Exhibit 4.2
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FORM OF INDENTURE
between
USAA AUTO OWNER TRUST 200_-[ ]
as Issuer
and
---------------------
as Indenture Trustee
Dated as of ___________, 200_
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Table of Contents
Page
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ARTICLE I
DEFINITIONS, USAGE AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions and Usage.......................................................................2
SECTION 1.2. Incorporation by Reference of Trust Indenture Act...........................................2
ARTICLE II
THE NOTES
SECTION 2.1. Form........................................................................................2
SECTION 2.2. Execution, Authentication and Delivery......................................................3
SECTION 2.3. Temporary Notes.............................................................................3
SECTION 2.4. Tax Treatment...............................................................................4
SECTION 2.5. Registration; Registration of Transfer and Exchange.........................................4
SECTION 2.6. Mutilated, Destroyed, Lost or Stolen Notes..................................................7
SECTION 2.7. Persons Deemed Owners.......................................................................8
SECTION 2.8. Payment of Principal and Interest; Defaulted Interest.......................................8
SECTION 2.9. Cancellation................................................................................9
SECTION 2.10. Release of Collateral.......................................................................9
SECTION 2.11. Book-Entry Notes............................................................................9
SECTION 2.12. Notices to Clearing Agency.................................................................10
SECTION 2.13. Definitive Notes...........................................................................10
SECTION 2.14. Authenticating Agents......................................................................11
ARTICLE III
COVENANTS
SECTION 3.1. Payment of Principal and Interest..........................................................11
SECTION 3.2. Maintenance of Office or Agency............................................................12
SECTION 3.3. Money for Payments To Be Held in Trust.....................................................12
SECTION 3.4. Existence..................................................................................13
SECTION 3.5. Protection of Indenture Trust Estate.......................................................14
SECTION 3.6. Opinions as to Indenture Trust Estate......................................................15
SECTION 3.7. Performance of Obligations; Servicing of Receivables.......................................15
SECTION 3.8. Negative Covenants.........................................................................17
SECTION 3.9. Annual Statement as to Compliance..........................................................18
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain Terms........................................18
SECTION 3.11. Successor or Transferee....................................................................20
SECTION 3.12. No Other Business..........................................................................20
SECTION 3.13. No Borrowing...............................................................................20
SECTION 3.14. Servicer's Obligations.....................................................................20
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities..........................................20
SECTION 3.16. Capital Expenditures.......................................................................21
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SECTION 3.17. Further Instruments and Acts...............................................................21
SECTION 3.18. Restricted Payments........................................................................21
SECTION 3.19. Notice of Events of Default................................................................21
SECTION 3.20. Removal of Administrator...................................................................21
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture....................................................21
SECTION 4.2. Application of Trust Money.................................................................23
SECTION 4.3. Repayment of Monies Held by Note Paying Agent..............................................23
ARTICLE V
REMEDIES
SECTION 5.1. Events of Default..........................................................................23
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment.........................................24
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee..................25
SECTION 5.4. Remedies; Priorities.......................................................................27
SECTION 5.5. Optional Preservation of the Receivables...................................................30
SECTION 5.6. Limitation of Suits........................................................................30
SECTION 5.7. Unconditional Rights of Noteholders To Receive Principal and Interest......................31
SECTION 5.8. Restoration of Rights and Remedies.........................................................31
SECTION 5.9. Rights and Remedies Cumulative.............................................................31
SECTION 5.10. Delay or Omission Not a Waiver.............................................................31
SECTION 5.11. Control by [Controlling Class] [Noteholders]...............................................32
SECTION 5.12. Waiver of Past Defaults....................................................................32
SECTION 5.13. Undertaking for Costs......................................................................33
SECTION 5.14. Waiver of Stay or Extension Laws...........................................................33
SECTION 5.15. Action on Notes............................................................................33
SECTION 5.16. Performance and Enforcement of Certain Obligations.........................................33
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.1. Duties of Indenture Trustee................................................................34
SECTION 6.2. Rights of Indenture Trustee................................................................36
SECTION 6.3. Individual Rights of Indenture Trustee.....................................................37
SECTION 6.4. Indenture Trustee's Disclaimer.............................................................37
SECTION 6.5. Notice of Defaults; Insolvency or Dissolution of Depositor or the Seller...................37
SECTION 6.6. Reports by Indenture Trustee to Noteholders................................................37
SECTION 6.7. Compensation and Indemnity.................................................................37
SECTION 6.8. Replacement of Indenture Trustee...........................................................38
SECTION 6.9. Successor Indenture Trustee by Merger......................................................39
SECTION 6.10. Appointment of Co-Indenture Trustee or Separate Indenture Trustee..........................39
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SECTION 6.11. Eligibility; Disqualification..............................................................41
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.1. Issuer To Furnish Indenture Trustee Names and Addresses of Noteholders.....................41
SECTION 7.2. Preservation of Information; Communications to Noteholders.................................41
SECTION 7.3. Reports by Issuer..........................................................................42
SECTION 7.4. Reports by Indenture Trustee...............................................................42
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1. Collection of Money........................................................................42
SECTION 8.2. Trust Accounts.............................................................................43
SECTION 8.3. General Provisions Regarding Accounts......................................................46
SECTION 8.4. Release of Indenture Trust Estate..........................................................47
SECTION 8.5. Opinion of Counsel.........................................................................48
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures Without Consent of Noteholders.....................................48
SECTION 9.2. Supplemental Indentures with Consent of Noteholders........................................49
SECTION 9.3. Execution of Supplemental Indentures.......................................................51
SECTION 9.4. Effect of Supplemental Indenture...........................................................51
SECTION 9.5. Conformity with Trust Indenture Act........................................................51
SECTION 9.6. Reference in Notes to Supplemental Indentures..............................................51
ARTICLE X
PREPAYMENT
SECTION 10.1. Prepayment.................................................................................52
SECTION 10.2. Form of Prepayment Notice..................................................................52
SECTION 10.3. Notes Payable on Prepayment Date...........................................................53
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Compliance Certificates and Opinions, etc..................................................53
SECTION 11.2. Form of Documents Delivered to Indenture Trustee...........................................54
SECTION 11.3. Acts of Noteholders........................................................................55
SECTION 11.4. Notices, etc., to Indenture Trustee, Issuer and Rating Agencies............................56
SECTION 11.5. Notices to Noteholders; Waiver.............................................................56
SECTION 11.6. Alternate Payment and Notice Provisions....................................................57
SECTION 11.7. Conflict with Trust Indenture Act..........................................................57
SECTION 11.8. Effect of Headings and Table of Contents...................................................57
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SECTION 11.9. Successors and Assigns.....................................................................57
