depositor,
or a securitization vehicle (other than the Trust) related to the Seller or
the Depositor, dedicated to other debt obligations of the Seller or the
Depositor or debt obligations of any other securitization vehicle (other than
the Trust) related to the Seller or the Depositor, its interest in those
assets is subordinate to claims or rights of such other debtholders to those
other assets. Furthermore, each Class A Noteholder, by accepting a Class A
Note, hereby covenants and agrees that such agreement constitutes a
subordination agreement for purposes of Section 510(a) of the Bankruptcy Code.
SECTION 11.19 No Recourse. Notwithstanding any provisions herein to
the contrary, all of the obligations of the Issuer under or in connection with
the Class A Notes and this Indenture are nonrecourse obligations of the Issuer
payable solely from the Collateral and following realization of the Collateral
and its reduction to zero, any claims of the Class A Noteholders and the
Indenture Trustee against the Issuer shall be extinguished and shall not
thereafter revive. It is understood that the foregoing provisions of this
Section 11.19 shall not (i) prevent recourse to the Collateral for the sums due
or to become due under any security, instrument or agreement which is part of
the Collateral or (ii) constitute a waiver, release or discharge of any
indebtedness or obligation evidenced by the Class A Notes or secured by this
Indenture (to the extent it relates to the obligation to make payments on the
Class A Notes) until such Collateral has been realized and reduced to zero,
whereupon any outstanding indebtedness or obligation in respect of the Class A
Notes shall be extinguished and shall not thereafter revive. It is further
understood that the foregoing provisions of this Section 11.19 shall not limit
the right of any Person to name the Issuer as a party defendant in any
Proceeding or in the exercise of any other remedy under the Class A Notes or
this Indenture, so long as no judgment in the nature of a deficiency judgement
shall be asked for or (if obtained) enforced against any such Person or entity.
SECTION 11.20 Inspection. The Issuer agrees that, with reasonable
prior notice, it will permit any representative of the Indenture Trustee,
during the Issuer's normal business hours, to examine all the books of account,
records, reports and other papers of the Issuer, to make copies and extracts
therefrom, to cause such books to be audited by Independent certified public
accountants, and to discuss the Issuer's affairs, finances and accounts with
the Issuer's officers, employees, and Independent certified public accountants,
all at such reasonable times and as often as may be reasonably requested. The
Indenture Trustee shall and shall cause its representatives to hold in
confidence all such information except to the extent disclosure may be required
by law (and all reasonable applications for confidential treatment are
unavailing) and except to the extent that the Indenture Trustee may reasonably
determine that such disclosure is consistent with its obligations hereunder.
59
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers, thereunto duly
authorized, all as of the day and year first above written.
USAA AUTO OWNER TRUST 2002-[ ]
By: [OWNER TRUSTEE], not in its individual
capacity but solely as Owner Trustee
of USAA Auto Owner Trust 2002-[ ]
By: [________________________________________________]
Name: [ ]
Title: [ ]
[INDENTURE TRUSTEE], not in its individual
capacity but solely as Indenture Trustee
By: [________________________________________________]
Name: [ ]
Title: [ ]
60
EXHIBIT A-1
FORM OF CLASS A-1 NOTE
[FOR BOOK ENTRY NOTES] [UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $
No. A-1-__ CUSIP NO. [o]
USAA AUTO OWNER TRUST 200_-[ ]
CLASS A-1 [ ]% ASSET BACKED NOTES
USAA Auto Owner Trust 200_-[ ], a business trust organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to CEDE & CO., or registered
assigns, the principal sum of _______________ dollars payable on each Payment
Date in an amount equal to the result obtained by multiplying (i) a fraction
the numerator of which is $___________ (the original face amount of this Note)
and the denominator of which is $ by (ii) the aggregate amount, if any, payable
to holders of Class [A-1] Notes on such Payment Date from the Principal
Distribution Account in respect of principal on the Class [A-1] Notes pursuant
to Section 3.1 of the Indenture dated as of [ ] (as from time to time amended,
supplemented or otherwise modified and in effect, the "Indenture"), between the
Issuer and [ ], as Indenture Trustee (in such capacity the "Indenture
Trustee"); provided, however, that the entire unpaid principal amount of this
Note shall be due and payable on the [ ] Payment Date (the "Class [A-1] Final
Scheduled Payment Date"). Capitalized terms used but not defined herein are
defined in Article I of the Indenture, which also contains rules as to
construction that shall be applicable herein.
A-1-1
The Issuer shall pay interest on this Note at the rate per annum shown
above on each Payment Date until the principal of this Note is paid or made
available for payment, on the principal amount of this Note outstanding on the
preceding Payment Date (after giving effect to all payments of principal made
on the preceding Payment Date), subject to certain limitations contained in
Section 3.1 of the Indenture. Interest on this Note will accrue for each
Payment Date from and including the previous Payment Date on which interest has
been paid (or, in the case of the initial Payment Date, from the Closing Date)
to but excluding such Payment Date. Interest will be computed on the basis of
actual days elapsed and a 360-day year. Such principal of and interest on this
Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note shall
not be entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
A-1-2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer, as of the date set forth
below.
Date:
USAA AUTO OWNER TRUST 200_-[ ]
By: [OWNER TRUSTEE], not in its individual
capacity but solely as Owner Trustee
of USAA Auto Owner Trust 200_-[ ]
By: ___________________________________
Authorized Officer
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class [A-1] Notes designated above and referred to in
the within-mentioned Indenture.
Date:
[INDENTURE TRUSTEE], not in its individual
capacity but solely as Indenture Trustee
By: ___________________________________
Authorized Officer
A-1-3
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class [A-1] [ ]% Asset Backed Notes (the "Class [A-1] Notes")
which, together with the Issuer's Class [A-2] [ ]% Asset Backed Notes (the
"Class [A-2] Notes"), Class [A-3] [ ]% Asset Backed Notes (the "Class [A-3]
Notes") and Class [A-4] [ ]% Asset Backed Notes (the "Class [A-4] Notes" and,
together with the Class [A-1] Notes, the Class [A-2] Notes and the Class [A-3]
Notes, the "Class A Notes" or the "Notes"), are issued under the Indenture, to
which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights and obligations thereunder of the
Issuer, the Indenture Trustee and the Noteholders. The Notes are subject to all
terms of the Indenture.
The Class [A-1] Notes, Class [A-2] Notes, Class [A-3] Notes and Class
[A-4] are and will be equally and ratably secured by the collateral pledged as
security therefor as provided in the Indenture.
Principal of the Class [A-1] Notes will be payable on each Payment Date in
an amount described on the face hereof. "Payment Date" means the 15th day of
each month, or, if any such day is not a Business Day, the next succeeding
Business Day, commencing [ ].
As described on the face hereof, the entire unpaid principal amount of
this Note shall be due and payable on the Class [A-1] Final Scheduled Payment
Date. Notwithstanding the foregoing, the entire unpaid principal amount of the
Notes shall be due and payable on the date on which an Event of Default shall
have occurred and be continuing and the Indenture Trustee or the Noteholders of
Notes evidencing not less than a majority of the principal amount of the Class
A Notes have declared the Notes to be immediately due and payable in the manner
provided in Section 5.2 of the Indenture. All principal payments on the Class
[A-1] Notes shall be made pro rata to the Noteholders entitled thereto.
Payments of interest on this Note on each Payment Date, together with the
installment of principal, if any, to the extent not in full payment of this
Note, shall be made to the Person whose name appears as the Registered
Noteholder of the Note (or one or more Predecessor Notes) on the Note Register
as of the close of business on each Record Date either by wire transfer in
immediately available funds, to the account of such Noteholder at a bank or
other entity having appropriate facilities therefor, if such Noteholder shall
have provided to the Note Registrar appropriate written instructions at least
five Business Days prior to such Payment Date and such Noteholder's Notes in
the aggregate evidence a denomination of not less than $1,000,000, or, if not,
by check mailed first-class postage prepaid to such Person's address as it
appears on the Note Register on such Record Date; provided that, unless
Definitive Notes have been issued to Note Owners, with respect to Notes
registered on the Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.), payments will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Such payments will be made without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of
this Note (or any one or more Predecessor Notes)
A-1-4
effected by any payments made on any Payment Date shall be binding upon all
future Noteholders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not noted
hereon. If funds are expected to be available, as provided in the Indenture,
for payment in full of the then remaining unpaid principal amount of this Note
on a Payment Date, then the Indenture Trustee, in the name of and on behalf of
the Issuer, will notify the Person who was the Registered Noteholder hereof as
of the Record Date preceding such Payment Date by notice mailed or transmitted
by facsimile prior to such Payment Date, and the amount then due and payable
shall be payable only upon presentation and surrender of this Note at the
Indenture Trustee's principal Corporate Trust Office or at the office of the
Indenture Trustee's agent appointed for such purposes located in The City of
New York.
The Issuer shall pay interest on overdue installments of interest at
the Class [A-1] Rate to the extent lawful.
As provided in the Indenture, the Notes may be prepaid, in whole but not
in part, in the manner and to the extent described in the Indenture and the
Sale and Servicing Agreement.
As provided in the Indenture, and subject to certain limitations set forth
therein, the transfer of this Note may be registered on the Note Register upon
surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Noteholder hereof or such Noteholder's
attorney duly authorized in writing, with such signature guaranteed by an
"eligible guarantor institution" meeting the requirements of the Note
Registrar, and thereupon one or more new Notes of the same Class in authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.
Each Noteholder or Note Owner, by its acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under
the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Indenture Trustee or the Owner Trustee, each in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Owner Trustee, each in its individual capacity,
any holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee, each in its individual capacity, except as any such Person may
have expressly agreed and except that any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.
A-1-5
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of
a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner will
not at any time institute against the Issuer, or join in any institution
against the Issuer of, any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings under any United States federal or State bankruptcy
or similar law in connection with any obligations relating to the Notes, the
Indenture or the other Basic Documents.
The Issuer has entered into the Indenture and this Note is issued with the
intention that, for federal, State and local income, and franchise tax
purposes, the Notes will qualify as indebtedness of the Issuer secured by the
Indenture Trust Estate. Each Noteholder, by its acceptance of a Note (and each
Note Owner by its acceptance of a beneficial interest in a Note), will be
deemed to agree to treat the Notes for federal, State and local income and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits (with certain exceptions requiring the consent of
all Noteholders adversely affected) the amendment thereof by the Issuer and the
Indenture Trustee without the consent of the Noteholders provided certain
conditions are satisfied. The Indenture also contains provisions permitting the
Noteholders of Notes evidencing specified percentages of the principal amount
of the Notes Outstanding, on behalf of all Noteholders, to waive compliance by
the Issuer with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Noteholder of this Note (or any one or more Predecessor Notes) shall be
conclusive and binding upon such Noteholder and upon all future Noteholders of
this Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent or
waiver is made upon this Note.
The term "Issuer", as used in this Note, includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Indenture Trustee and the
Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
A-1-6
This Note and the Indenture shall be governed by, and construed in
accordance with the laws of the State of New York, without reference to its
conflicts of law provisions.
No reference herein to the Indenture, and no provision of this Note or of
the Indenture, shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of Indenture Trustee, in its individual
capacity, Owner Trustee, in its individual capacity, any owner of a beneficial
interest in the Issuer, or any of their respective partners, beneficiaries,
agents, officers, directors, employees or successors or assigns shall be
personally liable for, nor shall recourse be had to any of them for, the
payment of principal or of interest on this Note or performance of, or omission
to perform, any of the covenants, obligations or indemnifications contained in
the Indenture. The holder of this Note, by such holder's acceptance hereof,
agrees that, except as expressly provided in the Basic Documents, in the case
of an Event of Default under the Indenture, the Noteholder shall have no claim
against any of the foregoing for any deficiency, loss or claim therefrom;
provided, however, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer for any and all
liabilities, obligations and undertakings contained in the Indenture or in this
Note.
