EXHIBIT 4.1
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VOLKSWAGEN AUTO LOAN ENHANCED TRUST 20[__]-[__]
Class A-1 [_____]% Auto Loan Asset Backed Notes
Class A-2 [_____]% Auto Loan Asset Backed Notes
Class A-3 [_____]% Auto Loan Asset Backed Notes
Class A-4 [_____]% Auto Loan Asset Backed Notes
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INDENTURE
Dated as of [__________]
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[__________],
as the Indenture Trustee
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20[__]-[__] Indenture
CROSS REFERENCE TABLE(1)
TIA Indenture
Section Section
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310 (a) (1).................................................... 6.11
(a) (2).................................................... 6.11
(a) (3).................................................... 6.10; 6.11
(a) (4).................................................... N.A.(2)
(a) (5).................................................... 6.11
(b)........................................................ 6.8; 6.11
(c)........................................................ N.A.
311 (a)........................................................ 6.12
(b)........................................................ 6.12
(c)........................................................ N.A.
312 (a)........................................................ 7.1
(b)........................................................ 7.2
(c)........................................................ 7.2
313 (a)........................................................ 7.3
(b) (1).................................................... 7.3
(b) (2).................................................... 7.3
(c)........................................................ 7.3
(d)........................................................ 7.3
314 (a)........................................................ 3.9
(b)........................................................ 3.6; 11.15
(c) (1).................................................... 11.15
(c) (2).................................................... 11.1
(c) (3).................................................... 11.1
(d)........................................................ 11.1
(e)........................................................ 11.1
(f)........................................................ N.A.
315 (a)........................................................ 6.1(b)
(b)........................................................ 6.5
(c)........................................................ 6.1(a)
(d)........................................................ 6.1(c)
(e)........................................................ 5.13
316 (a) (1) (A)................................................ 5.11
(a) (1) (B)................................................ 5.12
(a) (2).................................................... N.A.
(b)........................................................ 5.7
(c)........................................................ 5.6(b)
317 (a) (1).................................................... 5.3(b)
(a) (2).................................................... 5.3(d)
(b)........................................................ 3.3(c)
318 (a)........................................................ 11.7
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(1) Note: This Cross Reference Table shall not, for any purpose, be deemed to
be part of this Indenture.
(2) N.A. means Not Applicable.
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE..................... 2
SECTION 1.1 Definitions............................................. 2
SECTION 1.2 Incorporation by Reference of Trust Indenture Act....... 2
SECTION 1.3 Other Interpretive Provisions........................... 2
ARTICLE II THE NOTES..................................................... 3
SECTION 2.1 Form.................................................... 3
SECTION 2.2 Execution, Authentication and Delivery.................. 3
SECTION 2.3 Temporary Notes......................................... 3
SECTION 2.4 Registration of Transfer and Exchange................... 4
SECTION 2.5 Mutilated, Destroyed, Lost or Stolen Notes.............. 5
SECTION 2.6 Persons Deemed Owners................................... 6
SECTION 2.7 Payment of Principal and Interest; Defaulted Interest... 6
SECTION 2.8 Cancellation............................................ 7
SECTION 2.9 Release of Collateral................................... 7
SECTION 2.10 Book-Entry Notes........................................ 8
SECTION 2.11 Notices to Clearing Agency.............................. 8
SECTION 2.12 Definitive Notes........................................ 9
SECTION 2.13 Authenticating Agents................................... 9
SECTION 2.14 Tax Treatment........................................... 10
ARTICLE III COVENANTS.................................................... 10
SECTION 3.1 Payment of Principal and Interest....................... 10
SECTION 3.2 Maintenance of Office or Agency......................... 10
SECTION 3.3 Money for Payments To Be Held in Trust.................. 10
SECTION 3.4 Existence............................................... 12
SECTION 3.5 Protection of Collateral................................ 12
SECTION 3.6 Opinions as to Collateral............................... 13
SECTION 3.7 Performance of Obligations; Servicing of Receivables.... 13
SECTION 3.8 Negative Covenants...................................... 14
SECTION 3.9 Annual Compliance Statement............................. 15
SECTION 3.10 Restrictions on Certain Other Activities................ 16
SECTION 3.11 Restricted Payments..................................... 16
SECTION 3.12 Notice of Events of Default............................. 16
SECTION 3.13 Further Instruments and Acts............................ 16
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TABLE OF CONTENTS
(Continued)
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SECTION 3.14 Compliance with Laws.................................... 16
SECTION 3.15 Removal of Administrator................................ 17
SECTION 3.16 Perfection Representations, Warranties and Covenants.... 17
ARTICLE IV SATISFACTION AND DISCHARGE.................................... 17
SECTION 4.1 Satisfaction and Discharge of Indenture................. 17
SECTION 4.2 Application of Trust Money.............................. 18
SECTION 4.3 Repayment of Monies Held by Paying Agent................ 18
ARTICLE V REMEDIES....................................................... 18
SECTION 5.1 Events of Default....................................... 18
SECTION 5.2 Acceleration of Maturity; Waiver of Event of Default.... 19
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by
the Indenture Trustee................................... 20
SECTION 5.4 Remedies; Priorities.................................... 22
SECTION 5.5 Optional Preservation of the Collateral................. 24
SECTION 5.6 Limitation of Suits..................................... 24
SECTION 5.7 Unconditional Rights of Noteholders To Receive Principal
and Interest............................................ 25
SECTION 5.8 Restoration of Rights and Remedies...................... 25
SECTION 5.9 Rights and Remedies Cumulative.......................... 25
SECTION 5.10 Delay or Omission Not a Waiver.......................... 25
SECTION 5.11 Control by Noteholders.................................. 25
SECTION 5.12 Waiver of Past Defaults................................. 26
SECTION 5.13 Undertaking for Costs................................... 26
SECTION 5.14 Waiver of Stay or Extension Laws........................ 27
SECTION 5.15 Action on Notes......................................... 27
SECTION 5.16 Performance and Enforcement of Certain Obligations...... 27
SECTION 5.17 Sale of Collateral...................................... 28
ARTICLE VI THE INDENTURE TRUSTEE......................................... 28
SECTION 6.1 Duties of the Indenture Trustee......................... 28
SECTION 6.2 Rights of the Indenture Trustee......................... 29
SECTION 6.3 Individual Rights of the Indenture Trustee.............. 30
SECTION 6.4 The Indenture Trustee's Disclaimer...................... 31
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TABLE OF CONTENTS
(Continued)
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SECTION 6.5 Notice of Defaults...................................... 31
SECTION 6.6 Reports by the Indenture Trustee to Noteholders......... 31
SECTION 6.7 Compensation and Indemnity.............................. 31
SECTION 6.8 Removal, Resignation and Replacement of the Indenture
Trustee................................................. 32
SECTION 6.9 Successor Indenture Trustee by Merger................... 33
SECTION 6.10 Appointment of Co-Indenture Trustee or Separate
Indenture Trustee....................................... 33
SECTION 6.11 Eligibility; Disqualification........................... 34
SECTION 6.12 Preferential Collection of Claims Against the Issuer.... 34
SECTION 6.13 Representations and Warranties.......................... 35
ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS............................... 35
SECTION 7.1 The Issuer to Furnish the Indenture Trustee Names and
Addresses of Noteholders................................ 35
SECTION 7.2 Preservation of Information; Communications to
Noteholders............................................. 35
SECTION 7.3 Reports by the Indenture Trustee........................ 35
ARTICLE VIII ACCOUNTS, DISBURSEMENTS AND RELEASES........................ 36
SECTION 8.1 Collection of Money..................................... 36
SECTION 8.2 Trust Accounts.......................................... 36
SECTION 8.3 General Provisions Regarding Accounts................... 37
SECTION 8.4 Release of Collateral................................... 37
SECTION 8.5 Opinion of Counsel...................................... 38
ARTICLE IX SUPPLEMENTAL INDENTURES....................................... 38
SECTION 9.1 Supplemental Indentures Without Consent of Noteholders.. 38
SECTION 9.2 Supplemental Indentures with Consent of Noteholders..... 39
SECTION 9.3 Execution of Supplemental Indentures.................... 41
SECTION 9.4 Effect of Supplemental Indenture........................ 41
SECTION 9.5 Conformity With Trust Indenture Act..................... 41
SECTION 9.6 Reference in Notes to Supplemental Indentures........... 41
ARTICLE X REDEMPTION OF NOTES............................................ 42
SECTION 10.1 Redemption.............................................. 42
SECTION 10.2 Form of Redemption Notice............................... 42
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TABLE OF CONTENTS
(Continued)
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SECTION 10.3 Notes Payable on Redemption Date........................ 43
ARTICLE XI MISCELLANEOUS................................................. 43
SECTION 11.1 Compliance Certificates and Opinions, etc............... 43
SECTION 11.2 Form of Documents Delivered to the Indenture Trustee.... 44
SECTION 11.3 Acts of Noteholders..................................... 45
SECTION 11.4 Notices................................................. 46
SECTION 11.5 Notices to Noteholders; Waiver.......................... 46
SECTION 11.6 Alternate Payment and Notice Provisions................. 46
SECTION 11.7 Conflict with Trust Indenture Act....................... 47
SECTION 11.8 Effect of Headings and Table of Contents................ 47
SECTION 11.9 Successors and Assigns.................................. 47
SECTION 11.10 Separability............................................ 47
SECTION 11.11 Benefits of Indenture................................... 47
SECTION 11.12 Legal Holidays.......................................... 47
SECTION 11.13 GOVERNING LAW........................................... 47
SECTION 11.14 Counterparts............................................ 48
SECTION 11.15 Recording of Indenture.................................. 48
SECTION 11.16 Trust Obligation........................................ 48
SECTION 11.17 No Petition............................................. 48
SECTION 11.18 Intent.................................................. 48
SECTION 11.19 Submission to Jurisdiction; Waiver of Jury Trial........ 49
SECTION 11.20 Subordination of Claims................................. 49
SECTION 11.21 Limitation of Liability of Owner Trustee................ 50
Schedule I Perfection Representations, Warranties and Covenants
Exhibit A Forms of Notes
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This INDENTURE, dated as of [____________] (as amended, modified or
supplemented from time to time, this "Indenture"), is between VOLKSWAGEN AUTO
LOAN ENHANCED TRUST 20[__]-[__], a Delaware statutory trust (the "Issuer"), and
[______________], a [national banking association], solely as trustee and not in
its individual capacity (the "Indenture Trustee").
Each party agrees as follows for the benefit of the other party and the
equal and ratable benefit of the Holders of the Issuer's Class A-1 [______]%
Auto Loan Asset Backed Notes (the "Class A-1 Notes"), Class A-2 [______]% Auto
Loan Asset Backed Notes (the "Class A-2 Notes"), Class A-3 [______]% Auto Loan
Asset Backed Notes (the "Class A-3 Notes") and the Class A-4 [______]% Auto Loan
Asset Backed Notes (the "Class A-4 Notes"; together with the Class A-1 Notes,
the Class A-2 Notes and the Class A-3 Notes, the "Notes").
GRANTING CLAUSE
The Issuer, 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 set forth herein, and to secure
compliance with the provisions of this Indenture, hereby Grants in trust to the
Indenture Trustee on the Closing Date, as trustee for the benefit of the
Noteholders, all of the Issuer's right, title and interest, whether now owned or
hereafter acquired, in and to (i) the Trust Estate and (ii) all present and
future claims, demands, causes and choses in action in respect of any or all of
the Trust Estate and all payments on or under and all proceeds of every kind and
nature whatsoever in respect of any or all of the Trust Estate, including all
proceeds of the conversion, voluntary or involuntary, into cash or other liquid
property, all cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, insurance proceeds,
condemnation awards, rights to payment of any and every kind and other forms of
obligations and receivables, instruments, securities, financial assets and other
property which at any time constitute all or part of or are included in the
proceeds of any of the Trust Estate (collectively, the "Collateral").
The Indenture Trustee, on behalf of the Noteholders, acknowledges the
foregoing Grant, accepts the trusts under this Indenture and agrees to perform
its duties required in this Indenture in accordance with the provisions of this
Indenture.
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 set forth
herein, and compliance with the provisions of this Indenture, all as provided in
this Indenture.
Without limiting the foregoing Grant, any Receivable purchased by the
Seller or the Servicer pursuant to Section 2.3 or Section 3.6, respectively, of
the Sale and Servicing Agreement shall be deemed to be automatically released
from the lien of this Indenture without any action being taken by the Indenture
Trustee upon payment by the Seller or the Servicer, as applicable, of the
related Repurchase Price for such Repurchased Receivable.
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions. Capitalized terms are used in this Indenture as
defined in Appendix A to the Sale and Servicing Agreement, dated as of
20[__]-[__] (as amended, modified
or supplemented from time to time, the "Sale and Servicing Agreement"), among
Volkswagen Public Auto Loan Securitization, LLC, as Seller, the Issuer, VW
Credit, Inc., as Servicer, and the Indenture Trustee.
SECTION 1.2 Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture. The following TIA terms used
in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule have
the meaning assigned to them by such definitions.
SECTION 1.3 Other Interpretive Provisions. All terms defined in this
Indenture shall have the defined meanings when used in any certificate or other
document delivered pursuant hereto unless otherwise defined therein. For
purposes of this Indenture and all such certificates and other documents, unless
the context otherwise requires: (a) accounting terms not otherwise defined in
this Indenture, and accounting terms partly defined in this Indenture to the
extent not defined, shall have the respective meanings given to them under GAAP
(provided that, to the extent that the definitions in this Indenture and GAAP
conflict, the definitions in this Indenture shall control); (b) the words
"hereof," "herein" and "hereunder" and words of similar import refer to this
Indenture as a whole and not to any particular provision of this Indenture; (c)
references to any Article, Section, Schedule or Exhibit are references to
Articles, Sections, Schedules and Exhibits in or to this Indenture and
references to any paragraph, subsection, clause or other subdivision within any
Section or definition refer to such paragraph, subsection, clause or other
subdivision of such Section or definition; (d) the term "including" and all
variations thereof means "including without limitation"; (e) except as otherwise
expressly provided herein, references to any law or regulation refer to that law
or regulation as amended from time to time and include any successor law or
regulation; (f) references to any Person include that Person's successors and
assigns; and (g) headings are for purposes of reference only and shall not
otherwise affect the meaning or interpretation of any provision hereof.
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ARTICLE II THE NOTES
SECTION 2.1 Form. The Class A-1 Notes, Class A-2 Notes, Class A-3 Notes and
Class A-4 Notes, in each case together with the Indenture Trustee's certificate
of authentication, shall be in substantially the applicable form set forth in
Exhibit A hereto, 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 the Notes, as evidenced by their execution of the Notes. Any
portion of the text of any Note may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Note.