SECTION 11.10. Separability...............................................................................57
SECTION 11.11. Benefits of Indenture......................................................................57
SECTION 11.12. Legal Holidays.............................................................................58
SECTION 11.13. GOVERNING LAW..............................................................................58
SECTION 11.14. Counterparts...............................................................................58
SECTION 11.15. Recording of Indenture.....................................................................58
SECTION 11.16. Trust Obligation...........................................................................58
SECTION 11.17. No Petition................................................................................58
SECTION 11.18. Subordination Agreement....................................................................59
SECTION 11.19. No Recourse................................................................................59
SECTION 11.20. Inspection.................................................................................59
EXHIBIT A-1 FORM OF CLASS [ ] NOTE..................................................................A-1-1
EXHIBIT A-2 FORM OF CLASS [ ] NOTE..................................................................A-2-1
EXHIBIT A-3 FORM OF CLASS [ ] NOTE..................................................................A-3-1
EXHIBIT A-4 FORM OF CLASS [ ] NOTE..................................................................A-4-1
[EXHIBIT B FORM OF CLASS [ ] NOTE...................................................................B-1]
SCHEDULE A Schedule of Receivables..................................................................SA-1
APPENDIX A Definitions and Usage............................................................Appendix-A-1
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INDENTURE, dated as of ____________, 200_ (as from time to time
amended, supplemented or otherwise modified and in effect, this "Indenture"),
between USAA AUTO OWNER TRUST 200_-[ ], a Delaware statutory trust, as Issuer,
and __________, a __________, as trustee and not in its individual capacity
(in such capacity, the "Indenture Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the holders of the Issuer's Class [ ]
[o]% Asset Backed Notes (the "Class [ ] Notes"), Class [ ] [o]% Asset Backed
Notes (the "Class [ ] Notes"), Class [ ] [o]% Asset Backed Notes (the "Class [
] Notes")[,] [and] Class [ ] [o]% Asset Backed Notes (the "Class [ ] Notes"
and, together with the Class [ ] Notes, the Class [ ] Notes and the Class [ ]
Notes, the "Class [ ] Notes" [or, the "Notes"]) [and Class [ ] [o]% Asset
Backed Notes (the "Class [ ] Notes" and, together with the Class [ ] Notes,
the "Notes")]:
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing
Date, as Indenture Trustee for the benefit of the Noteholders, all of the
Issuer's right, title and interest in, to and under, whether now owned or
existing or hereafter acquired or arising, (a) the Receivables; (b) monies
received thereunder on or after the Cut-off Date; (c) the security interests
in the Financed Vehicles granted by Obligors pursuant to the Receivables and
any other interest of the Issuer in the Financed Vehicles; (d) rights to
receive proceeds with respect to the Receivables from claims on any theft,
physical damage, credit life, credit disability, or other insurance policies
covering Financed Vehicles or Obligors; (e) all of the rights to the
Receivable Files; (f) the Trust Accounts, and all amounts, securities,
investments and other property deposited in or credited to any of the
foregoing, all securities entitlements related to the foregoing and all
proceeds thereof; (g) the Receivables Purchase Agreement and the Sale and
Servicing Agreement; (h) payments and proceeds with respect to the Receivables
held by the Servicer; (i) all property (including the right to receive
Liquidation Proceeds) securing a Receivable (other than a Receivable purchased
by the Servicer or repurchased by the Depositor); (j) rebates of premiums and
other amounts relating to insurance policies and other items financed under
the Receivables in effect as of the Cut-off Date; and (k) all present and
future claims, demands, causes of action and choses in action in respect of
any or all of the foregoing and all payments on or under and all proceeds of
every kind and nature whatsoever in respect of any or all of the foregoing,
including all proceeds of the conversion thereof, voluntary or involuntary,
into cash or other liquid property, all cash proceeds, accounts, accounts
receivable, notes, drafts, acceptances, chattel paper, checks, deposit
accounts, insurance proceeds, condemnation awards, rights to payment of any
and every kind and other forms of obligations and receivables, instruments and
other property which at any time constitute all or part of or are included in
the proceeds of any of the foregoing (collectively, the "Collateral").
The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Notes, equally and ratably without prejudice, priority or distinction, except
as provided in the Indenture, and to secure compliance with the provisions of
this Indenture, all as provided in this Indenture.
The Indenture Trustee, as Indenture Trustee on behalf of the
Noteholders, acknowledges such Grant, accepts the trusts under this Indenture
in accordance with the provisions of this
Indenture and agrees to perform its duties required in this Indenture to the
best of its ability to the end that the interests of the Noteholders may be
adequately and effectively protected.
ARTICLE I
DEFINITIONS, USAGE AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions and Usage. Except as otherwise specified
herein or as the context may otherwise require, capitalized terms used but not
otherwise defined herein are defined in Appendix A hereto, which also contains
rules as to usage that shall be applicable herein.
SECTION 1.2. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"indenture securities" shall mean the Notes.
"indenture security holder" shall mean a Noteholder.
"indenture to be qualified" shall mean this Indenture.
"indenture trustee" or "institutional trustee" shall mean the
Indenture Trustee.
"obligor" on the indenture securities shall mean the Issuer and any
other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined in the
TIA, defined by TIA reference to another statute or defined by Commission rule
have the meaning assigned to them by such definitions.
ARTICLE II
THE NOTES
SECTION 2.1. Form. (a) The Class [ ] Notes, the Class [ ] Notes, the
Class [ ] Notes[,] [and] the Class [ ] Notes [and the Class [ ] Notes],
together with the Indenture Trustee's certificates of authentication, shall be
in substantially the forms set forth in Exhibit X-0, Xxxxxxx X-0, Exhibit
A-3[,] [and] Exhibit A-4 [and Exhibit B], respectively, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may,
consistently herewith, be determined by the officers executing such Notes, as
evidenced by their execution 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.
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(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 X-0, Xxxxxxx X-0, Exhibit A-3[,] [and]
Exhibit A-4 [and Exhibit B] are part of the terms of this Indenture and are
incorporated herein by reference.
SECTION 2.2. Execution, Authentication and Delivery. (a) The Notes
shall be executed on behalf of the Issuer by any of its Authorized Officers.
The signature of any such Authorized Officer on the Notes may be manual or
facsimile.
(b) Notes bearing the manual or facsimile signature of individuals
who were at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
(c) The Indenture Trustee shall, upon Issuer Order, authenticate and
deliver the Notes for original issue in the Classes and initial aggregate
principal amounts as set in the table below.
Initial Aggregate
Class Principal Amount
----- ----------------
Class [ ] Notes $ [o]
Class [ ] Notes $ [o]
Class [ ] Notes $ [o]
Class [ ] Notes $ [o]
[Class [ ] Notes $ [o]]
The aggregate principal amount of Class [ ] Notes, Class [ ] Notes,
Class [ ] Notes, Class [ ] Notes and Class [ ] Notes Outstanding at any time
may not exceed those respective amounts except as provided in Section 2.6.
(d) The Class [ ], Class [ ], Class [ ][,] [and] Class [ ] [and Class
[ ]] Notes shall be issuable as Book-Entry Notes in minimum denominations of
$1,000 and in integral multiples of $1,000 in excess thereof (except for one
Note of each class which may be issued in a denomination other than an
integral of $1,000).
(e) No Note shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated
and delivered hereunder.
SECTION 2.3. Temporary Notes. (a) Pending the preparation of
Definitive Notes, the Issuer may execute, and upon receipt of an Issuer Order
the Indenture Trustee shall authenticate and deliver, temporary Notes that are
printed, lithographed, typewritten,
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mimeographed or otherwise produced, substantially of the tenor of the
Definitive Notes in lieu of which they are issued and with such variations not
inconsistent with the terms of this Indenture as the officers executing the
temporary Notes may determine, as evidenced by their execution of such
temporary Notes.
If temporary Notes are issued, the Issuer shall cause Definitive
Notes to be prepared without unreasonable delay. After the preparation of
Definitive Notes, the temporary Notes shall be exchangeable for Definitive
Notes upon surrender of the temporary Notes at the office or agency of the
Issuer to be maintained as provided in Section 3.2, without charge to the
Noteholder. Upon surrender for cancellation of any one or more temporary
Notes, the Issuer shall execute, and the Indenture Trustee shall authenticate
and deliver in exchange therefor, a like principal amount of Definitive Notes
of authorized denominations. Until so exchanged, the temporary Notes shall in
all respects be entitled to the same benefits under this Indenture as Notes.
SECTION 2.4. Tax Treatment. The Issuer has entered into this
Indenture, and the Notes shall be issued, with the intention that, for
federal, State and local income and franchise tax purposes, the Notes shall
qualify as indebtedness of the Issuer secured by the Indenture Trust Estate.
The Issuer, by entering into this Indenture, and each Noteholder, by its
acceptance of a Note (and each Note Owner by its acceptance of an interest in
the applicable Book-Entry Note), agree to treat the Notes for federal, State
and local income and franchise tax purposes as indebtedness of the Issuer.