A-1-7
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
-----------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto: -----------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ____________________________________, attorney, to transfer said
Note on the books kept for registration thereof, with full power of substitution
in the premises.
Dated: _____________________ ____________________________*/
Signature Guaranteed
____________________________*/
---------------------------
*/ NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar.
X-0-0
XXXXXXX X-0
FORM OF CLASS [A-2] NOTE
[FOR BOOK-ENTRY NOTES] [UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $
No. A-2-__ CUSIP NO. [?]
USAA AUTO OWNER TRUST 2002-[ ]
CLASS [A-2] [ ]% ASSET BACKED NOTES
USAA Auto Owner Trust 2002-[ ], a business trust organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to CEDE & CO., or registered
assigns, the principal sum of ______________________ dollars payable on each
Payment Date in an amount equal to the result obtained by multiplying (i) a
fraction the numerator of which is $___________ (the original face amount of
this Note) and the denominator of which is $[ ] by (ii) the aggregate amount,
if any, payable to holders of Class [A-2] Notes on such Payment Date from the
Principal Distribution Account in respect of principal on the Class [A-2] Notes
pursuant to Section 3.1 of the Indenture dated as of [ ] (as from time to time
amended, supplemented or otherwise modified and in effect, the "Indenture"),
between the Issuer and [ ], as Indenture Trustee (in such capacity the
"Indenture Trustee"); provided, however, that the entire unpaid principal
amount of this Note shall be due and payable on the [ ] Payment Date (the
"Class [A-2] Final Scheduled Payment Date"). No payments of principal of the
Class [A-2] Notes will be made until the Class [A-1] Notes have been paid in
full. Capitalized terms used but not defined herein are defined in Article I of
the Indenture, which also contains rules as to construction that shall be
applicable herein.
A-2-1
The Issuer shall pay interest on this Note at the rate per annum shown
above on each Payment Date until the principal of this Note is paid or made
available for payment, on the principal amount of this Note outstanding on the
preceding Payment Date (after giving effect to all payments of principal made
on the preceding Payment Date), subject to certain limitations contained in
Section 3.1 of the Indenture. Interest on this Note will accrue for each
Payment Date from and including the fifteenth day of the calendar month
immediately preceding such Payment Date (or, in the case of the initial Payment
Date, from the Closing Date) to but excluding the fifteenth day of the calendar
month of the Payment Date. Interest will be computed on the basis of a 360-day
year of twelve 30-day months. Such principal of and interest on this Note shall
be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note shall
not be entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
A-2-2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer, as of the date set forth
below.
Date:
USAA AUTO OWNER TRUST 2002-[ ]
By: [OWNER TRUSTEE], not in its individual
capacity but solely as Owner Trustee
of USAA Auto Owner Trust 2002-[ ]
By:________________________________________
Authorized Officer
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class [A-2] Notes designated above and referred to in
the within-mentioned Indenture.
Date:
[INDENTURE TRUSTEE], not in its individual
capacity but solely as Indenture Trustee
By:________________________________________
Authorized Officer
A-2-3
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class [A-2] [ ]% Asset Backed Notes (the "Class [A-2] Notes")
which, together with the Issuer's Class [A-1] [ ]% Asset Backed Notes (the
"Class [A-1] Notes"), Class [A-3] [ ]% Asset Backed Notes (the "Class [A-3]
Notes") and Class [A-4] [ ]% Asset Backed Notes (the "Class [A-4] Notes" and,
together with the Class [A-1] Notes, the Class [A-2] Notes and Class [A-3]
Notes, the "Class A Notes" or the "Notes"), are issued under the Indenture, to
which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights and obligations thereunder of the
Issuer, the Indenture Trustee and the Noteholders. The Notes are subject to all
terms of the Indenture.
The Class [A-1] Notes, Class [A-2] Notes, Class [A-3] Notes and Class
[A-4] are and will be equally and ratably secured by the collateral pledged as
security therefor as provided in the Indenture.
Principal of the Class [A-2] Notes will be payable on each Payment Date in
an amount described on the face hereof. "Payment Date" means the 15th day of
each month, or, if any such day is not a Business Day, the next succeeding
Business Day, commencing [ ].
As described on the face hereof, the entire unpaid principal amount of
this Note shall be due and payable on the Class [A-2] Final Scheduled Payment
Date. Notwithstanding the foregoing, the entire unpaid principal amount of the
Notes shall be due and payable on the date on which an Event of Default shall
have occurred and be continuing and the Indenture Trustee or the Noteholders of
Notes evidencing not less than a majority of the principal amount of the Class
A Notes have declared the Notes to be immediately due and payable in the manner
provided in Section 5.2 of the Indenture. All principal payments on the Class
[A-2] Notes shall be made pro rata to the Noteholders entitled thereto.
Payments of interest on this Note on each Payment Date, together with the
installment of principal, if any, to the extent not in full payment of this
Note, shall be made to the Person whose name appears as the Registered
Noteholder of the Note (or one or more Predecessor Notes) on the Note Register
as of the close of business on each Record Date either by wire transfer in
immediately available funds, to the account of such Noteholder at a bank or
other entity having appropriate facilities therefor, if such Noteholder shall
have provided to the Note Registrar appropriate written instructions at least
five Business Days prior to such Payment Date and such Noteholder's Notes in
the aggregate evidence a denomination of not less than $1,000,000, or, if not,
by check mailed first-class postage prepaid to such Person's address as it
appears on the Note Register on such Record Date; provided that, unless
Definitive Notes have been issued to Note Owners, with respect to Notes
registered on the Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.), payments will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Such payments will be made without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of
this Note (or any one or more Predecessor Notes)
A-2-4
effected by any payments made on any Payment Date shall be binding upon all
future Noteholders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not noted
hereon. If funds are expected to be available, as provided in the Indenture,
for payment in full of the then remaining unpaid principal amount of this Note
on a Payment Date, then the Indenture Trustee, in the name of and on behalf of
the Issuer, will notify the Person who was the Registered Noteholder hereof as
of the Record Date preceding such Payment Date by notice mailed or transmitted
by facsimile prior to such Payment Date, and the amount then due and payable
shall be payable only upon presentation and surrender of this Note at the
Indenture Trustee's principal Corporate Trust Office or at the office of the
Indenture Trustee's agent appointed for such purposes located in The City of
New York.
The Issuer shall pay interest on overdue installments of interest at the
Class [A-2] Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed, in whole but not
in part, in the manner and to the extent described in the Indenture and the
Sale and Servicing Agreement.
As provided in the Indenture, and subject to certain limitations set forth
therein, the transfer of this Note may be registered on the Note Register upon
surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Noteholder hereof or such Noteholder's
attorney duly authorized in writing, with such signature guaranteed by an
"eligible guarantor institution" meeting the requirements of the Note
Registrar, and thereupon one or more new Notes of the same Class in authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.
Each Noteholder or Note Owner, by its acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under
the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Indenture Trustee or the Owner Trustee, each in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Owner Trustee, each in its individual capacity,
any holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee, each in its individual capacity, except as any such Person may
have expressly agreed and except that any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.
A-2-5
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of
a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner will
not at any time institute against the Issuer, or join in any institution
against the Issuer of, any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings under any United States federal or State bankruptcy
or similar law in connection with any obligations relating to the Notes, the
Indenture or the other Basic Documents.
The Issuer has entered into the Indenture and this Note is issued with the
intention that, for federal, State and local income, and franchise tax
purposes, the Notes will qualify as indebtedness of the Issuer secured by the
Indenture Trust Estate. Each Noteholder, by its acceptance of a Note (and each
Note Owner by its acceptance of a beneficial interest in a Note), will be
deemed to agree to treat the Notes for federal, State and local income and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits (with certain exceptions requiring the consent of
all Noteholders adversely affected) the amendment thereof by the Issuer and the
Indenture Trustee without the consent of the Noteholders provided certain
conditions are satisfied. The Indenture also contains provisions permitting the
Noteholders of Notes evidencing specified percentages of the principal amount
of the Notes Outstanding, on behalf of all Noteholders, to waive compliance by
the Issuer with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Noteholder of this Note (or any one or more Predecessor Notes) shall be
conclusive and binding upon such Noteholder and upon all future Noteholders of
this Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent or
waiver is made upon this Note.
The term "Issuer", as used in this Note, includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Indenture Trustee and the
Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
A-2-6
This Note and the Indenture shall be governed by, and construed in
accordance with the laws of the State of New York, without reference to its
conflicts of law provisions.
No reference herein to the Indenture, and no provision of this Note or of
the Indenture, shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of Indenture Trustee, in its individual
capacity, Owner Trustee, in its individual capacity, any owner of a beneficial
interest in the Issuer, or any of their respective partners, beneficiaries,
agents, officers, directors, employees or successors or assigns shall be
personally liable for, nor shall recourse be had to any of them for, the
payment of principal or of interest on this Note or performance of, or omission
to perform, any of the covenants, obligations or indemnifications contained in
the Indenture. The holder of this Note, by such holder's acceptance hereof,
agrees that, except as expressly provided in the Basic Documents, in the case
of an Event of Default under the Indenture, the Noteholder shall have no claim
against any of the foregoing for any deficiency, loss or claim therefrom;
provided, however, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer for any and all
liabilities, obligations and undertakings contained in the Indenture or in this
Note.
A-2-7
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
-----------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto:
----------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ________________________________, attorney, to transfer said Note
on the books kept for registration thereof, with full power of substitution in
the premises.
Dated: _____________________ ____________________________*/
Signature Guaranteed
____________________________*/
---------------------------
*/ NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar.
X-0-0
XXXXXXX X-0
FORM OF CLASS [A-3] NOTE
[FOR BOOK-ENTRY NOTES] [UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $
No. A-3-__ CUSIP NO. [?]
USAA AUTO OWNER TRUST 2002-[ ]
CLASS [A-3] [ ]% ASSET BACKED NOTES
USAA Auto Owner Trust 2002-[ ], a business trust organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to CEDE & CO., or registered
assigns, the principal sum of ____________________ dollars payable on each
Payment Date in an amount equal to the result obtained by multiplying (i) a
fraction the numerator of which is $__________ (the original face amount of
this Note) and the denominator of which is $[ ] by (ii) the aggregate amount,
if any, payable to holders of Class [A-3] Notes on such Payment Date from the
Principal Distribution Account in respect of principal on the Class [A-3] Notes
pursuant to Section 3.1 of the Indenture dated as of [ ] (as from time to time
amended, supplemented or otherwise modified and in effect, the "Indenture"),
between the Issuer and [ ], as Indenture Trustee (in such capacity the
"Indenture Trustee"); provided, however, that the entire unpaid principal
amount of this Note shall be due and payable on the [ ] Payment Date (the
"Class [A-3] Final Scheduled Payment Date"). No payments of principal of the
Class [A-3] Notes will be made until the Class [A-1] Notes and, except in the
case of an Event of Default, Class [A-2] Notes have been paid in full.
Capitalized terms used but not defined herein are defined in Article I of the
Indenture, which also contains rules as to construction that shall be
applicable herein.
