EXHIBIT 10.63
FIRST INVESTORS AUTO OWNER TRUST 2000-A,
as Issuer,
FIRST INVESTORS FINANCIAL SERVICES, INC.,
as Seller,
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
as Indenture Trustee
------------------------------
INDENTURE
Dated as of January 1, 2000
------------------------------
$167,969,000 7.174% Asset-Backed Notes
TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS; INCORPORATION BY REFERENCE...........................2
SECTION 1.1. Definitions..............................................2
SECTION 1.2. Rules of Construction...................................12
ARTICLE II. THE NOTES.......................................................13
SECTION 2.1. Form....................................................13
SECTION 2.2. Execution, Authentication and Delivery..................13
SECTION 2.3. Temporary Notes.........................................14
SECTION 2.4. Tax Treatment...........................................15
SECTION 2.5. Registration; Registration of Transfer and Exchange.....15
SECTION 2.6. Mutilated, Destroyed, Lost or Stolen Notes..............16
SECTION 2.7. Persons Deemed Owners...................................18
SECTION 2.8. Payments................................................18
SECTION 2.9. Cancellation............................................21
SECTION 2.10. Release of Collateral...................................21
SECTION 2.11. Book-Entry Notes........................................21
SECTION 2.12. Notices to Clearing Agency..............................22
SECTION 2.13. Definitive Notes........................................23
SECTION 2.14. Authenticating Agents...................................23
SECTION 2.15. Restrictions............................................24
ARTICLE III. COVENANTS......................................................26
SECTION 3.1. Payment Covenant........................................26
SECTION 3.2. Maintenance of Office or Agency.........................26
SECTION 3.3. Money for Payments To Be Held in Trust..................27
SECTION 3.4. Existence...............................................28
SECTION 3.5. Protection of Trust Estate..............................29
SECTION 3.6. Opinions as to Trust Estate.............................29
SECTION 3.7. Performance of Obligations; Servicing of Contracts......30
SECTION 3.8. Negative Covenants......................................33
SECTION 3.9. Annual Statement as to Compliance.......................34
SECTION 3.10. Issuer May Not Merge....................................34
SECTION 3.11. No Other Business.......................................34
SECTION 3.12. No Borrowing............................................34
SECTION 3.13. Servicer's Obligations..................................34
SECTION 3.14. Guarantees, Loans, Advances and Other Liabilities.......34
SECTION 3.15. Capital Expenditures....................................35
SECTION 3.16. Restricted Payments.....................................35
SECTION 3.17. Notice of Events of Default.............................35
SECTION 3.18. Removal of Administrator................................35
SECTION 3.19. Further Instruments and Acts............................35
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SECTION 3.20. Rule 144A Information...................................35
SECTION 3.21. Re-Xxxxxxx Trigger......................................36
ARTICLE IV. SATISFACTION AND DISCHARGE......................................36
SECTION 4.1. Satisfaction and Discharge of Indenture.................36
SECTION 4.2. Satisfaction, Discharge and Defeasance of the Notes.....37
SECTION 4.3. Application of Trust Money..............................39
SECTION 4.4. Repayment of Monies Held by Paying Agent................39
SECTION 4.5. Continuing Obligations of Indenture Trustee.............39
ARTICLE V. REMEDIES.........................................................39
SECTION 5.1. Events of Default.......................................39
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment......42
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement
by Indenture Trustee.................................43
SECTION 5.4. Remedies................................................46
SECTION 5.5. Optional Preservation of the Contracts..................48
SECTION 5.6. Limitation of Suits.....................................48
SECTION 5.7. Unconditional Rights of Noteholders To Receive
Principal and Interest...............................49
SECTION 5.8. Restoration of Rights and Remedies......................49
SECTION 5.9. Rights and Remedies Cumulative..........................49
SECTION 5.10. Delay or Omission Not a Waiver..........................50
SECTION 5.11. Control by Noteholders..................................50
SECTION 5.12. Waiver of Past Defaults.................................51
SECTION 5.13. Undertaking for Costs...................................51
SECTION 5.14. Waiver of Stay or Extension Laws........................51
SECTION 5.15. Action on Notes.........................................52
SECTION 5.16. Performance and Enforcement of Certain Obligations......52
ARTICLE VI. THE INDENTURE TRUSTEE...........................................53
SECTION 6.1. Duties of Indenture Trustee.............................53
SECTION 6.2. Rights of Indenture Trustee.............................54
SECTION 6.3. Individual Rights of Indenture Trustee..................56
SECTION 6.4. Indenture Trustee's Disclaimer..........................56
SECTION 6.5. Notice of Defaults......................................56
SECTION 6.6. Reports by Indenture Trustee to Holders.................56
SECTION 6.7. Compensation and Indemnity..............................57
SECTION 6.8. Replacement of Indenture Trustee........................58
SECTION 6.9. Successor Indenture Trustee by Merger...................59
SECTION 6.10. Appointment of Co-Indenture Trustee or Separate
Indenture Trustee....................................60
SECTION 6.11. Eligibility; Disqualification...........................61
ARTICLE VI-A................................................................62
SECTION 6A.1 Possession of Contract Files by the Custodian...........62
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SECTION 6A.2 Remedies................................................63
SECTION 6A.3 Release of Contract Files by the Custodian..............63
SECTION 6A.4 Regarding the Custodian.................................64
SECTION 6A.5 Resignation and Removal of the Custodian................66
ARTICLE VII. NOTEHOLDERS' LISTS AND REPORTS.................................67
SECTION 7.1. Issuer To Furnish Indenture Trustee Names and
Addresses of Noteholders.............................67
SECTION 7.2. Preservation of Information; Communications to
Noteholders..........................................67
SECTION 7.3. Reports by Issuer.......................................68
ARTICLE VIII. ACCOUNTS, DISBURSEMENTS AND RELEASES..........................68
SECTION 8.1. Collection of Money.....................................68
SECTION 8.2. Trust Accounts..........................................69
SECTION 8.3. General Provisions Regarding Accounts...................69
SECTION 8.4. Release of Trust Estate.................................70
SECTION 8.5. Opinion of Counsel......................................71
ARTICLE IX. SUPPLEMENTAL INDENTURES.........................................71
SECTION 9.1. Supplemental Indentures Without Consent of Noteholders..71
SECTION 9.2. Supplemental Indentures with Consent of Noteholders.....73
SECTION 9.3. Execution of Supplemental Indentures....................75
SECTION 9.4. Effect of Supplemental Indenture........................75
SECTION 9.5. Reference in Notes to Supplemental Indentures...........75
ARTICLE X. REDEMPTION OF NOTES..............................................76
SECTION 10.1. Redemption.............................................76
SECTION 10.2. Form of Redemption Notice..............................76
SECTION 10.3. Notes Payable on Redemption Date.......................77
ARTICLE XI. MISCELLANEOUS...................................................77
SECTION 11.1. Compliance Certificates and Opinions, etc..............77
SECTION 11.2. Form of Documents Delivered to Indenture Trustee.......79
SECTION 11.3. Acts of Noteholders....................................80
SECTION 11.4. Notices, etc., to Indenture Trustee, Issuer and
Rating Agencies.....................................81
SECTION 11.5. Notices to Noteholders; Waiver.........................81
SECTION 11.6. Alternate Payment and Notice Provisions................82
SECTION 11.7. Effect of Headings and Table of Contents...............82
SECTION 11.8. Successors and Assigns.................................82
SECTION 11.9. Severability...........................................83
SECTION 11.10. Benefits of Indenture..................................83
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SECTION 11.11. Legal Holiday..........................................83
SECTION 11.12. Governing Law..........................................83
SECTION 11.13. Counterparts...........................................83
SECTION 11.14. Recording of Indenture.................................83
SECTION 11.15. Trust Obligation.......................................83
SECTION 11.16. No Petition............................................84
SECTION 11.17. Inspection.............................................84
SECTION 11.18. Certain Matters Regarding the Insurer..................85
SECTION 11.19. Acknowledgment of Multiple Roles.......................85
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EXHIBITS
EXHIBIT A Form of Notes......................................A-1
EXHIBIT B Form of Issuer Opinion.............................B-1
EXHIBIT C Request for Release of Contract....................C-1
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INDENTURE, dated as of January 1, 2000 (as amended, supplemented or
otherwise modified and in effect from time to time, this "INDENTURE"), between
FIRST INVESTORS AUTO OWNER TRUST 2000-A, a Delaware business trust (the
"ISSUER"), FIRST INVESTORS FINANCIAL SERVICES, INC., a Texas corporation, as
seller (the "SELLER"), and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, a
national banking association, not in its individual capacity but solely as
indenture trustee (in such capacity, the "INDENTURE TRUSTEE").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the holders of the Issuer's 7.174%
Asset-Backed Notes (the "NOTES"):
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee on the Closing
Date, for the benefit of the Noteholders and the Insurer, all of the Issuer's
right, title and interest in, to and under, whether now owned or existing or
hereafter acquired or arising (i) the Contracts; (ii) all amounts received on or
in respect of the Contracts after the Cutoff Date (except interest received
which accrued before the Cutoff Date); (iii) the security interests in the
Financed Vehicles granted by the Obligors pursuant to the Contracts; (iv) all
proceeds from claims on or refunds of premiums with respect to any physical
damage, credit life or credit disability insurance policies covering the
Financed Vehicles or the Obligors; (v) any Liquidation Proceeds; (vi) all of the
Issuer's rights to the Contract Files; (vii) the Collection Account, the Reserve
Account and the Note Payment Account and all amounts, securities, financial
assets, investments and other property deposited in or credited to any of the
foregoing and all proceeds thereof; (viii) all of the Issuer's rights under the
Sale and Allocation Agreement and the Servicing Agreement, including the right
of the Issuer to cause the Seller or the Servicer, as applicable, to repurchase
Contracts from the Issuer and the right of the Issuer to cause the Servicer to
purchase Contracts from the Issuer; and (ix) all present and future claims,
demands, causes of action and choses in action in respect of any or all of the
foregoing and all payments on or under and all proceeds of every kind and nature
whatsoever in respect of any or all of the foregoing, including all proceeds of
the conversion thereof, voluntary or involuntary, into cash or other liquid
property, all cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, insurance proceeds,
condemnation awards, rights to payment of any and every kind and other forms of
obligations and receivables, instruments and other property which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing (collectively, the "COLLATERAL").
The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Notes, equally and ratably without prejudice, priority or distinction, and to
secure compliance with the provisions of this Indenture, all as provided in this
Indenture.
The Indenture Trustee, as Indenture Trustee on behalf of the
Noteholders, acknowledges such Grant, accepts the trusts under this Indenture in
accordance with the provisions of this Indenture and agrees to perform its
duties required in this Indenture to the best of its ability to the end that the
interests of the Noteholders and the Insurer may be adequately and effectively
protected.
ARTICLE I
DEFINITIONS; INCORPORATION BY REFERENCE
1.1. DEFINITIONS.
(1) Except as otherwise specified herein or as the context may
otherwise require, the following terms shall have the respective meanings set
forth below for all purposes of this Indenture.
"ACT" shall have the meaning specified in Section 11.3(a).
"ADMINISTRATION AGREEMENT" shall mean the Administration Agreement,
dated as of January 1, 2000, by and among the Administrator, the Issuer and the
Indenture Trustee, as the same may from time to time be amended, supplemented or
otherwise modified and in effect.
"ADMINISTRATOR" shall mean First Investors or any successor
Administrator under the Administration Agreement.
"AFFILIATE" shall have the meaning specified in the Sale and
Allocation Agreement.
"AUTHENTICATING AGENT" shall have the meaning specified in Section
2.14.
"AUTHORIZED OFFICER" shall mean, with respect to the Issuer, any
officer of the Owner Trustee who is authorized to act for or on behalf of the
Owner Trustee in matters relating to the Issuer and who is identified on the
list of Authorized Officers delivered by the Owner Trustee to the Indenture
Trustee on the Closing Date (as such list may be modified or supplemented from
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time to time thereafter) and, for so long as the Administration Agreement is in
full force and effect, any officer of the Administrator who is authorized to act
for the Administrator in matters relating to the Issuer and to be acted upon by
the Administrator pursuant to the Administration Agreement.
"BACK-UP SERVICER" shall have the meaning specified in the Sale and
Allocation Agreement.
"BOOK-ENTRY NOTES" shall mean a beneficial interest in the Notes,
ownership and transfers of which shall be made through book entries by a
Clearing Agency as described in Section 2.11.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or
a day on which banking institutions or trust companies in New York, New York,
Wilmington, Delaware, Houston, Texas, Minneapolis, Minnesota or Atlanta, Georgia
are authorized or obligated by law, executive order or governmental decree to
remain closed.
"CERTIFICATE OF TRUST" shall have the meaning specified in the Trust
Agreement.
"CERTIFICATE REGISTRAR" shall have the meaning specified in the
Trust Agreement.
"CLEARING AGENCY" shall mean an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act.
"CLEARING AGENCY PARTICIPANT" shall mean a broker, dealer, bank,
other financial institution or other Person for whom from time to time a
Clearing Agency effects book-entry transfers and pledges of securities deposited
with the Clearing Agency.
"CLOSING DATE" shall mean January 24, 2000.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the Treasury Regulations promulgated thereunder.
"COLLATERAL" shall have the meaning specified in the Granting Clause
of this Indenture.
"COLLECTION ACCOUNT" shall have the meaning specified in the Sale
and Allocation Agreement.
"COMMISSION" shall mean the Securities and Exchange Commission.
"CORPORATE TRUST OFFICE" shall mean the principal
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office of the Indenture Trustee at which at any particular time its corporate
trust business shall be administered, which office at date of execution of this
Indenture is located at Sixth Street and Marquette Avenue MAC N9311-161,
Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: Corporate Trust Services - Asset-Backed
Administration, or at such other address as the Indenture Trustee may designate
from time to time by notice to the Noteholders and the Issuer, or the principal
corporate trust office of any successor Indenture Trustee at the address
designated by such successor Indenture Trustee by notice to the Noteholders and
the Issuer.
"CUSTODIAN" shall mean Norwest Bank Minnesota, National Association,
not in its individual capacity but solely as custodian, as specified herein.
"CUTOFF DATE" shall mean December 31, 1999.
"DEFAULT" shall mean any event that, with notice or the lapse of
time or both, would become an Event of Default.
"DEFINITIVE NOTES" shall have the meaning specified in Section 2.11.
"DELINQUENCY RATIO" shall have the meaning specified in the Sale and
Allocation Agreement.
"DEPOSITOR" shall have the meaning specified in the Trust Agreement.
"DEPOSITOR ACCOUNT" shall have the meaning specified in the Sale and
Allocation Agreement.
"EVENT OF DEFAULT" shall have the meaning specified in Section 5.1.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"EXECUTIVE OFFICER" shall mean, with respect to any corporation, the
Chief Executive Officer, the Chief Operating Officer, the Chief Financial
Officer, the President, any Executive Vice President, any Senior Vice President,
any Vice President, the Secretary or the Treasurer of such corporation and with
respect to any partnership, any general partner of such partnership.
"FILE NUMBERS" shall have the meaning specified in Section 6A.1(f).
"FILE NUMBER LIST" shall have the meaning specified in Section
6A.1(f).
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"FINAL NOTE PAYMENT DATE" shall mean February 15, 2006.
"FINANCED VEHICLE" shall have the meaning assigned thereto in the
Sale and Allocation Agreement.
"FIRST INVESTORS" shall mean First Investors Financial Services,
Inc.
"FISC" shall mean First Investors Servicing Corporation, together
with its successors and assigns.
"FISCAL YEAR" shall mean the period commencing on May 1 and ending
on April 30 of the following year.
"GRANT" shall mean to mortgage, pledge, bargain, sell, warrant,
alienate, remise, release, convey, assign, transfer, create, and to xxxxx x xxxx
upon and a security interest in and right of set-off against, and to deposit,
set over and confirm pursuant to this Indenture. A Grant of the Collateral or of
any other agreement or instrument shall include all rights, powers and options
(but none of the obligations) of the granting party thereunder, including the
immediate and continuing right to claim for, collect, receive and give receipt
for principal and interest payments in respect of the Collateral and all other
monies payable thereunder, to give and receive notices and other communications,
to make waivers or other agreements, to exercise all rights and options, to
bring Proceedings in the name of the granting party or otherwise, and generally
to do and receive anything that the granting party is or may be entitled to do
or receive thereunder or with respect thereto.
"GUARANTY" shall mean the guaranty entered into as of January 1,
2000 by the Seller, the Depositor, the Issuer, FISC, the Back-Up Servicer and
the Indenture Trustee.
"HOLDER" or "NOTEHOLDER" shall mean the Person in whose name a Note
is registered in the Note Register.
"INDEMNIFICATION AGREEMENT" means the Indemnification Agreement
dated as of January 12, 2000 among the Insurer, the Seller, and Banc of America
Securities LLC.
"INDENTURE TRUSTEE" shall mean Norwest Bank Minnesota, National
Association, a national banking association, not in its individual capacity but
solely as Indenture Trustee under this Indenture, and any successor indenture
trustee under this Indenture.
"INDEPENDENT" shall mean, when used with respect to any specified
Person, that such Person (i) is in fact independent of the Trust, any other
obligor on the Notes, the Seller, the Servicer and any Affiliate of any of the
foregoing Persons, (ii)
5
does not have any direct financial interest or any material indirect financial
interest in the Trust, any such other obligor, the Seller, the Servicer or any
Affiliate (other than a special purpose securitization vehicle whose rating is
based in part on its being bankruptcy-remote) of any of the foregoing Persons
and (iii) is not connected with the Trust, any such other obligor, the Seller,
the Servicer or any Affiliate of any of the foregoing Persons as an officer,
employee, promoter, underwriter, trustee, partner, director or person performing
similar functions.
"INDEMNITEES" shall have the meaning specified in Section 6A.4(d).
"INDEPENDENT CERTIFICATE" shall mean a certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.1, made by
an Independent appraiser or other expert appointed by an Issuer Order and
approved by the Indenture Trustee in the exercise of reasonable care, and such
opinion or certificate shall state that the signer has read the definition of
"Independent" in this Indenture and that the signer is Independent within the
meaning thereof.
"INSOLVENCY EVENT" means (a) the entry against the Insurer of a
decree or order by a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a trustee, conservator,
receiver or liquidator in any insolvency, conservatorship, receivership,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding up or liquidation of the Insurer's affairs, and
the continuance of any such decree or under unstayed and in effect or (b) the
consent by the Insurer to the appointment of a trustee, conservator, receiver or
liquidator in any insolvency, conservatorship, receivership, readjustment of
debt, marshalling of assets and liabilities or similar proceedings of or
relating to such Insurer as of or relating to substantially all of its property,
or such Insurer shall admit in writing its liability to pay its debts generally
as they become due, file a petition (or have one filed against such Insurer) to
take advantage of any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors, or suspend (voluntarily or
involuntarily) payment of its obligations.
"INSURANCE AGREEMENT" shall mean the Insurance Agreement, dated as
of January 1, 2000, by and among the Seller, the Administrator, the Servicer,
the Back-Up Servicer, the Issuer, the Depositor, the Owner Trustee, the
Indenture Trustee and the Insurer, as the same may be amended, supplemented or
otherwise modified and in effect from time to time.
"INSURANCE PREMIUM" shall have the meaning specified in the Premium
Side Letter Agreement.
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"INSURER" shall mean MBIA Insurance Corporation, a corporation
domiciled in New York, and its successors.
"INSURER DEFAULT" shall mean a default by the Insurer under the
Policy, including an Insolvency Event (after giving effect to any applicable
cure period).
"ISSUER" shall mean First Investors Auto Owner Trust 2000-A or any
successor to First Investors Auto Owner Trust 2000-A and, for purposes of any
provision contained herein each other obligor on the Notes.
"ISSUER ORDER" shall mean a written order signed in the name of the
Issuer by an Authorized Officer of the Issuer and delivered to the Indenture
Trustee.
"ISSUER REQUEST" shall mean a written request signed in the name of
the Issuer by an Authorized Officer of the Issuer and delivered to the Indenture
Trustee.
"LIQUIDATION PROCEEDS" shall mean all amounts received by the
Servicer with respect to any Defaulted Contract, net of the sum of (i) any
reasonable expenses incurred by the Servicer in connection with collection of
such contract and the disposition of the related Financed Vehicle (to the extent
determinable by the Servicer and not previously reimbursed) PLUS (ii) any
amounts required by law to be remitted to the related Obligor.
"LOSSES" shall have the meaning specified in Sections 6.7(a) and
6A.3(d).
"MOODY'S" shall mean Xxxxx'x Investors Service, Inc., and its
successors.
"MONTHLY NOTE PRINCIPAL" shall have the meaning assigned thereto in
the Sale and Allocation Agreement.
"NOTE BALANCE" shall mean, at any time, the aggregate principal
amount of all Notes Outstanding at such time.
"NOTE DEPOSITORY AGREEMENT" shall mean the agreement dated as of
January 1, 2000, among the Issuer, the Indenture Trustee and The Depository
Trust Company, as the initial Clearing Agency, relating to the Notes.
"NOTE PAYMENT ACCOUNT" shall have the meaning assigned thereto in
the Sale and Allocation Agreement.
"NOTE OWNER" shall mean, with respect to any Book-Entry Note, the
Person who is the beneficial owner of such Book-Entry
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Note as reflected on the books of the Clearing Agency or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"NOTE RATE" shall mean 7.174% per annum.
"NOTE REGISTER" shall have the meaning specified in Section 2.5.
"NOTE REGISTRAR" shall have the meaning specified in Section 2.5.
"NOTEHOLDERS" shall mean the Person in whose name a Note is
registered on the Note Register.
"NOTES" shall mean the Asset-Backed Notes issued by the Issuer
pursuant to this Indenture in the initial aggregate principal amount of
$167,969,000.
"OFFICER'S CERTIFICATE" shall mean a certificate signed by an
Authorized Officer of the Issuer and delivered to the Indenture Trustee, which
certificate shall comply with the applicable requirements of Section 11.1.