Each Note shall be dated the date of its authentication. The terms of the
Notes set forth in Exhibit A hereto are part of the terms of this Indenture.
SECTION 2.2 Execution, Authentication and Delivery. The Notes shall be
executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who were at
any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The Indenture Trustee shall, upon Issuer Order, authenticate and deliver
Class A-1 Notes for original issue in an Initial Note Balance of $[_____], Class
A-2 Notes for original issue in an Initial Note Balance of $[_____], Class A-3
Notes for original issue in an Initial Note Balance of $[_____] and Class A-4
Notes for original issue in an Initial Note Balance of $[_____]. The Note
Balance 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 such amounts except as provided in
Section 2.5.
Each Note shall be dated the date of its authentication. The Notes shall be
issuable as registered Notes in the minimum denomination of $100,000 and in
integral multiples of $1,000 in excess thereof (except for one Note of each
Class which may be issued in a denomination other than an integral multiple of
$1,000).
No Note shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose, unless there appears on such Note a certificate
of authentication substantially in the form provided for herein executed by the
Indenture Trustee by the manual signature of one of its authorized signatories,
and such certificate upon any Note shall be conclusive evidence, and the only
evidence, that such Note has been duly authenticated and delivered hereunder.
SECTION 2.3 Temporary Notes. 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 which are printed,
lithographed, typewritten, mimeographed or otherwise produced, of the tenor of
the Definitive Notes in lieu of which they are issued and with such variations
not inconsistent with the terms of this Indenture as the officers executing such
Notes may determine, as evidenced by their execution of such Notes.
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If temporary Notes are issued, the Issuer shall cause Definitive Notes to
be prepared without unreasonable delay. After the preparation of Definitive
Notes, the temporary Notes shall be exchangeable for Definitive Notes upon
surrender of the temporary Notes at the office or agency of the Issuer to be
maintained as provided in Section 3.2, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Notes, the Issuer shall
execute and the Indenture Trustee upon Issuer Order shall authenticate and
deliver in exchange therefor a like principal amount of Definitive Notes of
authorized denominations. Until so exchanged, the temporary Notes shall in all
respects be entitled to the same benefits under this Indenture as Definitive
Notes.
SECTION 2.4 Registration of Transfer and Exchange. The Issuer shall cause
to be kept a register (the "Note Register") in which, subject to such reasonable
regulations as it may prescribe, the Issuer shall provide for the registration
of Notes and the registration of transfers of Notes. The Indenture Trustee shall
initially be "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, 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, and the Indenture Trustee shall
have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof, and the Indenture Trustee shall have the right to
conclusively rely upon a certificate executed on behalf of Note Registrar by a
Responsible Officer thereof as to the names and addresses of the Noteholders and
the principal amounts and number of such Notes.
Upon surrender for registration of transfer of any Note at the office or
agency of the Issuer to be maintained as provided in Section 3.2, if the
requirements of Section 8-401 of the UCC are met, the Issuer shall execute and
upon its written request the Indenture Trustee shall authenticate and the
Noteholder shall obtain from the Indenture Trustee, in the name of the
designated transferee or transferees, one or more new Notes, in any authorized
denominations, of the same Class and a like aggregate outstanding principal
amount.
At the option of the related Noteholder, Notes may be exchanged for other
Notes in any authorized denominations, of the same Class and a like aggregate
outstanding 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 of the UCC are met the Issuer shall execute
and, upon Issuer Request, the Indenture Trustee shall authenticate and the
related Noteholder shall obtain from the Indenture Trustee, the Notes which the
Noteholder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be (i) duly endorsed by, or be accompanied by, a written
instrument of transfer in form and substance
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satisfactory to the Issuer and the Indenture Trustee duly executed by the
Noteholder thereof or its attorney-in-fact duly authorized in writing, with such
signature guaranteed by an "eligible grantor institution" meeting the
requirements of the Note Registrar which requirements include membership or
participation in a Securities Transfer Agents Medallion Program ("Stamp") or
such other "signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, Stamp, all in accordance with
the Exchange Act and (ii) accompanied by such other documents as the Indenture
Trustee may require.
No service charge shall be made to a Noteholder for any registration of
transfer or exchange of Notes, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 2.3 or Section 9.6 not involving any transfer.
The preceding provisions of this Section notwithstanding, the Issuer shall
not be required to make and the Note Registrar need not register transfers or
exchanges of any Notes selected for redemption or of any Note for a period of 15
days preceding the due date for any payment with respect to such Note.
By acquiring a Note, each purchaser and transferee shall be deemed to
represent and warrant that either (a) it is not acquiring such Note with the
plan assets of an "employee benefit plan" as defined in Section 3(3) of ERISA,
which is subject to Title I of ERISA, a "plan" as defined in Section 4975 of the
Code, an entity deemed to hold the plan assets of any of the foregoing or any
other employee benefit plan or retirement arrangement that is subject to a law
that is similar to Section 406 of ERISA or Section 4975 of the Code; or (b) the
acquisition, holding and disposition of such Note will not give rise to a
nonexempt prohibited transaction under Section 406 of ERISA, Section 4975 of the
Code or any similar applicable law.
The Indenture Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer imposed
under this Indenture or under applicable law with respect to any transfer of any
interest in any Note other than to require delivery of such certificates and
other documentation or evidence as are expressly required by, and to do so if
and when expressly required by the terms of, this Indenture, and to examine the
same to determine substantial compliance as to form with the express
requirements hereof.
SECTION 2.5 Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (ii) there is delivered to the Indenture Trustee such security or
indemnity as may be required by it to hold the Issuer and the Indenture Trustee
harmless, then, in the absence of notice to the Issuer, the Note Registrar or
the Indenture Trustee that such Note has been acquired by a "protected
purchaser" (as contemplated by Article 8 of the UCC), and provided that the
requirements of Section 8-405 of the UCC are met, the Issuer shall execute and
upon its written 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; provided that if any such destroyed, lost or stolen
Note, but not a mutilated Note, shall have become or within seven days shall be
due and payable, or shall have been called for redemption, instead of issuing a
replacement Note, the Issuer may upon delivery of the
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security or indemnity herein required pay such destroyed, lost or stolen Note
when so due or payable or upon the Redemption Date without surrender thereof.
If, after the delivery of such replacement Note or payment of a destroyed, lost
or stolen Note pursuant to the proviso to the preceding sentence, a "protected
purchaser" (as contemplated by Article 8 of the UCC) 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" (as contemplated by Article 8 of the UCC), 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.
Upon the issuance of any replacement Note under this Section 2.5, the
Issuer or the Indenture Trustee may require the payment by the Noteholder of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other reasonable expenses (including the fees and
expenses of the Indenture Trustee or the Note Registrar) connected therewith.
Every replacement Note issued pursuant to this Section 2.5 in replacement
of any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, and shall be entitled to all
the benefits of this Indenture equally and proportionately with any and all
other Notes duly issued hereunder.
The provisions of this Section 2.5 are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.6 Persons Deemed Owners. Prior to due presentment for
registration of transfer of any Note, the Issuer, the 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 neither the Issuer, the Indenture Trustee nor any agent of the
Issuer or the Indenture Trustee shall be affected by notice to the contrary.
SECTION 2.7 Payment of Principal and Interest; Defaulted Interest. (a) Each
Note shall accrue interest at its respective Interest Rate, and such interest
shall be payable on each Payment Date as specified therein, subject to Sections
3.1 and 8.2. Any installment of interest or principal, if any, payable on any
Note which is punctually paid or duly provided for by the Issuer on the
applicable Payment Date shall be paid to the Person in whose name such Note (or
one or more Predecessor Notes) is registered on the Record Date, by check mailed
first-class, postage prepaid, to such Person's address as it appears on the Note
Register on such Record Date, except that, unless Definitive Notes have been
issued pursuant to Section 2.12, with respect to Notes registered on the Record
Date in the name of the nominee of the Clearing Agency (initially, such nominee
to be Cede & Co.), payment will be made by wire transfer in immediately
available funds to the account designated by such nominee and except for the
final installment of principal
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payable with respect to such Note on a Payment Date or on the Final Scheduled
Payment Date for such Class (and except for the Redemption Price for any Note
called for redemption pursuant to Section 10.1) which shall be payable as
provided below. The funds represented by any such checks returned undelivered
shall be held in accordance with Section 3.3.
(b) The principal of each Note shall be payable in installments on each
Payment Date as provided in Section 8.2. Notwithstanding the foregoing, the
entire unpaid Note Balance and all accrued interest thereon shall be due and
payable, if not previously paid, on the earlier of (i) the date on which an
Event of Default shall have occurred and be continuing, if the Indenture Trustee
or the Holders of a majority of the Outstanding Note Balance, have declared the
Notes to be immediately due and payable in the manner provided in Section 5.2
and (ii) with respect to any Class of Notes, on the Final Scheduled Payment Date
for that Class. 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 Indenture
Trustee expects that the final installment of principal of and interest on such
Note will be paid. Such notice shall be transmitted prior to such final Payment
Date and shall specify that such final installment will be payable only upon
presentation and surrender of such Note and shall specify the place where such
Note may be presented and surrendered for payment of such installment. Notices
in connection with redemptions of Notes shall be mailed to Noteholders as
provided in Section 10.2.
(c) If the Issuer defaults in a payment of interest on any Class of Notes,
the Issuer shall pay defaulted interest (plus interest on such defaulted
interest to the extent lawful at the applicable Interest Rate for such Class of
Notes), which shall be due and payable on the Payment Date following such
default. The Issuer shall pay such defaulted interest to the Persons who are
Noteholders on the Record Date for such following Payment Date.
SECTION 2.8 Cancellation. All Notes surrendered for payment, registration
of transfer, exchange or redemption shall, if surrendered to any Person other
than the Indenture Trustee, be delivered to the Indenture Trustee and shall be
promptly cancelled by the Indenture Trustee. The Issuer may at any time deliver
to the Indenture Trustee for cancellation any Notes previously authenticated and
delivered hereunder which the Issuer may have acquired in any manner whatsoever,
and all Notes so delivered shall be promptly cancelled by the Indenture Trustee.
No Notes shall be authenticated in lieu of or in exchange for any Notes
cancelled as provided in this Section, except as expressly permitted by this
Indenture. All cancelled Notes may be held or disposed of by the Indenture
Trustee in accordance with its standard retention or disposal policy as in
effect at the time unless the Issuer shall direct by an Issuer Order that they
be destroyed or returned to it; provided that such Issuer Order is timely and
that such Notes have not been previously disposed of by the Indenture Trustee.
SECTION 2.9 Release of Collateral. Subject to Section 11.1, 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)
7
modifying the Issuer's obligations under TIA Sections 314(c) and 314(d)(1),
subject to Section 11.1 and the terms of the Transaction 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 2.10 Book-Entry Notes. The Notes, upon original issuance, will be
issued in the form of typewritten notes representing the Book-Entry Notes, to be
delivered to the Indenture Trustee, as agent for DTC, the initial Clearing
Agency, by, or on behalf of, the Issuer. One fully registered Note shall be
issued with respect to each $500 million in principal amount of each Class of
Notes and any such lesser amount. Such Notes shall initially be registered on
the Note Register in the name of Cede & Co., the nominee of the initial Clearing
Agency, and no Note Owner shall receive a Definitive Note representing such Note
Owner's interest in such Note, except as provided in Section 2.12. Unless and
until definitive, fully registered Notes (the "Definitive Notes") have been
issued to Note Owners pursuant to Section 2.12:
(a) the provisions of this Section shall be in full force and effect;
(b) the Note Registrar and the Indenture Trustee shall be entitled to deal
with the Clearing Agency for all purposes of this Indenture (including the
payment of principal of and interest on the Notes and the giving of instructions
or directions hereunder) as the sole Noteholders of the Notes, and shall have no
obligation to the Note Owners;
(c) to the extent that the provisions of this Section conflict with any
other provisions of this Indenture, the provisions of this Section shall
control;
(d) the rights of Note Owners shall be exercised only through the Clearing
Agency and shall be limited to those established by law and agreements between
or among such Note Owners and the Clearing Agency and/or the Clearing Agency
Participants or Persons acting through Clearing Agency Participants. Pursuant to
the Note Depository Agreement, unless and until Definitive Notes are issued
pursuant to Section 2.12, the initial Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and transmit
payments of principal of and interest on the Notes to such Clearing Agency
Participants; and
(e) whenever this Indenture requires or permits actions to be taken based
upon instructions or directions of Noteholders evidencing a specified percentage
of the aggregate outstanding principal amount of the Outstanding Notes, the
Clearing Agency shall be deemed to represent such percentage only to the extent
that it has received instructions to such effect from Note Owners and/or
Clearing Agency Participants or Persons acting through Clearing Agency
Participants owning or representing, respectively, such required percentage of
the beneficial interest in the Notes and has delivered such instructions to the
Indenture Trustee.
SECTION 2.11 Notices to Clearing Agency. Whenever a notice or other
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Note Owners pursuant to Section
2.12, the Indenture Trustee shall give all such notices and communications
specified herein to be given to the Noteholders to the Clearing Agency, and
shall have no obligation to the Note Owners.
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SECTION 2.12 Definitive Notes. If (a) 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 the Notes, and
the Administrator or the Indenture Trustee is unable to locate a qualified
successor, (b) 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 (c) after the occurrence of an Event of Default, Note Owners
representing beneficial interests aggregating at least a majority of the
aggregate outstanding principal amount of the Outstanding Notes, voting together
as a single class, advise the Indenture Trustee through the Clearing Agency or
its successor in writing that the continuation of a book-entry system through
the Clearing Agency or its successor is no longer in the best interests of the
Note Owners, then the Clearing Agency shall notify all Note Owners and the
Indenture Trustee of the occurrence of any such event and of the availability of
Definitive Notes to Note Owners requesting the same. Upon surrender to the
Indenture Trustee of the typewritten Note or Notes representing the Book-Entry
Notes by the Clearing Agency, accompanied by registration instructions, the
Issuer shall execute and the Indenture Trustee shall authenticate the Definitive
Notes in accordance with the instructions of the Clearing Agency. None of the
Issuer, the Note Registrar or the Indenture Trustee shall be liable for any
delay in delivery of such instructions and may conclusively rely on, and shall
be protected in relying on, such instructions. Upon the issuance of Definitive
Notes, the Indenture Trustee shall recognize the Holders of the Definitive Notes
as Noteholders.
The Definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without steel
engraved borders), all as determined by the officers executing such Notes, as
evidenced by their execution of such Notes.