SECTION 2.5. Registration; Registration of Transfer and Exchange. (a)
The Issuer shall cause to be kept a register (the "Note Register") in which,
subject to such reasonable regulations as it may prescribe, the Issuer shall
provide for the registration of Notes and the registration of transfers of
Notes. The Indenture Trustee initially shall be the "Note Registrar" for the
purpose of registering Notes and transfers of Notes as herein provided. Upon
any resignation of any Note Registrar, the Issuer shall promptly appoint a
successor or, if it elects not to make such an appointment, assume the duties
of Note Registrar. If a Person other than the Indenture Trustee is appointed
by the Issuer as Note Registrar, (i) the Issuer shall give the Indenture
Trustee prompt written notice of the appointment of such Note Registrar and of
the location, and any change in the location, of the Note Register, (ii) the
Indenture Trustee shall have the right to inspect the Note Register at all
reasonable times and to obtain copies thereof, and (iii) the Indenture Trustee
shall have the right to rely upon a certificate executed on behalf of the Note
Registrar by an Executive Officer thereof as to the names and addresses of the
Noteholders and the principal amounts and number of such Notes.
(b) 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(a) of the UCC are met, an Authorized Officer
of the Issuer shall execute, and the Indenture Trustee shall authenticate and
the Noteholder shall obtain from the Indenture Trustee, in the name of the
designated transferee or transferees, one or more new Notes of the same Class
in any authorized denomination, of a like aggregate principal amount.
(c) At the option of the Noteholder, Notes may be exchanged for other
Notes of the same Class in any authorized denominations, of a like aggregate
principal amount, upon
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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(a)
of the UCC are met, the Issuer shall execute, the Indenture Trustee shall
authenticate, and the Noteholder shall obtain from the Indenture Trustee, the
Notes which the Noteholder making such exchange is entitled to receive.
(d) 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.
(e) Every Note presented or surrendered for registration of transfer
or exchange shall be (i) duly endorsed by, or be accompanied by a written
instrument of transfer in form satisfactory to the Indenture Trustee duly
executed by, the Noteholder thereof or such Noteholder's attorney duly
authorized in writing, with such signature guaranteed by an "eligible
guarantor institution" meeting the requirements of the Note Registrar and (ii)
accompanied by such other documents or evidence as the Indenture Trustee may
require.
(f) No service charge shall be made to a Noteholder for any
registration of transfer or exchange of Notes, but the Note Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Notes, other than exchanges pursuant to Section 2.3 or 9.6 not
involving any transfer.
(g) The preceding provisions of this Section 2.5 notwithstanding, the
Issuer shall not be required to make and the Note Registrar need not register
transfers or exchanges of Notes selected for redemption or of any Note for a
period of fifteen (15) days preceding the Payment Date for any payment with
respect to such Note.
(h) Each [Class A] Noteholder, by its acceptance of a [Class A] Note
(and each [Class A] Note Owner, by its acceptance of a beneficial interest in
a [Class A] Note) will be deemed to have represented that (x) it is not, and
is not acquiring the [Class A] Note on behalf of, or with "plan assets" (as
determined under Department of Labor Regulation ss.2510.3-101 or otherwise)
of, a Plan, or any employee benefit plan subject to Similar Law, or (y) its
acquisition and holding of the [Class A] Note satisfy the requirements for
relief under Prohibited Transaction Class Exemption ("PTCE") 00-00, XXXX 00-0,
XXXX 91-38, XXXX 00-00, XXXX 96-23 or a similar exemption, or, in the case of
an employee benefit plan subject to Similar Law, do not result in a nonexempt
violation of Similar Law.
(i) [Each Class B Noteholder, by its acceptance of a Class B Note
(and each Note Owner by its acceptance of a beneficial interest in a Class B
Note) will be deemed to have represented the following:
(i) Either:
(A) for the entire period during which such
purchaser or transferee holds its interest in the Class B
Notes, no portion of such purchaser's or transferee's assets
constitutes assets of any Benefit Plan Investor; or
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(B) (1) the assets used by such purchaser or
transferee to acquire the Class B Notes (or any interest
therein) constitute assets of an insurance company general
account, (2) for the entire period during which such
purchaser or transferee holds its interest in the Class B
Notes, less than 25% of the assets of such insurance company
general account will constitute "plan assets" of any Benefit
Plan Investor, (3) neither such purchaser or transferee nor
any affiliate is a Controlling Person of the Issuer and (4)
the acquisition and holding of the Class B Notes by such
purchaser or transferee will satisfy the requirements of
Section I of PTCE 95-60 and will not constitute a non-exempt
prohibited transaction under Section 406 of ERISA or Section
4975 of the Code or a violation of any applicable Similar
Law.
(ii) It is, and each account (if any) for which it is
purchasing Class B Notes is, a Person who is (A) a citizen or
resident of the United States, (B) a corporation or partnership
organized in or under the laws of the United States, any state
thereof or the District of Columbia, (C) an estate the income of
which is includible gross income for United States tax purposes,
regardless of its source, (D) a trust with respect to which a U.S.
court is able to exercise primary supervision over the administration
of such trust and one or more Persons meeting the conditions of
clause (A), (B), (C) or (D) of this paragraph (ii) has the authority
to control all substantial decisions of the trust or (E) a Person not
described in clauses (A) through (D) above whose ownership of Class B
Notes is effectively connected with such Person's conduct of a trade
or business within the United States (within the meaning of the Code)
and who provides the Indenture Trustee and the Depositor with an IRS
Form W-8 ECI (and such other certifications, representations, or
opinions of counsel as may be requested by the Indenture Trustee or
the Depositor).
(iii) It understands that any purported transfer of any
Class B Note (or any interest therein) to any Person who does not
meet the conditions of paragraphs (i) and (ii) above shall be, to the
fullest extent permitted by law, void ab initio, and the purported
transferee in such a transfer shall not be recognized by the Issuer
or any other Person as a Class B Noteholder for any purpose.]
(j) [Plans and persons investing on behalf of or with "plan assets"
of Plans may not acquire the Class B Notes. However, an insurance company
using the assets of its general account that include "plan assets" may
purchase the Class B Notes if:
(i) such insurance company is able to represent that, as of
the date it acquires an interest in the Class B Notes, less than 25%
of the assets of such general account constitute "plan assets" of a
Benefit Plan Investor within the meaning of 29 C.F.R.
ss.2510.3-101(f);
(ii) such insurance company agrees that if at any time
during any calendar quarter while it is holding an interest in the
Class B Notes, 25% or more of the assets of such general account
constitute "plan assets" of a Benefit Plan Investor within the
meaning of 29 C.F.R. ss.2510.3-101(f), and if, at that time, no
appropriate exemption or
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exception applies to the operation of the Issuer and its assets under
ERISA, such insurance company will dispose of the Class B Notes then
held in its general account;
(iii) neither such insurance company nor any affiliate is a
Controlling Person of the Issuer; and
(iv) the purchase satisfies the conditions for relief under
Section I of PTCE 95-60.]