"OPINION OF COUNSEL" shall mean one or more written opinions of
counsel who may, except as otherwise expressly provided in this Indenture, be
outside counsel to, the Issuer, the Seller or the Servicer and who shall be
acceptable to the Indenture Trustee and the Insurer (provided that no Insurer
Default shall have occurred and is continuing), which opinion or opinions shall
be addressed to and delivered to the Indenture Trustee as Indenture Trustee and
the Insurer (provided that no Insurer Default shall have occurred and is
continuing), shall comply with any applicable requirements of Section 11.1 and
shall be in form and substance satisfactory to the Indenture Trustee.
"OUTSTANDING" shall mean, as of the date of determination, all Notes
theretofore authenticated and delivered under this Indenture except:
(i) Notes theretofore canceled by the Note Registrar or
delivered to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in
the necessary amount has been theretofore deposited with the Indenture
Trustee or any Paying Agent in trust for the Holders of such Notes;
PROVIDED, HOWEVER, that if such Notes are to be redeemed, notice of such
redemption must have been duly given pursuant to this Indenture or
8
provision for such notice must have been made in a manner satisfactory to
the Indenture Trustee; and
(iii) Notes in exchange for or in lieu of which other Notes have
been authenticated and delivered pursuant to this Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Notes are
held by a protected purchaser;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite Note
Balance have given any request, demand, authorization, direction, notice,
consent or waiver hereunder or under any Transaction Document, Notes owned by
the Issuer, any other obligor upon the Notes, the Seller, the Servicer or any
Affiliate of any of the foregoing Persons shall be disregarded and deemed not to
be Outstanding, except that, in determining whether the Indenture Trustee shall
be protected in relying on any such request, demand, authorization, direction,
notice, consent or waiver, only Notes that a Responsible Officer knows to be so
owned shall be so disregarded. Notes so owned that have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Indenture Trustee the pledgee's right so to act with respect
to such Notes and that the pledgee is not the Issuer, any other obligor upon the
Notes, the Seller, the Servicer or any Affiliate of any of the foregoing
Persons.
"OWNER TRUSTEE" shall mean Bankers Trust (Delaware), a Delaware
banking corporation, not in its individual capacity but solely as Owner Trustee
under the Trust Agreement, and any successor owner trustee under the Trust
Agreement.
"PAYING AGENT" shall mean the Indenture Trustee or any other Person
that meets the eligibility standards for the Indenture Trustee specified in
Section 6.11 and is authorized by the Issuer to make payments to and
distributions from the Collection Account and the Note Payment Account,
including payment of principal of or interest on the Notes, on behalf of the
Issuer.
"PAYMENT DATE" shall mean the 15th day of each month, or if such
15th day is not a Business Day, the following Business Day, commencing on
February 15, 2000.
"POLICY" shall mean the irrevocable financial guaranty insurance
policy dated January 24, 2000, issued by the Insurer to the Indenture Trustee
for the benefit of the Noteholders.
"POLICY CLAIM AMOUNT" shall have the meaning specified in the Sale
and Allocation Agreement.
"POOL BALANCE" shall have the meaning specified in the Sale and
Allocation Agreement.
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"PREDECESSOR NOTE" shall mean, with respect to any particular Note,
every previous Note evidencing all or a portion of the same debt as that
evidenced by such particular Note. Any Note authenticated and delivered under
Section 2.6 in lieu of a mutilated, lost, destroyed or stolen Note shall be
deemed, for purposes of this definition, to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
"PREMIUM SIDE LETTER AGREEMENT" shall have the meaning specified in
the Insurance Agreement.
"PROCEEDING" shall mean any suit in equity, action at law or other
judicial or administrative proceeding.
"PURCHASE AGREEMENT" means that Purchase Agreement, dated as of
January 12, 2000, between the Issuer, the Seller and Banc of America Securities
LLC.
"RATING AGENCY" shall mean Standard & Poor's or Xxxxx'x or, if
Standard & Poor's and Xxxxx'x cease to exist, any nationally recognized
statistical rating organization or other comparable Person designated by the
Issuer and acceptable to the Insurer (provided that no Insurer Default shall
have occurred and be continuing), notice of which designation shall have been
given to the Indenture Trustee, the Owner Trustee and the Servicer.
"RATING AGENCY CONDITION" shall mean, with respect to any action,
that each Rating Agency shall have notified the Seller, the Servicer, the
Insurer, the Indenture Trustee and the Owner Trustee that such action shall not
result in a reduction or withdrawal of the then current rating assigned to the
Notes without regard to the Policy.
"RE-XXXXXXX TRIGGER" means the occurrence of one or more of the
following:
(a) the shareholders' equity of First Investors (including its
consolidated subsidiaries) falls below $20,000,000;
(b) any Event of Default;
(c) one or more courts of competent jurisdiction have issued final,
non-appealable orders to the effect that the Indenture Trustee is not the
secured party with respect to Financed Vehicles securing any Contracts
where the aggregate initial principal balance of such affected Contracts
is equal to or greater than 5.0% or more of the Pool Balance as of the
date of such order.
"RECORD DATE" shall mean, with respect to any Payment
10
Date or Redemption Date, the close of business on the Business Day preceding
such Payment Date or Redemption Date; PROVIDED, HOWEVER, that if Definitive
Notes have been issued pursuant to Section 2.13, Record Date shall mean, with
respect to any Payment Date or Redemption Date, the last day of the preceding
Collection Period.
"REDEMPTION DATE" shall mean the Payment Date specified by the
Servicer pursuant to Section 10.1 on which date the Indenture Trustee shall
withdraw any amount remaining in the Reserve Account and deposit the portion of
such amount payable to the Noteholders in the Note Payment Account.
"REDEMPTION PRICE" shall mean, in the case of a redemption of Notes
pursuant to Section 10.1, an amount equal to the unpaid principal amount of the
Notes redeemed plus accrued and unpaid interest thereon.
"RESERVE ACCOUNT" shall have the meaning assigned thereto in the
Sale and Allocation Agreement.
"RESPONSIBLE OFFICER" shall mean any officer within the Corporate
Trust Department of the Indenture Trustee with direct responsibility for the
administration of this Indenture and also, with respect to a particular matter,
any other officer of the Indenture Trustee to whom such matter is referred
because of such officer's knowledge of and familiarity with such matter or other
similar matters.
"RULE 144A" Rule 144A under the Securities Act of 1933. as amended.
"RULE 144A INFORMATION" shall be such information as is specified
pursuant to Rule 144A(d)(4) under the Securities Act (or any successor provision
thereto).
"SALE AND ALLOCATION AGREEMENT" shall mean the Sale and Allocation
Agreement, dated as of January 1, 2000, by and among the Issuer, the Seller, the
Servicer, the Indenture Trustee and the Depositor as the same may be amended,
supplemented or otherwise modified and in effect from time to time.
"SELLER" shall mean First Investors Financial Services, Inc. a Texas
corporation, in its capacity as seller under the Sale and Allocation Agreement,
and its successors in such capacity.
"SERVICER" shall mean FISC, in its capacity as servicer under the
Servicing Agreement, and any Successor Servicer.
"SERVICING AGREEMENT" shall mean that certain Servicing Agreement,
dated as of January 1, 2000, between FISC, the Depositor, the Back-Up Servicer,
the Indenture Trustee and the Trust.
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"SERVICING FEE" shall mean the amount paid to the Servicer on each
Payment Date for the preceding Collection Period equal to the product of the
Servicing Rate and the Pool Balance as of the close of business on the first day
of the related Collection Period.
"SERVICING RATE" shall mean 2.5% per annum or such other rate as
determined in the Servicing Agreement; PROVIDED, HOWEVER, that if the Back-Up
Servicer becomes the Successor Servicer, the Servicing Rate shall be equal to
the greater of (a) 2.5% per annum or (b) the lowest of three bids obtained by
the Back-Up Servicer from third party servicers, who are qualified to act as
servicers, selected by the Back-Up Servicer and approved by the Insurer pursuant
to Section 2.08 of the Servicing Agreement.
"STANDARD & POOR'S" shall mean Standard & Poor's, a division of The
XxXxxx-Xxxx Companies, Inc., and its successors.
"STATE" shall mean any of the fifty states of the United States of
America or the District of Columbia.
"SUCCESSOR SERVICER" shall have the meaning specified in Section
3.7(e).
"TOTAL AVAILABLE FUNDS" shall have the meaning assigned thereto in
the Sale and Allocation Agreement.
"TOTAL NOTE INTEREST" shall have the meaning assigned thereto in the
Sale and Allocation Agreement.
"TOTAL SERVICING FEE" shall have the meaning assigned thereto in the
Sale and Allocation Agreement.
"TRANSACTION DOCUMENTS" shall mean the Servicing Agreement, the Sale
and Allocation Agreement, the Premium Side Letter, the Trust Agreement, the
Indemnification Agreement, the Certificate of Trust, this Indenture, the
Administration Agreement, the Purchase Agreement, the Note Depository Agreement,
the Insurance Agreement, the Policy, the Guaranty and the other documents and
certificates delivered in connection therewith, in each case as the same may
from time to time be amended, supplemented or otherwise modified and in effect.
"TRUST ACCOUNTS" shall mean the Collection Account, the Note Payment
Account, the Depositor Account and the Reserve Account.
"TRUST ESTATE" shall mean all money, instruments, rights and other
property that are subject or intended to be
12
subject to the lien and security interest of this Indenture for the benefit of
the Noteholders and the Insurer (including, but not limited to, all property and
interests Granted to the Indenture Trustee), including all proceeds thereof.
(2) Except as otherwise specified herein or as the context may
otherwise require, capitalized terms used but not otherwise defined herein have
the respective meanings set forth in, or incorporated by reference into, the
Sale and Allocation Agreement for all purposes of this Indenture.
1.2. RULES OF CONSTRUCTION. Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the
plural include the singular;
(6) any agreement, instrument or statute defined or referred
to herein or in any instrument or certificate delivered in
connection herewith means such agreement, instrument or statute as
from time to time amended, modified or supplemented and includes (in
the case of agreements or instruments) references to all attachments
thereto and instruments incorporated therein; and
(7) references to a Person are also to its permitted
successors and assigns.
ARTICLE II
THE NOTES
2.1. FORM.
(a) The Notes, together with the Indenture Trustee's certificates of
authentication, shall be substantially in the form set forth in Exhibit A, with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture, and may have such letters, numbers
13
or other marks of identification and such legends or endorsements placed thereon
as may, consistently herewith, be determined by the officers executing such
Notes, as evidenced by their execution thereof. Any portion of the text of any
Note may be set forth on the reverse thereof, with an appropriate reference
thereto on the face of the Note.
(b) The Definitive Notes shall be typewritten, printed, lithographed
or engraved, or produced by any combination of these methods (with or without
steel engraved borders), all as determined by the officers executing such Notes,
as evidenced by their execution of such Notes.
(c) Each Note shall be dated the date of its authentication. The
terms of the Notes set forth in Exhibit A hereto are part of the terms of this
Indenture and are incorporated herein by reference.
2.2. EXECUTION, AUTHENTICATION AND DELIVERY.
(a) The Notes shall be executed on behalf of the Issuer by any of
its Authorized Officers. The signatures of any such Authorized Officer on the
Notes may be manual or facsimile.
(b) Notes bearing the manual or facsimile signature of individuals
who were at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices on the date of such Notes.
(c) The Indenture Trustee shall, upon Issuer Order, authenticate and
deliver the Notes for original issue in an aggregate principal amount of
$167,969,000. The Note Balance at any time may not exceed such amount except as
provided in this Indenture.
(d) Each Note shall be dated the date of its authentication. The
Notes shall be issuable as registered Notes in minimum denominations of $250,000
and integral multiples of $1,000 in excess thereof.
(e) No Note shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has
14
been duly authenticated and delivered hereunder.
2.3. TEMPORARY NOTES.
(a) Pending the preparation of Definitive Notes, the Issuer may
execute, and upon receipt of an Issuer Order the Indenture Trustee shall
authenticate and deliver, temporary Notes that are printed, lithographed,
typewritten, mimeographed or otherwise produced of the tenor of the Definitive
Notes in lieu of which they are issued and with such variations not inconsistent
with the terms of this Indenture as the officers executing such Notes may
determine, as evidenced by their execution of such Notes.
(b) If temporary Notes are issued, the Issuer shall cause Definitive
Notes to be prepared without unreasonable delay. After the preparation of
Definitive Notes, the temporary Notes shall be exchangeable for Definitive Notes
upon surrender of the temporary Notes at the office or agency of the Issuer to
be maintained as provided in Section 3.2, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Notes, the Issuer shall
execute, and the Indenture Trustee shall authenticate and deliver in exchange
therefor, a like principal amount of Definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as Definitive Notes.
2.4. TAX TREATMENT. The Issuer has entered into this Indenture, and
the Notes shall be issued, with the intention that, for federal, state and local
income and franchise tax purposes, the Notes shall qualify as indebtedness of
the Issuer secured by the Trust Estate. The Issuer, by entering into this
Indenture, and each Noteholder, by its acceptance of a Note (and each Note Owner
by its acceptance of an interest in the applicable Book-Entry Note), agree to
treat the Notes as indebtedness of the Issuer for federal, state and local
income and franchise tax purposes.
2.5. REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE.
(a) The Issuer shall cause to be kept a register (the "NOTE
REGISTER") in which, subject to such reasonable regulations as it may prescribe,
the Issuer shall provide for the registration of Notes and the registration of
transfers of Notes. The Indenture Trustee initially shall be the registrar (the
"NOTE REGISTRAR") for the purpose of registering Notes and transfers of Notes as
herein provided. Upon any resignation of any Note Registrar, the Issuer shall
promptly appoint a successor or, if it elects not to make such an appointment,
assume the
15
duties of Note Registrar. In addition, the Indenture Trustee hereby accepts its
appointment as Certificate Registrar, as defined in and pursuant to Section 3.4
of the Trust Agreement.
(b) If a Person other than the Indenture Trustee is appointed by the
Issuer as Note Registrar, (i) the Issuer shall give the Indenture Trustee prompt
written notice of the appointment of such Note Registrar and of the location, or
any change in the location, of the Note Register, (ii) the Indenture Trustee
shall have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof and (iii) the Indenture Trustee shall have the right to
rely upon a certificate executed on behalf of the Note Registrar by an Executive
Officer thereof as to the names and addresses of the Noteholders and the
principal amounts and number of such Notes.
(c) Upon surrender for registration of transfer of any Note at the
office or agency of the Issuer to be maintained as provided in Section 3.2, if
the requirements of Section 8-401 of the Relevant UCC are met, the Issuer shall
execute, and the Indenture Trustee shall authenticate and deliver to the
Noteholder making such surrender, in the name of the designated transferee or
transferees, one or more new Notes in any authorized denomination, of a like
aggregate principal amount. The Indenture Trustee may rely upon the
Administrator with respect to the determination of whether the requirements of
Section 8-401 of the Relevant UCC are met.
(d) At the option of the Noteholder, Notes may be exchanged for
other Notes in any authorized denominations, of a like aggregate principal
amount, upon surrender of the Notes to be exchanged at such office or agency.
Whenever any Notes are so surrendered for exchange, if the requirements of
Section 8-401 the Relevant UCC are met, the Issuer shall execute, and the
Indenture Trustee shall authenticate and deliver to the Noteholder making such
exchange, the Notes which such Noteholder is entitled to receive. The Indenture
Trustee may rely upon the Administrator with respect to the determination of
whether the requirements of Section 8-401 of the Relevant UCC are met.
(e) All Notes issued upon any registration of transfer or exchange
of Notes shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
(f) All Notes presented or surrendered for registration of transfer
or exchange shall be duly endorsed by, or be accompanied by a written instrument
of transfer in the form of the Assignment attached to Exhibit A hereto
satisfactory to the Indenture Trustee duly executed by, the Holder thereof or
such Holder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution"
16
meeting the requirements of the Note Registrar.
(g) No service charge shall be made to a Holder for any registration
of transfer or exchange of Notes, but the Issuer may require payment by such
Holder of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Notes, other than exchanges pursuant to Section 2.3 or 9.5 not involving any
transfer.
(h) The Issuer shall not be required to make, and the Note Registrar
need not register, transfers or exchanges of Notes selected for redemption or
Notes with respect to which the due date for any payment will occur within 15
days.
2.6. MUTILATED, DESTROYED, LOST OR STOLEN NOTES.
(a) If (i) any mutilated Note is surrendered to the Indenture
Trustee, or the Indenture Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Note, and (ii) there is delivered to the
Indenture Trustee such security or indemnity as may be required by it to hold
the Issuer and the Indenture Trustee harmless, then, in the absence of notice to
the Issuer, the Note Registrar or the Indenture Trustee that such Note has been
acquired by a protected purchaser, and provided that the requirements of Section
8-405 of the Relevant UCC are met, the Issuer shall execute and the Indenture
Trustee shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Note, a replacement Note ; PROVIDED,
HOWEVER, that if any such destroyed, lost or stolen Note, but not a mutilated
Note, shall have become or within seven (7) days of the Indenture Trustee's
receipt of evidence to its satisfaction of such destruction, loss or theft shall
be due and payable, or shall have been called for redemption in whole pursuant
to Section 10.1, instead of issuing a replacement Note , the Issuer may pay such
destroyed, lost or stolen Note when so due or payable or upon the Redemption
Date without surrender thereof. The Indenture Trustee may rely upon the
Administrator with respect to the determination of whether the requirements of
Section 8-405 of the Relevant UCC are met. If, after the delivery of such
replacement Note or payment of a destroyed, lost or stolen Note pursuant to the
proviso to the preceding sentence, a protected purchaser of the original Note in
lieu of which such replacement Note was issued presents for payment such
original Note, the Issuer and the Indenture Trustee shall be entitled to recover
such replacement Note (or such payment) from the Person to whom such replacement
Note was delivered or any Person taking such replacement Note from such Person
to whom such replacement Note was delivered or any assignee of such Person,
except a protected purchaser, and shall
17
be entitled to recover upon the security or indemnity provided therefor to the
extent of any loss, damage, cost or expense incurred by the Issuer or the
Indenture Trustee in connection therewith.
(b) Upon the issuance of any replacement Note under this Section
2.6, the Issuer may require the payment by the Holder of such Note of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with such issuance and any other reasonable expenses (including the
fees and expenses of the Indenture Trustee) related thereto.
(c) Every replacement Note issued pursuant to this Section 2.6 in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
(d) The provisions of this Section 2.6 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Notes.
2.7. PERSONS DEEMED OWNERS. Prior to due presentation of a Note for
registration of transfer, the Issuer, the Indenture Trustee and any agent of the
Issuer or the Indenture Trustee may treat the Person in whose name such Note is
registered in the Note Register (as of the day of determination) as the owner of
such Note for the purpose of receiving payments of principal of and interest on
such Note and for all other purposes whatsoever, whether or not such Note shall
be overdue, and none of the Issuer, the Indenture Trustee or any agent of the
Issuer or the Indenture Trustee shall be affected by any notice to the contrary.
2.8. PAYMENTS.
(a) On each Payment Date, upon receipt of instructions from the
Servicer pursuant to Section 3.5(d) of the Sale and Allocation Agreement, the
Indenture Trustee shall apply or cause to be applied the amount on deposit in
the Collection Account (including amounts deposited therein from all interest
earnings on the Collection Account) on such Payment Date to make the following
payments in the following order of priority:
(1) to the Back-Up Servicer, Indenture Trustee, Custodian and
Owner Trustee, in its individual capacity, respectively, any unpaid
or unreimbursed fees and expenses (including, but not limited to,
attorneys' fees and transaction expenses); PROVIDED that such
expenses shall not
18
exceed $50,000 in the aggregate per year and (A) prior to an Event
of Servicing Termination, $100,000 in the total aggregate or (B)
after an Event of Servicing Termination, $200,000 in the total
aggregate, during such time as the Notes shall remain outstanding
and the Policy has not been cancelled;
(2) to the Servicer, the Total Servicing Fee for the preceding
Collection Period;
(3) to the Note Payment Account, the Total Note Interest for
such Payment Date;
(4) to the Note Payment Account, the Monthly Note Principal
for such Payment Date,
(5) unless an Insurer Default has occurred and is continuing,
to the Insurer, the Insurance Premium for such Payment Date plus any
overdue Insurance Premiums for previous Payment Dates;
(6) to the Insurer, the aggregate amount of any unreimbursed
payments under the Policy to the extent payable to the Insurer under
the Insurance Agreement PLUS accrued interest on any unreimbursed
payments under the Policy at the rate provided in the Insurance
Agreement PLUS any other amounts due the Insurer under the Insurance
Agreement and the Policy;
(7) if the Notes have been declared immediately due and
payable following the occurrence of an Event of Default, to the Note
Payment Account, the lesser of (a) the amount of Available Funds
available to be applied on such Payment Date to pay the Note Balance
and (b) the Note Balance;
(8) to the Reserve Account, the Reserve Account Deficiency, if
any, for such Payment Date;
(9) to the Owner Trustee, in its individual capacity,
Indenture Trustee, Custodian, Back-Up Servicer, Servicer, and
Insurer, respectively, any other amounts, if any, due under the
Transaction Documents; and
(10) to the Depositor Account, any remaining amount of
Available Funds.
(b) The principal of each Note shall be due and payable in
installments on each Payment Date in an aggregate amount (unless the Notes have
been declared immediately due and payable in accordance with Section 5.2
following the occurrence of an Event of Default) equal to the Monthly Note
Principal for such Payment Date. On each Payment Date (unless the Notes have
19
been declared immediately due and payable in accordance with Section 5.2
following the occurrence of an Event of Default), upon receipt of instructions
from the Servicer pursuant to Section 3.5(d), (e) and (f) of the Sale and
Allocation Agreement, the Indenture Trustee shall apply or cause to be applied
the amount on deposit in the Note Payment Account on such Payment Date to make
the following payments in the following order of priority:
(i) to the Noteholders, the Total Note Interest payable for
such Payment Date; and
(ii) to the Noteholders, the Monthly Note Principal for that
Payment Date until the principal amount of the Notes has been paid in
full.