A-3-1
The Issuer shall pay interest on this Note at the rate per annum shown
above on each Payment Date until the principal of this Note is paid or made
available for payment, on the principal amount of this Note outstanding on the
preceding Payment Date (after giving effect to all payments of principal made
on the preceding Payment Date), subject to certain limitations contained in
Section 3.1 of the Indenture. Interest on this Note will accrue for each
Payment Date from and including the fifteenth day of the calendar month
immediately preceding such Payment Date (or, in the case of the initial Payment
Date, from the Closing Date) to but excluding the fifteenth day of the calendar
month of the Payment Date. Interest will be computed on the basis of a 360-day
year of twelve 30-day months. Such principal of and interest on this Note shall
be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note shall
not be entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
A-3-2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer, as of the date set forth
below.
Date: USAA AUTO OWNER TRUST 2002-[ ]
By: [OWNER TRUSTEE], not in its individual
capacity but solely as Owner Trustee
of USAA Auto Owner Trust 2002-[ ]
By:-----------------------------------
Authorized Officer
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class [A-3] Notes designated above and referred to in
the within-mentioned Indenture.
Date:
[INDENTURE TRUSTEE], not in its individual
capacity but solely as Indenture Trustee
By------------------------------------
Authorized Officer
A-3-3
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class [A-3] [ ]% Asset Backed Notes (the "Class [A-3] Notes")
which, together with the Issuer's Class [A-2] [ ]% Asset Backed Notes (the
"Class [A-1] Notes"), Class [A-2] [ ]% Asset Backed Notes (the "Class [A-2]
Notes") and Class [A-4] [ ]% Asset Backed Notes (the "Class [A-4] Notes" and,
together with the Class A-1 Notes, the Class [A-2] Notes and the Class [A-3]
Notes, the "Class [A] Notes" or the "Notes"), are issued under the Indenture,
to which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights and obligations thereunder of the
Issuer, the Indenture Trustee and the Noteholders. The Notes are subject to all
terms of the Indenture.
The Class [A-1] Notes, Class [A-2] Notes, Class [A-3] Notes and Class
[A-4] Notes are and will be equally and ratably secured by the collateral
pledged as security therefor as provided in the Indenture.
Principal of the Class [A-3] Notes will be payable on each Payment Date in
an amount described on the face hereof. "Payment Date" means the 15th day of
each month, or, if any such day is not a Business Day, the next succeeding
Business Day, commencing [ ].
As described on the face hereof, the entire unpaid principal amount of
this Note shall be due and payable on the Class [A-3] Final Scheduled Payment
Date. Notwithstanding the foregoing, the entire unpaid principal amount of the
Notes shall be due and payable on the date on which an Event of Default shall
have occurred and be continuing and the Indenture Trustee or the Noteholders of
Notes evidencing not less than a majority of the principal amount of the Class
A Notes have declared the Notes to be immediately due and payable in the manner
provided in Section 5.2 of the Indenture. All principal payments on the Class
[A-3] Notes shall be made pro rata to the Noteholders entitled thereto.
Payments of interest on this Note on each Payment Date, together with the
installment of principal, if any, to the extent not in full payment of this
Note, shall be made to the Person whose name appears as the Registered
Noteholder of the Note (or one or more Predecessor Notes) on the Note Register
as of the close of business on each Record Date either by wire transfer in
immediately available funds, to the account of such Noteholder at a bank or
other entity having appropriate facilities therefor, if such Noteholder shall
have provided to the Note Registrar appropriate written instructions at least
five Business Days prior to such Payment Date and such Noteholder's Notes in
the aggregate evidence a denomination of not less than $1,000,000, or, if not,
by check mailed first-class postage prepaid to such Person's address as it
appears on the Note Register on such Record Date; provided that, unless
Definitive Notes have been issued to Note Owners, with respect to Notes
registered on the Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.), payments will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Such payments will be made without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of
this Note (or any one or more Predecessor Notes)
A-3-4
effected by any payments made on any Payment Date shall be binding upon all
future Noteholders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not noted
hereon. If funds are expected to be available, as provided in the Indenture,
for payment in full of the then remaining unpaid principal amount of this Note
on a Payment Date, then the Indenture Trustee, in the name of and on behalf of
the Issuer, will notify the Person who was the Registered Noteholder hereof as
of the Record Date preceding such Payment Date by notice mailed or transmitted
by facsimile prior to such Payment Date, and the amount then due and payable
shall be payable only upon presentation and surrender of this Note at the
Indenture Trustee's principal Corporate Trust Office or at the office of the
Indenture Trustee's agent appointed for such purposes located in The City of
New York.
The Issuer shall pay interest on overdue installments of interest at the
Class [A-3] Rate to the extent lawful.
As provided in the Indenture, the Notes may be prepaid, in whole but not
in part, in the manner and to the extent described in the Indenture and the
Sale and Servicing Agreement.
The transfer of this Note is subject to the restrictions on transfer
specified on the face hereof and to the other limitations set forth in the
Indenture. Subject to the satisfaction of such restrictions and limitations,
the transfer of this Note may be registered on the Note Register upon surrender
of this Note for registration of transfer at the office or agency designated by
the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Indenture Trustee
duly executed by, the Noteholder hereof or such Noteholder's attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, and thereupon one
or more new Notes of the same Class in authorized denominations and in the same
aggregate principal amount will be issued to the designated transferee or
transferees. No service charge will be charged for any registration of transfer
or exchange of this Note, but the transferor may be required to pay a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any such registration of transfer or exchange.
Each Noteholder or Note Owner, by its acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under
the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Indenture Trustee or the Owner Trustee, each in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Owner Trustee, each in its individual capacity,
any holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee, each in its individual capacity, except as any such Person may
have expressly agreed and except that any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution
A-3-5
for stock, unpaid capital contribution or failure to pay any installment or
call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of
a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner will
not at any time institute against the Issuer, or join in any institution
against the Issuer of, any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings under any United States federal or State bankruptcy
or similar law in connection with any obligations relating to the Notes, the
Indenture or the other Basic Documents.
The Issuer has entered into the Indenture and this Note is issued with the
intention that, for federal, State and local income, and franchise tax
purposes, the Notes will qualify as indebtedness of the Issuer secured by the
Indenture Trust Estate. Each Noteholder, by its acceptance of a Note (and each
Note Owner by its acceptance of a beneficial interest in a Note), will be
deemed to agree to treat the Notes for federal, State and local income and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits (with certain exceptions requiring the consent of
all Noteholders adversely affected) the amendment thereof by the Issuer and the
Indenture Trustee without the consent of the Noteholders provided certain
conditions are satisfied. The Indenture also contains provisions permitting the
Noteholders of Notes evidencing specified percentages of the principal amount
of the Notes Outstanding, on behalf of all Noteholders, to waive compliance by
the Issuer with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Noteholder of this Note (or any one or more Predecessor Notes) shall be
conclusive and binding upon such Noteholder and upon all future Noteholders of
this Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent or
waiver is made upon this Note.
The term "Issuer," as used in this Note, includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Indenture Trustee and the
Noteholders under the Indenture.
A-3-6
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be governed by, and construed in
accordance with the laws of the State of New York, without reference to its
conflicts of law provisions.
No reference herein to the Indenture, and no provision of this Note or of
the Indenture, shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of Indenture Trustee, in its individual
capacity, Owner Trustee, in its individual capacity, any owner of a beneficial
interest in the Issuer, or any of their respective partners, beneficiaries,
agents, officers, directors, employees or successors or assigns shall be
personally liable for, nor shall recourse be had to any of them for, the
payment of principal or of interest on this Note or performance of, or omission
to perform, any of the covenants, obligations or indemnifications contained in
the Indenture. The holder of this Note, by such holder's acceptance hereof,
agrees that, except as expressly provided in the Basic Documents, in the case
of an Event of Default under the Indenture, the Noteholder shall have no claim
against any of the foregoing for any deficiency, loss or claim therefrom;
provided, however, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer for any and all
liabilities, obligations and undertakings contained in the Indenture or in this
Note.
A-3-7
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
----------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto:
-----------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ________________________________, attorney, to transfer said Note
on the books kept for registration thereof, with full power of substitution in
the premises.
Dated: _____________________ ____________________________*/
Signature Guaranteed
____________________________*/
*/ NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar.
X-0-0
XXXXXXX X-0
FORM OF CLASS A-4 NOTE
[FOR BOOK-ENTRY NOTES] [UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $
No. A-4-__ CUSIP NO. [?]
USAA AUTO OWNER TRUST 2002-[ ]
CLASS [A-4] [ ]% ASSET BACKED NOTES
USAA Auto Owner Trust 2002-[ ], a business trust organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to CEDE & CO., or registered
assigns, the principal sum of _____________________ dollars payable on each
Payment Date in an amount equal to the result obtained by multiplying (i) a
fraction the numerator of which is $__________ (the original face amount of
this Note) and the denominator of which is $[ ]by (ii) the aggregate amount, if
any, payable to holders of Class [A-4] Notes on such Payment Date from the
Principal Distribution Account in respect of principal on the Class [A-4] Notes
pursuant to Section 3.1 of the Indenture dated as of [ ] (as from time to time
amended, supplemented or otherwise modified and in effect, the "Indenture"),
between the Issuer and [ ], as Indenture Trustee (in such capacity the
"Indenture Trustee"); provided, however, that the entire unpaid principal
amount of this Note shall be due and payable on the [ ] Payment Date (the
"Class [A-4] Final Scheduled Payment Date"). No payments of principal of the
Class [A-4] Notes will be made until the Class [A-1] Notes and, except in the
case of an Event of Default, the Class [A-2] Notes and Class [A-3] Notes have
been paid in full. Capitalized terms used but not defined herein are defined in
Article I of the Indenture, which also contains rules as to construction that
shall be applicable herein.
A-4-1
The Issuer shall pay interest on this Note at the rate per annum shown
above on each Payment Date until the principal of this Note is paid or made
available for payment, on the principal amount of this Note outstanding on the
preceding Payment Date (after giving effect to all payments of principal made
on the preceding Payment Date), subject to certain limitations contained in
Section 3.1 of the Indenture. Interest on this Note will accrue for each
Payment Date from and including the fifteenth day of the calendar month
immediately preceding such Payment Date (or, in the case of the initial Payment
Date, from the Closing Date) to but excluding the fifteenth day of the
following calendar month. Interest will be computed on the basis of a 360-day
year of twelve 30-day months. Such principal of and interest on this Note shall
be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note shall
not be entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
A-4-2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer, as of the date set forth
below.
Date: USAA AUTO OWNER TRUST 2002-[ ]
By: [OWNER TRUSTEE], not in its individual
capacity but solely as Owner Trustee
of USAA Auto Owner Trust 2002-[ ]
By:----------------------------------------
Authorized Officer
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class [A-4] Notes designated above and referred to in
the within-mentioned Indenture.
Date:
[INDENTURE TRUSTEE], not in its individual
capacity but solely as Indenture Trustee
By:----------------------------------------
Authorized Officer
A-4-3
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class [A-4] [ ]% Asset Backed Notes (the "Class [A-4] Notes")
which, together with the Issuer's Class [A-1] [ ]% Asset Backed Notes (the
"Class [A-1] Notes"), Class [A-2] [ ]% Asset Backed Notes (the "Class [A-2]
Notes") and Class [A-3] [ ]% Asset Backed Notes (the "Class [A-3] Notes" and,
together with the Class A-1 Notes, the Class [A-2] Notes and the Class [A-4]
Notes, the "Class [A] Notes" or the "Notes"), are issued under the Indenture,
to which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights and obligations thereunder of the
Issuer, the Indenture Trustee and the Noteholders. The Notes are subject to all
terms of the Indenture.