SECTION 2.6. Mutilated, Destroyed, Lost or Stolen Notes. (a) If (i)
any mutilated Note is surrendered to the Indenture Trustee or the Note
Registrar, or the Indenture Trustee receives evidence to its satisfaction of
the destruction, loss or theft of any Note, and (ii) there is delivered to the
Indenture Trustee such security or indemnity as may be required by it to hold
the Issuer and the Indenture Trustee harmless, then, in the absence of notice
to the Issuer, the Note Registrar or the Indenture Trustee that such Note has
been acquired by a protected purchaser, as defined in Section 8-303 of the
UCC, and provided that the requirements of Section 8-405 of the UCC are met,
the Issuer shall execute, and upon Issuer Request the Indenture Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a replacement Note of the same Class;
provided, however, that if any such destroyed, lost or stolen Note, but not a
mutilated Note, shall have become or within seven (7) days shall be due and
payable, or shall have been called for redemption, instead of issuing a
replacement Note, the Issuer may pay such destroyed, lost or stolen Note when
so due or payable or upon the Prepayment Date without surrender thereof. If,
after the delivery of such replacement Note or payment of a destroyed, lost or
stolen Note pursuant to the proviso to the preceding sentence, a protected
purchaser of the original Note in lieu of which such replacement Note was
issued presents for payment such original Note, the Issuer and the Indenture
Trustee shall be entitled to recover such replacement Note (or such payment)
from the Person to whom it was delivered or any Person taking such replacement
Note from such Person to whom such replacement Note was delivered or any
assignee of such Person, except a protected purchaser, and shall be entitled
to recover upon the security or indemnity provided therefor to the extent of
any loss, damage, cost or expense incurred by the Issuer or the Indenture
Trustee in connection therewith.
(b) Upon the issuance of any replacement Note under this Section 2.6,
the Issuer may require the payment by the Noteholder of such Note of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other reasonable expenses (including the fees and
expenses of the Indenture Trustee) connected therewith.
(c) Every replacement Note issued pursuant to this Section 2.6 in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute
an original additional contractual obligation of the Issuer, whether or not
the mutilated, destroyed, lost or stolen Note shall be at any time enforceable
by anyone, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Notes duly issued hereunder.
(d) The provisions of this Section 2.6 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Notes.
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SECTION 2.7. Persons Deemed Owners. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and
any agent of the Issuer or the Indenture Trustee may treat the Person in whose
name any Note is registered (as of the day of determination) as the owner of
such Note for the purpose of receiving payments of principal of and interest,
if any, on such Note and for all other purposes whatsoever, whether or not
such Note be overdue, and none of the Issuer, the Indenture Trustee or any
agent of the Issuer or the Indenture Trustee shall be affected by notice to
the contrary.
SECTION 2.8. Payment of Principal and Interest; Defaulted Interest.
(a) The Class [ ] Notes, the Class [ ] Notes, the Class [ ] Notes[,] [and] the
Class [ ] Notes [and the Class [ ]] Notes shall accrue interest at the Class [
] Rate, the Class [ ] Rate, the Class [ ] Rate[,] [and] the Class [ ] Rate
[and the Class [ ] Rate], respectively, as set forth in Exhibit X-0, Xxxxxxx
X-0, Exhibit A-3[,] [and] Exhibit A-4 [and Exhibit B], respectively, and such
interest shall be due and payable on each Payment Date as specified therein,
subject to Section 3.1. Any installment of interest or principal, if any,
payable on any Note that is punctually paid or duly provided for by the Issuer
on the applicable Payment Date shall be paid to the Person in whose name such
Note (or one or more Predecessor Notes) is registered on the Record Date
either by wire transfer in immediately available funds, to the account of such
Noteholder at a bank or other entity having appropriate facilities therefor,
if such Noteholder shall have provided to the Note Registrar appropriate
written instructions at least five (5) Business Days prior to such Payment
Date and such Noteholder's Notes in the aggregate evidence a denomination of
not less than $1,000,000, or, if not, by check mailed first-class postage
prepaid to such Person's address as it appears on the Note Register on such
Record Date; provided that, unless Definitive Notes have been issued to Note
Owners pursuant to Section 2.13, with respect to Notes registered on the
Record Date in the name of the nominee of the Clearing Agency (initially, such
nominee to be Cede & Co.), payment shall be made by wire transfer in
immediately available funds to the account designated by such nominee, and
except for the final installment of principal payable with respect to such
Note on a Payment Date, Prepayment Date or the applicable Final Scheduled
Payment Date, which shall be payable as provided below. The funds represented
by any such checks returned undelivered shall be held in accordance with
Section 3.3.
(b) The principal of each Note shall be payable in installments on
each Payment Date as provided in this Indenture and in the forms of Notes set
forth in Exhibit X-0, Xxxxxxx X-0, Exhibit A-3[,] [and] Exhibit A-4 [and
Exhibit B hereto]. Notwithstanding the foregoing, the entire unpaid principal
amount of each Class of Notes shall be due and payable, if not previously
paid, on the date on which an Event of Default shall have occurred and be
continuing, if the Indenture Trustee or the Noteholders of Notes evidencing
not less than a majority of the principal amount of the Controlling Class have
declared the [Controlling Class] [Notes] to be immediately due and payable in
the manner provided in Section 5.2. All principal payments on each Class of
Notes shall be made pro rata to the Noteholders of such Class entitled
thereto. The Indenture Trustee shall notify the Person in whose name a Note is
registered at the close of business on the Record Date preceding the Payment
Date on which the Issuer expects that the final installment of principal of
and interest on such Note shall be paid. Such notice shall be mailed or
transmitted by facsimile prior to such final Payment Date and shall specify
that such final installment shall be payable only upon presentation and
surrender of such Note and shall specify the place where such Note may be
presented and surrendered for payment of such
8
installment. Notices in connection with redemption of Notes shall be mailed to
Noteholders as provided in Section 10.2.
(c) If the Issuer defaults in a payment of interest on the Notes, the
Issuer shall pay defaulted interest (plus interest on such defaulted interest
to the extent lawful) at the applicable Note Interest Rate on the Payment Date
following such default. The Issuer shall pay such defaulted interest to the
Persons who are Noteholders on the Record Date for such following Payment
Date.
SECTION 2.9. Cancellation. All Notes surrendered for payment,
registration of transfer or exchange shall, if surrendered to any Person other
than the Indenture Trustee, be delivered to the Indenture Trustee and shall be
promptly cancelled by the Indenture Trustee. The Issuer may at any time
deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in
any manner whatsoever, and all Notes so delivered shall be promptly cancelled
by the Indenture Trustee. No Notes shall be authenticated in lieu of or in
exchange for any Notes cancelled as provided in this Section 2.9, except as
expressly permitted by this Indenture. All cancelled Notes may be held or
disposed of by the Indenture Trustee in accordance with its standard retention
or disposal policy as in effect at the time unless the Issuer shall direct by
an Issuer Order that they be destroyed or returned to it and so long as such
Issuer Order is timely and the Notes have not been previously disposed of by
the Indenture Trustee.
SECTION 2.10. Release of Collateral. Subject to Section 11.1 and the
terms of the Basic Documents, the Indenture Trustee shall release property
from the lien of this Indenture only upon receipt of an Issuer Request
accompanied by an Officer's Certificate, an Opinion of Counsel and Independent
Certificates in accordance with TIA Sections 314(c) and 314(d)(1) or an
Opinion of Counsel in lieu of such Independent Certificates to the effect that
the TIA does not require any such Independent Certificates. If the Commission
shall issue an exemptive order under TIA Section 304(d) modifying the Issuer's
obligations under TIA Sections 314(c) and 314(d)(1), subject to Section 11.1
and the terms of the Basic Documents, the Indenture Trustee shall release
property from the lien of this Indenture in accordance with the conditions and
procedures set forth in such exemptive order.