(c) The principal amount of the Notes, to the extent not previously
paid, shall be due on the Final Note Payment Date.
(d) The Notes shall accrue interest at 7.174% and such interest
shall be due and payable on each Payment Date. Interest on the Notes shall be
calculated on the basis a 360-day year consisting of twelve 30-day months.
Subject to Section 3.1, any installment of interest or principal, if any,
payable on any Note that is punctually paid or duly provided for by the Issuer
on the applicable Payment Date shall be paid to the Person in whose name such
Note (or one or more Predecessor Notes) is registered on the related Record Date
by check mailed first-class postage prepaid to such Person's address as it
appears on the Note Register on such Record Date; PROVIDED, HOWEVER, that,
unless Definitive Notes have been issued pursuant to Section 2.13, with respect
to Notes registered on the Record Date in the name of the nominee of the
Clearing Agency (initially, such nominee to be Cede & Co.), payment shall be
made by wire transfer in immediately available funds to the account designated
by such nominee, and except for the final installment of principal payable with
respect to such Note on a Payment Date or on the related Final Note Payment Date
(and except for the Redemption Price for any Note called for redemption in whole
pursuant to Section 10.1(a) or (b)), 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. The Indenture Trustee shall pay all Total Note
Interest for any Payment Date to the Noteholders on the related Record Date even
if a portion of such Total Note Interest relates to an earlier Payment Date.
(e) All principal and interest payments on the Notes shall be made
PRO RATA to the Noteholders. The Indenture Trustee shall, before the Payment
Date on which the Issuer expects to pay the final installment of principal of
and interest on any Note, notify the Holder of such Note as of the related
Record Date of such final installment. Such notice shall be mailed or
20
transmitted by facsimile and shall specify that such final installment shall be
payable only upon presentation and surrender of such Note and shall specify the
place where such Note may be presented and surrendered for payment of such
installment. Notices in connection with redemption of Notes shall be mailed to
Noteholders as provided in Section 10.2.
(f) Notwithstanding the foregoing, the entire unpaid principal
amount of the Notes shall be due and payable, if not previously paid, on the
date on which the Notes have been declared or have automatically become
immediately due and payable in accordance with Section 5.2 following the
occurrence of an Event of Default. On each Payment Date following acceleration
of the Notes, upon receipt of instructions from the Servicer pursuant to Section
3.5(d) of the Sale and Allocation Agreement, the Indenture Trustee shall apply
or cause to be applied the amount on deposit in the Note Payment Account on such
Payment Date to make the following payments in the following order of priority:
(i) to the Noteholders, the Total Note Interest payable for
such Payment Date; and
(ii) to the Noteholders, the amount remaining on deposit in the
Note Payment Account on such Payment Date up to the Note Balance.
(g) the Indenture Trustee, upon receipt of instructions from the
Servicer, pursuant to Section 3.5(c) of the Sale and Allocation Agreement, shall
deposit the proceeds of any drawing under the Policy in respect of the Policy
Claim Amount in the Note Payment Account.
(h) the Indenture Trustee, upon receipt of instructions from the
Servicer pursuant to Section 3.5(e) or (f) of the Sale and Allocation Agreement,
shall apply the proceeds of any drawing from the Reserve Account as follows: (i)
amounts drawn in respect of the Total Servicing Fee shall be deposited to an
account designated by the Servicer; (ii) amounts drawn in respect of Total Note
Interest, Monthly Note Principal or the Note Balance shall be deposited into the
Note Payment Account; and (iii) amounts drawn in respect of the Insurance
Premium or unreimbursed payments under the Policy shall be deposited to an
account designated by the Insurer.
2.9. CANCELLATION. All Notes surrendered for payment, registration
of transfer, exchange or redemption in whole pursuant to Section 10.1(a) or (b)
shall, if surrendered to any Person other than the Indenture Trustee, be
delivered to the Indenture Trustee and shall be promptly canceled by the
Indenture Trustee. The Issuer may at any time deliver to the Indenture Trustee
for cancellation any Notes previously
21
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly canceled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for
any Notes canceled as provided in this Section 2.9, except as expressly
permitted by this Indenture. All canceled Notes may be held or disposed of by
the Indenture Trustee in accordance with its standard retention or disposal
policy as in effect at the time unless the Issuer shall direct by an Issuer
Order that they be destroyed or returned to it, provided that such Issuer Order
is timely and the Notes have not been previously disposed of by the Indenture
Trustee.
2.10. RELEASE OF COLLATERAL. Subject to Section 11.1 and the terms
of the Transaction Documents, the Indenture Trustee shall release property from
the lien of this Indenture at any time before the Notes have been paid in full
only upon receipt of an Issuer Request accompanied by an Officer's Certificate
and an Opinion of Counsel.
2.11. BOOK-ENTRY NOTES. The Notes, upon original issuance, shall be
issued in the form of typewritten Notes representing the Book-Entry Notes, to be
delivered to The Depository Trust Company, the initial Clearing Agency, by, or
on behalf of, the Issuer. The Notes representing the Book-Entry Notes shall be
registered initially on the Note Register in the name of Cede & Co. , the
nominee of the initial Clearing Agency, and no Note Owner thereof shall receive
a definitive Note representing such Note Owner's interest in such Note, except
as provided in Section 2.13. Unless and until definitive, fully registered Notes
(the "DEFINITIVE NOTES") have been issued to such Note Owners pursuant to
Section 2.13:
(i) the provisions of this Section 2.11 shall be in full
force and effect;
(ii) the Note Registrar and the Indenture Trustee shall be
entitled to deal with the Clearing Agency for all purposes of this
Indenture (including the payment of principal of and interest on the Notes
and the giving of instructions or directions hereunder) as the sole Holder
of the Notes, and shall have no obligation to the Note Owners;
(iii) to the extent that the provisions of this Section 2.11
conflict with any other provisions of this Indenture, the provisions of
this Section shall control;
(iv) the rights of Note Owners shall be exercised only through
the Clearing Agency and shall be limited to those established by law and
agreements between such Note Owners and the Clearing Agency and/or the
Clearing Agency Participants pursuant to the Note Depository Agreement;
unless and until Definitive Notes are issued pursuant to Section 2.13, the
initial Clearing Agency shall make book-entry transfers among the Clearing
Agency
22
Participants and receive and transmit payments of principal of and
interest on the Notes to such Clearing Agency Participants; and
(v) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Noteholders evidencing a
specified percentage of the Note Balance, the Clearing Agency shall be
deemed to represent such percentage only to the extent that it has
received instructions to such effect from Note Owners and/or Clearing
Agency Participants owning or representing, respectively, such required
percentage of the beneficial interest in the Notes and has delivered such
instructions to the Indenture Trustee.
2.12. NOTICES TO CLEARING AGENCY. Whenever a notice or other
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to such Note Owners pursuant to
Section 2.13, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Noteholders to the Clearing
Agency, and shall have no obligation to such Note Owners.
2.13. DEFINITIVE NOTES. If (i) the Issuer, the Administrator or the
Servicer 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 Book-Entry Notes and the Indenture Trustee or the Administrator is unable
to locate a qualified successor, (ii) the Administrator, at its option, advises
the Indenture Trustee in writing that it elects to terminate the book-entry
system through the Clearing Agency or (iii) after the occurrence of an Event of
Default or an Event of Servicing Termination, Note Owners of the Book-Entry
Notes representing beneficial interests aggregating not less than 51% of the
principal amount of such Notes advise the Indenture Trustee and the Clearing
Agency in writing that the continuation of a book-entry system through the
Clearing Agency is no longer in the best interests of such Note Owners, then the
Clearing Agency shall notify all Note Owners and the Indenture Trustee of the
occurrence of such event and of the availability of Definitive Notes to Note
Owners requesting the same. Upon surrender to the Indenture Trustee of the
typewritten Note 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
23
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.
2.14. AUTHENTICATING AGENTS. The Indenture Trustee may appoint one
or more Persons (each, an "AUTHENTICATING AGENT") with power to act on its
behalf and subject to its direction in the authentication of Notes in connection
with issuance, transfers and exchanges under Sections 2.2, 2.3, 2.5 and 2.6, as
fully to all intents and purposes as though each such Authenticating Agent had
been expressly authorized by those Sections to authenticate such Notes. For all
purposes of this Indenture, the authentication of Notes by an Authenticating
Agent pursuant to this Section 2.14 shall be deemed to be the authentication of
Notes "by the Indenture Trustee."
Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of any Authenticating Agent, shall be the successor
of such Authenticating Agent hereunder, without the execution or filing of any
further act on the part of the parties hereto or such Authenticating Agent or
such successor corporation.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Indenture Trustee and the Owner Trustee. The
Indenture Trustee may at any time terminate the agency of any Authenticating
Agent by giving written notice of termination to such Authenticating Agent and
the Owner Trustee. Upon receiving such notice of resignation or upon such a
termination, the Indenture Trustee may appoint a successor Authenticating Agent
and shall give written notice of any such appointment to the Owner Trustee.
The Administrator agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services. The provisions of
Sections 2.9 and 6.4 shall be applicable to any Authenticating Agent.
2.15. RESTRICTIONS.
(1) The Notes have not been and will not be registered under the
Securities Act and no Note or any interest therein may be reoffered, resold,
pledged or otherwise transferred except as contemplated by the legend set forth
in paragraph (d) below. Any
24
resale or other transfer, or attempted resale or other transfer which is not
made in compliance with the restrictions set forth in such legend shall not be
recognized by the Issuer. Authorization of the Issuer of a purchase, resale or
transfer of a Note will be granted only if made to a qualified institutional
buyer and, in each case, in accordance with the other requirements applicable to
a sale of Notes. Each purchaser acknowledges and is deemed to acknowledge that
no representation is made by the Issuer as to the availability of any exemption
under the Securities Act or any state securities laws for resale of the Notes
and that such purchaser may be required to bear the financial risks of this
investment for an indefinite period of time.
(2) Each purchaser and any account for which such purchaser is
acquiring the Notes are "Qualified Institutional Buyers" (as defined in Rule
144A under the Securities Act). Each purchaser has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of its investment in the Notes, and each purchaser and any account for
which such purchaser is acting are each able to bear the economic risk of such
investment.
(3) Each purchaser understands that the Notes, herein, are being
sold to it pursuant to an exemption from the registration requirements of the
Securities Act. Each purchaser is not purchasing the Notes with a view to
resale, distribute or dispose of in any other manner thereof in violation of the
Securities Act. Each purchaser has had access to such financial and other
information concerning the Issuer and the Notes as it deemed necessary or
appropriate in order to make an informed investment decision with respect to
such purchase of the Notes, including an opportunity to ask questions of and
request information from the Issuer.
(4) Each Note evidencing Book-Entry Notes and Definitive Notes (and
all Notes issued in exchange therefor or substitution thereof) shall bear a
legend in substantially the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION AND SUBJECT TO COMPLIANCE WITH OTHER APPLICABLE LAWS.
THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN (THE
"HOLDER")BY ITS ACCEPTANCE HEREOF OR OF SUCH INTEREST OR PARTICIPATION HEREIN
AGREES AND IS DEEMED TO AGREE TO OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY
OR ANY INTEREST OR PARTICIPATION HEREIN,
25
IF SUCH SALE IS MADE (I) PRIOR TO THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER
PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER RULE 144(K) (OR ANY SUCCESSOR
PROVISION THEREOF) AS PERMITTING THE RESALE BY NON-AFFILIATES OF RESTRICTED
SECURITIES WITHOUT RESTRICTION) AFTER THE LATER OF THE ORIGINAL ISSUE DATE
HEREOF AND THE LAST DATE ON WHICH THE TRUST OR ANY AFFILIATE OF THE TRUST WAS
THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) (THE "TWO-YEAR
DATE"), ONLY (A) TO THE TRUST, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS
BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES
ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A,(D) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
OTHERWISE IN COMPLIANCE WITH OTHER APPLICABLE LAWS, SUBJECT TO THE TRUST'S AND
THE INDENTURE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT
TO CLAUSE (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM OR (II) ON OR AFTER THE
TWO-YEAR DATE, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS MADE IN COMPLIANCE
WITH, OR IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER, THE SECURITIES ACT AND
ANY OTHER APPLICABLE SECURITIES LAWS, AND SUCH PERSON FURTHER COVENANTS AND
AGREES THAT IT WILL, PRIOR TO ANY OFFER, SALE, PLEDGE OR OTHER TRANSFER OF THIS
SECURITY, NOTIFY THE PERSON TO WHOM SUCH RESALE, PLEDGE OR OTHER TRANSFER IS TO
BE MADE OF THE RESALE RESTRICTIONS SET FORTH ABOVE AND THE REPRESENTATIONS SUCH
PERSON SHALL BE DEEMED TO HAVE MADE UPON ITS ACQUISITION HEREOF IN COMPLIANCE
WITH THE SECURITIES ACT. UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO ISSUER OR THE INDENTURE TRUSTEE FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY CERTIFICATE 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."
(5) The purchaser of a Note or any interest therein understands and
agrees and is deemed to understand and agree by its acceptance of such purchase
that the Notes and related documentation may be amended or supplemented from
time to time to modify the restrictions on and procedures for resales and other
transfers of the Notes to reflect any change in applicable law or regulation (or
interpretation thereof) or in practice relating to the resale or transfer of
restricted securities generally.
26
(6) The Holders of the Notes and all Note Owners are bound by, and
are deemed to have notice of, all provisions contained in the Indenture.
(7) The purchaser of a Note or any interest therein acknowledges and
is deemed to acknowledge by its acceptance of such purchase that the Issuer and
others will rely upon the truth and accuracy of the foregoing acknowledgments,
representations and agreements. If the purchaser is acquiring any Notes as a
fiduciary or agent for one or more investor accounts, it represents that it has
sole investment discretion with respect to each such account and that it has
full power to make the foregoing acknowledgments, representations and agreements
on behalf of each such account.
ARTICLE III
COVENANTS
3.1. PAYMENT COVENANT. The Issuer shall duly and punctually pay the
principal of and interest, if any, on the Notes in accordance with the terms of
the Notes and this Indenture. Amounts properly withheld under the Code by any
Person from a payment to any Noteholder of interest and/or principal shall be
considered as having been paid by the Issuer to such Noteholder for all purposes
of this Indenture.
3.2. MAINTENANCE OF OFFICE OR AGENCY. The Issuer shall maintain in
Minneapolis, Minnesota, 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.
3.3. MONEY FOR PAYMENTS TO BE HELD IN TRUST.
(a) As provided in Section 8.2, all payments of amounts due and
payable with respect to the Notes that are to be
27
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 from the Trust Accounts shall be paid over to the Issuer, except as
provided in this Section 3.3.
(b) On or before each Payment Date and Redemption Date, the Issuer
shall deposit or cause to be deposited in the Note Payment Account an aggregate
sum sufficient to pay the amounts then becoming due under the Notes, such sum to
be held in trust for the benefit of the Persons entitled thereto, and (unless
the Paying Agent is the Indenture Trustee) shall promptly notify the Indenture
Trustee of its action or failure so to act.
(c) The Issuer shall cause each Paying Agent other than the
Indenture Trustee to execute and deliver to the Indenture Trustee an instrument
in which such Paying Agent shall agree with the Indenture Trustee (and if the
Indenture Trustee acts as Paying Agent, it hereby so agrees), subject to the
provisions of this Section 3.3, that such Paying Agent shall:
(i) hold all sums held by it for the payment of amounts due
with respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and pay such sums to such Persons as herein
provided;
(ii) give the Indenture Trustee notice of any default by the
Issuer (or any other obligor upon the Notes) of which it has actual
knowledge in the making of any payment required to be made with respect to
the Notes;
(iii) at any time during the continuance of any such default,
upon the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to
the Indenture Trustee all sums held by it in trust for payment of the
Notes if at any time it ceases to meet the standards required to be met by
a Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code and any state or
local tax law with respect to the withholding from any payments made by it
on the 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
28
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 payment by any Paying Agent to the Indenture
Trustee, such Paying Agent shall be released from all further liability with
respect to such sums.
(e) Subject to applicable laws with respect to escheat of funds, any
money held by the Indenture Trustee or any Paying Agent in trust for the payment
of any amount due with respect to any Note and remaining unclaimed for two (2)
years after such amount has become due and payable shall be discharged from such
trust and be paid to the Issuer on Issuer Request, and the Holder of such Note
shall thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Indenture Trustee or such Paying Agent with respect to
such trust money shall thereupon cease; PROVIDED, HOWEVER, that the Indenture
Trustee or such Paying Agent, before being required to make any such repayment,
shall at the expense and direction of the Issuer cause to be published once, in
a newspaper published in the English language, customarily published on each
Business Day and of general circulation in The City of New York, notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than thirty (30) days from the date of such publication, any
unclaimed balance of such money then remaining shall be repaid to the Issuer.
The Indenture Trustee shall also adopt and employ, at the expense and direction
of the Issuer, any other reasonable means of notification of such repayment
(including, but not limited to, mailing notice of such repayment to Holders
whose Notes have been called but have not been surrendered for redemption in
whole pursuant to Section 10.1 or whose right to or interest in monies due and
payable but not claimed is determinable from the records of the Indenture
Trustee or of any Paying Agent at the last address of record for each such
Holder).
3.4. EXISTENCE. The Issuer shall keep in full effect its existence,
rights and franchises as a business trust under the laws of the State of
Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other State or of the United States of America,
in which case the Issuer shall keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and shall obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Trust Estate.
29
3.5. PROTECTION OF TRUST ESTATE. The Issuer shall from time to time
execute and deliver all such supplements and amendments hereto and all such
financing statements, continuation statements, instruments of further assurance
and other instruments, and shall take such other action necessary or advisable
to:
(i) maintain or preserve the lien and security interest (and
the priority thereof) of this Indenture or carry out more effectively the
purposes hereof;
(ii) perfect, publish notice of or protect the validity of
any Grant made or to be made by this Indenture;
(iii) enforce any of the Collateral; or
(iv) preserve and defend title to the Trust Estate and the
rights of the Indenture Trustee and the Noteholders in the Trust Estate
against the claims of all Persons.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute upon a written instruction from the Issuer or
Servicer any financing statement, continuation statement or other instrument
required to be executed pursuant to this Section 3.5.
3.6. OPINIONS AS TO TRUST ESTATE.
(a) On the Closing Date, the Issuer shall deliver to the Indenture
Trustee an Opinion of Counsel substantially in the form attached hereto as
Exhibit B.
(b) On or before March 31 of each year (commencing with the year
2001), the Issuer shall deliver to the Indenture Trustee an Opinion of Counsel
either stating that, in the opinion of such counsel, such action has been taken
with respect to the recording, filing, re-recording and refiling of this
Indenture, any indentures supplemental hereto and any other requisite documents
and with respect to the execution and filing of any financing statements and
continuation statements as is necessary to maintain the lien and security
interest created by this Indenture and reciting the details of such action or
stating that, in the opinion of such counsel, no such action is necessary to
maintain such lien and security 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 shall, in the opinion of such counsel, be required to
30
maintain the lien and security interest of this Indenture until March 31 in the
following year.
3.7. PERFORMANCE OF OBLIGATIONS; SERVICING OF CONTRACTS.
(a) The Issuer shall not take any action and shall use its best
efforts not to permit any action to be taken by others that would release any
Person from any of such Person's material covenants or obligations under any
instrument or agreement included in the Trust Estate or that would result in the
amendment, hypothecation, subordination, termination or discharge of, or impair
the validity or effectiveness of, any such instrument or agreement, except as
expressly provided in this Indenture and the other Transaction Documents.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee in an Officer's Certificate
shall be deemed to be action taken by the Issuer. Initially, the Issuer has
contracted with the Servicer and the Administrator to assist the Issuer in
performing its duties under this Indenture.
(c) The Issuer shall punctually perform and observe all of its
obligations and agreements contained in this Indenture, the other Transaction
Documents and the instruments and agreements included in the Trust Estate,
including, but not limited to, filing or causing to be filed all financing
statements and continuation statements required to be filed under the Relevant
UCC by the terms of this Indenture and the Servicing Agreement in accordance
with and within the time periods provided for herein and therein. Except as
otherwise expressly provided therein, the Issuer shall not waive, amend, modify,
supplement or terminate any Transaction Document or any provision thereof
without the consent of the Indenture Trustee or the Noteholders evidencing not
less than 51% of the Note Balance.
(d) If the Issuer shall have knowledge of the occurrence of an Event
of Servicing Termination under the Servicing Agreement, the Issuer shall
promptly notify the Indenture Trustee, the Insurer and the Rating Agencies
thereof and shall specify in such notice the action, if any, the Issuer is
taking in respect of such default. If an Event of Servicing Termination shall
arise from the failure of the Servicer to perform any of its duties or
obligations under the Servicing Agreement with respect to the Contracts, the
Issuer shall take all reasonable steps available to it to remedy such failure.