The Class [A-1] Notes, Class [A-2] Notes, Class [A-3] Notes and Class
[A-4] Notes are and will be equally and ratably secured by the collateral
pledged as security therefor as provided in the Indenture.
Principal of the Class [A-4] Notes will be payable on each Payment Date in
an amount described on the face hereof. "Payment Date" means the 15th day of
each month, or, if any such day is not a Business Day, the next succeeding
Business Day, commencing [ ].
As described on the face hereof, the entire unpaid principal amount of
this Note shall be due and payable on the Class [A-4] Final Scheduled Payment
Date. Notwithstanding the foregoing, the entire unpaid principal amount of the
Notes shall be due and payable on the date on which an Event of Default shall
have occurred and be continuing and the Indenture Trustee or the Noteholders of
Notes evidencing not less than a majority of the principal amount of the Class
A Notes have declared the Notes to be immediately due and payable in the manner
provided in Section 5.2 of the Indenture. All principal payments on the Class
[A-4] Notes shall be made pro rata to the Noteholders entitled thereto.
Payments of interest on this Note on each Payment Date, together with the
installment of principal, if any, to the extent not in full payment of this
Note, shall be made to the Person whose name appears as the Registered
Noteholder of the Note (or one or more Predecessor Notes) on the Note Register
as of the close of business on each Record Date either by wire transfer in
immediately available funds, to the account of such Noteholder at a bank or
other entity having appropriate facilities therefor, if such Noteholder shall
have provided to the Note Registrar appropriate written instructions at least
five Business Days prior to such Payment Date and such Noteholder's Notes in
the aggregate evidence a denomination of not less than $1,000,000, or, if not,
by check mailed first-class postage prepaid to such Person's address as it
appears on the Note Register on such Record Date; provided that, unless
Definitive Notes have been issued to Note Owners, with respect to Notes
registered on the Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.), payments will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Such payments will be made without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of
this Note (or any one or more Predecessor Notes)
A-4-4
effected by any payments made on any Payment Date shall be binding upon all
future Noteholders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not noted
hereon. If funds are expected to be available, as provided in the Indenture,
for payment in full of the then remaining unpaid principal amount of this Note
on a Payment Date, then the Indenture Trustee, in the name of and on behalf of
the Issuer, will notify the Person who was the Registered Noteholder hereof as
of the Record Date preceding such Payment Date by notice mailed or transmitted
by facsimile prior to such Payment Date, and the amount then due and payable
shall be payable only upon presentation and surrender of this Note at the
Indenture Trustee's principal Corporate Trust Office or at the office of the
Indenture Trustee's agent appointed for such purposes located in The City of
New York.
The Issuer shall pay interest on overdue installments of interest at the
Class [A-4] Rate to the extent lawful.
As provided in the Indenture, the Notes may be prepaid, in whole but not
in part, in the manner and to the extent described in the Indenture and the
Sale and Servicing Agreement.
The transfer of this Note is subject to the restrictions on transfer
specified on the face hereof and to the other limitations set forth in the
Indenture. Subject to the satisfaction of such restrictions and limitations,
the transfer of this Note may be registered on the Note Register upon surrender
of this Note for registration of transfer at the office or agency designated by
the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Indenture Trustee
duly executed by, the Noteholder hereof or such Noteholder's attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, and thereupon one
or more new Notes of the same Class in authorized denominations and in the same
aggregate principal amount will be issued to the designated transferee or
transferees. No service charge will be charged for any registration of transfer
or exchange of this Note, but the transferor may be required to pay a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any such registration of transfer or exchange.
Each Noteholder or Note Owner, by its acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under
the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Indenture Trustee or the Owner Trustee, each in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Owner Trustee, each in its individual capacity,
any holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee, each in its individual capacity, except as any such Person may
have expressly agreed and except that any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution
A-4-5
for stock, unpaid capital contribution or failure to pay any installment or
call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of
a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner will
not at any time institute against the Issuer, or join in any institution
against the Issuer of, any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings under any United States federal or State bankruptcy
or similar law in connection with any obligations relating to the Notes, the
Indenture or the other Basic Documents.
The Issuer has entered into the Indenture and this Note is issued with the
intention that, for federal, State and local income, and franchise tax
purposes, the Notes will qualify as indebtedness of the Issuer secured by the
Indenture Trust Estate. Each Noteholder, by its acceptance of a Note (and each
Note Owner by its acceptance of a beneficial interest in a Note), will be
deemed to agree to treat the Notes for federal, State and local income and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits (with certain exceptions requiring the consent of
all Noteholders adversely affected) the amendment thereof by the Issuer and the
Indenture Trustee without the consent of the Noteholders provided certain
conditions are satisfied. The Indenture also contains provisions permitting the
Noteholders of Notes evidencing specified percentages of the principal amount
of the Notes Outstanding, on behalf of all Noteholders, to waive compliance by
the Issuer with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Noteholder of this Note (or any one or more Predecessor Notes) shall be
conclusive and binding upon such Noteholder and upon all future Noteholders of
this Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent or
waiver is made upon this Note.
The term "Issuer," as used in this Note, includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Indenture Trustee and the
Noteholders under the Indenture.
A-4-6
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be governed by, and construed in
accordance with the laws of the State of New York, without reference to its
conflicts of law provisions.
No reference herein to the Indenture, and no provision of this Note or of
the Indenture, shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of Indenture Trustee, in its individual
capacity, Owner Trustee, in its individual capacity, any owner of a beneficial
interest in the Issuer, or any of their respective partners, beneficiaries,
agents, officers, directors, employees or successors or assigns shall be
personally liable for, nor shall recourse be had to any of them for, the
payment of principal or of interest on this Note or performance of, or omission
to perform, any of the covenants, obligations or indemnifications contained in
the Indenture. The holder of this Note, by such holder's acceptance hereof,
agrees that, except as expressly provided in the Basic Documents, in the case
of an Event of Default under the Indenture, the Noteholder shall have no claim
against any of the foregoing for any deficiency, loss or claim therefrom;
provided, however, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer for any and all
liabilities, obligations and undertakings contained in the Indenture or in this
Note.
A-4-7
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
----------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto:
-----------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ________________________________, attorney, to transfer said Note
on the books kept for registration thereof, with full power of substitution in
the premises.
Dated: _____________________ ____________________________*/
Signature Guaranteed
____________________________*/
---------------------------
*/ NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar.
A-4-8
SCHEDULE A
Schedule of Receivables
SA-1
APPENDIX A
Definitions and Usage
AA-1
Appendix A
DEFINITIONS AND USAGE
The following rules of construction and usage shall be applicable to any
agreement or instrument that is governed by this Appendix:
(a) All terms defined in this Appendix shall have the defined meanings
when used in any agreement or instrument governed hereby and in any
certificate or other document made or delivered pursuant thereto unless
otherwise defined therein.
(b) As used herein, in any agreement or instrument governed hereby and
in any certificate or other document made or delivered pursuant thereto,
accounting terms not defined in this Appendix or in any such agreement,
instrument, certificate or other document, and accounting terms partly defined
in this Appendix or in any such agreement, instrument, certificate or other
document, to the extent not defined, shall have the respective meanings given
to them under generally accepted accounting principles as in effect on the
date of such agreement or instrument. To the extent that the definitions of
accounting terms in this Appendix or in any such agreement, instrument,
certificate or other document are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in
this Appendix or in any such instrument, certificate or other document shall
control.
The words "hereof," "herein," "hereunder" and words of similar import
when used in an agreement or instrument refer to such agreement or instrument
as a whole and not to any particular provision or subdivision thereof;
references in an agreement or instrument to "Article," "Section" or another
subdivision or to an attachment are, unless the context otherwise requires, to
an article, section or subdivision of or an attachment to such agreement or
instrument; and the term "including" and its variations means "including
without limitation."
The definitions contained in this Appendix are equally applicable to
both the singular and plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
Any agreement, instrument or statute defined or referred to below or in
any agreement or instrument that is governed by this Appendix means such
agreement or instrument or statute as from time to time amended, modified or
supplemented, including (in the case of agreements or instruments) by waiver
or consent and (in the case of statutes) by succession of comparable successor
statutes and includes (in the case of agreements or instruments) references to
all attachments thereto and instruments incorporated therein. References to a
Person are also to its permitted successors and assigns.
Definitions
"Accrued Class A Note Interest" shall mean, with respect to any Payment
Date, the sum of the Class A Noteholders' Monthly Accrued Interest for such
Payment Date and the Class A Noteholders' Interest Carryover Shortfall for
such Payment Date.
"Accrued Class B Certificate Interest" shall mean, with respect to any
Payment Date, the sum of the Class B Certificateholders' Monthly Accrued
Interest for such Payment Date and the Class B Certificateholders' Interest
Carryover Shortfall for such Payment Date.
"Act" shall have the meaning specified in Section 11.3(a) of the
Indenture.
"Administration Agreement" shall mean the Administration Agreement,
dated as of [ ], by and among the Administrator, the Issuer and the Indenture
Trustee.
"Administrator" shall mean the Bank, in its capacity as administrator
under the Administration Agreement, or any successor Administrator thereunder.
"Advance" shall mean the amount of interest, as of a Determination Date,
which the Servicer is required to advance on the Receivables pursuant to
Section 4.4(a) of the Sale and Servicing Agreement.
"Affiliate" shall mean, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such
specified Person. For the purposes of this definition, "control" when used
with respect to any Person shall mean the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling"
and "controlled" shall have meanings correlative to the foregoing.
"Amount Financed" shall mean, with respect to a Receivable, the amount
advanced under the Receivable toward the purchase price of the Financed
Vehicle and any related costs.
"Annual Percentage Rate" or "APR" of a Receivable shall mean the annual
rate of finance charges stated in the Receivable.
"Applicable Tax State" shall mean, as of any date of determination, each
State as to which any of the following is then applicable: (a) a State in
which the Owner Trustee maintains its Corporate Trust Office and (b) the State
of Texas.
"Authenticating Agent" shall have the meaning specified in Section 2.14
of the Indenture or 3.14 of the Trust Agreement, as applicable.
"Authorized Officer" shall mean, (i) with respect to the Issuer, any
officer within the Corporate Trust Office of the Owner Trustee, including any
vice president, assistant vice president, secretary, assistant secretary or
any other officer of the Owner Trustee customarily performing functions
similar to those performed by any of the above designated officers and, for so
long as the Administration Agreement is in full force and effect, any officer
of the Administrator who is authorized to act for the Administrator in matters
relating to the Issuer and to be acted upon by the Administrator pursuant to
the Administration Agreement; and (ii) with respect to the Indenture Trustee
or the Owner Trustee, any officer within the Corporate Trust Office of the
Indenture Trustee or the Owner Trustee, as the case may be, including any vice
president, assistant vice president, secretary, assistant secretary or any
other officer of the Indenture Trustee or the Owner Trustee, as the case may
be, customarily performing functions similar to those performed by any of the
above designated officers and also, with respect to a
2
particular matter, any other officer to whom such matter is referred because
of such officer's knowledge of and familiarity with the particular subject and
shall also mean, with respect to the Owner Trustee, any officer of the
Administrator.