SECTION 2.13 Authenticating Agents. (a) Upon the request of the Issuer, the
Indenture Trustee shall, and if the Indenture Trustee so chooses, 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, 2.4, 2.5 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 shall be deemed to
be the authentication of Notes "by the Indenture Trustee." The Indenture Trustee
shall be the Authenticating Agent in the absence of any appointment thereof.
(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 Issuer. 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
Issuer. Upon receiving such notice of resignation or upon such
9
termination, the Indenture Trustee may appoint a successor Authenticating Agent
and shall give written notice of any such appointment to the Issuer.
(d) The provisions of Section 6.4 shall be applicable to any Authenticating
Agent.
SECTION 2.14 Tax Treatment. The Issuer has entered into this Indenture, and
the Notes shall be issued, with the intention that, solely for federal, state
and local income and franchise tax purposes, the Notes shall qualify as
indebtedness secured by the Collateral. 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.
ARTICLE III COVENANTS
SECTION 3.1 Payment of Principal and Interest. The Issuer will duly and
punctually pay the principal of and interest on the Notes in accordance with the
terms of the Notes and this Indenture. Without limiting the foregoing and
subject to Section 8.2, on each Payment Date the Issuer shall cause to be paid
all amounts on deposit in the Collection Account which represent Available Funds
for such Payment Date, Advances made on such Payment Date pursuant to Section
4.3(c) of the Sale and Servicing Agreement and the Reserve Account Draw Amount
for such Payment Date received by the Servicer during the preceding Collection
Period. Amounts properly withheld under the Internal Revenue Code by any Person
from a payment to any Noteholder of interest and/or principal shall be
considered to have been paid by the Issuer to such Noteholder for all purposes
of this Indenture. Interest accrued on the Notes shall be due and payable on
each Payment Date. The final interest payment on each Class of Notes is due on
the earlier of (a) the Payment Date (including any Redemption Date) on which the
principal amount of that Class of Notes is reduced to zero or (b) the applicable
Final Scheduled Payment Date for that Class of Notes.
SECTION 3.2 Maintenance of Office or Agency. As long as any of the Notes
remain outstanding, 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, 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
Paying Agent, and no amounts so withdrawn therefrom for payments on the Notes
shall be paid over to the Issuer except as provided in this Section and Section
4.4 of the Sale and Servicing Agreement.
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(b) On or prior to each Payment Date and Redemption Date, the Issuer shall
deposit or cause to be deposited into the Collection Account an aggregate sum
sufficient to pay the amounts then becoming due under the Notes, and the Paying
Agent shall hold such sum to be held in trust for the benefit of the Persons
entitled thereto pursuant to the Transaction Documents and (unless the Paying
Agent is the Indenture Trustee) shall promptly notify the Indenture Trustee in
writing of its action or failure so to act.
(c) The Issuer shall cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee an instrument in which
such Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent, it hereby so agrees to the extent relevant),
subject to the provisions of this Section, that such Paying Agent shall:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and pay such sums to such Persons as provided in the
Transaction Documents;
(ii) give the Indenture Trustee written notice of any default by the
Issuer (or any other obligor upon the Notes) of which it has actual
knowledge in the making of any payment required to be made with respect to
the Notes;
(iii) at any time during the continuance of any such default, upon the
written request of the Indenture Trustee, forthwith pay to the Indenture
Trustee all sums so held in trust by such Paying Agent;
(iv) promptly resign as a Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of Notes if
at any time it ceases to meet the standards required to be met by a Paying
Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith.
(d) The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which such sums were held by such Paying Agent;
and upon such a payment by any Paying Agent to the Indenture Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
(e) Subject to applicable laws with respect to the escheat of funds, any
money held by the Indenture Trustee or any Paying Agent in trust for the payment
of any amount due with respect to any Note and remaining unclaimed for two years
after such amount has become due and payable shall be discharged from such trust
and distributed by the Indenture Trustee to the Issuer on receipt of an Issuer
Request and the Holder of such Note shall thereafter, as an
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unsecured general creditor, look only to the Issuer for payment thereof and all
liability of the Indenture Trustee or such Paying Agent with respect to such
trust money shall thereupon cease; provided, however, that the Indenture Trustee
or such Paying Agent, before being required to make any such payment, shall at
the reasonable expense of the Issuer cause to be published once, in an
Authorized Newspaper, notice that such money remains unclaimed and that, after a
date specified therein, which date shall not be less than 30 days from the date
of such publication, any unclaimed balance of such money then remaining shall be
paid to the Issuer. The Indenture Trustee may also adopt and employ, at the
written direction of and at the expense of the Issuer, any other reasonable
means of notification of such repayment (including, but not limited to, mailing
notice of such repayment to Holders whose Notes have been called but have not
been surrendered for redemption or whose right to or interest in monies due and
payable but not claimed is determinable from the records of the Indenture
Trustee or of any Paying Agent, at the last address of record for each such
Noteholder).
SECTION 3.4 Existence. The Issuer will keep in full effect its existence,
rights and franchises as a statutory trust under the laws of the State of
Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other State or of the United States of America,
in which case the Issuer shall keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and shall obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Trust Estate.
SECTION 3.5 Protection of Collateral. The Issuer intends the security
interest Granted pursuant to this Indenture in favor of the Indenture Trustee on
behalf of the Noteholders to be prior to all other Liens in respect of the
Collateral, and the Issuer shall take all actions necessary to obtain and
maintain, for the benefit of the Indenture Trustee on behalf of the Noteholders,
a first lien on and a first priority, perfected security interest in the
Collateral. 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,
all as prepared by the Administrator and delivered to the Issuer, and shall take
such other action necessary or advisable to:
(a) Grant more effectively all or any portion of the Collateral;
(b) maintain or preserve the lien and security interest (and the priority
thereof) created by this Indenture or carry out more effectively the purposes
hereof;
(c) perfect, publish notice of or protect the validity of any Grant made or
to be made by this Indenture;
(d) enforce any of the Collateral; or
(e) preserve and defend title to the Collateral and the rights of the
Indenture Trustee and the Noteholders in the Collateral against the claims of
all Persons.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact and hereby authorizes the Indenture Trustee to file all
financing statements, continuation statements
12
or other instruments required to be executed (if any) pursuant to this Section;
provided, however, the Indenture Trustee shall have no duty and shall not be
responsible for filing any financing or continuation statements or recording any
documents or instruments in any public office at any time or times or otherwise
perfecting or maintaining the perfection of any security interest.
Notwithstanding any statement to the contrary contained herein or in any other
Transaction Document, the Issuer shall not be required to notify any Dealer or
any insurer with respect to any Insurance Policy about any aspect of the
transactions contemplated by the Transaction Documents.
SECTION 3.6 Opinions as to Collateral. (a) On the Closing Date, the Issuer
shall furnish or cause to be furnished to the Indenture Trustee an Opinion of
Counsel to the effect that, in the opinion of such counsel, either (i) 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 filing of any financing statements and continuation
statements as are necessary to perfect and make effective the first priority
lien and security interest of this Indenture, and reciting the details of such
action, or (ii) no such action is necessary to make such lien and security
interest effective.
(b) Within [90] days after the beginning of each calendar year (commencing
with the year ended [_____]), the Issuer shall furnish to the Indenture Trustee
an Opinion of Counsel to the effect that, in the opinion of such counsel, either
(i) such action has been taken with respect to the recording, filing,
re-recording and refiling of this Indenture, any indentures supplemental hereto
and any other requisite documents, and with respect to the execution and filing
of any financing statements and continuation statements as are necessary to
maintain the lien and security interest created by this Indenture, and reciting
the details of such actions or (ii) 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 requisite documents and the execution and
filing of any financing statements and continuation statements that will, in the
opinion of such counsel, be required to maintain the lien and security interest
of this Indenture until [March 31] in the following calendar year.
SECTION 3.7 Performance of Obligations; Servicing of Receivables. (a) The
Issuer shall not take any action and shall use its reasonable efforts not to
permit any action to be taken by others, including the Administrator, that would
release any Person from any of such Person's material covenants or obligations
under any instrument or agreement included in the Collateral or that would
result in the amendment, hypothecation, subordination, termination or discharge
of, or impair the validity or effectiveness of, any such instrument or
agreement, except as ordered by any bankruptcy or other court or as expressly
provided in this Indenture, the Transaction Documents or such other instrument
or agreement.
(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 Administrator, and the Administrator has agreed, to assist
the Issuer in performing its duties under this Indenture.
13
(c) The Issuer shall, and shall cause the Administrator and the Servicer
to, punctually perform and observe all of its respective obligations and
agreements contained in this Indenture, the other Transaction Documents and the
instruments and agreements included in the Collateral, including but not limited
to preparing (or causing to prepared) and filing (or causing to be filed) all
UCC financing statements and continuation statements required to be filed by the
terms of this Indenture and the other Transaction Documents in accordance with
and within the time periods provided for herein and therein. Except as otherwise
expressly provided therein, the Issuer shall not waive, amend, modify,
supplement or terminate any Transaction Document or any provision thereof other
than in accordance with the amendment provisions set forth in such Transaction
Document.
SECTION 3.8 Negative Covenants. So long as any Notes are Outstanding, the
Issuer shall not:
(a) engage in any activities other than financing, acquiring, owning,
pledging and managing the Receivables and the other Collateral as contemplated
by this Indenture and the other Transaction Documents;
(b) except as expressly permitted by this Indenture or in the other
Transaction Documents, sell, transfer, exchange or otherwise dispose of any of
the properties or assets of the Issuer;
(c) claim any credit on, or make any deduction from the principal or
interest payable in respect of, the Notes (other than amounts properly withheld
from such payments under the Code or applicable state law) or assert any claim
against any present or former Noteholder by reason of the payment of the taxes
levied or assessed upon any part of the Trust Estate;
(d) dissolve or liquidate in whole or in part;
(e) (i) 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, (ii) permit any Lien (other than
Permitted Liens) to be created on or extend to or otherwise arise upon or burden
the assets of the Issuer or any part thereof or any interest therein or the
proceeds thereof or (iii) permit the lien of this Indenture not to constitute a
valid first priority (other than with respect to any Permitted Lien) security
interest in the Collateral;
(f) incur, assume or guarantee any indebtedness other than indebtedness
incurred in accordance with the Transaction Documents; or
(g) merge or consolidate with, or transfer substantially all of its assets
to, any other Person.
Notwithstanding any statement to the contrary contained herein or in any
other Transaction Document, the Issuer shall not be required to notify any
Dealer or any insurer with respect to any Insurance Policy about any aspect of
the transactions contemplated by the Transaction Documents.
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SECTION 3.9 Annual Compliance Statement.
(a) The Issuer shall deliver to the Indenture Trustee and each Rating
Agency, within [90] days after the end of each calendar year (commencing with
the year ending [_____]), an Officer's Certificate stating, as to the Authorized
Officer signing such Officer's Certificate, that:
(i) a review of the activities of the Issuer during such year and of
its performance under this Indenture has been made under such Authorized
Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based on such
review, the Issuer has complied with all conditions and covenants under
this Indenture throughout such year, or, if there has been a default in the
compliance of any such condition or covenant, specifying each such default
known to such Authorized Officer and the nature and status thereof.
(b) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the Issuer
is required (if at all) to file the same with the Commission, copies of the
annual reports and such other information, documents and reports (or copies
of such portions of any of the foregoing as the Commission may from time to
time by rules and regulations prescribe) as the Issuer may be required to
file with the Commission pursuant to Section 13 or 15(d) of the Exchange
Act or such other reports required pursuant to TIA Section 314(a)(1);
(ii) file with the Indenture Trustee and the Commission in accordance
with rules and regulations prescribed from time to time by the Commission
such other 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 as required by 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 3.9(b) as may
be required pursuant to rules and regulations prescribed from time to time
by the Commission.
(c) Delivery of such reports, information and documents to the Indenture
Trustee is for informational purposes only and the Indenture Trustee's receipt
of such shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the
Issuer's compliance with any of its covenants hereunder (as to which the
Indenture Trustee is entitled to rely exclusively on Officer's Certificates).
(d) Unless the Issuer otherwise determines, the fiscal year of the Issuer
shall be the same as the fiscal year of the Servicer.
SECTION 3.10 Restrictions on Certain Other Activities. The Issuer shall
not: (i) engage in any activities other than financing, acquiring, owning,
pledging and managing the Trust Estate and the other Collateral in the manner
contemplated by the Transaction Documents; (ii) issue,
15
incur, assume, guarantee or otherwise become liable, directly or indirectly, for
any indebtedness other than the Notes; (iii) make any loan, advance or credit
to, 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, 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; or (iv) make any expenditure (by
long-term or operating lease or otherwise) for capital assets (either realty or
personalty).
SECTION 3.11 Restricted Payments. The Issuer shall not, directly or
indirectly, (a) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the Issuer or to the Servicer or the Administrator, (b) redeem,
purchase, retire or otherwise acquire for value any such ownership or equity
interest or security or (c) set aside or otherwise segregate any amounts for any
such purpose; provided that the Issuer may cause to be made distributions to the
Servicer, the Administrator, the Owner Trustee, the Indenture Trustee, the
Noteholders and the Certificateholders as permitted by, and to the extent funds
are available for such purpose under, this Indenture, the Sale and Servicing
Agreement, the Administration Agreement or the Trust Agreement. Other than as
set forth in the preceding sentence, the Issuer will not, directly or
indirectly, make distributions from the Trust Accounts.
SECTION 3.12 Notice of Events of Default. The Issuer shall promptly deliver
to the Indenture Trustee and each Rating Agency written notice in the form of an
Officer's Certificate of any event which with the giving of notice, the lapse of
time or both would become an Event of Default, its status and what action the
Issuer is taking or proposes to take with respect thereto.
SECTION 3.13 Further Instruments and Acts. Upon request of the Indenture
Trustee, the Issuer will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 3.14 Compliance with Laws. The Issuer shall comply with the
requirements of all applicable laws, the non-compliance with which would,
individually or in the aggregate, materially and adversely affect the ability of
the Issuer to perform its obligations under the Notes, this Indenture or any
other Transaction Document.
SECTION 3.15 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.
SECTION 3.16 Perfection Representations, Warranties and Covenants. The
perfection representations, warranties and covenants attached hereto as Schedule
I shall be deemed to be part of this Indenture for all purposes.