(e) As promptly as possible after the giving of notice of
termination to the Servicer and Back-Up Servicer of the
31
Servicer's rights and powers pursuant to Section 5.02 of the Servicing
Agreement, the Issuer shall (subject to the rights of the Indenture Trustee to
direct such appointment pursuant to Section 5.02 of the Servicing Agreement)
appoint a successor servicer acceptable to the Insurer (the "SUCCESSOR
SERVICER"), and such Successor Servicer shall accept its appointment by a
written assumption in a form acceptable to the Indenture Trustee and the Insurer
(provided that no Insurer Default shall have occurred and be continuing). In the
event that a Successor Servicer has not been appointed and has not accepted its
appointment at the time when the Servicer ceases to act as Servicer, the
Indenture Trustee, without further action, shall automatically be appointed the
Successor Servicer. In its role as Successor Servicer, Norwest Bank Minnesota,
National Association its successors or assigns, shall have (i) no liability with
respect to any obligation which was required to be performed by the terminated
Servicer prior to the date that the Successor Servicer becomes the Servicer or
any claim of a third party based on any alleged action or inaction of the
terminated Servicer, (ii) no obligation to perform any repurchase or advancing
obligations, if any, of the Servicer, (iii) no obligation to pay any taxes
required to be paid by the Servicer, (iv) no obligation to pay any of the fees
and expenses of any other party involved in this transaction and (v) no
liability or obligation with respect to any Servicer indemnification obligations
of any prior Servicer including the original Servicer. Notwithstanding any other
provision in the Transaction Documents to the contrary, should the Back-Up
Servicer by any means become Successor Servicer, the Back-Up Servicer shall not
inherit any of the indemnification obligations of any prior servicer including
the original Servicer. The indemnification obligations of the Back-Up Servicer,
upon becoming Successor Servicer are expressly limited to those instances of
gross negligence or willful misconduct on behalf of the Back-Up Servicer in its
role as Successor Servicer. The Indenture Trustee may resign as the Servicer by
giving written notice of such resignation to the Issuer and the Insurer
(provided that no Insurer Default shall have occurred and be continuing) and in
such event shall be released from such duties and obligations, such release not
to be effective until the date a new servicer enters into a Servicing Agreement
with the Issuer as provided below. Upon delivery of any such notice to the
Issuer, the Issuer shall obtain a new servicer as the Successor Servicer under
the Servicing Agreement. Any Successor Servicer (other than the Indenture
Trustee) shall (i) be an established financial institution having a net worth of
not less than $50,000,000 and whose regular business includes the servicing of
installment sale contracts and (ii) enter into a Servicing Agreement with the
Issuer having substantially the same provisions as the provisions of the
Servicing Agreement applicable to the Servicer and (iii) shall otherwise be an
Eligible Servicer. If, within thirty (30) days after the delivery of the notice
referred to above, the
32
Issuer shall not have obtained such a new servicer, the Indenture Trustee may
appoint, or may petition a court of competent jurisdiction to appoint, a
Successor Servicer. In connection with any such appointment, the Indenture
Trustee may make such arrangements for the compensation of such successor as it
and such successor shall agree, subject to the limitations set forth below and
in the Servicing Agreement, and, in accordance with Section 2.01 of the
Servicing Agreement, the Issuer shall enter into an agreement with such
successor for the servicing of the Contracts (such agreement to be in form and
substance satisfactory to the Indenture Trustee and the Insurer (provided that
no Insurer Default shall have occurred and be continuing) or if an Insurer
Default has occurred and is continuing, such agreement has been consented to by
the Noteholders evidencing not less than 51% of the Note Balance). If the
Indenture Trustee shall succeed to the Servicer's duties as servicer of the
Contracts as provided herein, it shall do so in its individual capacity and not
in its capacity as Indenture Trustee and, accordingly, the provisions of Article
VI shall be inapplicable to the Indenture Trustee in its duties as the successor
to the Servicer and the servicing of the Contracts. In case the Indenture
Trustee shall become successor to the Servicer under the Servicing Agreement,
the Indenture Trustee shall be entitled to subservice any and all of its duties
and responsibilities hereunder; PROVIDED, HOWEVER, that the Indenture Trustee,
in its capacity as the Servicer, shall be fully liable for the actions and
omissions of such subservicer in such capacity as Successor Servicer.
(f) Upon any termination of the Servicer's rights and powers
pursuant to Section 5.02 of the Servicing Agreement, the Issuer shall promptly
notify the Indenture Trustee and the Insurer of such termination. Upon any
appointment of a Successor Servicer by the Issuer, the Issuer shall promptly
notify the Indenture Trustee and the Insurer of such appointment, specifying in
such notice the name and address of such Successor Servicer.
(g) Without derogating from the absolute nature of the assignment
granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Issuer shall not, without the prior written
consent of the Insurer (if no Insurer Default shall have occurred an be
continuing), the Indenture Trustee and the Holders of not less than 51% of the
Note Balance, amend, modify, waive, supplement, terminate or surrender, or agree
to any amendment, modification, waiver, supplement, termination or surrender of,
the terms of any Collateral (except to the extent otherwise provided in the
Servicing Agreement or the other Transaction Documents).
3.8. NEGATIVE COVENANTS. If any Notes are Outstanding or the Insurer
has not been paid all amounts owed to it, the Issuer shall not:
33
(i) except as expressly permitted by this Indenture, the Trust
Agreement, the Servicing Agreement or the Sale and Allocation Agreement,
sell, transfer, exchange or otherwise dispose of any of the properties or
assets of the Issuer, including those included in the Trust Estate, unless
directed to do so by the Indenture Trustee with the prior written consent
of the Insurer;
(ii) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Notes (other than amounts
properly withheld from such payments under the Code or applicable state
law) or assert any claim against any present or former Noteholder by
reason of the payment of taxes levied or assessed upon the Issuer;
(iii) dissolve or liquidate in whole or in part;
(iv) (A) permit the validity or effectiveness of this Indenture
to be impaired, or permit the lien of this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit any Person
to be released from any covenants or obligations with respect to the Notes
under this Indenture except as may be expressly permitted hereby, (B)
permit any lien, charge, excise, claim, security interest, mortgage or
other encumbrance (other than the lien of this Indenture) to be created on
or extend to or otherwise arise upon or burden the Trust Estate or any
part thereof or any interest therein or the proceeds thereof (other than
tax liens, mechanics' liens and other liens that arise by operation of
law, in each case on any of the Financed Vehicles and arising solely as a
result of an action or omission of the related Obligor) or (C) permit the
lien of this Indenture not to constitute a valid first priority (other
than with respect to any such tax, mechanics' or other lien) security
interest in the Trust Estate;
(v) engage in any activities other than financing, acquiring,
owning, pledging and managing the Contracts as contemplated by the
Servicing Agreement, the Trust Agreement, the Sale and Allocation
Agreement and this Indenture and activities incidental to such activities;
or
(vi) incur, assume or guarantee any indebtedness other than the
indebtedness evidenced by the Notes or indebtedness otherwise permitted by
the Servicing Agreement, the Trust Agreement, the Sale and Allocation
Agreement or this Indenture.
3.9. ANNUAL STATEMENT AS TO COMPLIANCE. On or before July 31 of each
year (commencing with the year 2001),
34
the Issuer shall deliver to the Indenture Trustee and the Insurer 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 the
preceding Fiscal Year (or, in the case of the Officer's Certificate to be
delivered in the year 2001, during the period beginning on the Closing
Date and ending on April 30, 2001) 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 preceding Fiscal Year (or, in the
case of the Officer's Certificate to be delivered in the year 2001, during
the period beginning on the Closing Date and ending on April 30, 2001) or,
if there has been a default in its compliance with any such condition or
covenant, specifying each such default known to such Authorized Officer
and the nature and status thereof.
3.10. ISSUER MAY NOT MERGE. The Issuer shall not enter into any
merger, consolidation or conveyance transaction regardless of the surviving
entity.
3.11. NO OTHER BUSINESS. The Issuer shall not engage in any business
other than financing, acquiring, owning and pledging the Contracts in the manner
contemplated by this Indenture and the other Transaction Documents and
activities incidental thereto.
3.12. NO BORROWING. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
3.13. SERVICER'S OBLIGATIONS. The Issuer shall cause the Servicer to
comply with the Sale and Allocation Agreement and the Servicing Agreement.
3.14. GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES. Except as
contemplated by this Indenture and the other Transaction Documents, the Issuer
shall not make any loan or advance or credit to, or guarantee (directly or
indirectly or by an instrument having the effect of assuring another's payment
or performance on any obligation or capability of so doing or
35
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or own,
purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person.
3.15. CAPITAL EXPENDITURES. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
3.16. RESTRICTED PAYMENTS. The Issuer shall not, directly or
indirectly, (i) make any distribution (by reduction of capital or otherwise),
whether in cash, property, securities or a combination thereof, to the Owner
Trustee or any owner of a beneficial interest in the Issuer or otherwise with
respect to any ownership or equity interest or security in or of the Issuer or
to the Servicer, (ii) redeem, purchase, retire or otherwise acquire for value
any such ownership or equity interest or security or (iii) set aside or
otherwise segregate any amounts for any such purpose; PROVIDED, HOWEVER, that
the Issuer may make, or cause to be made, (A) payments to the Servicer and the
Owner Trustee as contemplated by, and to the extent funds are available for such
purpose under, the Sale and Allocation Agreement or the Trust Agreement and (B)
payments to the Indenture Trustee pursuant to Section 2(a)(ii) of the
Administration Agreement. The Issuer shall not, directly or indirectly, make
payments to or distributions from the Collection Account except in accordance
with this Indenture and the other Transaction Documents.
3.17. NOTICE OF EVENTS OF DEFAULT. The Issuer shall give the
Indenture Trustee, the Insurer and the Rating Agencies prompt written notice of
each Event of Default hereunder, each default on the part of the Seller or the
Servicer of its obligations under the Sale and Allocation Agreement.
3.18. 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.
3.19. FURTHER INSTRUMENTS AND ACTS. Upon request of the Indenture
Trustee or the Insurer, the Issuer shall execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper to
carry out more effectively the purpose of this Indenture.
36
3.20. RULE 144A INFORMATION. At any time when the Issuer is not
subject to Section 13 or 15(d) of the Exchange Act and is not exempt from
reporting pursuant to Rule 12g3-2(b) under the Exchange Act, upon the request of
any Noteholder or Note Owner, the Issuer shall promptly furnish or cause to be
furnished Rule 144A Information to such Noteholder or Note Owner or to a
prospective purchaser of a Note designated by such Noteholder or Note Owner, in
order to permit compliance by such Noteholder or Note Owner with Rule 144A in
connection with the resale of such Note.
3.21. RE-XXXXXXX TRIGGER. Upon the occurrence of a Re-Xxxxxxx
Trigger, the Seller shall request the Servicer to and, upon the receipt of such
request, the Servicer shall, take all steps necessary to cause the certificate
of title or other evidence of ownership of the related Financed Vehicle to be
revised to name the Indenture Trustee as lien holder on behalf of the
Noteholders and the Insurer. Any costs associated with such revision of the
certificate of title shall be paid by the Seller, and to the extent not paid by
the Seller, by the Servicer.
It is understood that the Servicer shall remain obligated to perform
its duties pursuant to this Section 3.21, notwithstanding anything to the
contrary in this Indenture, until such time as all outstanding amounts under the
Transaction Documents have been paid to the Noteholders and the Insurer.
ARTICLE IV
SATISFACTION AND DISCHARGE
4.1. SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture shall
cease to be of further effect with respect to the Notes except as to (i) rights
of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.3, 3.4, 3.5, 3.8,
3.10, 3.11, 3.12, 3.13, 3.15 and 3.16 and, (v) the rights, obligations and
immunities of the Indenture Trustee hereunder (including the rights of the
Indenture Trustee under Section 6.7 and the obligations of the Indenture Trustee
under Section 4.3), and (vi) the rights of Noteholders as beneficiaries hereof
with respect to the property so deposited with the Indenture Trustee payable to
all or any of them, and the Indenture Trustee, on demand of and at the expense
of the Issuer, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture with respect to the Collateral securing the Notes
and the Notes, when:
37
(A) either
(1) all Notes theretofore authenticated and delivered (other
than (i) Notes that have been destroyed, lost or stolen and that have been
replaced or paid as provided in Section 2.6 and (ii) Notes for whose
payment money has theretofore been irrevocably 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 and the Policy
has expired and has been returned to the Insurer for cancellation; or
(2) all Notes not theretofore delivered to the Indenture
Trustee for cancellation have become due and payable and the Issuer has
irrevocably deposited or caused to be irrevocably deposited with the
Indenture Trustee, in trust, cash or direct obligations of or obligations
guaranteed by the United States of America (which will mature prior to the
date needed), in an amount sufficient to pay and discharge the entire
indebtedness on such Notes when due on the Final Note Payment Date or
Redemption Date (if Notes shall have been called for redemption pursuant
to Section 10.1(a)), as the case may be;
(B) the Issuer has paid or caused to be paid all other sums payable
by the Issuer hereunder and under the other Transaction Documents;
(C) the Issuer has delivered to the Indenture Trustee and the
Insurer an Officer's Certificate, an Opinion of Counsel and (if required by the
Indenture Trustee) an Independent Certificate from a firm of certified public
accountants, each meeting the applicable requirements of Section 11.1(a) and,
subject to Section 11.2, each stating that all conditions precedent provided for
in this Indenture relating to the satisfaction and discharge of this Indenture
have been complied with; and
(D) the Issuer has delivered to the Indenture Trustee an Opinion of
Counsel to the effect that the satisfaction and discharge of this Indenture
pursuant to this Section 4.1 will not cause any Noteholder to be treated as
having sold or exchanged any of its Notes for purposes of Section 1001 of the
Code.
4.2. SATISFACTION, DISCHARGE AND DEFEASANCE OF THE NOTES.
(a) Upon satisfaction of the conditions set forth in subsection (b)
below, the Issuer shall be deemed to have paid and
38
discharged the entire indebtedness on all the Notes Outstanding, and the
provisions of this Indenture, as it relates to such Notes, shall no longer be in
effect (and the Indenture Trustee, at the expense of the Issuer, shall execute
proper instruments acknowledging the same), except as to:
(i) the rights of the Noteholders to receive, from the trust
funds described in subsection (b)(i) hereof, payment of the principal of
and interest on the Notes Outstanding at maturity of such principal or
interest;
(ii) the obligations of the Issuer with respect to the Notes
under Sections 2.5, 2.6, 3.2 and 3.3;
(iii) the obligations of the Issuer to the Indenture Trustee
under Section 6.7; and
(iv) the rights, powers, trusts and immunities of the Indenture
Trustee hereunder and the duties of the Indenture Trustee hereunder.
(b) The satisfaction, discharge and defeasance of the Notes pursuant
to subsection (a) of this Section 4.2 is subject to the satisfaction of all of
the following conditions:
(i) the Issuer has deposited or caused to be deposited
irrevocably (except as provided in Section 4.4) with the Indenture Trustee
as trust funds in trust, specifically pledged as security for, and
dedicated solely to, the benefit of the Noteholders, which, through the
payment of interest and principal in respect thereof in accordance with
their terms will provide, not later than one day prior to the due date of
any payment referred to below, money in an amount sufficient, in the
opinion of a nationally recognized firm of independent certified public
accountants expressed in a written certification thereof delivered to the
Indenture Trustee, to pay and discharge the entire indebtedness on the
Notes Outstanding, for principal thereof and interest thereon to the date
of such deposit (in the case of Notes that have become due and payable) or
to the maturity of such principal and interest, as the case may be;
(ii) such deposit will not result in a breach or violation of,
or constitute an event of default under, any Transaction Document or other
agreement or instrument to which the Issuer is bound;
(iii) no Event of Default has occurred and is continuing on
the date of such deposit or on the ninety-first (91st) day after such
date;
39
(iv) the Issuer has delivered to the Indenture Trustee and the
Insurer an Opinion of Counsel to the effect that the satisfaction,
discharge and defeasance of the Notes pursuant to this Section 4.2 will
not cause any Noteholder to be treated as having sold or exchanged any of
its Notes for purposes of Section 1001 of the Code; and
(v) the Issuer has delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for in this Indenture relating to the
defeasance contemplated by this Section 4.2 have been complied with; and
(vi) all amounts then owing to the Insurer have been paid.
4.3. APPLICATION OF TRUST MONEY. All monies deposited with the
Indenture Trustee pursuant to Section 4.1 shall be held in trust and applied by
the Indenture Trustee, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent, as the
Indenture Trustee may determine, to the Noteholders for the payment or
redemption of which such monies have been deposited with the Indenture Trustee,
of all sums due and to become due thereon for principal and interest, but such
monies need not be segregated from other funds except to the extent required
herein or in the Sale and Allocation Agreement or required by law.
4.4. REPAYMENT OF MONIES HELD BY PAYING AGENT. In connection with
the satisfaction and discharge of this Indenture with respect to the Notes, all
monies then held by any Paying Agent other than the Indenture Trustee under the
provisions of this Indenture with respect to such Notes shall, upon demand of
the Issuer, be paid to the Indenture Trustee to be held and applied according to
Section 3.3, and thereupon such Paying Agent shall be released from all further
liability with respect to such monies.
4.5. CONTINUING OBLIGATIONS OF INDENTURE TRUSTEE. It is understood
that the Indenture Trustee shall remain obligated to perform its duties pursuant
to Sections 2.8 (a)(i), (ii), (v), (vi), (vii), (viii), (ix) and (x) and Section
5.4(b)(i),(ii), (v) and (vi), notwithstanding anything to the contrary in this
Article IV or elsewhere in this Indenture, until such time as all outstanding
amounts have been paid pursuant to such sections.
40
ARTICLE V
REMEDIES
5.1. EVENTS OF DEFAULT. "EVENT OF DEFAULT" means the occurrence of
any one of the following events (whatever the reason for such event and whether
such event 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):
(1) default in the payment of any interest on any Note when the same
becomes due and payable;
(2) default in the payment of any principal due and payable on the
Notes on the date payable, including, the Final Note Payment Date;
(3) default in the observance or performance of any material
covenant or agreement of the Issuer, the Seller or the Servicer made in
the Transaction Documents (other than a covenant or agreement a default in
the observance or performance of which is specifically dealt with
elsewhere in this Section 5.1), and such default shall continue or not be
cured for a period of thirty (30) days after there shall have been given,
by registered or certified mail, to the Issuer by the Indenture Trustee or
to the Issuer and the Indenture Trustee by the Noteholders evidencing not
less than 25% of the Notes or the Insurer (provided that no Insurer
Default shall have occurred and be continuing), a written notice
specifying such default and requiring it to be remedied and stating that
such notice is a notice of Default hereunder;
(4) any representation or warranty of the Issuer, the Seller or the
Servicer made in the Transaction Documents or in any certificate delivered
pursuant hereto or in connection herewith proving to have been incorrect
in any material respect as of the time when the same shall have been made,
and the circumstance or condition in respect of which such representation
or warranty was incorrect shall not have been eliminated or otherwise
cured for a period of thirty (30) days after there shall have been given,
by registered or certified mail, to the Issuer by the Indenture Trustee or
to the Issuer and the Indenture Trustee by the Noteholders evidencing not
less than 25% of the Notes or the Insurer (provided that no Insurer
Default shall have occurred and be continuing), a written notice
specifying such incorrect representation or warranty and requiring it to
be remedied and stating that such notice is a notice of Default hereunder;
41
(5) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Seller, the Servicer, the
Issuer or any substantial part of the Trust Estate in an involuntary case
under any applicable federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
of the Issuer or for any substantial part of the Trust Estate, or ordering
the winding-up or liquidation of the Issuer's affairs, and such decree or
order shall remain unstayed and in effect for a period of sixty (60)
consecutive days;
(6) the cessation of a valid perfected first priority security
interest in the Contracts in favor of the Issuer which is not cured within
the applicable cure period;
(7) the merger or consolidation (including any conveyance
transaction) of the Issuer with or into any Person regardless of the
surviving entity;
(8) the merger or consolidation (including a conveyance transaction)
of the Servicer with or into any person whereby the Servicer is not the
surviving entity;
(9) the commencement by the Seller, the Servicer or the Issuer of a
voluntary case under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or the consent
by the Seller, the Servicer or the Issuer to the entry of an order for
relief in an involuntary case under any such law, or the consent by the
Seller, the Servicer or the Issuer to the appointment or taking possession
by a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Seller, the Servicer or the Issuer or for any
substantial part of the Trust Estate, or the making by the Seller, the
Servicer or the Issuer of any general assignment for the benefit of
creditors, or the failure by the Seller, the Servicer or the Issuer
generally to pay its debts as such debts become due, or the taking of any
action by the Seller, the Servicer or the Issuer in furtherance of any of
the foregoing;
(10) an Event of Servicing Termination shall have occurred under the
Servicing Agreement;
(11) the Seller or the Servicer shall have defaulted on any payment
required to be made by it under any material credit agreement or other
loan agreement pursuant to which it has borrowed money;
(12) a draw shall be made under the Policy;
42
(13) the Insurer shall have given notice that an event of default
has occurred and is continuing under the Insurance Agreement;
(14) a material breach by the Seller of its obligations under the
Sale and Allocation Agreement;
(15) failure of the Servicer to make any required deposit or payment
when due under the Transaction Documents;
(16) an event of default under any Transaction Document which is not
cured within the applicable cure period set forth under the related
Transaction Document;
(17) the average Delinquency Ratio for any three Collection Periods
exceeds 7.0% during months one through twelve after closing and the
Delinquency Ratio exceeds 8.5% thereafter;
(18) Cumulative Net Losses at any month indicated in the following
table (measured from the Closing Date) shall exceed the percentage
corresponding thereto:
------------------
Month
------------------
0-3 | 0.25%
------------------
4-6 | 1.80%
------------------
7-9 | 3.00%
------------------
10-12 | 4.30%
------------------
13-15 | 5.60%
------------------
16-18 | 6.60%
------------------
19-21 | 7.40%
------------------
22-24 | 8.20%
------------------
25-27 | 8.80%
------------------
28-30 | 9.50%
------------------
31-33 | 10.00%
------------------
34-36 | 10.40%
------------------
37-39 | 10.70%
------------------
40-42 | 11.00%
------------------
43 and | 11.10%
there- |
after |
------------------
and
(1) the Servicer shall violate the servicing standards in the
Servicing Agreements;
43
PROVIDED, HOWEVER, that if no Insurer Default shall have occurred and be
continuing, neither the Indenture Trustee nor the Noteholders may declare an
Event of Default under the Indenture. If no Insurer Default shall have occurred
and be continuing, an Event of Default shall occur only upon delivery by the
Insurer to the Indenture Trustee of notice of the occurrence of such Event of
Default.
The Issuer shall deliver to the Indenture Trustee, within five (5) days after
the occurrence of any event that, with notice or the lapse of time or both,
would become an Event of Default under clause (iii) or (iv), written notice of
such Default in the form of an Officer's Certificate, the status of such Default
and what action the Issuer is taking or proposes to take with respect to such
Default.