"Available Collections" shall mean, for any Payment Date, the sum of the
following amounts with respect to the Collection Period preceding such Payment
Date: (i) all payments collected with respect to Receivables; (ii) all
Liquidation Proceeds attributable to Receivables which were designated as
Defaulted Receivables in prior Collection Periods in accordance with the
Servicer's customary servicing procedures; (iii) all Advances made by the
Servicer of interest due on the Receivables; (iv) the Purchase Amount received
with respect to each Receivable that became a Purchased Receivable during such
Collection Period; and (v) partial prepayments of any refunded item included
in the principal balance of a Receivable, such as extended warranty protection
plan costs, or physical damage, credit life, disability insurance premiums, or
any partial prepayment which causes a reduction in the Obligor's periodic
payment to an amount below the Scheduled Payment as of the Cut-off Date;
provided however, that in calculating the Available Collections the following
will be excluded: (i) amounts received on any Receivable to the extent that
the Servicer has previously made an unreimbursed Advance on such Receivable
and the amount received exceeds the accrued and unpaid interest on such
Receivable; (ii) amounts received on any of the Receivables to the extent that
the Servicer has previously made an unreimbursed Advance on a Receivable which
is not recoverable from collections on the particular Receivable; (iii) all
payments and proceeds (including Liquidation Proceeds) of any Receivables the
Purchase Amount of which has been included in the Available Funds in a prior
Collection Period; (iv) Liquidation Proceeds with respect to a Receivable
attributable to accrued and unpaid interest thereon (but not including
interest for the then current Collection Period) but only to the extent of any
unreimbursed Advances; and (v) amounts constituting the Supplemental Servicing
Fee.
"Available Funds" shall mean, for any Payment Date, the sum of the
Available Collections for such Payment Date and the Reserve Account Excess
Amount for such Payment Date.
"Average Delinquency Ratio" shall mean, for any Payment Date, the
average of the Delinquency Ratios for the preceding three Collection Periods.
"Average Delinquency Trigger Percentage" shall mean [1.25]%.
"Average Net Loss Ratio" shall mean, for any Payment Date, the average
of the Net Loss Ratios for the preceding three Collection Periods.
"Average Net Loss Trigger Percentage" shall mean [1.25]%.
"Bank" shall mean USAA Federal Savings Bank, a federally chartered
savings association.
"Bankruptcy Code" shall mean the United States Bankruptcy Code, 11
U.S.C. 101 et seq., as amended.
3
"Basic Documents" shall mean the Certificate of Trust, the Trust
Agreement, the Sale and Servicing Agreement, the Receivables Purchase
Agreement, the Indenture, the Administration Agreement, the Note Depository
Agreement and the other documents and certificates delivered in connection
therewith.
"Book-Entry Certificate" shall mean, a beneficial interest in any of the
Class B Certificates issued in book-entry form as described in Section 3.2 of
the Trust Agreement.
"Book-Entry Note" shall mean a beneficial interest in any of the Class
A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes,
in each case issued in book-entry form.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
day on which banking institutions or trust companies located in the State of
New York [or the State of Texas] are authorized or obligated by law,
regulation or executive order to remain closed.
"Certificates" shall mean the Class B Certificates.
"Certificate Balance" shall mean, as the context so requires, (i) with
respect to all the Class B Certificates, an amount equal to, initially, the
Initial Certificate Balance of the Class B Certificates and, thereafter, an
amount equal to the Initial Certificate Balance of the Class B Certificates,
reduced by all amounts distributed to Class B Certificateholders and allocable
to principal or (ii) with respect to any Class B Certificate, an amount equal
to, initially, the initial denomination of such Class B Certificate and,
thereafter, an amount equal to such initial denomination, reduced by all
amounts distributed in respect of such Class B Certificate and allocable to
principal; provided, that, unless all of the Certificates are owned by the
Seller or an Affiliate of the Seller, in determining whether the holders of
Class B Certificates evidencing the requisite portion or percentage of the
Certificate Balance have given any request, demand, authorization, direction,
notice, consent, or waiver hereunder or under any Basic Document, Class B
Certificates owned by the Issuer, any other obligor upon the Class B
Certificates, the Seller, the Servicer or any Affiliate of any of the
foregoing Persons shall be disregarded and deemed to be excluded from the
Certificate Balance except that, in determining whether the Indenture Trustee
and Owner Trustee shall be protected in relying on any such request, demand,
authorization, direction, notice, consent, or waiver, only Class B
Certificates that a Trustee Officer of the Indenture Trustee, if applicable,
and an Authorized Officer of the Owner Trustee with direct responsibility for
the administration of the Trust Agreement, if applicable, knows to be so owned
shall be so disregarded. Class B Certificates so owned that have been pledged
in good faith may be regarded as included in the Certificate Balance if the
pledgee establishes to the satisfaction of the Indenture Trustee or the Owner
Trustee, as applicable, the pledgee's right so to act with respect to such
Class B Certificates and that the pledgee is not the Issuer, any other obligor
upon the Certificates, the Seller, the Servicer or any Affiliate of any of the
foregoing Persons.
4
"Certificate Distribution Account" shall mean the account established
and maintained as such pursuant to Section 4.1(c) of the Sale and Servicing
Agreement.
"Certificate Owner" shall mean, with respect to any Book-Entry
Certificate, the Person who is the beneficial owner of the Book-Entry
Certificate, as reflected on the books of the Clearing Agency or on the books
of a Person maintaining an account with such Clearing Agency (directly as a
Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Certificateholder" or "holder of a Certificate" shall mean a Person in
whose name a Certificate is registered in the Certificate Register.
"Certificate Interest Distribution Account" means [ ].
"Certificate Principal Distribution Account" means [ ].
"Certificate of Trust" shall mean the Certificate of Trust in the form
of Exhibit B to the Trust Agreement filed for the Trust pursuant to Section
3810(a) of the Statutory Trust Statute.
"Certificate Paying Agent" shall mean any paying agent or co-paying
agent appointed pursuant to Section 3.10 of the Trust Agreement and shall
initially be the Owner Trustee.
"Certificate Pool Factor" shall mean, as of the close of business on the
last day of a Collection Period, a seven-digit decimal figure equal to the
Certificate Balance of the Class B Certificates (after giving effect to any
reductions therein to be made on the immediately following Payment Date)
divided by the Initial Certificate Balance of the Class B Certificates. Each
Certificate Pool Factor will be 1.0000000 as of the Closing Date; thereafter,
each Certificate Pool Factor will decline to reflect reductions in the
Certificate Balance of the Class B Certificates.
"Certificate Register" and "Certificate Registrar" shall have the
respective meanings specified in Section 3.5 of the Trust Agreement.
"Class" shall mean (i) a class of Notes, which may be the Class A-1
Notes, the Class A-2 Notes, the Class A-3 Notes or the Class A-4 Notes or (ii)
the Class B Certificates.
"Class A Notes" shall mean, collectively, the Class A-1 Notes, the Class
A-2 Notes, the Class A-3 Notes and the Class A-4 Notes.
"Class A Noteholders' Interest Carryover Shortfall" shall mean, for any
Payment Date, the excess of the Accrued Class A Note Interest for the
preceding Payment Date over the amount in respect of interest that is actually
paid to Noteholders of Class A Notes on such preceding Payment Date, plus
interest on the amount of interest due but not paid to Noteholders of Class A
Notes on the preceding Payment Date, to the extent permitted by law, at the
respective Note Interest Rates borne by such Class A Notes for the related
Interest Period.
5
"Class A Noteholders' Monthly Accrued Interest" shall mean, with respect
to any Payment Date, the aggregate interest accrued for the related Interest
Period on the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and
the Class A-4 Notes at the respective Note Interest Rate for such Class in
accordance with its terms on the outstanding principal amount of the Notes of
each such Class on the immediately preceding Payment Date or the Closing Date,
as the case may be, after giving effect to all payments of principal to the
holders of the Notes of such Class on or prior to such preceding Payment Date.
"Class A-1 Final Scheduled Payment Date" shall mean the [ ] Payment
Date.
"Class A-1 Noteholder" shall mean the Person in whose name a Class A-1
Note is registered on the Note Register.
"Class A-1 Notes" shall mean the $[ ] aggregate initial principal amount
Class A-1 [ ]% Asset Backed Notes issued by the Trust pursuant to the
Indenture, substantially in the form of Exhibit A-1 to the Indenture.
"Class A-1 Rate" shall mean [ ]% per annum. Interest with respect to the
Class A-1 Notes shall be computed on the basis of actual days elapsed in the
applicable Interest Period divided by 360 for all purposes of the Basic
Documents.
"Class A-2 Final Scheduled Payment Date" shall mean the [ ] Payment
Date.
"Class A-2 Noteholder" shall mean the Person in whose name a Class A-2
Note is registered on the Note Register.
"Class A-2 Notes" shall mean the $[ ] aggregate initial principal amount
Class A-2 [ ]% Asset Backed Notes issued by the Trust pursuant to the
Indenture, substantially in the form of Exhibit A-2 to the Indenture.
"Class A-2 Rate" shall mean [ ]% per annum. Interest with respect to the
Class A-2 Notes shall be computed on the basis of a 360-day year consisting of
twelve 30-day months for all purposes of the Basic Documents.
"Class A-3 Final Scheduled Payment Date" shall mean the [ ] Payment
Date.
"Class A-3 Noteholder" shall mean the Person in whose name a Class A-3
Note is registered on the Note Register.
"Class A-3 Notes" shall mean the $[ ] aggregate initial principal amount
Class A-3 [ ]% Asset Backed Notes issued by the Trust pursuant to the
Indenture, substantially in the form of Exhibit A-3 to the Indenture.
"Class A-3 Rate" shall mean [ ]% per annum. Interest with respect to the
Class A-3 Notes shall be computed on the basis of a 360-day year consisting of
twelve 30-day months for all purposes of the Basic Documents.
"Class A-4 Final Scheduled Payment Date" shall mean the [ ] Payment
Date.
6
"Class A-4 Noteholder" shall mean the Person in whose name a Class A-4
Note is registered on the Note Register.
"Class A-4 Notes" shall mean the $[ ] aggregate initial principal amount
Class A-4 [ ]% Asset Backed Notes issued by the Trust pursuant to the
Indenture, substantially in the form of Exhibit A-4 to the Indenture.
"Class A-4 Rate" shall mean [ ]% per annum. Interest with respect to the
Class A-4 Notes shall be computed on the basis of a 360-day year consisting of
twelve 30-day months for all purposes of the Basic Documents.
"Class B Certificateholder" shall mean the Person in whose name a Class
B Certificate is registered in the Certificate Register.
"Class B Certificateholders' Interest Carryover Shortfall" shall mean,
with respect to any Payment Date, the excess of the Accrued Class B
Certificate Interest for the preceding Payment Date over the amount in respect
of interest that is actually paid to Class B Certificateholders on such
preceding Payment Date, plus thirty (30) days of interest on such excess, to
the extent permitted by law, at the Class B Rate.
"Class B Certificateholders' Monthly Accrued Interest" shall mean, with
respect to any Payment Date, thirty (30) days of interest (or, in the case of
the first Payment Date, interest accrued from and including the Closing Date
to but excluding such Payment Date) at the Class B Rate on the Certificate
Balance on the immediately preceding Payment Date or the Closing Date, as the
case may be, after giving effect to all distributions allocable to the
reduction of the Certificate Balance made on or prior to such preceding
Payment Date.
"Class B Certificates" shall mean the $[ ] aggregate initial principal
balance Class B [ ]% Asset Backed Certificates evidencing the beneficial
interest of a Class B Certificateholder in the property of the Trust,
substantially in the form of Exhibit A to the Trust Agreement; provided,
however, that the Owner Trust Estate has been pledged to the Indenture Trustee
to secure payment of the Notes and that the rights of the Class B
Certificateholders to receive distributions on the Class B Certificates are
subordinated to the rights of the Noteholders as described in the Sale and
Servicing Agreement, the Indenture and the Trust Agreement.