SECTION 2.11. Book-Entry Notes. The Notes, upon original issuance,
shall be issued in the form of typewritten Notes representing the Book-Entry
Notes, to be delivered to The Depository Trust Company, the initial Clearing
Agency, by, or on behalf of, the Issuer. The Book-Entry Notes shall be
registered initially on the Note Register in the name of Cede & Co., the
nominee of the initial Clearing Agency, and no Note Owner thereof shall
receive a Definitive Note (as defined below) representing such Note Owner's
interest in such Note, except as provided in Section 2.13. Unless and until
definitive, fully registered Notes (the "Definitive Notes") have been issued
to such Note Owners pursuant to Section 2.13:
(i) the provisions of this Section 2.11 shall be in full
force and effect;
(ii) the Note Registrar and the Indenture Trustee shall be
entitled to deal with the Clearing Agency for all purposes of this
Indenture (including the payment of principal of and interest on the
Book-Entry Notes and the giving of instructions or
9
directions hereunder) as the sole Noteholder, 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 2.11 shall control;
(iv) the rights of Note Owners shall be exercised only
through the Clearing Agency and shall be limited to those established
by law and agreements between such Note Owners and the Clearing
Agency and/or the Clearing Agency Participants pursuant to the
Security Depository Agreement. Unless and until Definitive Notes are
issued to Note Owners pursuant to Section 2.13, the initial Clearing
Agency shall make book-entry transfers among the Clearing Agency
Participants and receive and transmit payments of principal of and
interest on the Book-Entry Notes to such Clearing Agency Participants
(and neither the Indenture Trustee nor the Note Registrar shall have
any liability or responsibility therefor); and
(v) whenever this Indenture requires or permits actions to
be taken based upon instructions or directions of Noteholders of
Notes evidencing a specified percentage of the principal amount of
the Notes Outstanding (or any Class thereof), the Clearing Agency
shall be deemed to represent such percentage only to the extent that
it has received instructions to such effect from Note Owners and/or
Clearing Agency Participants owning or representing, respectively,
such required percentage of the beneficial interest of the Notes
Outstanding (or Class thereof) and has delivered such instructions to
the Indenture Trustee.
SECTION 2.12. Notices to Clearing Agency. Whenever a notice or other
communication to the Noteholders of Book-Entry Notes is required under this
Indenture, unless and until Definitive Notes shall have been issued to the
Note Owners pursuant to Section 2.13, the Indenture Trustee shall give all
such notices and communications specified herein to be given to Noteholders of
Book-Entry Notes to the Clearing Agency, and shall have no obligation to such
Note Owners.
SECTION 2.13. Definitive Notes. With respect to any Class or Classes
of Book-Entry Notes, if (i) the Administrator advises the Indenture Trustee in
writing that the Clearing Agency is no longer willing or able to properly
discharge its responsibilities with respect to such Class of Book-Entry Notes
and the Administrator is unable to locate a qualified successor or (ii) after
the occurrence of an Event of Default or an Event of Servicing Termination,
Note Owners of such Class of Book- Entry Notes evidencing beneficial interests
aggregating not less than a majority of the principal amount of such Class
advise the Indenture Trustee and the Clearing Agency in writing that the
continuation of a book-entry system through the Clearing Agency is no longer
in the best interests of such Class of Note Owners, then the Clearing Agency
shall notify all Note Owners of such Class and the Indenture Trustee of the
occurrence of such event and of the availability of Definitive Notes to the
Note Owners of the applicable Class requesting the same. Upon surrender to the
Indenture Trustee of the typewritten Notes representing the Book-Entry Notes
by the Clearing Agency, accompanied by registration instructions, the Issuer
shall execute and the Indenture Trustee shall authenticate the Definitive
Notes in accordance with the instructions of the Clearing Agency. None of the
Issuer, the Note Registrar or the Indenture
10
Trustee shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Notes to Note Owners, the Indenture Trustee
shall recognize the holders of such Definitive Notes as Noteholders.
SECTION 2.14. Authenticating Agents. (a) The Indenture Trustee may
appoint one or more Persons (each, an "Authenticating Agent") with power to
act on its behalf and subject to its direction in the authentication of Notes
in connection with issuance, transfers and exchanges under Sections 2.2, 2.3,
2.5, 2.6 and 9.6, as fully to all intents and purposes as though each such
Authenticating Agent had been expressly authorized by those Sections to
authenticate such Notes. For all purposes of this Indenture, the
authentication of Notes by an Authenticating Agent pursuant to this Section
2.14 shall be deemed to be the authentication of Notes "by the Indenture
Trustee."
(b) Any corporation into which any Authenticating Agent may be merged
or converted or with which it may be consolidated, or any corporation
resulting from any merger, consolidation or conversion to which any
Authenticating Agent shall be a party, or any corporation succeeding to all or
substantially all of the corporate trust business of any Authenticating Agent,
shall be the successor of such Authenticating Agent hereunder, without the
execution or filing of any further act on the part of the parties hereto or
such Authenticating Agent or such successor corporation.
(c) Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Indenture Trustee and the Owner Trustee. The
Indenture Trustee may at any time terminate the agency of any Authenticating
Agent by giving written notice of termination to such Authenticating Agent and
the Owner Trustee. Upon receiving such notice of resignation or upon such a
termination, the Indenture Trustee may appoint a successor Authenticating
Agent and shall give written notice of any such appointment to the Owner
Trustee.
(d) The Administrator agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services. The provisions of
Sections 2.9 and 6.4 shall be applicable to any Authenticating Agent.
ARTICLE III
COVENANTS
SECTION 3.1. Payment of Principal and Interest. The Issuer shall duly
and punctually pay the principal of and interest, if any, on the Notes in
accordance with the terms of the Notes and this Indenture. Without limiting
the foregoing, on each Payment Date the Issuer shall cause to be paid pursuant
to Section 8.2 all amounts on deposit in the Collection Account and the
Principal Distribution Account with respect to the Collection Period preceding
such Payment Date and deposited therein pursuant to the Sale and Servicing
Agreement. Amounts properly withheld under the Code by any Person from a
payment to any Noteholder of interest and/or principal shall be considered as
having been paid by the Issuer to such Noteholder for all purposes of this
Indenture.
11
SECTION 3.2. Maintenance of Office or Agency. The Issuer shall
maintain in the Borough of Manhattan, The City of New York, an office or
agency where Notes may be surrendered for registration of transfer or
exchange, and where notices and demands to or upon the Issuer in respect of
the Notes and this Indenture may be served. The Issuer hereby initially
appoints the Indenture Trustee to serve as its agent, and its Corporate Trust
Office as its office, for the foregoing purposes. The Issuer shall give prompt
written notice to the Indenture Trustee of the location, and of any change in
the location, of any such office or agency. If, at any time, the Issuer shall
fail to maintain any such office or agency or shall fail to furnish the
Indenture Trustee with the address thereof, such surrenders, notices and
demands may be made or served at the Corporate Trust Office, and the Issuer
hereby appoints the Indenture Trustee as its agent to receive all such
surrenders, notices and demands.
SECTION 3.3. Money for Payments To Be Held in Trust. (a) As provided
in Sections 8.2 and 5.4(b), all payments of amounts due and payable with
respect to any Notes that are to be made from amounts withdrawn from the Trust
Accounts shall be made on behalf of the Issuer by the Indenture Trustee or by
another Note Paying Agent, and no amounts so withdrawn from the Trust Accounts
for payments of Notes shall be paid over to the Issuer, except as provided in
this Section 3.3.
(b) On or before the Business Day preceding each Payment Date and
Prepayment Date, the Issuer shall deposit or cause to be deposited (including
the provision of written instructions to the Indenture Trustee to make any
required withdrawals from the Reserve Account and to deposit such amounts in
the Collection Account) in the Collection Account an aggregate sum sufficient
to pay the amounts then becoming due under the Notes, such sum to be held in
trust for the benefit of the Persons entitled thereto, and (unless the Note
Paying Agent is the Indenture Trustee) shall promptly notify the Indenture
Trustee of its action or failure so to act.