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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 (a) rights
of registration of transfer and exchange, (b) substitution of mutilated,
destroyed, lost or stolen Notes, (c) rights of Noteholders to receive payments
of principal thereof and interest thereon, (d) Sections 3.3, 3.4, 3.5, 3.8, 3.10
and 3.11, (e) 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 4.2) and (f) 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 (i) all Notes theretofore authenticated and delivered (other
than (1) Notes that have been destroyed, lost or stolen and that have been
replaced or paid as provided in Section 2.5 and (2) Notes for which 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 (ii) all Notes not theretofore delivered to the Indenture
Trustee for cancellation (1) have become due and payable, (2) will become due
and payable at the Final Scheduled Payment Date within one year, or (3) are to
be called for redemption within one year under arrangements satisfactory to the
Indenture Trustee for the giving of notice of redemption by the Indenture
Trustee in the name, and at the expense, of the Issuer, and the Issuer, in the
case of clauses (1), (2) or (3), has irrevocably deposited or caused to be
irrevocably deposited with the Indenture Trustee cash or direct obligations of
or obligations guaranteed by the United States of America (which will mature
prior to the date such amounts are payable), in trust for such purpose, in an
amount sufficient to pay and discharge the entire indebtedness on such Notes not
theretofore delivered to the Indenture Trustee for cancellation, when due, to
the Final Scheduled Payment Date or Redemption Date (if Notes shall have been
called for redemption pursuant to Section 10.1), as the case may be;
(b) the Issuer has paid or caused to be paid all other sums payable
hereunder by the Issuer; or
(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) a 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, in
the case of an Officer's Certificate, stating that the Rating Agency Condition
has been satisfied).
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, this Indenture and Article
IV of the Sale and Servicing Agreement. Such monies need not be segregated from
other funds except to the extent required herein, in the Sale and Servicing
Agreement or by law.
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SECTION 4.3 Repayment of Monies Held by Paying Agent. In connection with
the satisfaction and discharge of this Indenture with respect to the Notes, all
monies then held by any Paying Agent other than the Indenture Trustee under the
provisions of this Indenture with respect to such Notes shall, upon demand of
the Issuer, be paid to the Indenture Trustee to be held and applied according to
Section 3.3 and thereupon such Paying Agent shall be released from all further
liability with respect to such monies.
ARTICLE V REMEDIES
SECTION 5.1 Events of Default. The occurrence and continuation of any one
of the following events (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body) shall constitute a
default under this Indenture (each, an "Event of Default"):
(a) default in the payment of any interest on any Note when the
same becomes due and payable, and such default shall continue for a
period of five days;
(b) default in the payment of principal of any Note at the
related Final Scheduled Payment Date or the Redemption Date;
(c) any failure by the Issuer to duly observe or perform in any
material respect any of its material covenants or agreements made in
this Indenture (other than a covenant or agreement, a default in the
observance or performance of which is elsewhere in this Section
specifically dealt with), which failure materially and adversely
affects the interests of the Noteholders, and such failure shall
continue unremedied for a period of 90 days after there shall have
been given, by registered or certified mail, to the Issuer by the
Indenture Trustee or by Noteholders evidencing at least a majority of
the aggregate outstanding principal amount of the Outstanding Notes, a
written notice specifying such failure and requiring it to be remedied
and stating that such notice is a "Notice of Default" hereunder;
(d) any representation or warranty of the Issuer made in this
Indenture proves to have been incorrect in any material respect when
made, which failure materially and adversely affects the interests of
the Noteholders, and which failure continues unremedied for 90 days
after there shall have been given, by registered or certified mail, to
the Issuer by the Indenture Trustee or by Noteholders evidencing at
least a majority of the aggregate outstanding principal amount of the
Outstanding Notes, a written notice specifying such failure and
requiring it to be remedied and stating that such notice is a "Notice
of Default" hereunder; or
(e) a Bankruptcy Event with respect to the Issuer;
provided, however, that a delay in or failure of performance referred to under
clauses (a), (b) (c) or (d) above for a period of 120 days will not constitute
an Event of Default if that delay or failure was caused by force majeure or
other similar occurrence.
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SECTION 5.2 Acceleration of Maturity; Waiver of Event of Default. (a)
Except as set forth in the following sentence, if an Event of Default should
occur and be continuing, then and in every such case the Indenture Trustee may,
or if directed by the Noteholders representing not less than a majority of the
Outstanding Note Balance, shall 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. If an Event of
Default specified in Section 5.1(e) occurs, all unpaid principal, together with
all accrued and unpaid interest thereon, of all Notes, and all other amounts
payable hereunder, shall automatically become due and payable without any
declaration or other act on the part of the Indenture Trustee or any Noteholder.
(b) At any time after such declaration of acceleration of maturity has been
made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee as hereinafter provided for in this Article V,
the Noteholders representing a majority of the Outstanding Note Balance, 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.
If the Notes have been declared due and payable or have automatically
become due and payable following an Event of Default, the Indenture Trustee may
institute proceedings to collect amounts due, exercise remedies as a secured
party (including foreclosure or sale of the Collateral) or elect to maintain the
Collateral and continue to apply the proceeds from the Collateral as if there
had been no declaration of acceleration. Any sale of the Collateral by the
Indenture Trustee will be subject to the terms and conditions of Section 5.4.
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by the
Indenture Trustee. (a) The Issuer covenants that if (i) default is made in the
payment of any interest on any Note when the same becomes due and payable, and
such default continues for a period of five days, or (ii) default is made in the
payment of the principal of or any installment of the principal of any Note when
the same becomes due and payable, the Issuer will, upon demand of the Indenture
Trustee in writing as directed by a majority of the Outstanding Note Balance,
pay to the Indenture Trustee, for the benefit of the Holders of the Notes, the
whole amount then due and payable on such Notes for principal and interest, with
interest upon the overdue principal, and, to
19
the extent payment at such rate of interest shall be legally enforceable, upon
overdue installments of interest, at the applicable Interest Rate and in
addition thereto such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee and its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay the amounts described in
clause (a) above 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 shall have occurred and is continuing, the
Indenture Trustee may, as more particularly provided in Section 5.4, in its
discretion, proceed to protect and enforce its rights and the rights of the
Noteholders, by such appropriate proceedings as the Indenture Trustee shall deem
most effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy or
legal or equitable right vested in the Indenture Trustee by this Indenture or by
law.
(d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Collateral, proceedings under the Bankruptcy Code or any other applicable
federal or state bankruptcy, insolvency or other similar law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Issuer or its property or such other obligor or Person, or in
case of any other comparable judicial proceedings relative to the Issuer or
other obligor upon the Notes, or to the creditors or property of the Issuer or
such other obligor, the Indenture Trustee, irrespective of whether the principal
of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes and to file
such other papers or documents as may be necessary or advisable in order to
have the claims of the Indenture Trustee (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 made, by the Indenture Trustee and each predecessor Indenture
Trustee, except as a result of negligence, bad faith or willful misconduct)
and of the Noteholders allowed in such proceedings;
(ii) unless prohibited by applicable law and regulations, to vote on
behalf of the Holders of Notes in any election of a trustee, a standby
trustee or person performing similar functions in any such proceedings;
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(iii) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute all amounts received with
respect to the claims of the Noteholders and of the Indenture Trustee on
their behalf; and
(iv) to file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Indenture
Trustee or the Noteholders allowed in any judicial proceedings relative to
the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such proceeding is hereby authorized by each Noteholder 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 made, by the Indenture Trustee and each
predecessor Indenture Trustee except as a result of negligence, bad faith or
willful misconduct, and any other amounts due the Indenture Trustee under
Section 6.7.
(e) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar person.
(f) All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
proceedings relative thereto, and any such action or proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the Notes.
(g) In any proceedings brought by the Indenture Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Noteholders, and it shall not be necessary to make any
Noteholder a party to any such proceedings.
SECTION 5.4 Remedies; Priorities. (a) If an Event of Default shall have
occurred and be continuing, the Indenture Trustee may do one or more of the
following (subject to Sections 5.2 and 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
21
thereto, whether by declaration or otherwise, enforce any judgment
obtained, and collect from the Issuer and any other obligor upon such Notes
monies adjudged due;
(ii) institute proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Collateral;
(iii) exercise any other 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) subject to Section 5.17, after an acceleration of the maturity of
the Notes pursuant to Section 5.2, sell the Collateral 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, that the Indenture Trustee may not sell or otherwise
liquidate the Collateral following an Event of Default unless (A) the holders of
100% of the Outstanding Note Balance have consented to such liquidation, (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) the default relates
to the failure to pay interest or principal when due (a "Payment Default") and
the Indenture Trustee determines (but shall have no obligation to make such
determination) that the Collections on the Receivables will not be sufficient on
an ongoing basis to make all payments on the Notes as they would have become due
if the Notes had not been declared due and payable; and the Indenture Trustee
obtains the consent of the holders of 66-2/3% of the Outstanding Note Balance.
In determining such sufficiency or insufficiency with respect to clauses (B) and
(C) of the preceding sentence, the Indenture Trustee may, but need not, obtain
and rely upon an opinion of an Independent investment banking or accounting firm
of national reputation as to the feasibility of such proposed action and as to
the sufficiency of the Trust Estate for such purpose. Notwithstanding anything
herein to the contrary, if the Event of Default does not relate to a Payment
Default or Bankruptcy Event with respect to the Issuer, the Indenture Trustee
may not sell or otherwise liquidate the Trust Estate unless the Holders of all
Outstanding Notes consent to such sale or the proceeds of such sale are
sufficient to pay in full the principal of and accrued interest on the
Outstanding Notes.
(b) Notwithstanding the provisions of Section 8.2 of this Indenture or
Section 4.4 of the Sale and Servicing Agreement, if the Indenture Trustee
collects any money or property pursuant to this Article V and the Notes have
been accelerated, it shall pay out such money or property (and other amounts,
including all amounts held on deposit in the Reserve Account) held as Collateral
for the benefit of the Noteholders (net of liquidation costs associated with the
sale of the Trust Estate) in the following order of priority:
(i) first, to the Indenture Trustee and the Owner Trustee, any accrued
and unpaid fees (including any unpaid Indenture Trustee or Owner Trustee
fees with respect to prior periods) and reasonable expenses and indemnity
payments which have not previously been paid; provided that aggregate
expenses payable to the Indenture Trustee and the Owner Trustee pursuant to
this clause (i) shall be limited to $100,000 per annum in the aggregate;
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(ii) second, to the Servicer (or any predecessor Servicer, if
applicable), for reimbursement of all outstanding Advances;
(iii) third, to the Servicer, the Servicing Fee and all unpaid
Servicing Fees with respect to prior periods;
(iv) fourth, to the Noteholders, for payment to each respective Class
of Noteholders, the Accrued Note Interest for the related Interest Period;
provided that if there are not sufficient funds available to pay the entire
amount of the Accrued Note Interest, the amounts available shall be applied
to the payment of such interest on the Notes on a pro rata basis based upon
the amount of interest payable to each Class of Notes;
(v) fifth, to the Holders of the Class A-1 Notes in respect of
principal thereof until the Class A-1 Notes have been paid in full;
(vi) sixth, to the Holders of the Class A-2 Notes, Class A-3 Notes and
Class A-4 Notes, in respect of principal thereon, on a pro rata basis
(based on the aggregate outstanding principal amount of the Outstanding
Notes of each Class on such Payment Date), until all Classes of the Notes
have been paid in full;
(vii) seventh, to the Indenture Trustee and the Owner Trustee, any
accrued and unpaid fees, reasonable expenses and indemnity payments which
have not previously been paid;
(viii) eighth, to the Certificateholder, in respect of the principal
thereof until the Certificate has been paid in full; and
(ix) ninth, any remaining funds shall be distributed to or at the
direction of the Seller.
The Indenture Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section. At least 15 days before such
record date, the Issuer shall mail to each Noteholder and the Indenture Trustee
a notice that states the record date, the payment date and the amount to be
paid.
Prior to an acceleration of the Notes after an Event of Default, if the
Indenture Trustee collects any money or property pursuant to this Article V,
such amounts shall be deposited into the Collection Account and distributed in
accordance with Section 4.4 of the Sale and Servicing Agreement and Section 8.2
hereof.
SECTION 5.5 Optional Preservation of the Collateral. If the Notes have been
declared or are automatically due and payable under Section 5.2 following an
Event of Default and such declaration or automatic occurrence and its
consequences have not been rescinded and annulled, if permitted hereunder, the
Indenture Trustee may, but need not, elect to maintain possession of the Trust
Estate and continue to apply the proceeds thereof in accordance with Section
5.4(b). It is the intent 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
23
intent into account when determining whether or not to maintain possession of
the Collateral. In determining whether to maintain possession of the Collateral,
the Indenture Trustee may, but need not, obtain and rely upon an opinion of an
Independent investment banking or accounting firm of national reputation as to
the feasibility of such proposed action and as to the sufficiency of the
Collateral for such purpose.
SECTION 5.6 Limitation of Suits. (a) No Holder of any Note shall have any
right to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(i) such Holder has previously given written notice to the Indenture
Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Outstanding Note Balance
have made written request to the Indenture Trustee to institute such
proceeding in respect of such Event of Default in its own name as the
Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture Trustee
indemnity reasonably satisfactory to it against the costs, expenses and
liabilities to be incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such
proceedings; and
(v) no direction inconsistent with such written request has been given
to the Indenture Trustee during such 60-day period by the Holders of a
majority of the Outstanding Note Balance.
No Noteholder or group of 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 each case, to the extent and
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
representing less than a majority of the Outstanding Note Balance, the Indenture
Trustee in its sole discretion may determine what action, if any, shall be
taken, notwithstanding any other provisions of this Indenture.
(b) No Noteholder shall have any right to vote except as provided pursuant
to this Indenture and the Notes, nor any right in any manner to otherwise
control the operation and management of the Issuer. However, in connection with
any action as to which Noteholders are entitled to vote or consent under this
Indenture and the Notes, the Issuer may set a record date for purposes of
determining the identity of Noteholders entitled to vote or consent in
accordance with TIA Section 316(c).