5.2. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
(a) If no Insurer Default shall have occurred and be continuing and
if an Event of Default shall have occurred and be continuing, then the Insurer
shall have the right, but not the obligation, upon prior written notice to each
Rating Agency, to declare the Notes to be immediately due and payable by written
notice to the Issuer, the Servicer and the Indenture Trustee, and upon any such
declaration the unpaid principal amount of the Notes, together with accrued and
unpaid interest thereon through the date of acceleration, shall become
immediately due and payable. The Indenture Trustee shall have no discretion with
respect to the acceleration of the Notes under the foregoing circumstances. In
the event of any such acceleration of the Notes, the Indenture Trustee shall
continue to make claims under the Policy with respect to the Notes.
(b) If an Insurer Default has occurred and is continuing and an
Event of Default has occurred and is continuing, then and in every such case the
Indenture Trustee or the Noteholders evidencing not less than 66 2/3% of the
Note Balance may, upon prior written notice to each Rating Agency, declare the
Notes to be immediately due and payable by written notice to the Issuer (and to
the Indenture Trustee if given by Noteholders), and upon any such declaration
the unpaid principal amount of the Notes, together with accrued and unpaid
interest thereon through the date of acceleration, shall become immediately due
and payable.
Notwithstanding the foregoing, upon the occurrence of an Event of Default
specified in Section 5.1(ix) with respect to the Issuer, the Notes shall become
immediately due and payable, without declaration, notice or demand by or to any
Person.
44
(c) At any time after a declaration of acceleration of maturity has
been made and before a judgment or decree for payment of the amount due has been
obtained by the Indenture Trustee as hereinafter provided in this Article V,
either (i) if the Noteholders accelerated, the Noteholders evidencing not less
than 66 2/3% of the Note Balance or (ii) if the Insurer accelerated, the
Insurer, 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 all principal of and interest on the Notes and all
other amounts that would then be due hereunder or upon the Notes if the
Event of Default giving rise to such acceleration had not occurred; 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.
(d) If an Event of Default has occurred and is continuing, the
Insurer may (i) if the Notes have been accelerated in accordance with 5.2(a) or
5.2(b) and not rescinded pursuant to 5.2(c), elect to prepay all or any portion
of the Notes, plus accrued but unpaid interest thereon to the date of payment
and (ii) terminate FISC as the servicer under the Servicing Agreement; PROVIDED,
HOWEVER, that the Insurer shall fulfill its obligations under the Policy.
5.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
INDENTURE TRUSTEE.
(a) If (i) default is made in the payment of any interest on any
Note when the same becomes due and payable, and such default continues for a
period of five (5) Business Days, or (ii) default is made in the payment of the
principal of any Note when the same becomes due and payable, the Issuer shall
pay to the Indenture Trustee, for the benefit of the Noteholders, the amount
then due and payable on the Notes for principal and interest, with interest upon
the overdue principal at the applicable Note Interest Rate and, to the extent
payment at such rate of interest shall be legally enforceable, upon overdue
installments of interest at the applicable Note Interest Rate and in addition
thereto such further amount as shall be sufficient to
45
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Indenture Trustee and
its agents and counsel and other amounts due and owing to the Indenture Trustee
pursuant to Section 6.7.
(b) If the Issuer shall fail forthwith to pay such amounts upon such
demand, the Indenture Trustee, in its own name and as trustee of an express
trust, may with the written consent of the Insurer (provided that no Insurer
Default shall be occurred and be continuing), and shall, at the direction of the
Insurer (provided that no Insurer Default shall have occurred and be
continuing), 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 any other obligor upon the Notes and
collect in the manner provided by law out of the property of the Issuer or such
other obligor, wherever situated, the monies adjudged or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee may, as more particularly provided in Section 5.4, in its discretion,
proceed to protect and enforce its rights and the rights of the Noteholders and
the Insurer by such appropriate Proceedings as the Indenture Trustee shall deem
most effective to protect and enforce 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) If there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Trust Estate, Proceedings under Title 11 of the United States Code or any
other applicable federal or state bankruptcy, insolvency or other similar law,
or if 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 if there shall be pending any other comparable judicial Proceedings relative
to the Issuer or any other obligor upon the Notes, or to the creditors or
property of the Issuer or such other obligor, the Indenture Trustee,
irrespective of whether the principal of any Notes shall then be due and payable
as therein expressed or by declaration or otherwise and irrespective of whether
the Indenture Trustee shall have made any demand pursuant to the provisions of
this Section 5.3, shall be entitled and empowered, by intervention in such
Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in
46
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 all other amounts due and owing to the
Indenture Trustee pursuant to Section 6.7) and of the Noteholders allowed
in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Noteholders in any election of a trustee, a standby
trustee or Person performing similar functions in any such Proceedings;
(iii) to collect and receive any monies or other property payable
or deliverable on any such claims and to pay all amounts received with
respect to the claims of the Noteholders and of the Indenture Trustee on
their behalf; and
(iv) to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the
Indenture Trustee or the Noteholders allowed in any judicial proceedings
relative to the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of the Noteholders to make
payments to the Indenture Trustee and, in the event that the Indenture Trustee
shall consent to the making of payments directly to the Noteholders, to pay to
the Indenture Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Indenture Trustee and each predecessor Indenture Trustee,
and their respective agents, attorneys and counsel, and all other amounts due
and owing to the Indenture Trustee pursuant to Section 6.7.
(e) Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any 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
47
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 Noteholders.
(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.
5.4. REMEDIES.
(a) If an Event of Default has occurred and is continuing, the
Indenture Trustee shall, at the direction of the Insurer (if no Insurer Default
has occurred and is continuing), or at the direction of the Noteholders
evidencing not less than 66 2/3% of the Note Balance (if an Insurer Default has
occurred and is continuing), take one or more of the following actions as so
directed (subject to Section 5.5):
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the Notes
or under this Indenture with respect thereto, whether by declaration or
otherwise, enforce any judgment obtained, and collect from the Issuer and
any other obligor upon the Notes monies adjudged due;
(ii) institute Proceedings from time to time for the complete
or partial foreclosure of this Indenture with respect to the Trust Estate;
(iii) exercise any remedies of a secured party under the
Relevant UCC and take any other appropriate action under applicable law to
protect and enforce the rights and remedies of the Indenture Trustee and
the Noteholders; and
(iv) sell the Trust Estate or any portion thereof or rights or
interest therein at one or more public or private sales called and
conducted in any manner permitted by law;
PROVIDED, HOWEVER, that the Indenture Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default unless (A) if no
Insurer Default has occurred and is continuing, the Insurer consents thereto; or
if an Insurer Default has occurred, the Holders of 100% of the Notes consent
thereto, (B) the proceeds of such sale or liquidation are sufficient to pay in
full the Notes and all accrued but unpaid interest on the outstanding Notes and
all amounts due to the
48
Insurer under the Insurance Agreement and the Policy and (C) if an Insurer
Default has occurred and is continuing, the Indenture Trustee determines that
the Trust Estate will not continue to provide sufficient funds for the payment
of principal of and interest on the Notes as they would have become due if the
Notes had not been declared due and payable, and the Indenture Trustee obtains
the consent of the Noteholders evidencing not less than 66 2/3% of the Note
Balance, or if no Insurer Default has occurred or is continuing, the Insurer
makes such determination. In determining such sufficiency or insufficiency with
respect to clauses (B) and (C) above, the Indenture Trustee may, but need not,
obtain and rely upon an opinion of an Independent investment banking or
accounting firm of national reputation as to the feasibility of such proposed
action and as to the sufficiency of the Trust Estate for such purpose.
(b) If the Indenture Trustee collects any money or property pursuant
to this Section 5.4, it shall pay out such money or property in the following
order of priority:
(i) to the Back-Up Servicer, Indenture Trustee and Owner
Trustee, in its individual capacity, respectively, any unpaid or
unreimbursed fees and any out-of-pocket expenses (including, but not
limited to, attorneys' fees and transition expenses); PROVIDED that such
expenses shall not exceed $50,000 in the aggregate per year and $100,000
in the total aggregate;
(ii) to the Servicer, all amounts due to the Servicer as
compensation pursuant to Sections 2.08 and 2.11 of the Servicing
Agreement;
(iii) to the Noteholders, all accrued but unpaid interest
on the Notes;
(iv) to the Noteholders, the outstanding Note Balance;
(v) to the Insurer, all amounts then owing to it; and
(vi) to the Depositor Account any remaining amounts.
The Indenture Trustee may fix a record date and payment date for any payment to
Noteholders pursuant to this Section 5.4. At least fifteen (15) days before such
record date, the Issuer shall mail to each Noteholder and the Indenture Trustee
a notice that states the record date, the payment date and the amount to be
paid.
5.5. OPTIONAL PRESERVATION OF THE CONTRACTS. If the Notes have been
49
declared to be due and payable under Section 5.2 following an Event of Default,
and such declaration and its consequences have not been rescinded and annulled,
the Indenture Trustee may, but need not, elect to maintain possession of the
Trust Estate and apply proceeds as if there had been no declaration of
acceleration; PROVIDED, HOWEVER, that the Total Available Funds shall be applied
in accordance with such declaration of acceleration in the manner specified in
Sections 3.5(d), (e) and (f) of the Sale and Allocation Agreement. It is the
desire of the parties hereto and the Noteholders that there be at all times
sufficient funds for the payment of principal of and interest on the Notes, and
the Indenture Trustee shall take such desire into account when determining
whether or not to maintain possession of the Trust Estate. In determining
whether to maintain possession of the Trust Estate, the Indenture Trustee may,
but need not, obtain and rely upon an opinion of an Independent investment
banking or accounting firm of national reputation as to the feasibility of such
proposed action and as to the sufficiency of the Trust Estate for such purpose.
5.6. LIMITATION OF SUITS. No Holder of any Note shall have any right
to institute any Proceeding 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 Noteholders evidencing not less than 25% of the Notes
have made written request to the Indenture Trustee to institute such
Proceeding in respect of such Event of Default in its own name as
Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture
Trustee reasonable indemnity against the costs, expenses and liabilities
to be incurred in complying with such request;
(iv) the Indenture Trustee for sixty (60) days after its receipt
of such notice, request and offer of indemnity has failed to institute
such Proceedings;
(v) no direction inconsistent with such written request has
been given to the Indenture Trustee during such 60-day period by the
Noteholders evidencing not less than 51% of the Note Balance; and
(vi) an Insurer Default has occurred and is continuing.
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It is understood and intended that no one or more Noteholders shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Noteholders or to obtain or to seek to obtain priority or preference over
any other Noteholders or to enforce any right under this Indenture, except in
the manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Noteholders, each
evidencing less than 51% of the 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.
5.7. UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE PRINCIPAL AND
INTEREST. Notwithstanding any other provisions in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest, if any, on such Note on or after the
respective due dates thereof expressed in such Note or in this Indenture (or, in
the case of redemption, on or after the Redemption Date) and to institute suit
for the enforcement of any such payment, and such right shall not be impaired
without the consent of such Holder.
5.8. RESTORATION OF RIGHTS AND REMEDIES. If the Indenture Trustee,
the Insurer or any Noteholder has instituted any Proceeding to enforce any right
or remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee, the Insurer or such Noteholder, then and in every such case the Issuer,
the Indenture Trustee, the Insurer and the Noteholders shall, subject to any
determination in such Proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Indenture Trustee and the Noteholders shall continue as though no such
Proceeding had been instituted.
5.9. RIGHTS AND REMEDIES CUMULATIVE. No right or remedy herein
conferred upon or reserved to the Indenture Trustee, the Insurer or 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
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employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
5.10. DELAY OR OMISSION NOT A WAIVER. No delay or omission of the
Indenture Trustee, the Insurer or any Holder of any Note to exercise any right
or remedy accruing upon any Default or Event of Default shall impair any such
right or remedy or constitute a waiver of any such Default or Event of Default
or any acquiescence therein. Every right and remedy given by this Article V or
by law to the Indenture Trustee, the Insurer or the Noteholders may be exercised
from time to time, and as often as may be deemed expedient, by the Indenture
Trustee, the Insurer or the Noteholders, as the case may be.
5.11. CONTROL BY NOTEHOLDERS. The Noteholders evidencing not less
than 51% of the 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 exercising any trust or power conferred on
the Indenture Trustee; PROVIDED, HOWEVER, that:
(i) such direction shall not be in conflict with any rule
of law or with this Indenture;
(ii) subject to the express terms of Section 5.4, any direction
to the Indenture Trustee to sell or liquidate the Trust Estate shall be by
the Noteholders evidencing not less than 100% of the Notes;
(iii) 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
the Noteholders evidencing less than 100% of the Notes to sell or
liquidate the Trust Estate shall be of no force and effect;
(iv) the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee that is not inconsistent with such
direction; and
(v) an Insurer Default shall have occurred and is
continuing.
Notwithstanding the rights of Noteholders set forth in this Section
5.11, subject to Section 6.1, the Indenture Trustee need not take any action
that it reasonably believes might involve it in costs, expenses and liabilities
for which it will not be adequately indemnified or might materially adversely
affect the rights of any Noteholders not consenting to such
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action.
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
Insurer (if no Insurer Default shall have occurred and be continuing) or the
Noteholders evidencing not less than 51% of the Note Balance, with the consent
of the Insurer (if no Insurer Default shall have occurred and be continuing),
may waive any past Default or Event of Default and its consequences except a
Default or Event of Default (i) in the payment of principal of or interest on
any of the Notes or (ii) in respect of a covenant or provision hereof that
cannot be amended, supplemented or modified without the consent of all the
Holders. Upon any such waiver, the Issuer, the Indenture Trustee, the Insurer
and the Holders shall be restored to their former positions and rights
hereunder, respectively, but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereto. Upon
any such waiver, such Default or Event of Default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured and not to have occurred,
for every purpose of this Indenture, but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereto.
5.13. UNDERTAKING FOR COSTS. All parties to this Indenture agree,
and each Holder of any Note by such Holder's acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable 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; PROVIDED,
HOWEVER, that the provisions of this Section 5.13 shall not apply to (i) any
suit instituted by the Indenture Trustee, (ii) any suit instituted by any
Noteholder or group of Noteholders, in each case holding Notes evidencing in the
aggregate more than 10% of the Notes or (iii) 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).
5.14. WAIVER OF STAY OR EXTENSION LAWS. The Issuer covenants (to the
extent that it may lawfully do so) that it
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shall not at any time insist upon, or plead or in any manner whatsoever, claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, that may affect the covenants or the
performance of this Indenture, and the Issuer (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it shall not hinder, delay or impede the execution of
any power herein granted to the Indenture Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
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).
5.16. PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS.
(a) Promptly following a request from the Indenture Trustee to do
so, and at the Administrator's expense, the Issuer shall take all such lawful
action as the Indenture Trustee may request to compel or secure the performance
and observance by the Seller and the Servicer, as applicable, of each of their
obligations to the Issuer under or in connection with the Sale and Allocation
Agreement or by the Seller of each of its obligations under or in connection
with the Servicing Agreement, and to exercise any and all rights, remedies,
powers and privileges lawfully available to the Issuer under or in connection
with the Sale and Allocation Agreement to the extent and in the manner directed
by the Indenture Trustee, including the transmission of notices of default on
the part of the Seller or the Servicer thereunder and the institution of legal
or administrative actions or proceedings to compel or secure performance by the
Seller or the Servicer of each of their obligations under the Sale and
Allocation Agreement.
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee may with prior written consent of the Insurer (provided that
no Insurer Default has occurred and is continuing), and at the direction (which
direction shall be in writing or by telephone (confirmed in writing promptly
thereafter)) of the Noteholders evidencing not less than 66 2/3%
54
of the Note Balance (with the prior written consent of the Insurer, or, at the
direction of the Insurer, in each case provided that no Insurer Default has
occurred and is continuing) 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 Allocation Agreement or against the Servicer
under or in connection with the Servicing Agreement, including the right or
power to take any action to compel or secure performance or observance by the
Seller or the Servicer, as the case may be, of each of their obligations to the
Issuer thereunder and to give any consent, request, notice, direction, approval,
extension or waiver under the Sale and Allocation Agreement or the Servicing
Agreement, as the case may be, and any right of the Issuer to take such action
shall be suspended.
ARTICLE VI
THE INDENTURE TRUSTEE
6.1. DUTIES OF INDENTURE TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Indenture Trustee shall exercise the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such Person's own affairs.
(b) Except upon the occurrence and during the continuation of an
Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture against
the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and, if required by the terms
of this Indenture, conforming to the requirements of this Indenture;
PROVIDED, HOWEVER, that the Indenture Trustee shall examine the
certificates and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own gross negligent failure to act or its own willful
misconduct, except that:
55
(i) this paragraph does not limit the effect of paragraph
(b) of this Section 6.1;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is proved
that the Indenture Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Indenture Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.11.
(d) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to paragraphs (a), (b), (c) and (g) of this Section
6.1.
(e) The Indenture Trustee shall not be liable for interest on any
money received by it except as the Indenture Trustee may agree in writing with
the Issuer.
(f) Money held in trust by the Indenture Trustee need not be
segregated from other funds except to the extent required by law or the terms of
this Indenture or the Sale and Allocation Agreement.
(g) No provision of this Indenture shall require the Indenture
Trustee to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties hereunder or in the exercise of any of
its rights or powers hereunder if the Indenture Trustee shall have reasonable
grounds to believe that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured or provided to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section 6.1.
(i) The Indenture Trustee shall not be charged with knowledge of any
Event of Default unless either (1) a Responsible Officer shall have actual
knowledge of such Event of Default or (2) written notice of such Event of
Default shall have been given to the Indenture Trustee in accordance with the
provisions of this Indenture.
6.2. RIGHTS OF INDENTURE TRUSTEE.
(a) The Indenture Trustee may rely on any document believed by it to
be genuine and to have been signed or presented by the proper Person.
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(b) Before the Indenture Trustee acts or refrains from acting, it
may require an Officer's Certificate or an Opinion of Counsel. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on an Officer's Certificate or Opinion of Counsel unless it is
proved that the Indenture Trustee was negligent in such reliance.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed with
due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be authorized or
within its rights or powers; PROVIDED, HOWEVER, that such action or omission by
the Indenture Trustee does not constitute willful misconduct, negligence or bad
faith.
(e) The Indenture Trustee may consult with counsel, and the advice
or opinion of counsel with respect to legal matters relating to this Indenture
and the Notes shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
(f) The Indenture Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the request or
direction of any of the Noteholders pursuant to this Indenture, unless such
Noteholders shall have offered to the Indenture Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be incurred by
it in compliance with such request or direction.
(g) The Indenture Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture or other paper or document, but the Indenture Trustee, in
its discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Indenture Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Issuer, personally or by agent or attorney.
(h) Except where the Transaction Documents
57
specifically state otherwise, the Indenture Trustee, provided it has sent out
notices in accordance with the applicable Transaction Document and is otherwise
acting in accordance with the Transaction Documents, may act as directed by the
majority of the outstanding Noteholders responding in writing to such request
for amendment or written direction; PROVIDED, HOWEVER, that the Noteholders
representing at least 51% of the Note Balance as of the time such voting
response is due back to the Indenture Trustee must have responded in writing to
the Indenture Trustee's notice to amend or for written direction. In addition,
the Indenture Trustee shall not have any liability to any Noteholder or Note
Owner with respect to any action taken pursuant to such notice if the Noteholder
or Note Owner does not respond to such notice within the time period set forth
in such notice. By acceptance of a Note, each Noteholder and Note owner is
deemed to agree to the foregoing provisions.
6.3. INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE. The Indenture Trustee,
in its individual or any other capacity, may become the owner or pledgee of
Notes and may otherwise deal with the Issuer or its Affiliates with the same
rights it would have if it were not Indenture Trustee. Any Paying Agent, Note
Registrar, co-registrar or co-paying agent hereunder may do the same with like
rights.
6.4. INDENTURE TRUSTEE'S DISCLAIMER. The Indenture Trustee (i) shall
not be responsible for, and makes no representation as to, the validity or
adequacy of this Indenture or the Notes and (ii) shall not be accountable for
the Issuer's use of the proceeds from the Notes or responsible for any statement
of the Issuer in this Indenture or in any document issued in connection with the
sale of the Notes or in the Notes other than the Indenture Trustee's certificate
of authentication.
6.5. NOTICE OF DEFAULTS. If a Default occurs and is continuing and
if it is known to a Responsible Officer of the Indenture Trustee, the Indenture
Trustee shall mail to each Noteholder notice of such Default within ninety (90)
days after it occurs. Except in the case of a Default in payment of 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.
6.6. REPORTS BY INDENTURE TRUSTEE TO HOLDERS.
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The Indenture Trustee shall deliver, within a reasonable period of
time after the end of each calendar year, to each Person who at any time during
such calendar year was a Noteholder, such information as may be required to
enable such Person to prepare its federal and state income tax returns.
6.7. COMPENSATION AND INDEMNITY.
(a) The Issuer shall, or shall cause the Administrator to, pay to
the Indenture Trustee from time to time reasonable compensation for its
services. The Indenture Trustee's compensation shall not be limited by any law
on compensation of a trustee of an express trust. The Issuer shall, or shall
cause the Administrator to, reimburse the Indenture Trustee for all expenses
reasonably incurred or made by it, including costs of collection, in addition to
the compensation for its services; PROVIDED, HOWEVER, that neither the Issuer
nor the Administrator need reimburse the Indenture Trustee for any expense
incurred through the Indenture Trustee's willful misconduct, negligence, or bad
faith. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Indenture Trustee's agents, counsel,
accountants and experts. The Issuer shall, or shall cause the Administrator to,
indemnify the Indenture Trustee and the Custodian against any and all loss,
liability or expense (including attorneys' fees) (collectively, together with
the amounts specified as "Losses" in Section 6A.3(d), the "Losses") incurred by
it in connection with the administration of this trust and the performance of
its duties hereunder; PROVIDED, HOWEVER, that neither the Issuer nor the
Administrator need indemnify the Indenture Trustee or the Custodian for any such
loss, liability or expense incurred through the Indenture Trustee's or
Custodian's willful misconduct, negligence, or bad faith, as applicable. The
Indenture Trustee or Custodian shall notify the Issuer and the Administrator
promptly of any claim for which it may seek indemnity. Any failure by the
Indenture Trustee or the Custodian to so notify the Issuer and the Administrator
shall not, however, relieve the Issuer or the Administrator of its obligations
hereunder. The Issuer shall, or shall cause the Servicer to, defend any such
claim, and the Indenture Trustee or the Custodian, as applicable, may have
separate counsel and the Issuer shall, or shall cause the Servicer to, pay the
fees and expenses of such counsel. Notwithstanding the foregoing, Losses shall
be paid pursuant to this Section 6.7 solely from amounts in excess of funds
necessary to pay all outstanding interest and principal due to the Noteholders
in accordance with the priorities set forth in Section 3.5(d) of the Sale and
Allocation Agreement and shall in any case be nonrecourse as to the Issuer and,
to the extent funds are not so available to pay any Losses when due and owing,
the claims relating thereto shall not
59
constitute a claim (as defined in Section 101 of Title 11 of the United States
Bankruptcy Code) against the Issuer but shall continue to accrue. Each party
hereto agrees that the payment of any claim of any such party in respect of
Losses shall be subordinated to the payment in full of all outstanding interest
and principal due to the Noteholders.