(c) The Issuer shall cause each Note Paying Agent other than the
Indenture Trustee to execute and deliver to the Indenture Trustee an
instrument in which such Note Paying Agent shall agree with the Indenture
Trustee (and if the Indenture Trustee acts as Note Paying Agent, it hereby so
agrees), subject to the provisions of this Section 3.3, that such Note Paying
Agent shall:
(i) hold all sums held by it for the payment of amounts due
with respect to the Notes in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided;
(ii) give the Indenture Trustee notice of any default by the
Issuer (or any other obligor upon the Notes) of which it has actual
knowledge in the making of any payment required to be made with
respect to the Notes;
(iii) at any time during the continuance of any such
default, upon the written request of the Indenture Trustee, forthwith
pay to the Indenture Trustee all sums so held in trust by such Note
Paying Agent;
12
(iv) immediately resign as a Note Paying Agent and forthwith
pay to the Indenture Trustee all sums held by it in trust for the
payment of Notes if at any time it ceases to meet the standards
required to be met by a Note Paying Agent at the time of its
appointment; and
(v) comply with all requirements of the Code and any State
or local tax law with respect to the withholding from any payments
made by it on any Notes of any applicable withholding taxes imposed
thereon and with respect to any applicable reporting requirements in
connection therewith.
(d) The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by
Issuer Order direct any Note Paying Agent to pay to the Indenture Trustee all
sums held in trust by such Note Paying Agent, such sums to be held by the
Indenture Trustee upon the same trusts as those upon which the sums were held
by such Note Paying Agent; and upon such payment by any Note Paying Agent to
the Indenture Trustee, such Note Paying Agent shall be released from all
further liability with respect to such money.
(e) Subject to applicable laws with respect to escheat of funds, any
money held by the Indenture Trustee or any Note Paying Agent in trust for the
payment of any amount due with respect to any Note and remaining unclaimed for
two (2) years after such amount has become due and payable shall be discharged
from such trust and be paid to the Issuer on Issuer Request; and the
Noteholder of such Note shall thereafter, as an unsecured general creditor,
look only to the Issuer for payment thereof (but only to the extent of the
amounts so paid to the Issuer), and all liability of the Indenture Trustee or
such Note Paying Agent with respect to such trust money shall thereupon cease;
provided, however, that the Indenture Trustee or such Note Paying Agent,
before being required to make any such repayment, shall at the expense and
direction of the Issuer cause to be published once, in a newspaper published
in the English language, customarily published on each Business Day and of
general circulation in The City of New York, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less
than thirty (30) days from the date of such publication, any unclaimed balance
of such money then remaining shall be repaid to the Issuer. The Indenture
Trustee shall also adopt and employ, at the expense and direction of the
Issuer, any other reasonable means of notification of such repayment
(including, but not limited to, mailing notice of such repayment to
Noteholders whose Notes have been called but have not been surrendered for
redemption or whose right to or interest in monies due and payable but not
claimed is determinable from the records of the Indenture Trustee or of any
Note Paying Agent, at the last address of record for each such Noteholder).
SECTION 3.4. Existence. The Issuer shall keep in full effect its
existence, rights and franchises as a statutory trust under the laws of the
State of Delaware (unless it becomes, or any successor Issuer hereunder is or
becomes, organized under the laws of any other State or of the United States
of America, in which case the Issuer shall keep in full effect its existence,
rights and franchises under the laws of such other jurisdiction) and shall
obtain and preserve its qualification to do business in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Indenture Trust Estate.
13
SECTION 3.5. Protection of Indenture Trust Estate. (a) The Issuer
shall from time to time execute, deliver and file, as applicable, all such
supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance and other
instruments, and shall take such other action necessary or advisable to:
(i) maintain or preserve the lien and security interest (and
the priority thereof) of this Indenture or carry out more effectively
the purposes hereof;
(ii) perfect, publish notice of or protect the validity of
any Grant made or to be made by this Indenture;
(iii) enforce any of the Collateral; or
(iv) preserve and defend title to the Indenture Trust Estate
and the rights of the Indenture Trustee and the Noteholders in such
Indenture Trust Estate against the claims of all Persons.
The Issuer hereby authorizes the Indenture Trustee to file any
financing statement, continuation statement or other instrument required to be
executed pursuant to this Section 3.5; provided, however, that the Indenture
Trustee shall be under no obligation to file any such financing statement,
continuation statement or other instrument required pursuant to this Section
3.5.
(b) The Issuer hereby represents and warrants that, as to the
Collateral pledged to the Indenture Trustee for the benefit of the
Noteholders, on the Closing Date, which representations and warranties shall
survive such pledge:
(i) the Indenture creates a valid and continuing security
interest (as defined in the applicable UCC) in the Collateral that is
in existence in favor of the Indenture Trustee, which security
interest is prior to all other liens, and is enforceable as such as
against creditors of and purchasers from the Issuer;
(ii) the Receivables constitute "tangible chattel paper"
under the applicable UCC;
(iii) the Issuer owns and has good and marketable title to
such Collateral free and clear of any liens, claims or encumbrances
of any Person, other than the interest Granted under this Indenture;
(iv) the Issuer has acquired its ownership in such
Collateral in good faith without notice of any adverse claim;
(v) the Trust Accounts are not in the name of any person
other than the Indenture Trustee and the Issuer has not consented to
the bank maintaining the Trust Accounts to comply with the
instructions of any person other than the Indenture Trustee;
(vi) the Issuer has not assigned, pledged, sold, granted a
security interest in or otherwise conveyed any interest in such
Collateral (or, if any such interest has been
14
assigned, pledged or otherwise encumbered, it has been released)
other than interests Granted pursuant to this Indenture;
(vii) the Issuer has caused or will have caused, within ten
days after the Closing Date, the filing of all appropriate financing
statements in the proper filing office in the appropriate
jurisdiction under the applicable law in order to perfect the
security interest Granted hereunder in the Receivables, which
financing statements will contain a statement to the following effect
"A purchase of or security interest in any collateral described in
this financing statement will violate the rights of the Secured
Party";
(viii) other than its Granting hereunder, the Issuer has not
Granted such Collateral, the Issuer has not authorized the filing of
and is not aware of any financing statements against the Issuer that
include a description of such Collateral other than the financing
statement in favor of the Indenture Trustee, and the Issuer is not
aware of any judgment or tax lien filing against it; and
(ix) the information relating to such Collateral set forth
in the Schedule of Receivables (attached hereto as Schedule A) is
correct.
SECTION 3.6. Opinions as to Indenture Trust Estate. (a) On the
Closing Date, the Issuer shall furnish to the Indenture Trustee an Opinion of
Counsel either stating that, in the opinion of such counsel, such action has
been taken with respect to the recording and filing of this Indenture, any
indentures supplemental hereto, and any other requisite documents, and with
respect to the authorization and filing of any financing statements and
continuation statements, as are necessary to perfect and make effective the
lien and security interest of this Indenture and reciting the details of such
action, or stating that, in the opinion of such counsel, no such action is
necessary to make such lien and security interest effective.
(b) On or before April 30 in each calendar year, beginning on April
30, 200_, the Issuer shall furnish to the Indenture Trustee an Opinion of
Counsel either stating that, in the opinion of such counsel, such action has
been taken with respect to the recording, filing, re-recording and refiling of
this Indenture, any indentures supplemental hereto and any other requisite
documents and with respect to the filing of any financing statements and
continuation statements and any other action that may be required by law as is
necessary to maintain the lien and security interest created by this Indenture
and reciting the details of such action or stating that in the opinion of such
counsel no such action is necessary to maintain such lien and security
interest. Such Opinion of Counsel shall also describe the recording, filing,
re-recording and refiling of this Indenture, any indentures supplemental
hereto and any other requisite documents and the filing of any financing
statements and continuation statements that shall, in the opinion of such
counsel, be required to maintain the lien and security interest of this
Indenture until April 30 in the following calendar year.
SECTION 3.7. Performance of Obligations; Servicing of Receivables.
(a) The Issuer shall not take any action and shall use its best efforts not to
permit any action to be taken by others that would release any Person from any
of such Person's material covenants or obligations under any instrument or
agreement included in the Indenture Trust Estate or that would result in the
amendment, hypothecation, subordination, termination or discharge of, or
impair the validity
15
or effectiveness of, any such instrument or agreement, except as expressly
provided in this Indenture and the other Basic Documents.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee in an Officer's Certificate of
the Issuer shall be deemed to be action taken by the Issuer. Initially, the
Issuer has contracted with the Servicer and the Administrator to assist the
Issuer in performing its duties under this Indenture.