SECTION 5.7 Unconditional Rights of Noteholders To Receive Principal and
Interest. Notwithstanding any other provisions in this Indenture, the Holder of
any Note shall have the
24
right, which is absolute and unconditional, to receive payment of the principal
of and interest on such Note on or after the respective due dates thereof
expressed in such Note or in this Indenture (or, in the case of redemption, on
or after the Redemption Date) and to institute suit for the enforcement of any
such payment and such right shall not be impaired without the consent of such
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 Holder of any Note to exercise any right or remedy
accruing upon any Default or Event of Default shall impair any such right or
remedy or constitute a waiver of any such Default or Event of Default or an
acquiescence therein. Every right and remedy given by this Article 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. Subject to the provisions of Sections
5.4, 5.6, 6.2(d) and 6.2(e), Noteholders holding not less than a majority of the
Outstanding Note Balance, shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Indenture
Trustee with respect to the Notes or with respect to the exercise of 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 the proviso and the last
sentence of Section 5.4(a), any direction to the Indenture Trustee to
sell or liquidate the Trust Estate shall be by the Holders of Notes
representing not less than 100% of the aggregate outstanding principal
amount of the Outstanding Notes unless the proceeds of such sale are
sufficient to pay in full the principal of and accrued interest on the
Outstanding Notes;
25
(c) if the conditions set forth in Section 5.5 have been
satisfied and the Indenture Trustee elects to retain the Trust Estate
pursuant to such Section, then any direction to the Indenture Trustee
by Holders of Notes representing less than 100% of the aggregate
outstanding principal amount of the Outstanding Notes to sell or
liquidate the Trust Estate shall be of no force and effect;
(d) the Indenture Trustee may take any other action deemed proper
by the Indenture Trustee that is not inconsistent with such direction,
applicable law and the terms of this Indenture; and
(e) such direction shall be in writing;
provided, further, that, subject to Section 6.1, the Indenture Trustee need not
take any action that it determines might 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 of not less than a majority of the Outstanding Note Balance,
may waive any past Default or Event of Default and its consequences except a
Default (a) in payment of principal of or interest on any of the Notes, (b) in
respect of a covenant or provision hereof which cannot be modified or amended
without the consent of each Noteholder or (c) arising from a Bankruptcy Event
with respect to the Issuer. 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 or Event of Default shall cease to exist
and be deemed to have been cured and not to have occurred, and any Event of
Default arising therefrom shall be deemed to have been cured and not to have
occurred, for every purpose of this Indenture; but no such waiver shall extend
to any prior, 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 the
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to (a) any suit instituted by the
Indenture Trustee, (b) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the
aggregate outstanding principal amount of the Outstanding Notes or (c) any suit
instituted by any Noteholder for the enforcement of the payment of principal of
or interest on any Note on or after the respective due dates expressed in such
Note and in this Indenture (or, in the case of redemption, on or after the
Redemption Date).
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SECTION 5.14 Waiver of Stay or Extension Laws. The Issuer covenants (to the
extent that it may lawfully do so) that it will not at any time insist upon, or
plead or in any manner whatsoever, claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture; and
the Issuer (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Indenture
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
SECTION 5.15 Action on Notes. The Indenture Trustee's right to seek and
recover judgment on the Notes or under this Indenture shall not be affected by
the seeking, obtaining or application of any other relief under or with respect
to this Indenture. Neither the lien of this Indenture nor any rights or remedies
of the Indenture Trustee or the Noteholders shall be impaired by the recovery of
any judgment by the Indenture Trustee against the Issuer or by the levy of any
execution under such judgment upon any portion of the Trust Estate or upon any
of the assets of the Issuer. Any money or property collected by the Indenture
Trustee shall be applied in accordance with Section 5.4(b), if the maturity of
the Notes has been accelerated pursuant to Section 5.2, or Section 4.4 of the
Sale and Servicing Agreement and Section 8.2 of this Indenture, if the maturity
of the Notes has not been accelerated.
SECTION 5.16 Performance and Enforcement of Certain Obligations. (a)
Promptly following a request from the Indenture Trustee to do so, the Issuer
shall take all such lawful action as the Indenture Trustee may request to compel
or secure the performance and observance (i) by the Seller and the Servicer, as
applicable, of each of their obligations to the Issuer under or in connection
with the Sale and Servicing Agreement, or (ii) by the Seller or VCI, as
applicable, of each of their obligations under or in connection with the
Purchase Agreement, in each case, in accordance with the terms thereof, and to
exercise any and all rights, remedies, powers and privileges lawfully available
to the Issuer under or in connection with the Sale and Servicing Agreement and
the Purchase Agreement, as the case may be, 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, the Servicer or VCI 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 or by the Seller or VCI, as applicable,
of each of their obligations under or in connection with the Purchase 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) of the
Holders of a majority of the Outstanding Note Balance shall, exercise all
rights, remedies, powers, privileges and claims of the Issuer against the Seller
or the Servicer under or in connection with the Sale and Servicing Agreement or
against the Seller or VCI under the Purchase Agreement, including the right or
power to take any action to compel or secure performance or observance by the
Seller, the Servicer or VCI of each of their obligations to the Issuer
thereunder and to give any consent, request, notice, direction, approval,
extension or waiver under the Sale and Servicing Agreement or the Purchase
Agreement, as applicable, and any right of the Issuer to take such action shall
be suspended.
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SECTION 5.17 Sale of Collateral. If the Indenture Trustee acts to sell the
Collateral or any part thereof, pursuant to Section 5.4(a), the Indenture
Trustee shall publish a notice in an Authorized Newspaper stating that the
Indenture Trustee intends to effect such a sale in a commercially reasonable
manner and on commercially reasonable terms, which shall include the
solicitation of competitive bids. Following such publication, the Indenture
Trustee shall, unless otherwise prohibited by applicable law from any such
action, sell the Collateral or any part thereof, in such manner and on such
terms as provided above to the highest bidder, provided, however, that the
Indenture Trustee may from time to time postpone any sale by public announcement
made at the time and place of such sale. The Indenture Trustee shall give notice
to the Seller and the Servicer of any proposed sale, and the Seller, the
Servicer or any Affiliate thereof shall be permitted to bid for the Collateral
at any such sale. The Indenture Trustee may obtain a prior determination from a
conservator, receiver or trustee in bankruptcy of the Issuer that the terms and
manner of any proposed sale are commercially reasonable. The power to effect any
sale of any portion of the Collateral pursuant to Section 5.4 and this Section
5.17 shall not be exhausted by any one or more sales as to any portion of the
Collateral remaining unsold, but shall continue unimpaired until the entire
Collateral shall have been sold or all amounts payable on the Notes shall have
been paid.
ARTICLE VI THE INDENTURE TRUSTEE
SECTION 6.1 Duties of the Indenture Trustee. (a) If an Event of Default has
occurred and is continuing, the Indenture Trustee shall exercise the rights and
powers vested in it by this Indenture and shall 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) Prior to the occurrence 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 the other
Transaction Documents to which it is a party and no implied covenants or
obligations shall be read into this Indenture or the other Transaction
Documents against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; but in the case of any such certificates or
opinions which by any provisions hereof are specifically required to be
furnished to the Indenture Trustee, the Indenture Trustee shall examine the
certificates and opinions to determine whether or not they conform to the
requirements of this Indenture (but need not confirm or investigate the
accuracy of mathematical calculations or other facts stated therein).
(c) The Indenture Trustee shall 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;
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(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is proved
that the Indenture Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Indenture Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.11.
(d) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Indenture Trustee shall not be liable for interest on any money
received by it except as the Indenture Trustee may agree in writing with the
Issuer.
(f) Money held in trust by the Indenture Trustee need not be segregated
from other funds except to the extent required by law or the terms of this
Indenture or the Sale and Servicing Agreement.
(g) No provision of this Indenture or any other Transaction Document 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
thereunder 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 indemnity
satisfactory to it against such risk or liability is not reasonably assured to
it.
(h) Every provision of this Indenture and each other Transaction Document
relating to the conduct or affecting the liability of or affording protection to
the Indenture Trustee shall be subject to the provisions of this Section and to
the provisions of the TIA.
(i) The Indenture Trustee shall take all actions required to be taken by
the Indenture Trustee under the Sale and Servicing Agreement.
SECTION 6.2 Rights of the Indenture Trustee. Subject to the provisions of
Section 6.1:
(a) The Indenture Trustee may conclusively rely on any document believed by
it to be genuine and to have been signed or presented by the proper person. The
Indenture Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel, as applicable. The
Indenture Trustee shall not be liable for any action it takes, suffers or omits
to take in good faith in reliance on such Officer's Certificate or Opinion of
Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers hereunder
or under any of the Transaction Documents to which the Indenture Trustee is a
party or perform any duties hereunder or under any of the Transaction Documents
to which the Indenture Trustee is a party 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, the Administrator, any co-trustee or separate trustee appointed
in accordance
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with the provisions of Section 6.10, or any other 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 reasonably believes to be authorized or
within discretion or rights or powers conferred upon it by this Indenture;
provided, however, that the Indenture Trustee's conduct does not constitute
willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture, the
Notes and any Transaction Documents to which the Indenture Trustee is a party
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 under this Indenture or in relation to this Indenture 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 satisfactory to the Indenture Trustee against
the reasonable costs, expenses, disbursements, advances and liabilities that
might be incurred by it, its agents and its counsel in compliance with such
request or direction.
(g) The Indenture Trustee shall not be deemed to have notice of any Default
or Event of Default unless a Responsible Officer of the Indenture Trustee has
actual knowledge thereof or unless written notice of any event which is in fact
such a default is received by the Indenture Trustee at the Corporate Trust
Office of the Indenture Trustee, and such notice references the Notes and this
Indenture.
SECTION 6.3 Individual Rights of the Indenture Trustee. Subject to Section
310 of the TIA, the Indenture Trustee in its individual or any other capacity
may become the owner or pledgee of Notes and may otherwise deal with the Seller,
the Owner Trustee, the Administrator and their respective Affiliates with the
same rights it would have if it were not the Indenture Trustee, and the Seller,
the Owner Trustee, the Administrator and their respective Affiliates may
maintain normal commercial banking and investment banking relationships with the
Indenture Trustee and its Affiliates. Any Paying Agent, Note Registrar,
co-registrar, co-paying agent, co-trustee or separate trustee may do the same
with like rights. However, the Indenture Trustee must comply with Section 6.11.
SECTION 6.4 The Indenture Trustee's Disclaimer. The Indenture Trustee shall
not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, shall not be accountable for the
Issuer's use of the proceeds from the Notes, and shall not be responsible for
any statement of the Issuer in the 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 the statements of the Issuer, other than the Indenture Trustee's
certificate of authentication.
SECTION 6.5 Notice of Defaults. If a Default occurs and is continuing and
if it is either actually known by a Responsible Officer of the Indenture Trustee
or written notice of the
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existence thereof has been delivered to a Responsible Officer of the Indenture
Trustee, the Indenture Trustee shall mail to each Noteholder and the Rating
Agencies notice of the Default within 90 days after such knowledge or notice
occurs. Except in the case of a Default in payment of principal of or interest
on any Note (including payments pursuant to the mandatory redemption provisions
of such Note), the Indenture Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of Noteholders.
SECTION 6.6 Reports by the Indenture Trustee to Noteholders. The Indenture
Trustee, at the expense of the Issuer, shall deliver to each Noteholder, not
later than the latest date permitted by law, such information as may be required
by law to enable such Holder to prepare its federal and state income tax
returns.
SECTION 6.7 Compensation and Indemnity. The Issuer shall cause the Servicer
pursuant to the Sale and Servicing Agreement to, (i) pay to the Indenture
Trustee from time to time such compensation as the Servicer and the Indenture
Trustee shall from time to time agree in writing for services rendered by the
Indenture Trustee hereunder in accordance with a fee letter between the Servicer
and the Indenture Trustee, (ii) reimburse the Indenture Trustee for all
reasonable expenses, advances and disbursements reasonably incurred by it in
connection with the performance of its duties as Indenture Trustee and (iii)
indemnify the Indenture Trustee for, and hold it harmless against, any and all
loss, liability or expense (including reasonable attorneys' fees) incurred by it
in connection with the administration of the trust or trusts hereunder or the
performance of its duties as Indenture Trustee. The Indenture Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Indenture Trustee shall notify the Issuer and the Servicer
promptly of any claim for which it may seek indemnity. Failure by the Indenture
Trustee to so notify the Issuer and the Servicer shall not relieve the Issuer or
the Servicer of its obligations hereunder. The Issuer shall, or shall cause the
Servicer to, defend any such claim, and the Indenture Trustee may have separate
counsel and the Issuer shall, or shall cause the Servicer to, pay the fees and
expenses of such counsel. The Indenture Trustee shall not be indemnified by the
Administrator, the Issuer, the Transferor or the Servicer against any loss,
liability or expense incurred by it through its own willful misconduct,
negligence or bad faith, except that the Indenture Trustee shall not be liable
(i) for any error of judgment made by it in good faith unless it is proved that
the Indenture Trustee was negligent in ascertaining the pertinent facts, (ii)
with respect to any action it takes or omits to take in good faith in accordance
with a direction received by it from the Noteholders in accordance with the
terms of this Indenture and (iii) for interest on any money received by it
except as the Indenture Trustee and the Issuer may agree in writing.
The compensation and indemnity obligations to the Indenture Trustee
pursuant to this Section shall survive the discharge of this Indenture. When the
Indenture Trustee incurs expenses after the occurrence of an Event of Default
set forth in Section 5.1(e) with respect to the Issuer, the expenses are
intended to constitute expenses of administration under the Bankruptcy Code or
any other applicable federal or state bankruptcy, insolvency or similar law.
SECTION 6.8 Removal, Resignation and Replacement of the Indenture Trustee.
The Indenture Trustee may resign at any time by so notifying the Issuer, the
Administrator, the Servicer and each Rating Agency. The Holders of a majority of
the Outstanding Note Balance
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may remove the Indenture Trustee without cause by so notifying the Indenture
Trustee and the Issuer, and following that removal may appoint a successor to
the Indenture Trustee. The Issuer shall remove the Indenture Trustee if:
(a) the Indenture Trustee fails to comply with Section 6.11;
(b) a Bankruptcy Event occurs with respect to the Indenture
Trustee;
(c) a receiver or other public officer takes charge of the
Indenture Trustee or its property; or
(d) 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 the Indenture Trustee for any reason (the Indenture Trustee in
such event being referred to herein as the retiring Indenture Trustee), the
Issuer shall promptly appoint a successor Indenture Trustee which satisfies the
requirements set forth in Section 6.11.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuer. Thereupon the
resignation or removal of the retiring Indenture Trustee shall become effective,
and the successor Indenture Trustee, without any further act, deed or
conveyance, shall have all the rights, powers and duties of the Indenture
Trustee under this Indenture subject to satisfaction of the Rating Agency
Condition. The successor Indenture Trustee shall mail a notice of its succession
to Noteholders. The retiring Indenture Trustee shall promptly transfer all
property held by it as the Indenture Trustee to the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days after
the retiring Indenture Trustee resigns or is removed, the retiring Indenture
Trustee, the Issuer or the Holders of a majority of the Outstanding Note Balance
may petition any court of competent jurisdiction, at the expense of the Issuer,
for the appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any Noteholder
may petition any court of competent jurisdiction for the removal of the
Indenture Trustee and the appointment of a successor Indenture Trustee.
Any resignation or removal of the Indenture Trustee and appointment of a
successor Indenture Trustee pursuant to any of the provisions of this Section
shall not become effective until acceptance of appointment by the successor
Indenture Trustee pursuant to this Section 6.8 and payment of all fees and
expenses owed to the outgoing Indenture Trustee.
Notwithstanding the resignation or removal of the Indenture Trustee
pursuant to this Section, the Issuer's and the Administrator's obligations under
Section 6.7 shall continue for the benefit of the retiring Indenture Trustee.