(b) Notwithstanding the foregoing, the Indenture Trustee and
the Custodian will not be liable:
(i) for any error of judgment made by it in good faith
unless it is proved that the Indenture Trustee or the Custodian, as
applicable, was negligent in ascertaining the pertinent facts;
(ii) for any action it takes or omits to take in good faith
in accordance with directions received by it from the requisite percentage
of Noteholders in accordance with the terms herein or in the other
applicable Transaction Documents; or
(iii) for interest on any money received by the Indenture
Trustee except as the Indenture Trustee and the Issuer may agree in
writing.
(c) The Issuer's payment obligations to the Indenture Trustee
pursuant to this Section 6.7 shall survive the resignation or removal of the
Indenture Trustee and the discharge of this Indenture. When the Indenture
Trustee incurs expenses after the occurrence of a Default specified in Section
5.1(v) or (ix) with respect to the Issuer, the expenses are intended to
constitute expenses of administration under Title 11 of the United States Code
or any other applicable federal or state bankruptcy, insolvency or similar law.
6.8. REPLACEMENT OF INDENTURE TRUSTEE.
(a) No resignation or removal of the Indenture Trustee, and no
appointment of a successor Indenture Trustee, shall become effective until
either (i) the acceptance of appointment by the successor Indenture Trustee and
payment of fees and expenses owed to the outgoing Indenture Trustee pursuant to
this Section 6.8 and Section 6.7 or (ii) the Notes have been paid and discharged
in full in accordance with Section 4.2 of the this Indenture and all amounts
received, if any, in connection with the payment and discharge of the Notes have
been distributed to the Noteholders. The Indenture Trustee may resign at any
time by so notifying the Issuer and the Insurer. The Insurer, provided an
Insurer Default shall not have occurred and be continuing, or the Noteholders
evidencing not less than 51% of the Note Balance (with the prior written consent
of the Insurer
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(provided that no Insurer Default has occurred and is continuing)) may remove
the Indenture Trustee without cause by so notifying the Indenture Trustee and
the Issuer and shall appoint a successor Indenture Trustee. The Issuer shall
remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) an Insolvency Event occurs with respect to the Indenture
Trustee;
(iii) a receiver or other public officer takes charge of the
Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of
acting.
If (a) the Indenture Trustee resigns or is removed, (b) the
Noteholders fail to appoint a successor Indenture Trustee acceptable to the
Insurer (provided that no Insurer Default has occurred and is continuing)
following the removal of the Indenture Trustee without cause or (c) if a vacancy
exists in the office of Indenture Trustee for any reason (the Indenture Trustee
in such event being referred to herein as the retiring Indenture Trustee), the
Issuer shall promptly appoint a successor Indenture Trustee acceptable to the
Insurer (provided that no Insurer Default has occurred and is continuing).
(b) Any successor Indenture Trustee shall deliver a written
acceptance of its appointment to the retiring Indenture Trustee, the Insurer and
the Issuer. Upon delivery of such written acceptance, the resignation or removal
of the retiring Indenture Trustee shall become effective and the successor
Indenture Trustee shall have all the rights, powers and duties of the Indenture
Trustee under this Indenture. The successor Indenture Trustee shall mail a
notice of its succession to the Noteholders. The retiring Indenture Trustee
shall promptly transfer all property held by it as Indenture Trustee to the
successor Indenture Trustee.
(c) If a successor Indenture Trustee does not take office within
sixty (60) days after the retiring Indenture Trustee resigns or is removed, the
retiring Indenture Trustee, the Issuer or the Noteholders evidencing not less
than 51% of the Note Balance may petition any court of competent jurisdiction
for the appointment of a successor Indenture Trustee. If the Indenture Trustee
fails to comply with Section 6.11, any Noteholder may petition any court of
competent jurisdiction for the removal of the Indenture Trustee and the
appointment of a successor Indenture Trustee.
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(d) Notwithstanding the replacement of the Indenture Trustee
pursuant to this Section 6.8, the Issuer's and the Administrator's obligations
under Section 6.7 shall continue for the benefit of the retiring Indenture
Trustee.
6.9. SUCCESSOR INDENTURE TRUSTEE BY MERGER.
(a) If the Indenture Trustee consolidates with, merges or converts
into, or transfers all or substantially all its corporate trust business or
assets to, another corporation or banking association, the resulting, surviving
or transferee corporation or banking association without any further act shall
be the successor Indenture Trustee; PROVIDED, HOWEVER, that such corporation or
banking association must be otherwise qualified and eligible under Section 6.11.
The Indenture Trustee shall provide the Rating Agencies with prior written
notice of any such transaction.
(b) If at the time such successor or successors by consolidation,
merger or conversion 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 such successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor trustee or in the name of the
successor to the Indenture Trustee. In all such cases such certificates shall
have the full force which the Notes or this Indenture provide that the
certificate of the Indenture Trustee shall have.
6.10. APPOINTMENT OF CO-INDENTURE TRUSTEE OR SEPARATE INDENTURE
TRUSTEE.
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(a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust Estate may at the time be located, the Indenture
Trustee shall have the power and may execute and deliver an instrument to
appoint one or more Persons to act as a co-trustee or co-trustees, jointly with
the Indenture Trustee, 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 6.10,
such powers, duties, obligations, rights and trusts as the Indenture Trustee may
consider necessary or desirable. No co-trustee or separate trustee under this
Indenture shall be required to meet the terms of eligibility as a successor
trustee under Section 6.11 and no notice of the appointment of any co-trustee or
separate trustee shall be required under Section 6.8.
(b) Each separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon and
exercised or performed by the Indenture Trustee and such separate trustee
or co-trustee jointly (it being understood that such separate trustee or
co-trustee shall not be authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed
the Indenture Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust Estate or any portion thereof
in any such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the
Indenture Trustee;
(ii) no trustee under this Indenture shall be personally liable
by reason of any act or omission of any other trustee under this
Indenture; and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture
Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Indenture and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property 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. Each such instrument shall be filed with
the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute
the Indenture Trustee its agent or attorney-in-fact
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with full power and authority, to the extent permitted 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.
6.11. ELIGIBILITY; DISQUALIFICATION. The Indenture Trustee or its
parent shall have a combined capital, surplus and undivided profits of at least
$50,000,000 as set forth in its most recent published annual report of condition
and shall have a long-term debt rating of investment grade by each of the Rating
Agencies or shall otherwise be acceptable to each of the Rating Agencies and the
Insurer (provided that no Insurer Default has occurred and is continuing).
ARTICLE VI-A
SECTION 6A.1 POSSESSION OF CONTRACT FILES BY THE CUSTODIAN
(a) GRANT OF SECURITY INTEREST. The Seller hereby covenants and
agrees with the Indenture Trustee to deliver or cause to be delivered to the
Custodian all Contract Files no later than the Closing Date. The Custodian shall
hold the Contract Files (i) in trust for, and as bailee of, the Indenture
Trustee and as bailee for the Issuer for purposes of establishing the Issuer's
ownership thereof, (ii) for purposes of perfecting the Indenture Trustee's
security interest therein, to the extent available under applicable law, for the
benefit of the Noteholders and the Insurer, and establishing the Issuer's
ownership thereof subject to such security interest, (iii) to restrict the
possession thereof by any other person except as permitted in accordance with
the terms of this Article, and (iv) subject to and in accordance with the terms
and provisions of this Article.
(b) Subject to the terms and conditions hereof, the Indenture
Trustee hereby appoints the Custodian, and the Custodian hereby accepts such
appointment, to act as custodian and bailee of the Indenture Trustee, for the
benefit of the Noteholders and the Insurer, for purposes of Article 9 of the
Relevant UCC, to maintain custody of the Contract Files until the Servicer shall
have delivered a release with respect to any such Contract Files pursuant to
Section 6A.2 hereof.
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(c) The Custodian will promptly report to the Indenture Trustee and
the Insurer any failure on its part to hold the Contract Files as herein
provided and promptly take appropriate action to remedy any such failure.
(d) The Custodian shall (A) maintain in effect a fidelity bond and
errors and omissions insurance, affording coverage to such employees, directors,
officers and other Persons acting on the Custodian's behalf and in an amount
customary for custodians of automobile loans similar to the Contracts or (B)
self-insure at levels and in a manner acceptable to the Insurer.
(e) CUSTODY. All Contract Files held by the Custodian under this
Indenture shall be placed by the Issuer in a separate file for each Contract
File, properly fastened or secured.
(f) INVENTORY OF CONTRACT FILES. At the time of delivery by or on
behalf of the Issuer to the Custodian of any Contract File or other documents
related to a Contract, the Issuer shall also deliver a list in an electronic
format acceptable to the Custodian (the "FILE NUMBER LIST") of Contract File
numbers (the "FILE NUMBERS"). The Custodian shall check the File Numbers of the
Contract Files delivered pursuant to this Indenture and certify to the Seller,
the Insurer, the Issuer and the Indenture Trustee in writing within 48 hours
after delivery of the File Number List, that it has received all the Contract
Files corresponding to the File Number List. If upon examination of the Contract
Files, the Custodian determines that it does not have all the Contract Files on
the File Number List, the Custodian shall promptly give written notice of the
same to the Indenture Trustee, the Insurer, the Issuer and the Seller.
(g) POSSESSION OF CONTRACT FILES. Without any limitation of Section
6A.1(a) or (b) hereof, following the Custodian's receipt of each Contract File,
the Custodian shall retain possession and custody thereof, subject to the terms
of this Indenture, for the exclusive benefit of, in trust for, and as bailee of,
the Indenture Trustee and for purposes (i) of perfecting the Indenture Trustee's
security interest therein, to the extent available under applicable law, for the
benefit of the Noteholders and the Insurer and as bailee of the Issuer for
purposes of establishing the Issuer's ownership thereof and (ii) of restricting
the possession thereof by any person except as permitted in accordance with the
terms of this Article, until and unless such security interest in any Contract
File is released pursuant to the terms of Section 6A.3 hereof. Upon such receipt
the Custodian shall also make appropriate notations in the Custodian's books and
records reflecting that the Contract File has been pledged to the Indenture
Trustee for the benefit of the Noteholders and the Insurer and that the
Indenture Trustee has acquired and holds a security interest therein.
Notwithstanding any other provisions of this Indenture, the
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Custodian shall not at any time exercise or seek to enforce any claim, right or
remedy, including any statutory or common law rights of set-off, that it might
otherwise have against all or any of the Contract Files or related documents or
the proceeds thereof.
SECTION 6A.2 RELEASE OF CONTRACT FILES BY THE CUSTODIAN.
(a) The Custodian shall promptly release any Contract File then held
by it to the Servicer upon receipt of a written request for release of such
Contract File signed by an Authorized Officer of the Servicer in the form
attached hereto as Exhibit C; PROVIDED, HOWEVER, that the Custodian shall be
deemed to have received proper instructions with respect to the Contract Files
upon its receipt of such a written request from an Authorized Officer of the
Servicer. "Authorized Officer of the Servicer" shall mean an officer certified
by the Secretary of the Servicer as an officer who is authorized to give
instructions to the Custodian as set forth on a certificate delivered to the
Custodian, the Issuer, the Insurer and the Indenture Trustee on the Closing Date
or on any such subsequent certificate delivered to the Custodian, the Issuer,
the Insurer and the Indenture Trustee.
(b) The Custodian shall promptly deliver to the Indenture Trustee or
its designee any or all Contract Files in the Custodian's custody upon the
written request of an Authorized Officer of the Indenture Trustee. The Indenture
Trustee shall provide the Issuer, the Insurer and the Servicer with a copy of
any such request delivered to the Custodian. Written instructions as to the
method of shipment and shipper(s) the Custodian is directed to utilize in
connection with the delivery of Contract Files in the performance of the
Custodian's duties hereunder shall be delivered by the Indenture Trustee to the
Custodian prior to any shipment of Contract Files pursuant to the request of
Indenture Trustee hereunder. The Indenture Trustee will arrange for the
provision of such services at the cost and expense of the Issuer (or, at the
Custodian's option, the Custodian shall be reimbursed by the Issuer for all
costs and expenses incurred by the Custodian consistent with such instructions
(it being understood that any such reimbursement shall be paid in accordance
with the priorities set forth in Section 2.8 hereof)) and will maintain such
insurance against loss or damage to the Contract Files as the Indenture Trustee
and the Servicer reasonably deem appropriate. "Authorized Officer of the
Indenture Trustee" shall mean an officer certified by the Secretary of the
Indenture Trustee as an officer who is authorized to give instructions to the
Custodian as set forth on a certificate delivered to the Custodian, the Issuer
and the
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Insurer on the Closing Date or on any such subsequent certificate delivered to
the Custodian, the Issuer and the Insurer.
SECTION 6A.3 REGARDING THE CUSTODIAN.
(a) The Custodian undertakes to perform only such duties as are
expressly set forth herein.
(b) The Custodian may rely and shall be protected in acting or
refraining from acting upon any written notice, instruction or request furnished
to it hereunder and believed by it to be genuine and to have been signed or
presented by the proper party or parties. The Custodian shall be under no duty
to inquire into or investigate the validity, accuracy or content of any such
document. The Custodian shall have no duty to verify the authenticity,
genuineness or conformity to the requirements of this Indenture of any Contract
Files or related documents delivered to it hereunder, or to determine whether
the materials included in any Contract File conform to the requirements hereof.
(c) The Custodian shall not be liable for any action taken or
omitted by it in good faith unless a court of competent jurisdiction determines
that the Custodian's willful misconduct, gross negligence or bad faith was the
primary cause of any loss to the Issuer, the Insurer or the Indenture Trustee.
In the administration of the custodial account hereunder, the Custodian may
execute any of its powers and perform its duties hereunder directly or through
agents or attorneys and may consult with counsel, accountants and other skilled
persons to be selected and retained by it. The Custodian shall not be liable for
anything done, suffered or omitted in good faith by it in accordance with the
advice of counsel.
(d) The Issuer agrees to indemnify and hold the Custodian and its
directors, officers, agents and employees (collectively the "Indemnitees")
harmless from and against any and all claims, liabilities, losses, damages,
fines, penalties, and expenses, including out-of-pocket and incidental expenses
and legal fees and expenses (collectively, together with the amounts specified
as "Losses" pursuant to Section 6.7(a), the "LOSSES") that may be imposed on,
incurred by, or asserted against, the Indemnitees or any of them for following
any instructions or other directions upon which the Custodian is authorized to
rely pursuant to the terms of this Indenture (it being understood that such
Losses shall be paid pursuant to Section 2.8(ix) hereof).
(e) In addition to and not in limitation of paragraph (d)
immediately above, the Issuer also agrees to indemnify and hold the Indemnitees
and each of them harmless from and against any and all Losses that may be
imposed on, incurred by, or asserted against, the Indemnitees or any of them in
connection
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with or arising out of the Custodian's performance under this Indenture,
provided the Indemnitees have not acted with gross negligence or bad faith or
engaged in willful misconduct or breach of contract (it being understood that
such Losses shall be paid pursuant to Section 2.8(ix) hereof).
(f) The duties and responsibilities of the Custodian hereunder shall
be determined solely by the express provisions of this Indenture, and no other
or further duties or responsibilities shall be implied. The Custodian shall not
have any liability under, nor duty to inquire into the terms and provisions of,
any agreement or instructions, other than as specifically required by this
Indenture.
(g) The Custodian shall not incur any liability for following the
instructions herein contained or expressly provided for, or written instructions
given by the parties hereto in accordance with the express provisions hereof.
(h) In the event that the Custodian shall be uncertain as to its
duties or rights hereunder or shall receive instructions, claims or demands from
any party hereto which, in its opinion, conflict with any of the provisions of
this Indenture, it shall be entitled to refrain from taking any action and its
sole obligation shall be to request definitive instructions from the other
parties hereto and to keep safely all property held in custody until it shall be
directed otherwise in writing by all of the other parties hereto or by a final
order or judgment of a court of competent jurisdiction.
(i) Any corporation or association into which the Custodian in its
individual capacity may be merged or converted or with which it may be
consolidated, or any corporation or association resulting from any merger,
conversion or consolidation to which the Custodian in its individual capacity
shall be a party, or any corporation or association to which all or
substantially all of the corporate trust business of the Custodian in its
individual capacity may be sold or otherwise transferred, shall be the Custodian
under this Indenture without further act.
(j) Anything in this Agreement to the contrary notwithstanding, in
no event shall the Custodian be liable for special, indirect or consequential
loss or damage of any kind whatsoever (including but not limited to lost
profits), even if the Custodian has been advised of the likelihood of such loss
or damage and regardless of the form of action.
(k) The Custodian agrees to maintain the Contract Files which are
delivered to it at the offices of the Custodian located at Sixth Street and
Marquette Avenue, MAC N9311-160, Xxxxxxxxxxx, Xxxxxxxxx 00000, and the Custodian
shall notify the
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Indenture Trustee, the Issuer and the Insurer by written notice of any change in
the location of the Contract Files. Subject to the foregoing, the Custodian may
temporarily move individual Contract Files or any portion thereof without notice
as necessary to allow the Servicer to conduct collection and other servicing
activities in accordance with its customary practices and procedures.
(l) The Custodian shall hold the Contract Files in its
fire-resistant storage vault under its exclusive custody and control in
accordance with customary standards for such custody and shall maintain a
fidelity bond plus document hazard insurance in such amounts and against such
risks as customarily are maintained by custodians acting in a similar capacity
to the Custodian hereunder with respect to receivables similar to the Contracts.
If the Indenture Trustee or the Issuer suffers losses or damages as a result of
the destruction or loss of any of the Contract Files or any item therein, the
Custodian shall, (i) at the request of the Indenture Trustee or the Issuer, make
any appropriate claim under such bond or insurance, and (ii) to the extent of
the Indenture Trustee's or the Issuer's losses or damages, pay the proceeds
thereof to the Indenture Trustee, or if all of the Issuer's obligations under
this Indenture and the Notes and the Insurance Agreement have been paid in full,
to the Issuer, unless the Custodian has replaced the lost or destroyed items or
has otherwise reimbursed the Indenture Trustee or the Issuer, as applicable, for
such losses or damages. The Custodian shall maintain the Contract Files
segregated from and not commingled with any other files of the Custodian.
(m) The Custodian shall not deliver physical possession of, or
otherwise transfer, assign, pledge, mortgage, convey or dispose of any Contract
Files in its possession to any Person except (i) as provided in this Article,
and (ii) upon termination of this Indenture.
(n) The Custodian hereby waives any and all rights of offset with
respect to any and all Contract Files in the Custodian's possession, whether
such right of offset arises by contract, operation of law or otherwise.
(o) The Custodian specifically acknowledges and agrees that so long
as Norwest Bank Minnesota, National Association, is acting as Custodian under
this Indenture in the event that Norwest Bank Minnesota, National Association
shall either be terminated or resign as Indenture Trustee pursuant to this
Indenture, then the Custodian shall similarly either be terminated or resign and
the Custodian shall deliver the Contract Files to the successor Indenture
Trustee, acting as successor Custodian, appointed pursuant to the terms of this
Indenture at such place as the successor Custodian may reasonably designate. Any
entity acting as Custodian hereunder may not resign as such
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unless such entity also resigns its capacity as Indenture Trustee.
(p) Except for actions expressly authorized by this Article, the
Custodian shall take no action which would or would be likely to impair the
security interests created or existing under any Contract or Financed Vehicle or
to impair the value of any Contract or Financed Vehicle.
(q) The Custodian hereby agrees not to assert (in its individual
capacity or otherwise) any liens of any kind with respect to the Contract Files
held by it or the related Contracts and hereby releases and waives any such
liens.
(r) The Custodian shall permit inspection at all reasonable times
upon at least two Business Days prior notice during regular business hours by
the Issuer, the Indenture Trustee or the Insurer (or by its auditors when
requested by the Insurer or the Indenture Trustee, as applicable) of the
Contract Files and the records of the Custodian relating to this Article (or its
auditors when requested by the Insurer or the Indenture Trustee, as applicable)
to make copies of the Contract Files and the records of the Custodian relating
to this Indenture.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
7.1. ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND ADDRESSES OF
NOTEHOLDERS. The Issuer shall furnish or cause to be furnished to the Indenture
Trustee (i) within five (5) days after each Record Date, a list, in such form as
the Indenture Trustee may reasonably require, of the names and addresses of the
Noteholders as of such Record Date and (ii) at such other times as the Indenture
Trustee may request in writing, within thirty (30) days after receipt by the
Issuer of any such request, a list of similar form and content as of a date not
more than ten (10) days prior to the time such list is furnished; PROVIDED,
HOWEVER, that so long as the Indenture Trustee is the Note Registrar or the
Notes are issued as Book-Entry Notes, no such list shall be required to be
furnished.
7.2. PRESERVATION OF INFORMATION; COMMUNICATIONS TO NOTEHOLDERS.
(a) The Indenture Trustee shall preserve, in as
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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 the Noteholders
received by the Indenture Trustee in its capacity as Note Registrar. The
Indenture Trustee may destroy any list furnished to it as provided in Section
7.1 upon receipt of a new list so furnished.