"Class B Final Scheduled Payment Date" shall mean the [ ] Payment Date.
"Class B Rate" shall mean [ ]% per annum. Interest with respect to the
Class B Certificates shall be computed on the basis of a 360-day year
consisting of twelve 30-day months for all purposes of the Basic Documents.
"Clearing Agency" shall mean an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" shall mean a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with
the Clearing Agency.
7
"Closing Date" shall mean [ ].
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
Treasury Regulations promulgated thereunder.
"Collateral" shall have the meaning specified in the Granting Clause of
the Indenture.
"Collection Account" shall mean the account or accounts established and
maintained as such pursuant to Section 4.1(a) of the Sale and Servicing
Agreement.
"Collection Period" shall mean, with respect to the first Payment Date,
the period from and including the Cut-off Date to and including [ ] and, with
respect to each subsequent Payment Date, the calendar month preceding the
calendar month in which the Payment Date occurs.
"Collections" shall mean all amounts collected by the Servicer (from
whatever source) on or with respect to the Receivables.
"Commission" shall mean the Securities and Exchange Commission.
"Computer Tape" shall mean the computer tape generated by the Seller
which provides information relating to the Receivables and which was used by
the Seller in selecting the Receivables conveyed to the Trust hereunder.
"Corporate Trust Office" shall mean, (i) with respect to the Owner
Trustee, the principal corporate trust office of the Owner Trustee located at
[One Xxxxxx Square, 000 Xxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxxx, XX 00000] or at
such other address as the Owner Trustee may designate from time to time by
notice to the Certificateholders and the Depositor, or the principal corporate
trust office of any successor Owner Trustee (the address of which the
successor Owner Trustee will notify the Certificateholders and the Depositor);
and (ii) with respect to the Indenture Trustee, the principal corporate trust
office of the Indenture Trustee located at [ ], or at such other address as
the Indenture Trustee may designate from time to time by notice to the
Noteholders and the Issuer, or the principal corporate trust office of any
successor Indenture Trustee (the address of which the successor Indenture
Trustee will notify the Noteholders and the Issuer).
"Cut-off Date" shall mean [ ].
"Default" shall mean any occurrence that is, or with notice or the lapse
of time or both would become, an Event of Default.
"Defaulted Receivable" shall mean a Receivable (i) that the Servicer
determines is unlikely to be paid in full or (ii) with respect to which at
least [5]% of a Scheduled Payment is 120 or more days delinquent as of the end
of a calendar month.
"Definitive Certificates" shall have the meaning specified in Section
3.12 of the Trust Agreement.
8
"Definitive Notes" shall have the meaning specified in Section 2.11 of
the Indenture.
"Delinquency Ratio" shall mean, for any Collection Period, the ratio,
expressed as a percentage, of (a) the Principal Balance of all outstanding
Receivables other than Purchased Receivables and Receivables that are 60 or
more days delinquent as of the end of such Collection Period, determined in
accordance with the Servicer's customary practices, or Receivables as to which
the related Financial Vehicle has been repossessed but not sold, to (b) the
Pool Balance as of the last day of such Collection Period.
"Depositor" shall mean USAA Acceptance, LLC, a Delaware limited
liability company, as depositor and its successors and permitted assigns.
"Determination Date" shall mean, with respect to any Collection Period,
the second Business Day immediately preceding the Payment Date following such
Collection Period.
"Eligible Deposit Account" shall mean either (i) a segregated account
with an Eligible Institution or (ii) a segregated trust account with the
corporate trust department of a depository institution organized under the
laws of the U.S. or any one of the states thereof or the District of Columbia
(or any domestic branch of a foreign bank), having corporate trust powers and
acting as trustee for funds deposited in such account, so long as any of the
securities of such depository institution have a credit rating from each
Rating Agency in one of its generic rating categories which signifies
investment grade.
"Eligible Institution" shall mean either (i) the corporate trust
department of the Indenture Trustee or the related Trustee, as applicable; or
(ii) a depository institution organized under the laws of the U.S. or any one
of the states thereof or the District of Columbia (or any domestic branch of a
foreign bank), (1) which has either (A) a long-term unsecured debt rating of
at least "AA-" by Standard & Poor's and "Baa3" by Moody's or (B) a short-term
unsecured debt rating or certificate of deposit rating of "A-1+" by Standard &
Poor' and "P-1" by Moody's and (2) whose deposits are insured by the FDIC.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"Event of Default" shall have the meaning specified in Section 5.1 of
the Indenture.
"Event of Servicing Termination" shall mean an event specified in
Section 7.1 of the Sale and Servicing Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Executive Officer" shall mean, with respect to any corporation, the
Chief Executive Officer, Chief Operating Officer, Chief Financial Officer,
President, Executive Vice President, any Vice President, the Secretary or the
Treasurer of such corporation and, with respect to any partnership, any
general partner thereof.
"Expenses" shall have the meaning assigned to such term in Section 7.2
of the Trust Agreement.
9
"FDIC" shall mean the Federal Deposit Insurance Corporation and any
successor thereto.
"Final Scheduled Payment Date" shall mean, with respect to (i) the Class
A-1 Notes, the Class A-1 Final Scheduled Payment Date, (ii) the Class A-2
Notes, the Class A-2 Final Scheduled Payment Date, (iii) the Class A-3 Notes,
the Class A-3 Final Scheduled Payment Date, (iv) the Class A-4 Notes, the
Class A-4 Final Scheduled Payment Date, and (v) the Class B Certificates, the
Class B Final Scheduled Payment Date.
"Financed Vehicle" shall mean a new or used automobile or light-duty
truck, together with all accessions thereto, securing an Obligor's
indebtedness under the respective Receivable.
"Grant" shall mean to mortgage, pledge, bargain, sell, warrant,
alienate, remise, release, convey, assign, transfer, create, and to xxxxx x
xxxx upon and a security interest in and right of set-off against, and to
deposit, set over and confirm pursuant to the Indenture. A Grant of the
Collateral or of any other agreement or instrument shall include all rights,
powers and options (but none of the obligations) of the granting party
thereunder, including the immediate and continuing right to claim for,
collect, receive and give receipt for principal and interest payments in
respect of the Collateral and all other monies payable thereunder, to give and
receive notices and other communications, to make waivers or other agreements,
to exercise all rights and options, to bring Proceedings in the name of the
granting party or otherwise, and generally to do and receive anything that the
granting party is or may be entitled to do or receive thereunder or with
respect thereto.
"Indemnified Parties" shall have the meaning assigned to such term in
Section 7.2 of the Trust Agreement.
"Indenture" shall mean the Indenture, dated as of [_________], by and
between the Trust and the Indenture Trustee.
"Indenture Trustee" shall mean [INDENTURE TRUSTEE], a [ ], not in its
individual capacity but solely as Indenture Trustee under the Indenture, or
any successor Indenture Trustee under the Indenture.
"Indenture Trust Estate" shall mean all money, instruments, rights and
other property that are subject or intended to be subject to the lien and
security interest of Indenture for the benefit of the Noteholders (including,
without limitation, all property and interests Granted to the Indenture
Trustee), including all proceeds thereof.
"Independent" shall mean, when used with respect to any specified
Person, that such Person (a) is in fact independent of the Issuer, any other
obligor on the Notes, the Seller and any Affiliate of any of the foregoing
Persons, (b) does not have any direct financial interest or any material
indirect financial interest in the Issuer, any such other obligor, the Seller
or any Affiliate of any of the foregoing Persons and (c) is not connected with
the Issuer, any such other obligor, the Seller or any Affiliate of any of the
foregoing Persons as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.
10
"Independent Certificate" shall mean a certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.1 of the
Indenture, made by an Independent appraiser or other expert appointed by an
Issuer Order and approved by the Indenture Trustee in the exercise of
reasonable care, and such opinion or certificate shall state that the signer
has read the definition of "Independent" in the Indenture and that the signer
is Independent within the meaning thereof.
"Initial Certificate Balance" shall mean $[ ].
"Initial Pool Balance" shall mean $[ ].
"Insolvency Event" shall mean, with respect to any Person, (i) the
making of a general assignment for the benefit of creditors, (ii) the filing
of a voluntary petition in bankruptcy, (iii) being adjudged a bankrupt or
insolvent, or having had entered against such Person an order for relief in
any bankruptcy or insolvency proceeding, (iv) the filing by such Person of a
petition or answer seeking reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any statute,
law or regulation, (v) the filing by such Person of an answer or other
pleading admitting or failing to contest the material allegations of a
petition filed against such Person in any proceeding specified in (vii) below,
(vi) seeking, consent to or acquiescing in the appointment of a trustee,
receiver or liquidator of such Person or of all or any substantial part of the
assets of such Person or (vii) the failure to obtain dismissal within 60 days
of the commencement of any proceeding against such Person seeking
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any statute, law or regulation, or the
entry of any order appointing a trustee, liquidator or receiver of such Person
or of such Person's assets or any substantial portion thereof.
"Interest Period" shall mean, with respect to any Payment Date (i) with
respect to the Class A-1 Notes, from and including the Closing Date (in the
case of the first Payment Date) or from and including the most recent Payment
Date on which interest has been paid to but excluding the following Payment
Date and (ii) with respect to each Class of Notes other than the Class A-1
Notes, from and including the Closing Date (in the case of the first Payment
Date) or from and including the 15th day of the calendar month preceding each
Payment Date to but excluding the 15th day of the calendar month of such
Payment Date.
"IRS" shall mean the Internal Revenue Service.
"Issuer" shall mean the Trust unless a successor replaces it and,
thereafter, shall mean the successor.
"Issuer Order" and "Issuer Request" shall mean a written order or
request signed in the name of the Issuer by any one of its Authorized Officers
and delivered to the Indenture Trustee.
"Lien" shall mean a security interest, lien, charge, pledge, equity, or
encumbrance of any kind other than, in respect of a Receivable, tax liens,
mechanics' liens, and any liens which attach to the respective Receivable by
operation of law.
11
"Liquidation Proceeds" shall mean with respect to any Receivable (a)
insurance proceeds received by the Servicer and (b) monies collected by the
Servicer from whatever source, including but not limited to proceeds of
Financed Vehicles after repossession, on a Defaulted Receivable, net of any
payments required by law to be remitted to the Obligor.
"Monthly Remittance Condition" shall mean either (a) the Servicer
obtains a short-term certificate of deposit rating of the Servicer from
Standard & Poor's and Moody's of A-1+ and P-1, respectively, or (b) the
Servicer provides the Indenture Trustee with a letter from each Rating Agency
to the effect that the current ratings assigned to the Securities by such
Rating Agency will not be adversely affected by the remittance of Collections
on a monthly, rather than a daily, basis.
"Moody's" shall mean Xxxxx'x Investors Service, Inc. or its successor
in interest.
"Net Loss Ratio" shall mean, for any Collection Period, the ratio,
expressed as an annualized percentage, of (a) Realized Losses minus Recoveries
for such Collection Period, to (b) the average of the Pool Balances on the
first day of such Collection Period and the last day of such Collection
Period.
["Note Depositary Agreement" shall mean the Note Depositary Agreement,
dated as of [ ], by and among the Issuer and The Depository Trust Company.]
"Noteholder" or "holder of a Note" shall mean the Person in whose name a
Note is registered on the Note Register.
"Note Interest Rate" shall mean the Class A-1 Rate, the Class A-2 Rate,
the Class A-3 Rate or the Class A-4 Rate, as applicable.