The Indenture Trustee shall not be liable for the acts or omissions of any
successor Indenture Trustee.
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SECTION 6.9 Successor Indenture Trustee by Merger. Subject to Section 6.11,
if the Indenture Trustee consolidates with, merges or converts into, or
transfers all or substantially all its corporate trust business or assets to,
another corporation or banking association, the resulting, surviving or
transferee corporation without any further act shall be the successor Indenture
Trustee, provided that such corporation or banking association shall be
otherwise qualified and eligible under Section 6.11. The Indenture Trustee shall
provide each Rating Agency and the Administrator prior written notice of any
such transaction.
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.
SECTION 6.10 Appointment of Co-Indenture Trustee or Separate Indenture
Trustee. (a) Notwithstanding any other provisions of this Indenture, at any
time, after delivering written notice to the Administrator, for the purpose of
meeting any legal requirement of any jurisdiction in which any part of the Trust
Estate may at the time be located, the Indenture Trustee and the Administrator
acting jointly shall have the power and may execute and deliver all instruments
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 Estate,
and to vest in such Person or Persons, in such capacity and for the benefit of
the Noteholders, such title to the Trust Estate, or any part hereof, and,
subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Indenture Trustee and the Administrator
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 intended that such separate trustee or
co-trustee is not authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed
the Indenture Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Collateral 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 separate trustee or co-trustee hereunder shall be personally
liable by reason of any act or omission of any other trustee hereunder,
including acts or omissions of predecessor or successor trustees; and
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(iii) the Indenture Trustee and the Administrator may at any time
accept the resignation of or, acting jointly, remove any separate trustee
or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee
shall be deemed to have been given to each of 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 and a copy thereof given to the Administrator.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Indenture on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee. Notwithstanding anything to the
contrary in this Indenture, the appointment of any separate trustee or
co-trustee shall not relieve the Indenture Trustee of its obligations and duties
under this Indenture.
SECTION 6.11 Eligibility; Disqualification. The Indenture Trustee shall at
all times satisfy the requirements of TIA Section 310(a) and, in addition, 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 or better by each Rating Agency or shall otherwise be
acceptable to each Rating Agency. The Indenture Trustee shall also satisfy the
requirements of TIA Section 310(b). Neither the Issuer nor any Affiliate of the
Issuer may serve as Indenture Trustee.
SECTION 6.12 Preferential Collection of Claims Against the Issuer. The
Indenture Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). Any Indenture Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated.
SECTION 6.13 Representations and Warranties. The Indenture Trustee hereby
makes the following representations and warranties on which the Issuer and the
Noteholders shall rely:
(i) the Indenture Trustee is a national banking association duly
organized, validly existing and in good standing under the laws of the
United States of America; and
(ii) the Indenture Trustee has full power, authority and legal right
to execute, deliver, and perform this Indenture and shall have taken all
necessary action to authorize the execution, delivery and performance by it
of this Indenture.
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ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.1 The Issuer to Furnish the 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 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 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 days prior to the time such list is furnished; provided,
however, that so long as (i) the Indenture Trustee is the Note Registrar, or
(ii) the Notes are issued as Book-Entry Notes, no such list shall be required to
be furnished to the Indenture Trustee.
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 the 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; provided, however, that so long as the Indenture Trustee is the Note
Registrar or the Notes are issued as Book-Entry Notes, no such list shall be
required to be preserved or maintained.
(b) The 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 Noteholders of Notes evidencing not less than 25%
of the aggregate outstanding principal amount of the Outstanding Notes 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 Note Registrar shall have the
protection of TIA Section 312(c).
SECTION 7.3 Reports by the Indenture Trustee. If required by TIA Section
313(a), within 60 days after each March 31, beginning with March 31, [____], the
Indenture Trustee shall mail to each Noteholder as required by TIA Section
313(c), a brief report dated as of such date that complies with TIA Section
313(a). The Indenture Trustee also shall comply with TIA Section 313(b). 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
35
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 Collateral, 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, in the name of Indenture Trustee, the
Trust Accounts as provided in Section 4.1 of the Sale and Servicing Agreement.
(b) On or before each Payment Date, the Issuer shall cause (i) the Servicer
to deposit all Collections and Advances and (ii) the Servicer, the Seller or
VCI, as applicable, to deposit all Repurchase Prices with respect to the
Collection Period preceding such Payment Date in the Collection Account as
provided in 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 4.3 of the Sale and Servicing
Agreement shall be withdrawn by the Indenture Trustee from the Reserve Account
and deposited to the Collection Account.
(c) Prior to the acceleration of the Notes pursuant to Section 5.2 of this
Indenture, on each Payment Date and Redemption Date, the Indenture Trustee shall
distribute all amounts on deposit in the Principal Distribution Account to
Noteholders in respect of the Notes to the extent of the funds therein in the
following order of priority:
(i) first, to the Holders of the Class A-1 Notes, until the Class A-1
Notes are paid in full;
(ii) second, to the Holders of the Class A-2 Notes, until the Class
A-2 Notes are paid in full;
(iii) third, to the Holders of the Class A-3 Notes, until the Class
A-3 Notes are paid in full; and
(iv) fourth, to the Holders of the Class A-4 Notes, until the Class
A-4 Notes are paid in full.
SECTION 8.3 General Provisions Regarding Accounts. (a) The funds in the
Trust Accounts shall be invested in Permitted Investments in accordance with and
subject to Section 4.1(b) of the Sale and Servicing Agreement and all interest
and investment income (net of losses and investment expenses) on funds on
deposit (i) in the Collection Account and the Principal Distribution Account
shall be distributed in accordance with the provisions of Section 3.7 of the
Sale and Servicing Agreement and (ii) in the Reserve Account shall be
distributed in accordance with the provisions of Sections 4.3(b) and (d) of the
Sale and Servicing Agreement. The Indenture Trustee shall not be directed to
make any investment of any funds or to sell any
36
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 any
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) investment directions shall not have been given in writing by
the Servicer in accordance with Section 4.1(b) of the Sale and Servicing
Agreement for any funds on deposit in the Trust Accounts to the Indenture
Trustee by 11:00 a.m., New York City time (or such other time as may be agreed
by the Servicer and the Indenture Trustee), on any Business Day or (ii) 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 the Notes shall have been declared due and payable
following an Event of Default and amounts collected or received from the 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 Trust Accounts in one or more
Permitted Investments in accordance with the standing instructions most recently
given by the Servicer.
SECTION 8.4 Release of Collateral. (a) Subject to the payment of its fees
and expenses pursuant to Section 6.7, the Indenture Trustee may if permitted by
and in accordance with the terms hereof, 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 or such other document. No party relying upon an instrument
executed by the Indenture Trustee as provided in this Article VIII shall be
bound to ascertain the Indenture Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the application of any
monies.
(b) The Indenture Trustee shall, at such time as there are no Notes
Outstanding and all sums due the Indenture Trustee pursuant to Section 6.7 have
been paid, release any remaining portion of the Collateral 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. Such
release shall include release of the lien of this Indenture and transfer of
dominion and control over the Trust Accounts to the Issuer or its designee. The
Indenture Trustee shall release property from the lien of this Indenture
pursuant to this Section 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.
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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 (or shall be
deemed to automatically release the lien of this Indenture without any further
action) on any Receivable to be sold to (i) the Seller in accordance with
Section 2.3 of the Sale and Servicing Agreement, (ii) to the Servicer in
accordance with Section 3.6 of the Sale and Servicing Agreement and (iii) to VCI
in accordance with Section 3.3 of the Purchase Agreement.
SECTION 8.5 Opinion of Counsel. The Indenture Trustee shall receive at
least seven days' notice (or such shorter notice acceptable to the Indenture
Trustee) when requested by Issuer to take any action pursuant to Section 8.4(a),
accompanied by copies of any instruments involved, and Indenture Trustee may
also require as a condition to such action, an Opinion of Counsel, in form and
substance satisfactory to 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 that such Opinion of Counsel shall not be required to
express an opinion as to the fair value of the Trust Estate. Counsel rendering
any such opinion may rely, as to factual matters, 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 or any other Person but with prior notice
to each Rating Agency, 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 additional property
to the lien of this Indenture;
(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 contained herein and in
the Notes;
(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 to supplement any provision
herein or in any supplemental indenture which may be inconsistent with any
other provision herein or
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in any supplemental indenture or to make any other provisions with respect
to matters or questions arising under this Indenture or in any supplemental
indenture; provided that such action shall not materially and 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;
(vii) to modify, eliminate or add to the provisions of this Indenture
to such extent as shall be necessary to effect the qualification of this
Indenture under the TIA or under any similar federal statute hereafter
enacted and to add to this Indenture such other provisions as may be
expressly required by the TIA; or
(viii) to add, modify or eliminate such provisions as may be necessary
or advisable in order to enable (a) the transfer to the Issuer of all or
any portion of the Receivables to be derecognized under GAAP by the Seller
to the Issuer, (b) the Issuer to avoid becoming a member of Seller's
consolidated group under GAAP or (c) the Seller or any of its Affiliates to
otherwise comply with or obtain more favorable treatment under any law or
regulation or any accounting rule or principle; it being a condition to any
such amendment that the Rating Agency Condition be 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 Noteholder, 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, which require consent of each Noteholder affected thereby) the
rights of the Noteholders under this Indenture; provided (i) that the Rating
Agency Condition shall have been satisfied with respect to such action, and (ii)
that such action shall not, as evidenced by an Opinion of Counsel, (A)
materially and adversely affects the interests of any Noteholder, (B) affect the
treatment of the Notes as debt for federal income tax purposes, or (C) be deemed
to cause a taxable exchange of the Notes for federal income tax purposes.
SECTION 9.2 Supplemental Indentures with Consent of Noteholders. The Issuer
and the Indenture Trustee, when authorized by an Issuer Order, also may, with
prior notice to the Rating Agencies and with the consent of the Holders of not
less than a majority of the aggregate outstanding principal amount of the
Outstanding Notes, voting together as a single class, by Act of such Holders
delivered to the Issuer and the Indenture Trustee, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to, or
changing in any manner or eliminating any of the provisions of, this Indenture
or of modifying in any manner the rights of the Noteholders under this
Indenture; provided that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Note affected thereby:
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(i) change the date of payment of any installment of principal
(including, without limitation, the Final Scheduled Payment Date) of or
interest on any Note, or reduce the principal amount thereof, the interest
rate thereon or the Redemption Price with respect thereto, change the
provision of this Indenture relating to the application of collections on,
or the proceeds of the sale of, the Trust Estate to payment of principal of
or interest on the Notes, or change any place of payment where, or the coin
or currency in which, any Note or the interest thereon is payable, or
impair the right to institute suit for the enforcement of the provisions of
this Indenture requiring the application of funds available therefor, as
provided in Article V, to the payment of any such amount due on the Notes
on or after the respective due dates thereof (or, in the case of
redemption, on or after the Redemption Date);
(ii) reduce the percentage of the aggregate outstanding principal
amount of the Outstanding Notes, the consent of the Holders of which is
required for any such supplemental indenture, or the consent of the Holders
of which is required for any waiver of compliance with certain provisions
of this Indenture or certain defaults hereunder and their consequences
provided for in this Indenture;
(iii) modify or alter the provisions of the proviso to the definition
of the term "Outstanding";
(iv) reduce the percentage of the aggregate outstanding principal
amount of the Outstanding Notes required to direct the Indenture Trustee to
direct the Issuer to sell or liquidate the Trust Estate pursuant to Section
5.4 if the proceeds of such sale would be insufficient to pay the aggregate
outstanding principal amount of the Outstanding Notes plus accrued but
unpaid interest on the Notes;
(v) modify any provision of this Section in any respect adverse to the
interests of the Noteholders except to increase any percentage specified
herein or to provide that certain additional provisions of this Indenture
or the Transaction Documents cannot be modified or waived without the
consent of the Holder of each Outstanding Note affected thereby;
(vi) modify any of the provisions of this Indenture in such manner as
to affect the calculation of the amount of any payment of interest or
principal due on any Note on any Payment Date (including the calculation of
any of the individual components of such calculation) or to affect the
rights of the Noteholders to the benefit of any provisions for the
mandatory redemption of the Notes contained herein;
(vii) permit the creation of any Lien ranking prior to or on a parity
with the lien of this Indenture with respect to any part of the Trust
Estate or, except as otherwise permitted or contemplated herein or in the
Transaction Documents, terminate the lien of this Indenture on any property
at any time subject hereto or deprive any Noteholder of the security
provided by the lien of this Indenture; or
(viii) impair the right to institute suit for the enforcement of
payment as provided in Section 5.7.
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Any such supplemental indenture shall be executed only upon delivery of an
Opinion of Counsel to the same effect as in Section 9.1(b)(ii).
It shall not be necessary for any Act of Noteholders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee of any
supplemental indenture pursuant to this Section, the Indenture Trustee shall
mail to the Noteholders to which such amendment or supplemental indenture
relates a notice (to be provided by the Issuer and at the Issuer's expense)
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 modifications 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. 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 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.
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ARTICLE X REDEMPTION OF NOTES
SECTION 10.1 Redemption. (a) Each of the Notes is subject to redemption in
whole, but not in part, at the direction of VCI, as Servicer, pursuant to
Section 8.1 of the Sale and Servicing Agreement, on any Payment Date on which
VCI exercises its option to purchase the Trust Estate (other than the Reserve
Account) pursuant to said Section 8.1, for a purchase price equal to the
Optional Purchase Price, which amount shall be deposited by the Servicer into
the Collection Account on the Redemption Date.
(b) Each of the Notes is subject to redemption in whole, but not in part,
on any Payment Date on which the sum of the amounts in the Reserve Account and
the remaining Available Funds after the payments under clauses first through
fourth of Section 4.4(a) of the Sale and Servicing Agreement would be sufficient
to pay in full the aggregate unpaid Note Balance of all of the Outstanding Notes
as determined by the Servicer. On such Payment Date, (i) the Indenture Trustee
upon written direction from the Servicer shall transfer all amounts on deposit
in the Reserve Account to the Collection Account and (ii) the Outstanding Notes
shall be redeemed in whole, but not in part.
(c) If the Notes are to be redeemed pursuant to Sections 10.1(a) or
10.1(b), the Administrator or the Issuer shall provide at least 20 days' prior
notice of the redemption of the Notes to the Indenture Trustee and the Owner
Trustee, and the Indenture Trustee shall provide prompt (but not later than 10
days prior to the applicable Redemption Date) notice thereof to the Noteholders.