(c) The Issuer shall punctually perform and observe all of its
obligations and agreements contained in this Indenture, the other Basic
Documents and in the instruments and agreements included in the Indenture
Trust Estate, including, but not limited to, filing or causing to be filed all
financing statements and continuation statements required to be filed under
the UCC by the terms of this Indenture and the Sale and Servicing Agreement in
accordance with and within the time periods provided for herein and therein.
Except as otherwise expressly provided therein, the Issuer shall not waive,
amend, modify, supplement or terminate any Basic Document or any provision
thereof without the consent of the Indenture Trustee and the Noteholders of
Notes evidencing not less than a majority of the principal amount of each
Class of Notes then Outstanding, voting separately.
(d) If the Issuer shall have knowledge of the occurrence of an Event
of Servicing Termination under the Sale and Servicing Agreement, the Issuer
shall promptly notify the Indenture Trustee and the Rating Agencies thereof
and shall specify in such notice the action, if any, the Issuer is taking in
respect of such default. If an Event of Servicing Termination shall arise from
the failure of the Servicer to perform any of its duties or obligations under
the Sale and Servicing Agreement with respect to the Receivables, the Issuer
shall take all reasonable steps available to it to remedy such failure.
(e) As promptly as possible after the giving of notice of termination
to the Servicer of the Servicer's rights and powers pursuant to Section 7.1 of
the Sale and Servicing Agreement or the Servicer's resignation in accordance
with the terms of the Sale and Servicing Agreement, the Issuer shall appoint a
Successor Servicer meeting the requirements of the Sale and Servicing
Agreement, and such Successor Servicer shall accept its appointment by a
written assumption in a form acceptable to the Indenture Trustee. In the event
that a Successor Servicer has not been appointed at the time when the Servicer
ceases to act as Servicer, the Indenture Trustee without further action shall
automatically be appointed the Successor Servicer. If the Indenture Trustee
shall be legally unable to act as Successor Servicer, it may appoint, or
petition a court of competent jurisdiction to appoint, a Successor Servicer.
The Indenture Trustee may resign as the Servicer by giving written notice of
such resignation to the Issuer and the Depositor 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. In each case of either the appointment of the
Indenture Trustee (or any Affiliate as provided below) as Successor Servicer,
or resignation of the Indenture Trustee as Servicer, the Indenture Trustee
shall provide to the Depositor, in writing, such information as reasonably
requested by the Depositor to comply with its reporting obligation under the
Exchange Act with respect to a successor Servicer or the resignation of the
Servicer. Upon delivery of any such notice to the Issuer, the Issuer shall
obtain a new servicer as the Successor Servicer under the Sale and
16
Servicing Agreement. Any Successor Servicer (other than the Indenture Trustee
or any Affiliate thereof) shall (i) be an established institution having a net
worth of not less than $100,000,000 and whose regular business shall include
the servicing of automotive receivables and whose appointment as Successor
Servicer satisfies the Rating Agency Condition, (ii) enter into a servicing
agreement with the Issuer having substantially the same provisions as the
provisions of the Sale and Servicing Agreement applicable to the Servicer and
(iii) shall provide to the Depositor, in writing, such information as
reasonably requested by the Depositor to comply with its reporting obligation
under the Exchange Act with respect to a successor Servicer. If, within thirty
(30) days after the delivery of the notice referred to above, the Issuer shall
not have obtained such a new servicer, the Indenture Trustee may appoint, or
may petition a court of competent jurisdiction to appoint, a Successor
Servicer. In connection with any such appointment, the Indenture Trustee may
make such arrangements for the compensation of such successor as it and such
successor shall agree, subject to the limitations set forth below and in the
Sale and Servicing Agreement, and, in accordance with Section 7.2 of the Sale
and Servicing Agreement, the Issuer shall enter into an agreement with such
successor for the servicing of the Receivables (such agreement to be in form
and substance satisfactory to the Indenture Trustee). Notwithstanding anything
herein or in the Sale and Servicing Agreement to the contrary, in no event
shall the Indenture Trustee be liable for any Servicing Fee or for any
differential in the amount of the Servicing Fee paid hereunder and the amount
necessary to induce any Successor Servicer to act as Successor Servicer under
the Basic Documents and the transactions set forth or provided for therein. If
the Indenture Trustee shall succeed to the Servicer's duties as servicer of
the Receivables as provided herein, it shall do so in its individual capacity
and not in its capacity as Indenture Trustee and, accordingly, the provisions
of Article VI hereof shall be inapplicable to the Indenture Trustee in its
duties as the successor to the Servicer and the servicing of the Receivables.
In case the Indenture Trustee shall become successor to the Servicer under the
Sale and Servicing Agreement, the Indenture Trustee shall be entitled to
appoint as Servicer any one of its Affiliates; provided that the Indenture
Trustee, in its capacity as the Servicer, shall be fully liable for the
actions and omissions of such Affiliate in such capacity as Successor
Servicer.
(f) Upon any termination of the Servicer's rights and powers pursuant
to the Sale and Servicing Agreement, the Issuer shall promptly notify the
Indenture Trustee. As soon as a Successor Servicer is appointed by the Issuer,
the Issuer shall notify the Indenture Trustee of such appointment, specifying
in such notice the name and address of such Successor Servicer.
(g) Without derogating from the absolute nature of the assignment
granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Issuer hereby agrees that it shall not,
without the prior written consent of the Indenture Trustee or the Noteholders
of Notes evidencing not less than a majority in principal amount of the Notes
Outstanding, amend, modify, waive, supplement, terminate or surrender, or
agree to any amendment, modification, supplement, termination, waiver or
surrender of, the terms of any Collateral (except to the extent otherwise
provided in the Sale and Servicing Agreement or the other Basic Documents).
SECTION 3.8. Negative Covenants. So long as any Notes are
Outstanding, the Issuer shall not:
17
(i) except as expressly permitted by this Indenture, the
Trust Agreement or the Sale and Servicing Agreement, sell, transfer,
exchange or otherwise dispose of any of the properties or assets of
the Issuer, including those included in the Indenture Trust Estate,
unless directed to do so by the Indenture Trustee;
(ii) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Notes (other than
amounts properly withheld from such payments under the Code) or
assert any claim against any present or former Noteholder by reason
of the payment of the taxes levied or assessed upon the Trust or the
Indenture Trust Estate;
(iii) dissolve or liquidate in whole or in part; or
(iv) (A) permit the validity or effectiveness of this
Indenture to be impaired, or permit the lien of this Indenture to be
amended, hypothecated, subordinated, terminated or discharged, or
permit any Person to be released from any covenants or obligations
with respect to the Notes under this Indenture except as may be
expressly permitted hereby, (B) permit any lien, charge, excise,
claim, security interest, mortgage or other encumbrance (other than
the lien of this Indenture) to be created on or extend to or
otherwise arise upon or burden the assets of the Issuer, including
those included in the Indenture Trust Estate, or any part thereof or
any interest therein or the proceeds thereof (other than tax liens,
mechanics' liens and other liens that arise by operation of law, in
each case on any of the Financed Vehicles and arising solely as a
result of an action or omission of the related Obligor) or (C) permit
the lien of this Indenture not to constitute a valid first priority
(other than with respect to any such tax, mechanics' or other lien)
security interest in the Indenture Trust Estate.
SECTION 3.9. Annual Statement as to Compliance. The Issuer shall
deliver to the Indenture Trustee, within 120 days after the end of each
calendar year, an Officer's Certificate stating, as to the Authorized Officer
signing such Officer's Certificate, that:
(i) a review of the activities of the Issuer during such
year and of its performance under this Indenture has been made under
such Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge,
based on such review, the Issuer has complied in all material
respects with all conditions and covenants under this Indenture
throughout such year (or since the Closing Date, in the case of the
first such Officer's Certificate), or, if there has been a default in
any material respect in its compliance with any such condition or
covenant, specifying each such default known to such Authorized
Officer and the nature and status thereof.