7.3. REPORTS BY ISSUER.
(a) The Issuer shall:
(i) file with the Indenture Trustee, within fifteen (15) days
after the Issuer is required to file the same with the Commission, copies
of the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission may
from time to time by rules and regulations prescribe) that the Issuer may
be required to file with the Commission pursuant to Section 13 or 15(d) of
the Exchange Act;
(ii) file with the Indenture Trustee and the Commission in
accordance with the rules and regulations prescribed from time to time by
the Commission such additional information, documents and reports with
respect to compliance by the Issuer with the conditions and covenants of
this Indenture as may be required from time to time by such rules and
regulations; and
(iii) supply to the Indenture Trustee summaries of any
information, documents and reports required to be filed by the Issuer
pursuant to clauses (i) and (ii) of this Section 7.3(a) and by the rules
and regulations prescribed from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the Fiscal Year of the
Issuer shall end on April 30 of each year.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
8.1. COLLECTION OF MONEY. Except as otherwise expressly provided
herein, the Indenture Trustee may demand payment or delivery of, and shall
receive and collect, directly and without intervention or assistance of any
fiscal agent or other intermediary, all money and other property payable to or
receivable by the Indenture
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Trustee pursuant to this Indenture and the Sale and Allocation Agreement. The
Indenture Trustee shall apply all such money received by it as provided in this
Indenture and the Sale and Allocation Agreement. Except as otherwise expressly
provided in this Indenture, if any default occurs in the making of any payment
or performance under any agreement or instrument that is part of the Trust
Estate, the Indenture Trustee may take such action as may be appropriate to
enforce such payment or performance, including the institution and prosecution
of appropriate Proceedings. Any such action shall be without prejudice to any
right to claim a Default or Event of Default under this Indenture and any right
to proceed thereafter as provided in Article V.
8.2. TRUST ACCOUNTS.
(a) On or before the Closing Date, the Issuer shall cause the
Servicer to establish and maintain, in the name of the Indenture Trustee, for
the benefit of the Insurer and the Noteholders, the Collection Account as
provided in Section 3.1 of the Sale and Allocation Agreement. The Servicer shall
deposit in the Collection Account all amounts required to be deposited therein
with respect to the preceding Collection Period as provided in Section 3.2 of
the Sale and Allocation Agreement.
(b) On or before the Closing Date, the Issuer shall cause the
Servicer to establish and maintain, in the name of the Indenture Trustee, for
the benefit of the Noteholders and the Insurer, the Reserve Account as provided
in Section 3.6(a) of the Sale and Allocation Agreement. On each Payment Date,
upon receipt of instructions from the Servicer pursuant to Section 3.5(b) of the
Sale and Allocation Agreement, the Indenture Trustee shall withdraw from the
Reserve Account (up to the amount on deposit in the Reserve Account) and apply
pursuant to Section 3.5(e) thereof the amount, if any, by which the Required
Payment Amount for such Payment Date exceeds the Available Funds for such
Payment Date.
(c) On each Payment Date, the Indenture Trustee shall apply or cause
to be applied the amount on deposit in the Collection Account on such Payment
Date in accordance with Section 2.8(a).
(e) On or before the Closing Date, the Issuer shall cause the
Servicer to establish and maintain, in the name of the Indenture Trustee, for
the exclusive benefit of the Noteholders, the Note Payment Account as provided
in Section 3.1 of the Sale and Allocation Agreement. On each Payment Date, the
Indenture Trustee shall apply or cause to be applied the amount on deposit in
the Note Payment Account on such Payment Date in accordance with Section 2.8(b)
or (f), as applicable.
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8.3. GENERAL PROVISIONS REGARDING ACCOUNTS.
(a) So long as no Default or Event of Default shall have occurred
and be continuing, all or a portion of the funds in the Trust Accounts shall be
invested by the Indenture Trustee at the direction of the Servicer in Eligible
Investments as provided in Sections 3.1 and 3.6(b) of the Sale and Allocation
Agreement. All income or other gain (net of losses and investment expenses) from
investments of monies deposited in the Trust Accounts shall be withdrawn by the
Indenture Trustee from such accounts and distributed (but only under the
circumstances set forth in the Sale and Allocation Agreement) as provided in
Sections 3.1 and 3.6(d) of the Sale and Allocation Agreement. The Servicer shall
not direct the Indenture Trustee to make any investment of any funds or to sell
any investment held in any of the Trust Accounts unless the security interest
Granted and perfected in such account will continue to be perfected in such
investment or the proceeds of such sale, in either case without any further
action by any Person, and, in connection with any direction to the Indenture
Trustee to make any such investment or sale, if requested by the Indenture
Trustee, the Issuer shall deliver to the Indenture Trustee an Opinion of
Counsel, acceptable to the Indenture Trustee, to such effect.
(b) Subject to Section 6.1(c), the Indenture Trustee shall not in
any way be held liable by reason of any insufficiency in any of the Trust
Accounts resulting from any loss on any Permitted Investment included therein,
except for losses attributable to the Indenture Trustee's failure to make
payments on such Eligible Investments issued by the Indenture Trustee, in its
commercial capacity as principal obligor and not as trustee, in accordance with
their terms.
(c) If (i) the Servicer shall have failed to give investment
directions for any funds on deposit in the Trust Accounts to the Indenture
Trustee by 11:00 A.M. (New York City time) (or such other time as may be agreed
upon by the Issuer and Indenture Trustee), on the Business Day preceding each
Payment Date, (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, amounts collected or
receivable 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 Eligible Investments described in clause (vii) of the definition
thereof.
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8.4. RELEASE OF TRUST ESTATE.
(a) Subject to the payment of its fees and expenses pursuant to
Section 6.7, the Indenture Trustee may, and when required by the provisions of
this Indenture shall, execute instruments to release property from the lien of
this Indenture, or convey the Indenture Trustee's interest in the same, in a
manner and under circumstances that are not inconsistent with the provisions of
this Indenture. No party relying upon an instrument executed by the Indenture
Trustee as provided in this Article VIII shall be bound to ascertain the
Indenture Trustee's authority, inquire into the satisfaction of any conditions
precedent or see to the application of any monies.
(b) The Indenture Trustee shall, at such time as there are no Notes
Outstanding, the Policy has been terminated in accordance with its terms and has
been returned to the Insurer for cancellation and all sums due the Indenture
Trustee and the Insurer pursuant to Section 6.7 have been paid in full, release
any remaining portion of the Trust Estate that secured the Notes from the lien
of this Indenture and release to the Issuer or any other Person entitled thereto
any funds then on deposit in the Trust Accounts. The Indenture Trustee shall
release property from the lien of this Indenture pursuant to this Section 8.4(b)
only upon receipt of an Issuer Request accompanied by an Officer's Certificate
and an Opinion of Counsel.
8.5. OPINION OF COUNSEL. The Indenture Trustee shall receive at
least seven (7) days notice when requested by the Issuer to take any action
pursuant to Section 8.4(a), accompanied by copies of any instruments involved,
and the Indenture Trustee shall also require, except in connection with any
action contemplated by Section 8.4(b), as a condition to such action, an Opinion
of Counsel, in form and substance satisfactory to the Indenture Trustee, stating
the legal effect of any such action, outlining the steps required to complete
such action, and concluding that all conditions precedent to the taking of such
action have been complied with and such action will not materially and adversely
impair the security for the Notes or the rights of the Noteholders or the
Insurer in contravention of the provisions of this Indenture; PROVIDED, HOWEVER,
that such Opinion of Counsel shall not be required to express an opinion as to
the fair value of the Trust Estate. Counsel rendering any such opinion may rely,
without independent investigation, 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
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9.1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS.
The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, may, without the consent of the Holders of any Notes but with prior
notice to the Rating Agencies and the Insurer and with the consent of the
Insurer (if no Insurer Default shall have occurred and be continuing), at any
time and from time to time, enter into one or more indentures supplemental
hereto, in form satisfactory to the Indenture Trustee, for any of the following
purposes:
(i) to correct or amplify the description of any property at
any time subject to the lien of this Indenture, or better to assure,
convey and confirm unto the Indenture Trustee any property subject or
required to be subjected to the lien of this Indenture, or to subject to
the lien of this Indenture additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another Person to the Issuer, and the
assumption by any such successor of the covenants of the Issuer herein and
in the Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit
of the Noteholders and the Insurer, or to surrender any right or power
herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any
provision herein or in any supplemental indenture that may be inconsistent
with any other provision herein or in any supplemental indenture or to
make any other provisions with respect to matters or questions arising
under this Indenture which will not be inconsistent with other provisions
of this Indenture;
(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to the Notes and
to add to or change any of the provisions of this Indenture as shall be
necessary to facilitate the administration of the trusts hereunder by more
than one trustee, pursuant to the requirements of Article VI; or
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(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 any federal statute hereafter enacted.
PROVIDED, HOWEVER, that (i) such action shall not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Noteholder or the Insurer, (ii) the Rating Agency Condition shall have been
satisfied with respect to such action and (iii) such action shall not, as
evidenced by an Opinion of Counsel, cause the Issuer to be characterized for
federal income tax purposes as an association taxable as a corporation or
otherwise have any material adverse impact on the federal income taxation of any
Notes Outstanding or any Noteholder. 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.
9.2. SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS. The Issuer
and the Indenture Trustee, when authorized by an Issuer Order, may, with the
consent of the Insurer (if no Insurer Default shall have occurred and be
continuing) and the Noteholders evidencing not less than 51% of the Note Balance
and with prior notice to the Rating Agencies and the Insurer, by Act of such
Holders delivered to the Issuer and the Indenture Trustee, at any time and from
time to time, enter into one or more indentures supplemental hereto for the
purpose of adding any provisions to, or changing in any manner or eliminating
any of the provisions of, this Indenture or modifying in any manner the rights
of the Noteholders under this Indenture; PROVIDED, HOWEVER, that (i) such action
shall not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Noteholder or the Insurer, (ii) the Rating
Agency Condition shall have been satisfied with respect to such action and (iii)
such action shall not, as evidenced by an Opinion of Counsel, cause the Issuer
to be characterized for federal income tax purposes as an association taxable as
a corporation or otherwise have any material adverse impact on the federal
income taxation of any Notes Outstanding or any Noteholder; and, PROVIDED
FURTHER, that no such supplemental indenture shall, without the consent of the
Insurer and the Holder of each Outstanding Note affected thereby:
(i) change any Final Note Payment Date or the date of payment
of any installment of principal of or interest on any Note, or reduce the
principal amount thereof, the interest rate thereon or the Redemption
Price with respect thereto, change the provisions of this Indenture
relating to the application of collections on, or
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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;
(ii) impair the right to institute suit for the enforcement of
the provisions of this Indenture requiring the application of available
funds, as provided in Article V, to the payment of any amount due on the
Notes on or after the respective due dates thereof (or, in the case of
redemption, on or after the Redemption Date);
(iii) reduce the percentage of the Notes the consent of the
Holders of which is required for any such supplemental indenture or for
any waiver of compliance with certain provisions of this Indenture or of
certain defaults hereunder and their consequences as provided in this
Indenture;
(iv) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(v) reduce the percentage of the Notes the consent of the
Holders of which is required to direct the Indenture Trustee to sell or
liquidate the Trust Estate pursuant to Section 5.4 if the proceeds of such
sale would be insufficient to pay in full the principal amount of and
accrued but unpaid interest on the Notes;
(vi) modify any provision of this Indenture specifying a
percentage of the principal amount of the Notes necessary to amend this
Indenture or the other Transaction Documents except to increase any
percentage specified herein or to provide that certain additional
provisions of this Indenture or the other Transaction Documents cannot be
modified or waived without the consent of the Holders of each Outstanding
Note affected thereby;
(vii) modify any of the provisions of this Indenture in such a
manner as to affect the calculation of the amount of any payment of
interest or principal due on any Note on any Payment Date (including the
calculation of any of the individual components of such calculation) or to
affect the rights of the Noteholders to the benefit of any provisions for
the mandatory redemption of the Notes contained herein; or
(viii) permit the creation of any lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the
Trust Estate or, except as otherwise permitted or contemplated herein,
terminate the lien of this Indenture on any such collateral at any time
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subject hereto or deprive the Holder of any Note of the security provided
by the lien of this Indenture.
The Indenture Trustee may in its discretion determine whether or not
any Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The Indenture
Trustee shall not be liable for any such determination made in good faith.
The Indenture Trustee may in its discretion determine whether or not
any Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The Indenture
Trustee shall not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders under this
Section 9.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof. Promptly after the execution by the Issuer and the Indenture Trustee of
any supplemental indenture pursuant to this Section 9.2, the Indenture Trustee
shall mail to the Noteholders to which such amendment or supplemental indenture
relates a notice setting forth in general terms the substance of such
supplemental indenture. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
9.3. EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive and,
subject to Sections 6.1 and 6.2, shall be fully protected in relying upon an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture and that all conditions precedent in
this Indenture to the execution and delivery of such supplemental indenture have
been satisfied. The Indenture Trustee may, but shall not be obligated to, enter
into any such supplemental indenture that affects the Indenture Trustee's own
rights, duties, liabilities or immunities under this Indenture or otherwise.
9.4. EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of any
supplemental indenture pursuant to the
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provisions hereof, this Indenture shall be and shall be deemed to be modified
and amended in accordance therewith with respect to the Notes affected thereby,
and the respective rights, limitations of rights, obligations, duties,
liabilities and immunities under this Indenture of the Indenture Trustee, the
Issuer and the Noteholders shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and amendments,
and all the terms and conditions of any such supplemental indenture shall be and
be deemed to be part of the terms and conditions of this Indenture for any and
all purposes.
9.5. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES. Any Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes.
ARTICLE X
REDEMPTION OF NOTES
10.1. REDEMPTION.
(a) The Notes are subject to redemption in whole, but not in part,
at the direction of the Issuer on any Payment Date on which the Depositor
exercises its option to purchase the assets of the Issuer pursuant to Section
9.3(a) of the Trust Agreement, and the amount paid by the Depositor pursuant to
such Section 9.3(a) shall be treated as collections in respect of the Contracts
and applied to pay the unpaid principal amount of the Notes plus all amounts
owed to the Insurer plus accrued and unpaid interest thereon. The Issuer shall
furnish notice of such redemption to the Insurer, the Rating Agencies and the
Noteholders. If the Notes are to be redeemed pursuant to this Section 10.1(a),
the Issuer shall furnish or cause the Depositor to furnish notice of such
election to the Indenture Trustee not later than fifteen (15) days prior to the
Redemption Date and the Issuer shall deposit the Redemption Price of the Notes
to be redeemed in the Note Payment Account by 10:00 A.M. (New York City time) on
the Business Day prior to the Redemption Date, whereupon all such Notes shall be
due and payable on the Redemption Date.
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(b) In the event that the assets of the Issuer are sold pursuant to
Section 9.3 of the Trust Agreement, all amounts on deposit in the Note Payment
Account shall be paid to the Noteholders up to the unpaid principal amount of
the Notes and all accrued and unpaid interest thereon. If such amounts are to be
paid to Noteholders pursuant to this Section 10.1(b), the Issuer shall, to the
extent practicable, furnish or cause the Servicer to furnish notice of such
event to the Indenture Trustee not later than fifteen (15) days prior to the
Redemption Date, whereupon all such amounts shall be payable on the Redemption
Date.
10.2. FORM OF REDEMPTION NOTICE. Notice of redemption of the Notes
under Section 10.1(a) shall be given by the Indenture Trustee by first-class
mail, postage prepaid, or by facsimile mailed or transmitted promptly following
receipt of notice from the Issuer or the Servicer pursuant to Section 10.1(a),
but not later than ten (10) days prior to the applicable Redemption Date, to
each Holder of the Notes as of the close of business on the Record Date
preceding the applicable Redemption Date, at such Holder's address or facsimile
number appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price; and
(iii) the place where the Notes are to be surrendered for payment
of the Redemption Price (which shall be the office or agency of the Issuer
to be maintained as provided in Section 3.2).
Notice of redemption of the Notes shall be given by the Indenture
Trustee in the name and at the expense of the Issuer. Any failure to give notice
of redemption, or any defect therein, to any Holder of any Note shall not,
however, impair or affect the validity of the redemption of any other Note.
10.3. NOTES PAYABLE ON REDEMPTION DATE. The Notes to be redeemed
shall, following notice of redemption as required by Section 10.2 (in the case
of redemption pursuant to Section 10.1(a)), become due and payable on the
Redemption Date 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.
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ARTICLE XI
MISCELLANEOUS
11.1. COMPLIANCE CERTIFICATES AND OPINIONS, ETC.
(a) Upon any application or request by the Issuer to the Indenture
Trustee to take any action under any provision of this Indenture, the Issuer
shall furnish to the Indenture Trustee (i) an Officer's Certificate stating that
all conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, (ii) an Opinion of Counsel stating
that, in the opinion of such counsel, all such conditions precedent, if any,
have been complied with.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition and
the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory,
such signatory has made such examination or investigation as is necessary
to enable such signatory to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) 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, deliver to the Indenture Trustee an Officer's
Certificate certifying or stating the opinion of each person signing such
certificate as to the fair value (within ninety (90) days of such deposit) to
the Issuer of the Collateral or other property or securities to be so deposited.
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(c) 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 Section 11.1(b), the Issuer shall also
furnish to the Indenture Trustee an Independent Certificate as to the same
matters if the fair value to the Issuer of the property or securities to be so
deposited and of all other such property or securities made the basis of any
such withdrawal or release since the commencement of the then-current Fiscal
Year of the Issuer, as set forth in the certificates furnished pursuant to
Section 11.1(b) and this Section 11.1(c), is ten percent (10%) or more of the
Notes, but such a certificate need not be furnished with respect to any property
or securities so deposited if the fair value thereof to the Issuer as set forth
in the related Officer's Certificate is less than $25,000 or less than one
percent (1%) of the Notes.
(d) Whenever any property or securities are to be released from the
lien of this Indenture, the Issuer shall also furnish to the Indenture Trustee
an Officer's Certificate certifying or stating the opinion of each person
signing such certificate as to the fair value (within ninety (90) days of such
release) of the property or securities proposed to be released and stating that
in the opinion of such person the proposed release will not impair the security
under this Indenture in contravention of the provisions hereof.
(e) 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 Section 11.1(d), the Issuer shall also
furnish to the Indenture Trustee an Independent Certificate as to the same
matters if the fair value of the property or securities and of all other
property, other than property as contemplated by Section 11.1(f) 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 Section
11.1(d) and this Section 11.1(e), is ten percent (10%) or more of the Notes, but
such a certificate need not be furnished in the case of any release of property
or securities if the fair value thereof as set forth in the related Officer's
Certificate is less than $25,000 or less than one percent (1%) of the Notes.
(f) Notwithstanding Section 2.10 or any other provisions of this
Section 11.1, the Issuer may, without compliance with the requirements of the
other provisions of this Section 11.1, (i) collect, liquidate, sell or otherwise
dispose of Contracts and Financed Vehicles as and to the extent permitted or
required by the Transaction Documents and (ii) make cash payments out of the
Trust Accounts as and to the extent permitted or required by the Transaction
Documents.
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11.2. FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE.
(a) In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
(b) Any certificate or opinion of an Authorized Officer of the
Issuer may be based, insofar as it relates to legal matters, upon a certificate
or opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which such officer's
certificate or opinion is based are erroneous. Any such certificate of an
Authorized Officer or Opinion of Counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, one or
more 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 Authorized Officer or counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
(c) Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
(d) Whenever in this Indenture, in connection with any application
or certificate or report to the Indenture Trustee, it is provided that the
Issuer shall deliver any document as a condition of the granting of such
application, or as evidence of the Issuer's compliance with any term hereof, it
is intended that the truth and accuracy, at the time of the granting of such
application or at the effective date of such certificate or report (as the case
may be), of the facts and opinions stated in such document shall in such case be
conditions precedent to the right of the Issuer to have such application granted
or to the sufficiency of such certificate or report. The foregoing shall not,
however, be construed to affect the Indenture Trustee's right to rely upon the
truth and accuracy of any statement or opinion contained in any such document as
provided in Article VI.
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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 the
Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by the 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 11.3.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note
Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of every
Note issued upon the registration thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon, whether or not notation of
such action is made upon such Note.
11.4. NOTICES, ETC., TO INDENTURE TRUSTEE, ISSUER AND RATING
AGENCIES. Any request, demand, authorization, direction, notice, consent, waiver
or Act of Noteholders or other documents provided or permitted by this Indenture
shall be in writing and if such request, demand, authorization, direction,
notice, consent, waiver, Act of Noteholders is to be made upon, given or
furnished to or filed with:
(i) the Indenture Trustee by any Noteholder or by the Issuer,
shall be sufficient for every purpose hereunder if made, given, furnished
or filed in writing to or with the Indenture Trustee at its Corporate
Trust Office;
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(ii) the Issuer by the Indenture Trustee or by any Noteholder,
shall be sufficient for every purpose hereunder if in writing and mailed
first-class, postage prepaid to the Issuer addressed to: First Investors
Auto Owner Trust 2000-A, c/o Bankers Trust (Delaware), 0000 Xxxxxx Xxxx,
Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000-0000, Attention: Corporate Trust,
with a copy to Bankers Trust Company, 0 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Structured Finance Group, or at any other
address previously furnished in writing to the Indenture Trustee by the
Issuer or the Administrator. The Issuer shall promptly transmit any notice
received by it from the Noteholders to the Indenture Trustee; or
(iii) the Insurer by the Indenture Trustee, the Servicer or any
Noteholder, shall be sufficient for every purpose hereunder if in writing
and mailed first-class, postage prepaid to the Insurer addressed to MBIA
Insurance Corporation, 000 Xxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000, Attention:
Insured Portfolio Management, Structured Finance.