SECTION 10.2 Form of Redemption Notice. Notice of redemption under Section
10.1 shall be given by the Indenture Trustee by facsimile or by first-class
mail, postage prepaid, transmitted or mailed prior to the applicable Redemption
Date to each Holder of Notes as of the close of business on the Record Date
preceding the applicable Redemption Date, at such Holder's address appearing in
the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) that the Record Date otherwise applicable to such Redemption
Date is not applicable and that payments shall be made only upon
presentation and surrender of such Notes, and the place where such Notes
are to be surrendered for payment of the Redemption Price (which shall be
the office or agency of the Issuer to be maintained as provided in Section
3.2);
(iv) that interest on the Notes shall cease to accrue on the
Redemption Date; and
(v) the CUSIP numbers (if applicable) for such Notes.
Notice of redemption of the Notes shall be given by the Indenture Trustee
in the name and at the expense of the Issuer. In addition, the Issuer shall
notify each Rating Agency upon
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redemption of the Notes. Failure to give notice of redemption, or any defect
therein, to any Noteholder shall not impair or affect the validity of the
redemption of any Note.
SECTION 10.3 Notes Payable on Redemption Date. The Notes to be redeemed
shall, following notice of redemption as required by Section 10.2 (in the case
of redemption pursuant to Section 10.1), on the Redemption Date become due and
payable at the Redemption Price and (unless the Issuer shall default in the
payment of the Redemption Price) no interest shall accrue on the Redemption
Price for any period after the date to which accrued interest is calculated for
purposes of calculating the Redemption Price.
ARTICLE 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 that satisfies TIA Section 314(c)(1), (ii) an Opinion of Counsel
stating that in the opinion of such counsel all such conditions precedent, if
any, have been complied with that satisfies TIA Section 314(c)(2) and (iii) if
required by the TIA in the case of condition precedent compliance with which is
subject to verification by accountants, a certificate or opinion of an
accountant that satisfies TIA Section 314(c)(3), except that, in the case of any
such application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture, no additional
certificate or opinion need be furnished.
Every certificate or opinion in accordance with TIA Section 314(e) with
respect to compliance with a condition or covenant provided for in this
Indenture shall include:
(i) a statement that each signatory of such certificate or opinion has
read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such signatory
such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any 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 in
43
accordance with TIA Section 314(d) (within 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 in accordance with TIA Section 314(d) to the Issuer of the property
or securities to be so deposited and of all other such securities made the basis
of any such withdrawal or release since the commencement of the then-current
fiscal year of the Issuer, as set forth in the certificates delivered pursuant
to clause (i) and this clause (ii), is 10% or more of the aggregate outstanding
principal amount of the Outstanding Notes, but such a certificate need not be
furnished with respect to any securities so deposited, if the fair value thereof
to the Issuer as set forth in the related Officer's Certificate is less than
$25,000 or less than one percent of the aggregate outstanding principal amount
of the Outstanding Notes.
(iii) Other than as contemplated by Section 11.1(b)(v), whenever any
property or securities are to be released from the lien of this Indenture, the
Issuer shall also furnish to the Indenture Trustee an Officer's Certificate
certifying or stating the opinion of each person signing such certificate as to
the fair value (within 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
Purchased Receivables, or securities released from the lien of this Indenture
since the commencement of the then current calendar year, as set forth in the
certificates required by clause (iii) above and this clause (iv), equals 10% or
more of the aggregate outstanding principal amount of the Outstanding Notes, but
such certificate need not be furnished in the case of any release of property or
securities if the fair value thereof as set forth in the related Officer's
Certificate is less than $25,000 or less than one percent of the then aggregate
outstanding principal amount of the Outstanding Notes.
(v) Notwithstanding Section 2.9 or any other provision of this Section, the
Issuer may (A) collect, liquidate, sell or otherwise dispose of Receivables and
Financed Vehicles as and to the extent permitted or required by the Transaction
Documents and (B) make cash payments out of the Trust Accounts as and to the
extent permitted or required by the Transaction Documents.
SECTION 11.2 Form of Documents Delivered to the Indenture Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
44
Any certificate or opinion of an Authorized Officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his or her certificate or opinion is
based are erroneous. Any such certificate of an Authorized Officer or Opinion of
Counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Servicer, the Seller, the Administrator or the Issuer, stating that the
information with respect to such factual matters is in the possession of the
Servicer, the Seller, the Administrator or the Issuer, unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
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
therein and evidenced thereby) are herein sometimes referred to as the "Act" of
the Noteholders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 6.1)
conclusive in favor of the Indenture Trustee and the Issuer, if made in the
manner provided in this Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture
Trustee deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by any Noteholder shall bind the
Holder of every Note issued upon
45
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. All demands, notices and communications hereunder
shall be in writing and shall be delivered or mailed by registered or certified
first-class United States mail, postage prepaid, hand delivery, prepaid courier
service, or by telecopier, and addressed in each case as specified on Schedule
II to the Sale and Servicing Agreement or at such other address as shall be
designated by any of the foregoing in a written notice to the other parties
hereto. Delivery shall occur only upon receipt or reported tender of such
communication by an officer of the recipient entitled to receive such notices
located at the address of such recipient for notices hereunder.
SECTION 11.5 Notices to Noteholders; Waiver. 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 or via Electronic Transmission 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.
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.
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.
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 an 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 Paying Agent to such Noteholder, that
is different from the methods provided for in this Indenture for such payments
or notices, provided that such methods are reasonable and consented to by the
Indenture Trustee (which consent shall not be unreasonably withheld). The Issuer
will furnish to the Indenture Trustee a copy of each such agreement and the
Indenture
46
Trustee will 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 to
be included in this Indenture by any of the provisions of the Trust Indenture
Act, such required provision shall control.
The provisions of TIA Sections 310 through 317 that impose duties on any
person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
SECTION 11.8 Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 11.9 Successors and Assigns. All covenants and agreements in this
Indenture and the Notes by the Issuer shall bind its successors and assigns,
whether so expressed or not. All agreements of the Indenture Trustee in this
Indenture shall bind its successors.
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 Person
with an ownership interest in any part of the Trust Estate, any benefit or any
legal or equitable right, remedy or claim under this Indenture.
SECTION 11.12 Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
SECTION 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 OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK
GENERAL OBLIGATIONS LAW, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
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.
47
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
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. Each Noteholder or Note Owner, by
acceptance of a Note, or, in the case of a Note Owner or a beneficial interest
in a Note, by accepting the benefits of this Indenture, 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 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 respective individual capacities, (ii) any Certificateholder or
any other owner of a beneficial interest in the Issuer, (iii) the Servicer, the
Administrator or the Seller or (iv) any partner, owner, beneficiary, agent,
officer, director, employee, successor or assign of any Person described in
clauses (i), (ii) and (iii) above, except as any such Person may have expressly
agreed (it being understood that the Indenture Trustee and the Owner Trustee
have no such obligations in their individual capacity) and except that any such
partner, owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.
SECTION 11.17 No Petition. Each of the Indenture Trustee, by entering into
this Indenture, and each Noteholder and Note Owner, by accepting a Note or, in
the case of a Note Owner, a beneficial interest in a Note, hereby covenants and
agrees that prior to the date which is one year and one day after payment in
full of all obligations of each Bankruptcy Remote Party in respect of all
securities issued by the Bankruptcy Remote Parties, (i) such party shall not
authorize any Bankruptcy Remote Party to commence a voluntary winding-up or
other voluntary case or other proceeding seeking liquidation, reorganization or
other relief with respect to such Bankruptcy Remote Party or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect in any
jurisdiction or seeking the appointment of an administrator, a trustee,
receiver, liquidator, custodian or other similar official with respect to such
Bankruptcy Remote Party or any substantial part of its property or to consent to
any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against such
Bankruptcy Remote Party, or to make a general assignment for the benefit of, its
creditors generally, any party hereto or any other creditor of such Bankruptcy
Remote Party, and (ii) none of the parties hereto shall commence, join or
institute against, with any other Person, any proceeding against such Bankruptcy
Remote Party under any bankruptcy, reorganization, arrangement, liquidation or
insolvency law or statute now or hereafter in effect in any jurisdiction.
SECTION 11.18 Intent. (a) It is the intent of the Issuer that the Notes
constitute indebtedness for all financial accounting purposes and the Issuer
agrees and each purchaser of a Note (by virtue of the acquisition of such Note
or an interest therein) shall be deemed to have agreed, to treat the Notes as
indebtedness for all financial accounting purposes.
(b) It is the intent of the Issuer that the Notes constitute indebtedness
of the Issuer for all tax purposes and the Issuer agrees and each purchaser of a
Note (by virtue of the acquisition of
48
such Note or an interest therein) shall be deemed to have agreed to treat the
Notes as indebtedness for all federal, state and local income and franchise tax
purposes.
SECTION 11.19 Submission to Jurisdiction; Waiver of Jury Trial. Each of the
parties hereto hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or proceeding
relating to this Indenture or any documents executed and delivered in connection
herewith, or for recognition and enforcement of any judgment in respect thereof,
to the nonexclusive general jurisdiction of the courts of the State of New York,
the courts of the United States of America for the Southern District of New York
and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Person at its
address determined in accordance with Section 11.4 of this Indenture;
(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to xxx in
any other jurisdiction; and
(e) to the extent permitted by applicable law, waives all right of trial by
jury in any action, proceeding or counterclaim based on, or arising out of,
under or in connection with this Indenture, any other Transaction Document, or
any matter arising hereunder or thereunder.
SECTION 11.20 Subordination of Claims. The Issuer's obligations under this
Indenture are obligations solely of the Issuer and will not constitute a claim
against the Seller to the extent that the Issuer does not have funds sufficient
to make payment of such obligations. In furtherance of and not in derogation of
the foregoing, each of the Owner Trustee (in its individual capacity and as the
Owner Trustee), by accepting the benefits of this Indenture, the
Certificateholder, by accepting the Certificate, and Indenture Trustee (in its
individual capacity and as Indenture Trustee), by entering into this Indenture,
and each Noteholder and each Note Owner, by accepting the benefits of this
Indenture, hereby acknowledges and agrees that such Person has no right, title
or interest in or to the Other Assets of the Seller. To the extent that,
notwithstanding the agreements and provisions contained in the preceding
sentence, each of the Owner Trustee, the Indenture Trustee, each Noteholder or
Note Owner and the Certificateholder either (i) asserts an interest or claim to,
or benefit from, Other Assets, or (ii) is deemed to have any such interest,
claim to, or benefit in or from Other Assets, whether by operation of law, legal
process, pursuant to applicable provisions of insolvency laws or otherwise
(including by virtue of Section 1111(b) of the Bankruptcy Code or any successor
provision having similar effect under the Bankruptcy Code), then such Person
further acknowledges and agrees that any such interest, claim or benefit in or
from Other Assets is and will be expressly subordinated to the indefeasible
payment in full, which, under the terms of the relevant documents relating to
the securitization or
49
conveyance of such Other Assets, are entitled to be paid from, entitled to the
benefits of, or otherwise secured by such Other Assets (whether or not any such
entitlement or security interest is legally perfected or otherwise entitled to a
priority of distributions or application under applicable law, including
insolvency laws, and whether or not asserted against the Seller), including the
payment of post-petition interest on such other obligations and liabilities.
This subordination agreement will be deemed a subordination agreement within the
meaning of Section 510(a) of the Bankruptcy Code. Each of the Indenture Trustee
(in its individual capacity and as the Indenture Trustee), by entering into or
accepting this Indenture, the Certificateholder, by accepting the Certificate,
and the Owner Trustee, and each Noteholder or Note Owner, by accepting the
benefits of this Indenture, hereby further acknowledges and agrees that no
adequate remedy at law exists for a breach of this Section and the terms of this
Section may be enforced by an action for specific performance. The provisions of
this Section will be for the third party benefit of those entitled to rely
thereon and will survive the termination of this Indenture.
SECTION 11.21 Limitation of Liability of Owner Trustee. It is expressly
understood and agreed by and between the parties hereto that (i) this Indenture
is executed and delivered by [_____], not in its individual capacity but solely
as Owner Trustee of the Issuer in the exercise of the power and authority
conferred and vested in it as such Owner Trustee, (ii) each of the
representations, undertakings and agreements made herein by the Issuer are not
personal representations, undertakings and agreements of [______], but are
binding only on the Issuer, (iii) nothing contained herein shall be construed as
creating any liability on [_____] individually or personally, to perform any
covenant of the Issuer, either expressed or implied, contained herein, all such
liability, if any, being expressly waived by the parties hereto and by any
person claiming by, through or under any such party, and (iv) under no
circumstances shall [______] be personally liable for the payment of any
indebtedness or expense of the Issuer or be liable for the breach or failure of
any obligation, representation, warranty or covenant made or undertaken by the
Issuer under this Indenture.
[Remainder of Page Intentionally Left Blank]
50
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.
VOLKSWAGEN AUTO LOAN ENHANCED
TRUST 20[__]-[__]
By: [___________], not in its individual
capacity but solely as Owner Trustee
By:
------------------------------------
Name:
----------------------------------
Title: Xxxxxxxx-xx-Xxxx
X-0
[_______________], not in its individual
capacity but solely as Indenture Trustee
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
S-2
SCHEDULE I
PERFECTION REPRESENTATIONS, WARRANTIES AND COVENANTS
In addition to the representations, warranties and covenants contained in
the Indenture, the Issuer hereby represents, warrants, and covenants to the
Indenture Trustee as follows on the Closing Date:
GENERAL
1. This Indenture creates a valid and continuing security interest (as
defined in the applicable UCC) in the Receivables and the other Collateral 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.
2. The Receivables constitute "tangible chattel paper," "accounts,"
"instruments" or "general intangibles," within the meaning of the UCC.
3. Each Receivable is secured by a first priority validly perfected
security interest in the related Financed Vehicle in favor of the applicable
Originator, as secured party, or all necessary actions with respect to such
Receivable have been taken or will be taken to perfect a first priority security
interest in the related Financed Vehicle in favor of the applicable Originator,
as secured party.
4. Each Trust Account constitutes either a "deposit account" or a
"securities account" within the meaning of the UCC.
CREATION
5. Immediately prior to the sale, transfer, assignment and conveyance of a
Receivable by the Seller to the Issuer, the Seller owned and had good and
marketable title to such Receivable free and clear of any Lien and immediately
after the sale, transfer, assignment and conveyance of such Receivable to the
Issuer, the Issuer will have good and marketable title to such Receivable free
and clear of any Lien.
PERFECTION
6. The Issuer has caused or will have caused, within ten days after the
effective date of this Indenture, the filing of all appropriate financing
statements in the proper filing office in the appropriate jurisdictions under
applicable law in order to perfect the security interest in the Receivables
granted to the Indenture Trustee hereunder; and the Servicer has in its
possession the original copies of such instruments or tangible chattel paper
that constitute or evidence the Receivables, and all financing statements
referred to in this paragraph contain a statement that: "A purchase of or
security interest in any collateral described in this financing statement will
violate the rights of the Secured Party".