"Note Owner" shall mean, with respect to any Book-Entry Note, the Person
who is the beneficial owner of such Book-Entry Note, as reflected on the books
of the Clearing Agency or on the books of a Person maintaining an account with
such Clearing Agency (directly as a Clearing Agency Participant or as an
indirect participant, in each case in accordance with the rules of such
Clearing Agency).
"Note Paying Agent" shall mean the Indenture Trustee or any other Person
that meets the eligibility standards for the Indenture Trustee specified in
Section 6.11 of the Indenture and is authorized by the Issuer to make payments
to and distributions from the Collection Account (including the Principal
Distribution Account), including payment of principal of or interest on the
Notes on behalf of the Issuer.
"Note Pool Factor" shall mean, with respect to each Class of Notes as of
the close of business on the last day of a Collection Period, a seven-digit
decimal figure equal to the outstanding principal balance of such Class of
Notes (after giving effect to any reductions thereof to be made on the
immediately following Payment Date) divided by the original outstanding
principal balance of such Class of Notes. The Note Pool Factor will be
[1.0000000] as of the Closing Date; thereafter, the Note Pool Factor will
decline to reflect reductions in the outstanding principal amount of such
Class of Notes.
12
"Note Register" and "Note Registrar" shall have the respective meanings
specified in Section 2.5 of the Indenture.
"Notes" shall mean the Class A-1 Notes, the Class A-2 Notes, the Class
A-3 Notes and the Class A-4 Notes, collectively.
"Obligor" on a Receivable shall mean the purchaser or co-purchasers of
the Financed Vehicle or any other Person who owes payments under the
Receivable.
"Officer's Certificate" shall mean (i) with respect to the Trust, a
certificate signed by any Authorized Officer of the Trust and (ii) with
respect to the Depositor or the Servicer, a certificate signed by the chairman
of the board, the president, any executive or senior vice president, any vice
president, the treasurer or the controller of the Depositor or the Servicer,
as applicable.
"Opinion of Counsel" shall mean a written opinion of counsel which
counsel shall be acceptable to the Indenture Trustee, the Owner Trustee or the
Rating Agencies, as applicable.
"Optional Purchase Percentage" shall mean [5]%.
"Outstanding" shall mean with respect to the Securities, as of the date
of determination, all Securities theretofore authenticated and delivered under
the Indenture or the Trust Agreement, as applicable, except:
(a) Securities theretofore (i) cancelled by the Note
Registrar or the Certificate Registrar, as applicable, or (ii)
delivered to the Note Registrar or the Certificate Registrar, as
applicable, for cancellation;
(b) Securities or portions thereof the payment for which
money in the necessary amount has been theretofore deposited with
(i)in the case of the Notes, the Indenture Trustee or any Note
Paying Agent in trust for the Noteholders of such Notes (provided,
however, that if such Notes are to be prepaid, notice of such
prepayment has been duly given pursuant to the Indenture or
provision for such notice has been made, satisfactory to the
Indenture Trustee) or (ii) in the case of the Certificates, the
Owner Trustee or any Certificate Paying Agent in trust for the
Certificateholders of such Certificates (provided, however, that
if such Certificates are to be prepaid, notice of such prepayment
has been duly given pursuant to the Trust Agreement or provision
for such notice has been made, satisfactory to the Owner Trustee);
and
(c) Securities in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to the
Indenture or the Trust Agreement, as applicable, unless proof
satisfactory to the Indenture Trustee or the Owner Trustee, as
applicable, is presented that any such Securities are held by a
protected purchaser;
provided, that in determining whether the holders of Notes or Certificates
evidencing the requisite principal amount of the Notes Outstanding or
Certificates Outstanding have given any request, demand, authorization,
direction, notice, consent, or waiver under any Basic Document,
13
Securities owned by the Issuer, any other obligor upon the Securities, the
Seller, the Servicer or any Affiliate of any of the foregoing Persons shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Indenture Trustee or Owner Trustee, as applicable, shall be
protected in relying on any such request, demand, authorization, direction,
notice, consent, or waiver, only (i) Notes that a Responsible Officer of the
Indenture Trustee knows to be so owned and (ii) Certificates that a
Responsible Officer of the Owner Trustee knows to be so owned, shall be so
disregarded; provided, however, if the Issuer, any other obligor upon the
Securities, the Seller, the Servicer or any Affiliate of any of the foregoing
Persons owns an entire Class of Securities, such Securities shall be deemed to
be Outstanding. Notes owned by the Issuer, any other obligor upon the Notes,
the Seller, the Servicer or any Affiliate of any of the foregoing Persons that
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Indenture Trustee the pledgee's right
so to act with respect to such Notes and that the pledgee is not the Issuer,
any other obligor upon the Notes, the Seller, the Servicer or any Affiliate of
any of the foregoing Persons. Certificates owned by the Issuer, any other
obligor upon the Certificates, the Seller, the Servicer or any Affiliate of
any of the foregoing Persons that have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Owner Trustee the pledgee's right so to act with respect to such Certificates
and that the pledgee is not the Issuer, any other obligor upon the
Certificates, the Seller, the Servicer or any Affiliate of any of the
foregoing Persons.
"Outstanding Advances" on the Receivables shall mean the sum, as of the
close of business on the last day of a Collection Period, of all Advances as
reduced as provided in Section 4.4(a) of the Sale and Servicing Agreement.
"Owner Trustee" shall mean [ ], a [ ], not in its individual capacity
but solely as Owner Trustee under the Trust Agreement, or any successor Owner
Trustee under the Trust Agreement.
"Owner Trust Estate" shall mean all right, title and interest of the
Trust in, to and under the property and rights assigned to the Trust pursuant
to Article II of the Sale and Servicing Agreement.
"Payment Date" shall mean the fifteenth (15th) day of each calendar
month or, if such day is not a Business Day, the next succeeding Business Day.
"Permitted Investments" shall mean, on any date of determination,
book-entry securities, negotiable instruments or securities represented by
instruments in bearer or registered form with maturities not exceeding the
Business Day preceding the next Payment Date which evidence:
(a) direct non-callable obligations of, and obligations
fully guaranteed as to timely payment by, the United States of
America;
(b) demand deposits, time deposits or certificates of
deposit of any depository institution or trust company
incorporated under the laws of the United States of America or any
state thereof (or any domestic branch of a foreign bank) and
subject to supervision and examination by federal or State banking
or depository institution authorities; provided, however, that at
the time of the
14
investment or contractual commitment to invest therein, the
commercial paper or other short-term unsecured debt obligations
(other than such obligations the rating of which is based on the
credit of a Person other than such depository institution or trust
company) thereof shall have a credit rating from each of the Rating
Agencies in the highest investment category granted thereby;
(c) commercial paper having, at the time of the investment
or contractual commitment to invest therein, a rating from each of
the Rating Agencies in the highest investment category granted
thereby;
(d) investments in money market funds having a rating from
each of the Rating Agencies in the highest investment category
granted thereby (including funds for which the Indenture Trustee
or the Owner Trustee or any of their respective Affiliates is
investment manager or advisor);
(e) bankers' acceptances issued by any depository
institution or trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that
is a direct non-callable obligation of, or fully guaranteed by,
the United States of America or any agency or instrumentality
thereof the obligations of which are backed by the full faith and
credit of the United States of America, in either case entered
into with a depository institution or trust company (acting as
principal) described in clause (b); and
(g) any other investment with respect to which the Issuer or
the Servicer has received written notification from the Rating
Agencies that the acquisition of such investment as a Permitted
Investment will not result in a withdrawal or downgrading of the
ratings on the Notes or the Certificates.
"Person" shall mean any individual, corporation, estate, partnership,
joint venture, association, joint stock company, trust, unincorporated
organization, or government or any agency or political subdivision thereof.
"Plan" means an employee benefit plan (as defined in section 3(3) of
ERISA) that is subject to Title I of ERISA, a plan (as defined in section
4975(e)(1) of the Code) and any entity whose underlying assets include plan
assets by reason of a plan's investment in the entity or otherwise.
"Pool Balance" shall mean on any date of determination, the aggregate
outstanding Principal Balance of the Receivables (exclusive of Purchased
Receivables and Defaulted Receivables) as of such date of determination.
"Pool Factor" as of the last day of a Collection Period shall mean a
seven-digit decimal figure equal to the Pool Balance at that time divided by
the Initial Pool Balance.
"Predecessor Note" shall mean, with respect to any particular Note,
every previous Note evidencing all or a portion of the same debt as that
evidenced by such particular Note and, for
15
purposes of this definition, any Note authenticated and delivered under
Section 2.6 of the Indenture 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.
"Prepayment Date" shall mean (i) with respect to a prepayment of the
Certificates pursuant to Section 8.2(a) of the Trust Agreement or a
distribution to Certificateholders pursuant to Section 8.1(c) of the Trust
Agreement, the Payment Date specified by the Owner Trustee pursuant to said
Section 8.2(a) or 8.1(c), as applicable, and (ii) with respect to a prepayment
of the Notes pursuant to Section 10.1(a) of the Indenture, the Payment Date
specified by the Servicer pursuant to Section 10.1(a) or (b) of the Indenture,
as applicable.
"Prepayment Price" shall mean (i) in the case of the Certificates, an
amount equal to the Certificate Balance plus accrued and unpaid interest
thereon at the applicable Class B Rate plus interest on any overdue interest
at the applicable Class B Rate (to the extent lawful) to but excluding the
Prepayment Date and (ii) in the case of a Class of Notes to be prepaid, an
amount equal to the unpaid principal amount of such Class of Notes plus
accrued and unpaid interest thereon at the applicable Note Interest Rate plus
interest on any overdue interest at the applicable Note Interest Rate (to the
extent lawful) to but excluding the Prepayment Date.
"Priority Note Principal Payment" shall mean, for each Payment Date, a
payment of principal equal to the excess, if any, of the aggregate principal
amount of the Class A Notes (before giving effect to any payments on that
Payment Date) over the Pool Balance at the end of the related Collection
Period.
"Principal Balance" of a Receivable, as of any date of determination,
shall mean the Amount Financed minus that portion of all payments actually
received on or prior to such date allocable to principal.
"Principal Distribution Account" shall mean the administrative
sub-account of the Collection Account established and maintained as such
pursuant to Section 4.1(b) of the Sale and Servicing Agreement.
"Proceeding" shall mean any suit in equity, action at law or other
judicial or administrative proceeding.
"Prospectus" shall have the meaning specified in the Underwriting
Agreement.
"Prospectus Supplement" shall have the meaning specified in the
Underwriting Agreement.
"Purchase Amount" with respect to a Purchased Receivable shall mean the
sum, as of the last day of the preceding Collection Period on which such
Receivable becomes such, of the Principal Balance thereof plus the accrued
interest thereon at the weighted average of the Note Interest Rates and the
Class B Rate.
"Purchased Receivable" shall mean a Receivable purchased as of the close
of business on the last day of the respective Collection Period by the
Servicer pursuant to Section 3.7 of the Sale
16
and Servicing Agreement or by the Seller pursuant to Section 2.4 of the Sale
and Servicing Agreement.
"Rating Agency" shall mean each of the nationally recognized statistical
rating organizations designated by the Seller to provide a rating on the Notes
or the Certificates which is then rating such Notes or Certificates. If no
such organization or successor is any longer in existence, "Rating Agency"
shall be a nationally recognized statistical rating organization or other
comparable Person designated by the Seller, notice of which designation shall
be given to the Indenture Trustee, the Owner Trustee and the Servicer.
"Rating Agency Condition" shall mean, with respect to any action, that
each of the Rating Agencies shall have notified the Servicer, the Depositor,
the Owner Trustee and the Indenture Trustee in writing that such action will
not result in a reduction or withdrawal of the then current rating of the
Notes or the Certificates.