Notices required to be given to the Rating Agencies by the Issuer,
the Indenture Trustee or the Owner Trustee shall be in writing, personally
delivered, telecopied or mailed by certified mail, return receipt requested, to
(i) in the case of Moody's, at the following address: Xxxxx'x Investors Service,
Inc., ABS Monitoring Department, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and
(ii) in case of Standard & Poor's, at the following address: Standard & Poor's,
a division of The XxXxxx-Xxxx Companies, 00 Xxxxx Xxxxxx (00xx Xxxxx), Xxx Xxxx,
Xxx Xxxx 00000, Attention: Asset Backed Surveillance Department.
11.5. NOTICES TO NOTEHOLDERS; WAIVER.
(a) Where this Indenture provides for notice to Noteholders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class, postage prepaid to
each Noteholder affected by such event, at its address as it appears on the Note
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where notice to
Noteholders is given by mail, neither the failure to mail such notice nor any
defect in any notice so mailed to any particular Noteholder shall affect the
sufficiency of such notice with respect to other Noteholders, and any notice
that is mailed in the manner herein provided shall conclusively be presumed to
have been duly given.
(b) Where this Indenture provides for notice in any
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manner, such notice may be waived in writing by any Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Noteholders shall be filed with
the Indenture Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such a waiver.
(c) If, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.
(d) Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute a Default or
Event of Default.
11.6. ALTERNATE PAYMENT AND NOTICE PROVISIONS. Notwithstanding any
provision of this Indenture or any of the Notes to the contrary, the Issuer may
enter into any agreement with any Holder of a Note providing for a method of
payment, or notice by the Indenture Trustee or any Paying Agent to such Holder,
that is different from the methods provided for in this Indenture for such
payments or notices. The Issuer shall furnish to the Indenture Trustee a copy of
each such agreement and the Indenture Trustee shall cause payments to be made
and notices to be given in accordance with such agreements.
11.7. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and
Section headings herein and the Table of Contents are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
11.8. SUCCESSORS AND ASSIGNS. All covenants and agreements in this
Indenture and the Notes by the Issuer shall bind its successors and assigns,
whether so expressed or not. All agreements of the Indenture Trustee in this
Indenture shall bind its successors, co-trustees and agents.
11.9. SEVERABILITY. If any provision of this Indenture or the Notes
shall be invalid, illegal or unenforceable, the validity, legality, and
enforceability of the remaining provisions of this Indenture and the Notes shall
not in any way be affected or impaired thereby.
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11.10. 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, the Insurer, the Noteholders, any other
party secured hereunder, and any other Person with an ownership interest in any
part of the Trust Estate, any benefit or any legal or equitable right, remedy or
claim under this Indenture.
11.11. LEGAL HOLIDAY. If 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.
11.12. GOVERNING LAW. This Indenture shall be construed in
accordance with the laws of the State of New York and the obligations, rights
and remedies of the parties under this Indenture shall be determined in
accordance with such laws.
11.13. COUNTERPARTS. This Indenture may be executed in any number of
counterparts, each of which counterparts when so executed shall be deemed to be
an original, and all of which counterparts shall together constitute but one and
the same instrument.
11.14. RECORDING OF INDENTURE. If this Indenture is subject to
recording in any appropriate public recording office, such recording shall be
effected by the Issuer at its expense and shall be accompanied by an Opinion of
Counsel (which may be counsel to the Indenture Trustee or any other counsel
reasonably acceptable to the Indenture Trustee) to the effect that such
recording is necessary either for the protection of the Noteholders or any other
Person secured hereunder or for the enforcement of any right or remedy granted
to the Indenture Trustee under this Indenture.
11.15. TRUST OBLIGATION. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
holder of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the
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Indenture Trustee or the Owner Trustee in its individual capacity, of any holder
of a beneficial interest in the Issuer, the Owner Trustee or the Indenture
Trustee or of any successor or assign of the Indenture Trustee or the Owner
Trustee in its individual capacity, except as any such Person may have expressly
agreed (it being understood that the Indenture Trustee and the Owner Trustee
have no such obligations in their individual capacities), and except that any
such partner, owner or beneficiary shall be fully liable, to the extent provided
by applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity. For
all purposes of this Indenture the Owner Trustee (as such and in its individual
capacity) shall be subject to, and entitled to the benefits of, the terms and
provisions of the Trust Agreement.
11.16. NO PETITION. The Indenture Trustee, by entering into this
Indenture, and each Noteholder or Note Owner, by accepting a Note or beneficial
interest in a Note, as the case may be, hereby covenant and agree that they will
not at any time institute against, join in any institution against, or knowingly
or intentionally cooperate or encourage any other Person in instituting against,
the Depositor or the Issuer, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other proceedings under any United
States federal or state bankruptcy or similar law in connection with any
obligations relating to the Notes, this Indenture or any of the other
Transaction Documents.
11.17. INSPECTION. The Issuer shall, with reasonable prior notice,
permit any representative of the Indenture Trustee or the Insurer, during the
Issuer's normal business hours, to examine the books of account, records,
reports and other papers of the Issuer, to make copies and extracts therefrom,
to cause such books to be audited by Independent certified public accountants,
and to discuss the Issuer's affairs, finances and accounts with the Issuer's
officers, employees, and Independent certified public accountants, all at such
reasonable times and as often as may be reasonably requested. The Indenture
Trustee shall and shall cause its representatives to hold in confidence all such
information except to the extent disclosure may be required by law (and all
reasonable applications for confidential treatment are unavailing) and except to
the extent that the Indenture Trustee may reasonably determine that such
disclosure is consistent with its obligations hereunder.
11.18. CERTAIN MATTERS REGARDING THE INSURER. If no Insurer Default
shall have occurred and be continuing, the Insurer shall have the right to
exercise all rights, including voting rights, which the Noteholders are
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entitled to exercise pursuant to this Indenture, without any consent of such
Noteholders; PROVIDED, HOWEVER, that, without the consent of each Noteholder
affected thereby, the Insurer shall not exercise such rights to amend this
Indenture in any manner that would (i) reduce the amount of, or delay the timing
of, collections of payments on the Contracts or distributions which are required
to be made on any Note, (ii) adversely affect in any material respect the
interests of the Holders of any Notes or (iii) alter the rights of any such
Holder to consent to such amendment.
Notwithstanding any provision of this Indenture to the contrary, if
an Insurer Default has occurred and is continuing, the Insurer shall not have
the right to take any action under this Indenture or to control or direct the
actions of the Issuer, the Seller, the Indenture Trustee or the Owner Trustee
pursuant to the terms of this Indenture, nor shall the consent of the Insurer be
required with respect to any action (or waiver of a right to take action) to be
taken by the Issuer, the Seller, the Indenture Trustee, the Owner Trustee, the
Noteholders; PROVIDED, HOWEVER, that (i) the consent of the Insurer shall be
required at all times with respect to any amendment of this Indenture and (ii)
the Insurer shall be entitled to receive notices hereunder at all times whether
or not an Insurer Default has occurred.
11.19. ACKNOWLEDGMENT OF MULTIPLE ROLES. The parties expressly
acknowledge and consent to Norwest Bank Minnesota, National Association
("NORWEST") acting in the possible dual capacity of Back-Up Servicer or
successor Servicer and in the capacity as Indenture Trustee and Custodian.
Norwest may, in such dual capacity, discharge its separate functions fully,
without hindrance or regard to conflict of interest principles, duty of loyalty
principles or other breach of fiduciary duties to the extent that any such
conflict or breach arises from the performance by Norwest of express duties set
forth in this Indenture in any of such capacities, all of which defenses, claims
or assertions are hereby expressly waived by the other parties hereto except in
the case of negligence (other than errors in judgment) and willful misconduct by
Norwest.
SECTION 11.20. SELLER'S OBLIGATIONS. The Seller is a party to this
Indenture solely for the purpose of performing those duties which it is
explicitly obligated to perform pursuant to the terms hereof, including those
duties listed in Sections 3.21 and 6A.1 hereof.
89
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed by their respective officers, thereunto duly authorized and
duly attested, all as of the day and year first above written.
FIRST INVESTORS AUTO OWNER TRUST 2000-A
BANKERS TRUST (DELAWARE),
not in its individual capacity but
solely as Owner Trustee
By:______________________________
Name:
Title:
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
not in its individual capacity but
as Indenture Trustee and Custodian
By:______________________________
Name:
Title:
FIRST INVESTORS FINANCIAL
SERVICES, INC.,
as Seller
By:______________________________
Name:
Title:
STATE OF )
) ss. :
COUNTY OF )
The foregoing instrument was acknowledged before me this ____ day of
January, 2000, by ________________________, as ____________________ of BANKERS
TRUST (DELAWARE), Owner Trustee of FIRST INVESTORS AUTO OWNER TRUST 2000-A, a
Delaware business trust.
________________________
Notary Public in and for
the State of ____________
[SEAL]
My commission expires: ____________
STATE OF )
) ss. :
COUNTY OF )
The foregoing instrument was acknowledged before me this ___ day of
January, 2000, by ____________________, as ____________________ of NORWEST BANK
MINNESOTA, NATIONAL ASSOCIATION, Indenture Trustee of FIRST INVESTORS AUTO OWNER
TRUST 2000-A, a Delaware business trust.
________________________
Notary Public in and for
the State of ____________
[SEAL]
My commission expires: ____________
STATE OF )
) ss. :
COUNTY OF )
The foregoing instrument was acknowledged before me this ___ day of
January, 2000, by ____________________, as ____________________ of FIRST
INVESTORS FINANCIAL SERVICES, INC.
________________________
Notary Public in and for
the State of ____________
[SEAL]
My commission expires: ____________
EXHIBIT A
$167,969,000
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION AND SUBJECT TO COMPLIANCE WITH OTHER APPLICABLE LAWS.
THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN (THE
"HOLDER")BY ITS ACCEPTANCE HEREOF OR OF SUCH INTEREST OR PARTICIPATION HEREIN
AGREES AND IS DEEMED TO AGREE TO OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY
OR ANY INTEREST OR PARTICIPATION HEREIN, IF SUCH SALE IS MADE (I) PRIOR TO THE
DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD THAT MAY HEREAFTER BE PROVIDED
UNDER RULE 144(K) (OR ANY SUCCESSOR PROVISION THEREOF) AS PERMITTING THE RESALE
BY NON-AFFILIATES OF RESTRICTED SECURITIES WITHOUT RESTRICTION) AFTER THE LATER
OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE TRUST OR ANY
AFFILIATE OF THE TRUST WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
THIS SECURITY) (THE "TWO-YEAR DATE"), ONLY (A) TO THE TRUST, (B) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES
IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A,(D)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND OTHERWISE IN COMPLIANCE WITH OTHER APPLICABLE LAWS,
SUBJECT TO THE TRUST'S AND THE INDENTURE TRUSTEE'S RIGHT PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM OR (II) ON OR AFTER THE TWO-YEAR DATE, SUCH OFFER, SALE, PLEDGE OR OTHER
TRANSFER IS MADE IN COMPLIANCE WITH, OR IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER, THE SECURITIES ACT AND ANY OTHER APPLICABLE SECURITIES LAWS,
AND SUCH PERSON FURTHER COVENANTS AND AGREES THAT IT WILL, PRIOR TO ANY OFFER,
SALE, PLEDGE OR OTHER TRANSFER OF THIS SECURITY, NOTIFY THE PERSON TO WHOM SUCH
RESALE, PLEDGE OR OTHER TRANSFER IS TO BE MADE OF THE RESALE RESTRICTIONS SET
FORTH ABOVE AND THE REPRESENTATIONS SUCH PERSON SHALL BE DEEMED TO HAVE MADE
UPON ITS ACQUISITION HEREOF IN COMPLIANCE WITH THE SECURITIES ACT. UNLESS THIS
SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR THE INDENTURE TRUSTEE FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED
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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."
REGISTERED
No. R-1 CUSIP NO.00000XXX0____________
FIRST INVESTORS AUTO OWNERS TRUST 2000-A
ASSET-BACKED NOTES
First Investors Auto Owners Trust 2000-A, a business trust organized
and existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to Cede & Co., or its
registered assigns, the principal sum of $167,969,000 payable on each Payment
Date in the aggregate amount, if any, payable from the Note Payment Account in
respect of principal on the Notes pursuant to and in accordance with Section 2.8
of the Indenture, dated as of January 1, 2000 (as amended, supplemented or
otherwise modified and in effect from time to time, the "Indenture"), between
the Issuer and Norwest Bank Minnesota, National Association, a national banking
association, as Indenture Trustee (in such capacity the "Indenture Trustee");
PROVIDED, HOWEVER, that if not paid prior to such date, the entire unpaid
principal amount of this Note shall be due and payable on the earlier of
February 15, 2006 (the "Final Note Payment Date") and the Redemption Date, if
any, pursuant to Section 10.1(a) of the Indenture. Capitalized terms used but
not defined herein are defined in Article I of the Indenture, which also
contains rules as to construction that shall be applicable herein.
The Issuer shall pay interest on this Note at the rate per annum
shown above on each Payment Date until the principal of this Note is paid or
made available for payment, on the principal amount of this Note outstanding on
the preceding Payment Date (after giving effect to all payments of principal
made on the preceding Payment Date), subject to certain limitations contained in
Section 3.1 of the Indenture. Interest on this Note will accrue for each Payment
Date from and including the previous Payment Date (or, in the case of the
initial Payment Date or if no interest has been paid, from the Closing Date) to
but excluding such Payment Date. Interest will be computed on the basis of a
360-day year of twelve 30-day months. Such principal of and interest on this
Note shall be paid in the manner specified on the reverse hereof.
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The principal of and interest on this Note are payable in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth
on the reverse hereof, which shall have the same effect as though fully set
forth on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK.]
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IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, as of the date set forth below.
Date: January 24, 2000
FIRST INVESTORS AUTO OWNER TRUST 2000-A,
By: BANKERS TRUST (DELAWARE), not in its
individual capacity but solely as Owner
Trustee under the Trust Agreement
By:___________________________________________
Authorized Signatory
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Indenture Trustee
By:___________________________________________
Authorized Signatory
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Asset-Backed Notes, are issued under the Indenture, to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights and obligations thereunder of the Issuer, the
Indenture Trustee and the Holders of the Notes. The Notes are subject to all
terms of the Indenture.
This Note is and will be equally and ratably secured by the
Collateral pledged as security therefor as provided in the Indenture.
Principal of this Note is due and payable on each Payment Date as
described on the face hereof. "Payment Date" means the fifteenth day of each
month or, if any such day is not a Business Day, the next succeeding Business
Day, commencing February 15, 2000.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Final Note Payment Date and the
Redemption Date, if any, pursuant to Section 10.1(a) of the Indenture.
Notwithstanding the foregoing, the entire unpaid principal amount of this Note
shall be due and payable on the date on which an Event of Default shall have
occurred and be continuing and, provided that no Insurer Default shall have
occurred and be continuing, the Insurer has, or, if an Insurer Default shall
have occurred and be continuing, the Noteholders evidencing not less that 66
2/3% of the Note Balance have, declared the Notes to be immediately due and
payable in the manner provided in Section 5.2 of the Indenture (subject to the
right of the Insurer to make such declaration provided that no Insurer Default
shall have occurred and be continuing). Notwithstanding the foregoing sentence,
this Note shall become immediately due and payable without declaration, notice
or demand by or to any Person upon the occurrence of an Event of Default
specified in Section 5.1(ix) of the Indenture with respect to the Issuer. All
principal payments on the Notes shall be made PRO RATA to the Holders entitled
thereto.
Payments of interest on this Note due and payable on each Payment
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person in whose
name this Note is registered appears as the Registered Holder of this Note (or
one or more Predecessor Notes) on the related Record Date by check mailed
first-class postage prepaid to such Person's address as it appears on the Note
Register on such Record Date; provided, however, that, unless Definitive Notes
have been issued pursuant to Section 2.13 of the Indenture, if this Note is
registered in the name of the nominee of the Clearing Agency (initially, such
nominee to be Cede & Co.), payments will be made by wire transfer in immediately
available funds to the account designated by such
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nominee. Any reduction in the principal amount of this Note effected by any
payments made on any Payment Date shall be binding upon all future Holders of
this Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not noted hereon. If funds are
expected to be available, as provided in the Indenture, for payment in full of
the then remaining unpaid principal amount of this Note on a Payment Date, then
the Indenture Trustee, in the name of and on behalf of the Issuer, will notify
the Person who was the registered Holder hereof as of the Record Date preceding
such Payment Date by notice mailed or transmitted by facsimile prior to such
Payment Date, and the amount then due and payable shall be payable only upon
presentation and surrender of this Note at the Indenture Trustee's Corporate
Trust Office or at the office of the Indenture Trustee's agent appointed for
such purposes located at Sixth Street and Marquette Avenue MAC N9311-161,
Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: Corporate Trust Services - Asset-Backed
Administration or such other address as the Indenture Trustee may designate from
time to time as its Corporate Trust Offices in accordance with the Indenture.
The Issuer shall pay interest on overdue installments of interest at
the Note Rate to the extent permitted by law.
As provided in the Indenture, the Notes may be redeemed in the
manner and to the extent described in Section 10.1(a) of the Indenture.
As provided in the Indenture, and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or such Holder's attorney
duly authorized in writing, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.
Each Noteholder or Note Owner, by its acceptance of this Note or, in
the case of a Note Owner, a beneficial interest in this Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect to
the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on
this Note or under the Indenture or any certificate or other writing delivered
in connection therewith, against (i) the Indenture Trustee or the
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Owner Trustee, each in its individual capacity, (ii) any owner of a beneficial
interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer,
director or employee of the Indenture Trustee or the Owner Trustee, each in its
individual capacity, any holder of a beneficial interest in the Issuer, the
Owner Trustee or the Indenture Trustee or of any successor or assign of the
Indenture Trustee or the Owner Trustee, each in its individual capacity, except
as any such Person may have expressly agreed (it being understood that the
Indenture Trustee and the Owner Trustee have no such obligations in their
individual capacities) and except that any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by accepting this Note or a
beneficial interest in this Note, as the case may be, hereby covenants and
agrees that it will not at any time institute against, join in any institution
against, or knowingly or intentionally cooperate or encourage any other Person
in instituting against, the Depositor or the Issuer, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, the Indenture or any
of the other Transaction Documents.
The Issuer has entered into the Indenture and this Note is issued
with the intention that, for federal, state and local income, and franchise tax
purposes, the Notes will qualify as indebtedness of the Issuer secured by the
Trust Estate. The Issuer, by entering into the Indenture and this Note, and each
Noteholder, by its acceptance of this Note (and each Note Owner by its
acceptance of a beneficial interest in this Note), agree to treat this Note as
indebtedness of the Issuer for federal, state and local income and franchise tax
purposes.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture allows, with certain exceptions as therein provided,
the Issuer and the Indenture Trustee to enter into one or more indentures that
are supplemental to the Indenture and which effect a modification of the rights
and obligations of the
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Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Noteholders evidencing not less than
51% of the Note Balance (subject to the right of the Insurer to exercise such
consent provided that no Insurer Default shall have occurred and be continuing).
The Indenture also permits the Indenture Trustee and the Issuer to enter into
supplemental indentures with respect to certain terms and conditions set forth
in the Indenture without the consent of Holders of the Notes issued thereunder.
The term "Issuer," as used in this Note, includes any successor to
the Issuer under the Indenture.
The Issuer is not permitted by the Indenture to enter into any
merger, consolidation or conveyance transaction regardless of the surviving
entity.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be governed by, and construed in
accordance with the laws of the State of New York, and the obligations, rights
and remedies of the parties hereunder and thereunder shall be determined in
accordance with such laws.
No reference herein to the Indenture, and no provision of this Note
or of the Indenture, shall alter or impair the obligation of the Issuer, which
is absolute and unconditional, to pay the principal of and interest on this Note
at the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Transaction Documents, none of Norwest Bank Minnesota, National
Association, in its individual capacity, Bankers Trust (Delaware), in its
individual capacity, any owner of a beneficial interest in the Issuer, or any of
their respective partners, beneficiaries, agents, officers, directors, employees
or successors or assigns shall be personally liable for, nor shall recourse be
had to any of them for, the payment of principal or of interest on this Note or
performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in the Indenture. The Holder of this Note, by its
acceptance hereof (and each Note Owner, by its acceptance of a beneficial
interest herein), agrees that, except as expressly provided in the Transaction
Documents, in the case of an Event of Default under the Indenture, the Holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; PROVIDED, HOWEVER, that nothing contained herein shall be taken
to prevent recourse to, and enforcement against, the assets of the Issuer for
any and all liabilities, obligations and undertakings contained in the Indenture
or in this Note.
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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
*/
________________________________________________________________________________
Signature Guaranteed
__________________________________________
*/ NOTICE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar.
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Exhibit B
Form of Issuer Opinion
B-1
EXHIBIT C
REQUEST FOR RELEASE OF CONTRACT
TO: Norwest Bank Minnesota, National Association
as Custodian
Sixth Street and Marquette Avenue
MAC N9311-161
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Corporate Trust Services/Asset-Backed Administration
In connection with the Contract Files which are owned by First Investors
Auto Owner Trust 2000-A (the "Issuer") and are pledged by the Issuer to Norwest
Bank Minnesota, National Association, as Indenture Trustee (the "Indenture
Trustee"), the undersigned, as [Indenture Trustee][Servicer], requests the
release of the Contract File related to the Contract identified below by its
number. The undersigned shall return the documents to you when the undersigned's
need therefor no longer exists, except where the Contract is paid in full or
otherwise disposed of. Capitalized terms used but not otherwise defined herein
shall have the respective meanings assigned to such terms in the Indenture,
dated as of January 1, 2000, between you, the Issuer and First Investors
Financial Services, Inc.
By_______________________________________
Name:
Title:
CONTRACT NUMBER__________________________
CUSTOMER_________________________________
C-1
TO CUSTODIAN: Please acknowledge below by your signature the execution of the
above request. You must retain this form for your file, and a copy of this form,
signed and dated by you, shall be returned to the Indenture Trustee and the
Issuer.
_______________________________________
Authorized Signature of Custodian
Release Date
RETURN OF RELEASED DOCUMENT(S) FILE
All documents identified above as previously released have been returned:
_______________________________________
Date of Return
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