7. With respect to Receivables that constitute instruments or tangible
chattel paper, either:
I-1
(i) All original executed copies of each such instrument or tangible
chattel paper have been delivered to the Indenture Trustee; or
(ii) Such instruments or tangible chattel paper are in the possession of
the Servicer and the Indenture Trustee has received a written acknowledgment
from the Servicer that the Servicer is holding such instruments or tangible
chattel paper solely on behalf and for the benefit of the Indenture Trustee; or
(iii) The Servicer received possession of such instruments or tangible
chattel paper after the Indenture Trustee received a written acknowledgment from
the Servicer that the Servicer is acting solely as agent of the Indenture
Trustee.
8. With respect to the Trust Accounts that constitutes deposit accounts,
either:
(i) the Issuer has delivered to the Indenture Trustee a fully executed
agreement pursuant to which the bank maintaining the deposit accounts has agreed
to comply with all instructions originated by the Indenture Trustee directing
disposition of the funds in such Trust Accounts without further consent by the
Issuer; or
(ii) the Issuer has taken all steps necessary to cause the Indenture
Trustee to become the account holder of such Trust Accounts.
9. With respect to the Trust Accounts that constitute securities accounts
or securities entitlements, either:
(i) the Issuer has delivered to the Indenture Trustee a fully executed
agreement pursuant to which the securities intermediary has agreed to comply
with all instructions originated by the Indenture Trustee relating to such Trust
Accounts without further consent by the Issuer; or
(ii) the Issuer has taken all steps necessary to cause the securities
intermediary to identify in its records the Indenture Trustee as the person
having a security entitlement against the securities intermediary in each of
such Trust Accounts.
PRIORITY
10. The Issuer has not authorized the filing of, and is not aware of any
financing statements against the Issuer that include a description of collateral
covering the Receivables other than any financing statement (i) relating to the
conveyance of the Receivables by VCI to the Seller under the Purchase Agreement,
(ii) relating to the conveyance of the Receivables by the Seller to the Issuer
under the Sale and Servicing Agreement, (iii) relating to the security interest
granted to the Indenture Trustee under the Indenture or (iv) that has been
terminated.
11. The Issuer is not aware of any material judgment, ERISA or tax lien
filings against the Issuer.
I-2
12. Neither the Issuer nor a custodian holding any Receivable that is
electronic chattel paper has communicated an authoritative copy of any loan
agreement that constitutes or evidences such Receivable to any Person other than
the Servicer.
13. None of the instruments nor tangible chattel paper that constitutes or
evidences the Receivables has any marks or notations indicating that they have
been pledged, assigned or otherwise conveyed to any Person other than the Issuer
or the Indenture Trustee.
14. No Trust Account that constitutes a securities account or securities
entitlement is in the name of any person other than the Issuer or the Indenture
Trustee. The Issuer has not consented to the securities intermediary of any such
Trust Account to comply with entitlement orders of any person other than the
Indenture Trustee.
15. No Trust Account that constitutes a deposit account is in the name of
any person other than the Issuer or the Indenture Trustee. The Issuer has not
consented to the bank maintaining such Trust Account to comply with instructions
of any person other than the Indenture Trustee.
SURVIVAL OF PERFECTION REPRESENTATIONS
16. Notwithstanding any other provision of this Indenture or any other
Transaction Document, the perfection representations, warranties and covenants
contained in this Schedule I shall be continuing, and remain in full force and
effect until such time as all obligations under this Indenture have been finally
and fully paid and performed.
NO WAIVER
17. The parties to this Indenture shall provide the Rating Agencies with
prompt written notice of any breach of the perfection representations,
warranties and covenants contained in this Schedule I, and shall not, without
satisfying the Rating Agency Condition, waive a breach of any of such perfection
representations, warranties or covenants.
ISSUER TO MAINTAIN PERFECTION AND PRIORITY
18. The Issuer covenants that, in order to evidence the interests of the
Indenture Trustee under this Indenture, the Issuer shall take such action, or
execute and deliver such instruments as may be necessary or advisable
(including, without limitation, such actions as are requested by the Indenture
Trustee) to maintain and perfect, as a first priority interest, the Indenture
Trustee's security interest in the Receivables. The Issuer shall, from time to
time and within the time limits established by law, prepare and file, all
financing statements, amendments, continuations, initial financing statements in
lieu of a continuation statement, terminations, partial terminations, releases
or partial releases, or any other filings necessary or advisable to continue,
maintain and perfect the Indenture Trustee's security interest in the
Receivables as a first-priority interest.
I-3
Exhibit A
FORMS OF NOTES
20[__]-[__] Indenture
FORM OF CLASS [A-1] [A-2] [A-3][A-4] NOTES
REGISTERED $____________________(1)
No. R-________ CUSIP NO. ______________
ISIN. __________________
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.
BY ACQUIRING THIS NOTE, EACH PURCHASER OR TRANSFEREE WILL BE DEEMED TO
REPRESENT AND WARRANT THAT EITHER (I) IT IS NOT ACQUIRING AND WILL NOT HOLD THE
NOTES WITH THE ASSETS OF AN "EMPLOYEE BENEFIT PLAN" AS DEFINED IN SECTION 3(3)
OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), A
"PLAN" AS DEFINED IN SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE"), AN ENTITY DEEMED TO HOLD THE PLAN ASSETS OF ANY OF THE
FOREGOING OR ANY OTHER EMPLOYEE BENEFIT PLAN OR RETIREMENT ARRANGEMENT THAT IS
SUBJECT TO A LAW THAT IS SIMILAR TO SECTION 406 OF ERISA OR SECTION 4975 OF THE
CODE OR (II) THE ACQUISITION, HOLDING AND DISPOSITION OF THIS NOTE WILL NOT GIVE
RISE TO A NONEXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA, SECTION
4975 OF THE CODE OR ANY SIMILAR APPLICABLE LAW.
VOLKSWAGEN AUTO LOAN ENHANCED TRUST 20[__]-[__]
[CLASS A-1 [_____]%] [CLASS A-2 [_____]%] [CLASS A-3 [_____]%]
[CLASS A-4 [_____]%]
AUTO LOAN ASSET BACKED NOTES
Volkswagen Auto Loan Enhanced Trust 20[__]-[__], a statutory trust
organized and existing under the laws of the State of Delaware (including any
successor, the "Issuer"), for value received, hereby promises to pay to
[______], or registered assigns, the principal sum of
----------
(1) Denominations of $100,000 and integral multiples of $1,000 in excess
thereof.
A-2
[___] DOLLARS ($[___]), in monthly installments on the 20th of each month, or if
such day is not a Business Day, on the immediately succeeding Business Day,
commencing on [_________] (each, a "Payment Date") until the principal of this
Note is paid or made available for payment, and to pay interest on each Payment
Date on the Class [A-1] [A-2] [A-3] [A-4] Note Balance as of the preceding
Payment Date (after giving effect to all payments of principal made on the
preceding Payment Date), or as of the Closing Date in the case of the first
Payment Date, at the rate per annum shown above (the "Interest Rate"), in each
case as and to the extent set forth in Sections 2.7, 3.1, 5.4(b) and 8.2 of the
Indenture and Section 4.4 of the Sale and Servicing Agreement; provided,
however, that the entire Class [A-1] [A-2] [A-3] [A-4] Note Balance shall be due
and payable on the earliest of (i) [___] (the "Final Scheduled Payment Date"),
(ii) the Redemption Date, if any, pursuant to Section 10.1 of the Indenture and
(iii) the date the Notes are accelerated after an Event of Default pursuant to
Section 5.2 of the Indenture. Interest on this Note will accrue for each Payment
Date from and including the preceding Payment Date (or, in the case of the
initial Payment Date, from and including the Closing Date) to but excluding such
Payment Date. Interest will be computed on the basis of [Class A-1: actual days
elapsed and a 360-day year][Class X-0, X-0 and A-4: 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 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 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 the name of which appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually, by its Authorized Officer.
Dated: [_________________]
VOLKSWAGEN AUTO LOAN ENHANCED
TRUST 20[__]-[__]
By: [_____________________], not in its
individual capacity but solely as
Owner Trustee
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
A-3
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Dated: [_______________]
[_____________________________________],
a national banking association, not in
its individual capacity but solely as
Indenture Trustee
By:
------------------------------------
Authorized Signatory
A-4
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its [Class A-1 [_____]%] [Class A-2 [_____]%] [Class A-3 [_____]%]
[Class A-4 [_____]%] Auto Loan Asset-Backed Notes (herein called the "Class
[A-1] [A-2] [A-3] [A-4] Notes" or the "Notes"), all issued under an Indenture
dated as of [__________] (such Indenture, as supplemented or amended, is herein
called the "Indenture"), between the Issuer and [__________], a [national
banking association], not in its individual capacity but solely as trustee (the
"Indenture Trustee"), which term includes any successor Indenture Trustee under
the Indenture, to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the Noteholders.
The Notes are subject to all terms of the Indenture and the Sale and Servicing
Agreement. All terms used in this Note that are not otherwise defined herein and
that are defined in the Indenture or the Sale and Servicing Agreement shall have
the meanings assigned to them in the Indenture or in Appendix A of the Sale and
Servicing Agreement.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class
A-4 Notes are and will be equally and ratably secured by the collateral pledged
as security therefor as provided in the Indenture. All covenants and agreements
made by the Issuer in the Indenture are for the benefit of the Holders of the
Notes.
Principal payable on the Notes will be paid on each Payment Date in the
amount specified in the Indenture and in the Sale and Servicing Agreement. As
described above, the entire Class [A-1] [A-2] [A-3] [A-4] Note Balance shall be
due and payable on the earliest of (i) [__________] (the "Final Scheduled
Payment Date"), (ii) the Redemption Date, if any, pursuant to Section 10.1 of
the Indenture and (iii) the date the Notes are accelerated after an Event of
Default pursuant to Section 5.2 of the Indenture. All principal payments on the
Class [A-1] [A-2] [A-3] [A-4] Notes shall be made pro rata to the Class [A-1]
[A-2] [A-3] [A-4] Noteholders entitled thereto.
Payments of principal of and interest on this Note made on each Payment
Date, Redemption Date or upon acceleration shall be made by check mailed to the
Person whose name appears as the registered Holder of this Note (or one or more
Predecessor Notes) on the Note Register as of the close of business on the
related Record Date, except that with respect to Notes registered on the Record
Date in the name of the nominee of the Depository (initially, such nominee to be
Cede & Co.), payments will be made by wire transfer in immediately available
funds to the account designated by such nominee. Such checks shall be mailed to
the Person entitled thereto at the address of such Person as it appears on the
Note Register as of the applicable Record Date without requiring that this Note
be submitted for notation of payment. Any reduction in the principal amount of
this Note (or any one or more Predecessor Notes) affected by any payments made
on any Payment Date or Redemption Date shall be binding upon all future Holders
of this Note and of any Note issued upon the registration of transfer hereof or
in exchange hereof or in lieu hereof, whether or not noted hereon. If funds are
expected to be available, as provided in the Indenture, for payment in full of
the remaining unpaid principal amount of this Note on a Payment Date or
Redemption Date, then the Indenture Trustee, in the name of and on behalf of the
Issuer, will notify the Person who was the registered Holder hereof as of the
Record Date preceding such Payment Date or Redemption Date by notice mailed
prior
A-5
to such Payment Date or Redemption Date and the amount then due and payable
shall be payable only upon presentation and surrender of this Note at the
Corporate Trust Office of the Indenture Trustee or at the office of the
Indenture Trustee's agent appointed for such purposes located in The City of New
York.
Each Noteholder or Note Owner, by acceptance of a Note, or, in the case of
a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Seller, the Servicer, 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 Seller, the
Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity,
(ii) any owner of a beneficial interest in the Issuer or (iii) any partner,
owner, beneficiary, agent, officer, director, employee or agent of the Seller,
the Servicer, the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Seller, the
Servicer, the Owner Trustee or the Indenture Trustee or of any successor or
assign of the Seller, the Servicer, the Indenture Trustee or the Owner Trustee
in its individual capacity, except as any such Person may have expressly agreed
(it being understood that the Indenture Trustee and the Owner Trustee have no
such obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity.
It is the intent of the Seller, the Servicer, the Noteholders and the Note
Owners that, for purposes of federal, state and local income and franchise tax
the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4
Notes will qualify as indebtedness of the Issuer. The Noteholders, by acceptance
of a Note, agree to treat, and to take no action inconsistent with the treatment
of, the Notes for such tax purposes as indebtedness of the Issuer.
Each Noteholder or Note Owner, by acceptance of a Note, or, in the case of
a Note Owner, a beneficial interest in a Note, covenants and agrees that, prior
to the date which is one year and one day after payment in full of all
obligations of each Bankruptcy Remote Party in respect of all securities issued
by any Bankruptcy Remote Party (i) such party shall not authorize any Bankruptcy
Remote Party to commence a voluntary winding-up or other voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
such Bankruptcy Remote Party or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect in any jurisdiction or seeking the
appointment of an administrator, a trustee, receiver, liquidator, custodian or
other similar official with respect to such Bankruptcy Remote Party or any
substantial part of its property or to consent to any such relief or to the
appointment of or taking possession by any such official in any involuntary case
or other proceeding commenced against such Bankruptcy Remote Party, or to make a
general assignment for the benefit of, its creditors generally, any party hereto
or any other creditor of such Bankruptcy Remote Party, and (ii) none of the
parties hereto shall commence or join with any other Person in commencing any
proceeding against such Bankruptcy Remote Party under any bankruptcy,
reorganization, liquidation or insolvency law or statute now or hereafter in
effect in any jurisdiction.
A-6
This Note and the Indenture shall be construed in accordance with the laws
of the State of New York, without reference to its conflict of law provisions,
and the obligations, rights and remedies of the parties hereunder and thereunder
shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency, herein prescribed.
A-7
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee _______
________________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto _____________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ______________________, attorney, to transfer said Note on the
books kept for registration thereof, with full power of substitution in the
premises.
Dated: */
------------------------------ --------------------------------------
Signature Guaranteed:
----------------------------------------
Signatures must be guaranteed by an
"eligible guarantor institution" meeting
the requirements of the Note Registrar,
which requirements include membership or
participation in STAMP or such other
"signature guarantee program" as may be
determined by the Note Registrar in
addition to, or in substitution for,
STAMP, all in accordance with the
Securities Exchange Act of 1934, as
amended.
----------
*/ NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular without alteration, enlargement or any change whatsoever.
A-8