"Realized Losses" shall mean, for any Collection Period and for each
Receivable that became a Defaulted Receivable during such Collection Period,
the sum of the excess, for each such Receivable, of (i) the Principal Balance
of such Receivable over (ii) Liquidation Proceeds received with respect to
such Receivable during such Collection Period, to the extent allocable to
principal.
"Receivable" shall mean a motor vehicle installment loan contract listed
on Schedule A to the Sale and Servicing Agreement and all proceeds thereof and
payments thereunder, which Receivable shall not have been released by the
Indenture Trustee and the Owner Trustee from the Trust.
"Receivable Files" shall mean the documents specified in Section 2.5 of
the Sale and Servicing Agreement.
"Receivables Purchase Agreement" shall mean the Receivables Purchase
Agreement, dated as of [Closing Date], by and between the Bank, as seller and
the Depositor.
"Record Date" shall mean, with respect to any Payment Date or Prepayment
Date and any Book-Entry Security, the close of business on the day prior to
such Payment Date or Prepayment Date or, with respect to any Definitive Note
or Definitive Certificate, the last day of the month preceding the month in
which such Payment Date or Prepayment Date occurs.
"Recoveries" shall mean, with respect to any Collection Period, all
amounts received by the Servicer with respect to any Defaulted Receivable
during any Collection Period following the Collection Period in which such
Receivable became a Defaulted Receivable, net of any fees, costs and expenses
incurred by the Servicer in connection with the collection of such Receivable
and any payments required by law to be remitted to the Obligor.
"Registered Noteholder" shall mean the Person in whose name a Note is
registered on the Note Register on the applicable Record Date.
17
"Registration Statement" means Registration Statement No. 333-[___]
filed by the Depositor with the Securities and Exchange Commission in the
form in which it became effective on [___].
"Regular Principal Distribution Amount" shall mean, with respect to any
Payment Date, an amount equal to the sum of (i) the Collections on the
Receivables received during the related Collection Period and allocable to
principal and (ii) the aggregate Principal Balance (net of Liquidation
Proceeds received during the related Collection Period applied to principal)
of all Receivables that became designated as Defaulted Receivables in such
Collection Period; provided, however, that the Regular Principal Distribution
Amount shall not exceed the sum of the aggregate outstanding principal amount
of all of the Notes and the Certificate Balance on such Payment Date.
"Related Agreements" shall have the meaning specified in the recitals to
the Administration Agreement.
"Representatives" shall mean [ ] and [ ], as representatives of the
several Underwriters.
"Repurchase Event" shall have the meaning specified in Section 7.02 of
the Receivables Purchase Agreement.
"Required Rating" shall mean a rating on (i) short-term unsecured debt
obligations of P-1 by Moody's and (ii) short-term unsecured debt obligations
of A-1+ by Standard & Poor's; and any requirement that short-term unsecured
debt obligations have the "Required Rating" shall mean that such short-term
unsecured debt obligations have the foregoing required ratings from each of
such Rating Agencies.
"Reserve Account" shall mean the account established and maintained as
such pursuant to Section 4.7(a) of the Sale and Servicing Agreement.
"Reserve Account Property" shall have the meaning specified in Section
4.7(a) of the Sale and Servicing Agreement.
"Reserve Account Excess Amount" shall mean, with respect to any Payment
Date, an amount equal to the excess, if any, of (i) the amount of cash or
other immediately available funds in the Reserve Account on such Payment Date
(prior to giving effect to any withdrawals therefrom relating to such Payment
Date) over (ii) the Specified Reserve Balance with respect to such Payment
Date.
"Reserve Initial Deposit" shall mean, with respect to the Closing Date,
$[ ].
"Sale and Servicing Agreement" shall mean the Sale and Servicing
Agreement, dated as of [Closing Date], by and between the Trust, as issuer,
the Depositor, as seller, and the Bank, as seller and servicer.
"Scheduled Payment" shall mean, for any Collection Period for any
Receivable, the amount indicated in such Receivable as required to be paid by
the Obligor in such Collection
18
Period (without giving effect to deferments of payments pursuant to Section
3.2 of the Sale and Servicing Agreement or any rescheduling in any insolvency
or similar proceedings).
"Schedule of Receivables" shall mean the list of Receivables attached as
Schedule A to the Receivables Purchase Agreement, the Sale and Servicing
Agreement and the Indenture (which Schedules may be in the form of microfiche,
disk or other means acceptable to the Trustee).
"Secretary of State" shall mean the Secretary of State of the State of
Delaware.
"Securities" shall mean the Notes and the Certificates, collectively.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securities Depository Agreement" shall mean the agreement dated the
Closing Date by and among the Trust, the Indenture Trustee, the Owner Trustee
and The Depository Trust Company, as the initial Clearing Agency, relating to
the Securities.
"Securityholders" shall mean the Noteholders and the Certificateholders,
collectively.
"Seller" shall mean the Bank as the seller of the Receivables under the
Receivables Purchase Agreement and each successor to the Bank.
"Servicer" shall mean the Bank as the servicer of the Receivables under
the Sale and Servicing Agreement, and each successor to the Bank (in the same
capacity) pursuant to Section 6.3 of the Sale and Servicing Agreement.
"Servicer's Certificate" shall mean a certificate completed and executed
by the Servicer by the chairman of the board, the president, any executive
vice president, any vice president, the treasurer, any assistant treasurer,
the controller, or any assistant controller of the Servicer pursuant to
Section 3.9 of the Sale and Servicing Agreement.
"Servicing Fee" shall mean, with respect to a Collection Period, the fee
payable to the Servicer for services rendered during such Collection Period,
which shall be equal to one-twelfth of the Servicing Fee Rate multiplied by
the Pool Balance as of the first day of the Collection Period.
"Servicing Fee Rate" shall mean [0.5]% per annum.
"Simple Interest Method" shall mean the method of allocating a fixed
level payment to principal and interest, pursuant to which the portion of such
payment that is allocated to interest is equal to the amount accrued from the
date of the preceding payment to the date of the current payment.
["Specified Reserve Balance" shall mean, with respect to any Payment
Date, the greater of (i) [ ]% of the Initial Pool Balance and (ii) 0.75% of
the Pool Balance at the end of the Collection Period preceding such Payment
Date; provided, however, the Specified Reserve Balance shall be calculated
using a percentage of [ ]% in (i) above and 2.50% in (ii) above, for
19
any Payment Date on which the Average Net Loss Ratio exceeds the Average Net
Loss Trigger Percentage or the Average Delinquency Ratio exceeds the Average
Delinquency Trigger Percentage; provided, further, however, that such higher
percentage shall remain in effect until the Average Net Loss Ratio and the
Average Delinquency Ratio are equal to or less than [ ]% for at least six
consecutive Collection Periods. Notwithstanding the foregoing, the Specified
Reserve Balance may be reduced to a lesser amount as determined by the Seller
if the Rating Agency Condition is satisfied.]
"Standard & Poor's" shall mean Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc. or its successor in interest.
"State" shall mean any state or commonwealth of the United States of
America, or the District of Columbia.
"Statutory Trust Statute" shall mean Chapter 38 of Title 12 of the
Delaware Code, 12 Delaware Code ss. 3801 et seq., as amended.
"Successor Servicer" shall mean an institution appointed as successor
Servicer pursuant to Section 7.2 of the Sale and Servicing Agreement.
"Supplemental Servicing Fee" shall mean, the fee payable to the Servicer
for certain services rendered during the respective Collection Period,
determined pursuant to and defined in Section 3.8 of the Sale and Servicing
Agreement.
"Total Required Payment" shall mean, with respect to any Payment Date,
the sum of the Servicing Fee and all unpaid Servicing Fees from prior
Collection Periods, the Accrued Class A Note Interest, the Accrued Class B
Certificate Interest and the Regular Principal Distribution Amount; provided,
however, that on any Final Scheduled Payment Date the amount required to be
paid pursuant to Section 4.6(c)(v) of the Sale and Servicing Agreement shall
be included in the Total Required Payment; provided, further, that following
the occurrence and during the continuation of an Event of Default, on any
Payment Date until the Payment Date on which the outstanding principal amount
of all the Securities has been paid in full, the Total Required Payment shall
mean the sum of the Servicing Fee and all unpaid Servicing Fees from prior
Collection Periods, the Accrued Class A Note Interest, the Accrued Class B
Certificate Interest and the amount necessary to reduce the outstanding
principal amount of all the Securities to zero.
"Transfer Date" shall mean the Closing Date.
"Treasury Regulations" shall mean regulations, including proposed or
temporary regulations, promulgated under the Code. References to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" shall mean USAA Auto Owner Trust 200_-[ ], a Delaware statutory
trust governed by the Trust Agreement.
"Trust Accounts" shall have the meaning specified in Section 4.7(a) of
the Sale and Servicing Agreement.
20
"Trust Agreement" shall mean the Amended and Restated Trust Agreement of
the Trust dated as of [ ], by and among the Depositor and the Owner
Trustee, as amended and/or restated from time to time.
"Trust Indenture Act" or "TIA" shall mean the Trust Indenture Act of
1939, as amended, unless otherwise specifically provided.
"Trustee Officer" shall mean, with respect to the Indenture Trustee, any
officer within the Corporate Trust Office of the Indenture Trustee with direct
responsibility for the administration of the Indenture and the other Basic
Documents on behalf of the Indenture Trustee and also, with respect to a
particular matter, any other officer to whom such matter is referred because
of such officer's knowledge of and familiarity with the particular subject
and, with respect to the Owner Trustee, any officer within the Corporate Trust
Office of the Owner Trustee with direct responsibility for the administration
of the Trust Agreement and the other Basic Documents on behalf of the Owner
Trustee.
"Trust Property" shall mean, collectively, (i) the Receivables; (ii)
monies received thereunder on or after the Cut-off Date; (iii) 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;
(iv) rights to receive proceeds with respect to the Receivables from claims on
any theft, physical damage, credit life, credit disability, or other insurance
policies covering Financed Vehicles or Obligors; (v) all of the Seller's
rights to the Receivable Files; (vi) the Trust Accounts, the Certificate
Interest Distribution Account, the Certificate Principal Distribution Account
and all amounts, securities, investments, investment property and other
property deposited in or credited to any of the foregoing, all security
entitlements relating to the foregoing and all proceeds thereof; (vii)
payments and proceeds with respect to the Receivables held by the Servicer;
(viii) all property (including the right to receive Liquidation Proceeds)
securing a Receivable (other than a Receivable repurchased by the Servicer or
purchased by the Seller); (ix) rebates of premiums and other amounts relating
to insurance policies and other items financed under the Receivables in effect
as of the Cut-off Date; and (x) all present and future claims, demands, causes
of action and choses in action in respect of any or all of the foregoing and
all payments on or under and all proceeds of every kind and nature whatsoever
in respect of any or all of the foregoing, including all proceeds of the
conversion thereof, voluntary or involuntary, into cash or other liquid
property, all cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, insurance proceeds,
condemnation awards, rights to payment of any and every kind and other forms
of obligations and receivables, instruments and other property which at any
time constitute all or part of or are included in the proceeds of any of the
foregoing.
"UCC" shall mean the Uniform Commercial Code as in effect in any
relevant jurisdiction.
"Underwriters" shall mean the underwriters named in Schedule I to the
Underwriting Agreement.
"Underwriting Agreement" shall mean the Underwriting Agreement, dated [
] between the Seller and the Representatives of the several Underwriters.
21
"Underwritten Securities" shall mean the Notes.
22