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain Terms.
(a) The Issuer shall not consolidate or merge with or into any other Person,
unless:
(i) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger shall be a Person organized
and existing under the laws of the United States of America or any
State and shall expressly assume, by an indenture
18
supplemental hereto, executed and delivered to the Indenture Trustee,
in form satisfactory to the Indenture Trustee, the due and punctual
payment of the principal of and interest on all Notes and the
performance or observance of every agreement and covenant of this
Indenture on the part of the Issuer to be performed or observed, all
as provided herein;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied
with respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel
(and shall have delivered copies thereof to the Indenture Trustee) to
the effect that such transaction will not have any material adverse
federal income tax consequence to the Issuer, any Noteholder or any
Certificateholder;
(v) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been taken;
and
(vi) the Issuer shall have delivered to the Indenture
Trustee an Officer's Certificate and an Opinion of Counsel each
stating that such consolidation or merger and such supplemental
indenture comply with this Article III and that all conditions
precedent herein provided for relating to such transaction have been
complied with (including any filing required by the Exchange Act).
(b) Other than as specifically contemplated by the Basic Documents,
the Issuer shall not convey or transfer any of its properties or assets,
including those included in the Indenture Trust Estate, to any Person, unless:
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of
which is hereby restricted shall (A) be a United States citizen or a
Person organized and existing under the laws of the United States of
America or any State, (B) expressly assumes, by an indenture
supplemental hereto, executed and delivered to the Indenture Trustee,
in form satisfactory to the Indenture Trustee, the due and punctual
payment of the principal of and interest on all Notes and the
performance or observance of every agreement and covenant of this
Indenture on the part of the Issuer to be performed or observed, all
as provided herein, (C) expressly agrees by means of such
supplemental indenture that all right, title and interest so conveyed
or transferred shall be subject and subordinate to the rights of
Noteholders, (D) unless otherwise provided in such supplemental
indenture, expressly agrees to indemnify, defend and hold harmless
the Issuer against and from any loss, liability or expense arising
under or related to this Indenture and the Notes, and (E) expressly
agrees by means of such supplemental indenture that such Person (or
if a group of Persons, then one specified Person) shall make all
filings, if any, with the Commission (and any other appropriate
Person) required by the Exchange Act in connection with the Notes;
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(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied
with respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel
(and shall have delivered copies thereof to the Indenture Trustee) to
the effect that such transaction will not have any material adverse
federal income tax consequence to the Issuer, any Noteholder or any
Certificateholder;
(v) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been taken;
and
(vi) the Issuer shall have delivered to the Indenture
Trustee an Officer's Certificate and an Opinion of Counsel each
stating that such conveyance or transfer and such supplemental
indenture comply with this Article III and that all conditions
precedent herein provided for relating to such transaction have been
complied with (including any filing required by the Exchange Act).
SECTION 3.11. Successor or Transferee. (a) Upon any consolidation or
merger of the Issuer in accordance with Section 3.10(a), the Person formed by
or surviving such consolidation or merger (if other than the Issuer) shall
succeed to, and be substituted for, and may exercise every right and power of,
the Issuer under this Indenture with the same effect as if such Person had
been named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 3.10(b), the Issuer shall be released from
every covenant and agreement of this Indenture to be observed or performed on
the part of the Issuer with respect to the Notes immediately upon the delivery
of written notice to the Indenture Trustee stating that the Issuer is to be so
released.
SECTION 3.12. No Other Business. The Issuer shall not engage in any
business other than financing, acquiring, owning and pledging the Receivables
in the manner contemplated by this Indenture and the Basic Documents and
activities incidental thereto.
SECTION 3.13. No Borrowing. The Issuer shall not issue, incur,
assume, guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes and the Certificates.
SECTION 3.14. Servicer's Obligations. The Issuer shall cause the
Servicer to comply with the Sale and Servicing Agreement, including Sections
3.9, 3.10, 3.11, 3.12, 3.13 and 4.9 and Article VI thereof.
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities.
Except as contemplated by this Indenture and the other Basic Documents, the
Issuer shall not make any loan or advance or credit to, or guarantee (directly
or indirectly or by an instrument having the effect of assuring another's
payment or performance on any obligation or capability of so doing
20
or otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or
own, purchase, repurchase or acquire (or agree contingently to do so) any
stock, obligations, assets or securities of, or any other interest in, or make
any capital contribution to, any other Person.
SECTION 3.16. Capital Expenditures. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
SECTION 3.17. Further Instruments and Acts. Upon request of the
Indenture Trustee, the Issuer shall execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper
to carry out more effectively the purpose of this Indenture.
SECTION 3.18. Restricted Payments. The Issuer shall not, directly or
indirectly, (i) make any distribution (by reduction of capital or otherwise),
whether in cash, property, securities or a combination thereof, to the Owner
Trustee or any owner of a beneficial interest in the Issuer or otherwise with
respect to any ownership or equity interest or security in or of the Issuer or
to the Servicer or the Administrator, (ii) redeem, purchase, retire or
otherwise acquire for value any such ownership or equity interest or security
or (iii) set aside or otherwise segregate any amounts for any such purpose;
provided, however, that the Issuer may make, or cause to be made, (x) payments
to the Servicer, the Administrator, the Owner Trustee, the Indenture Trustee,
the Noteholders and the Certificateholders as contemplated by, and to the
extent funds are available for such purpose under, this Indenture and the
other Basic Documents and (y) payments to the Indenture Trustee pursuant to
Section 2(a)(ii) of the Administration Agreement. The Issuer shall not,
directly or indirectly, make payments to or distributions from the Collection
Account or the Principal Distribution Account except in accordance with this
Indenture and the other Basic Documents.
SECTION 3.19. Notice of Events of Default. The Issuer shall give the
Indenture Trustee and the Rating Agencies prompt written notice of each Event
of Default hereunder and of each default on the part of any party to the Sale
and Servicing Agreement with respect to any of the provisions thereof.
SECTION 3.20. Removal of Administrator. For so long as any Notes are
Outstanding, the Issuer shall not remove the Administrator without cause
unless the Rating Agency Condition shall have been satisfied in connection
therewith.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect with respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of
mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to
receive payments of principal thereof and interest thereon, (iv) Sections 3.3,
3.4, 3.5, 3.8, 3.10, 3.12 and 3.13, (v) the rights 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
21
property so deposited with the Indenture Trustee payable to all or any of
them, and the Indenture Trustee, on demand of and at the expense of the
Issuer, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture with respect to the Notes, when:
(A) either:
(1) all Notes theretofore authenticated
and delivered (other than (i) Notes that have been
destroyed, lost or stolen and that have been
replaced or paid as provided in Section 2.6 and
(ii) Notes for whose payment money has theretofore
been deposited in trust or segregated and held in
trust by the Issuer and thereafter repaid to the
Issuer or discharged from such trust, as provided
in Section 3.3) have been delivered to the
Indenture Trustee for cancellation; or
(2) all Notes not theretofore delivered to
the Indenture Trustee for cancellation have become
due and payable and the Issuer has irrevocably
deposited or caused to be irrevocably deposited
with the Indenture Trustee cash or direct
obligations of or obligations guaranteed by the
United States of America (which will mature prior
to the date such amounts are payable), in trust for
such purpose, in an amount sufficient without
reinvestment to pay and discharge the entire
indebtedness on such Notes not theretofore
delivered to the Indenture Trustee for cancellation
when due to the applicable Final Scheduled Payment
Date or Prepayment Date (if Notes shall have been
called for prepayment pursuant to Section 10.1), as
the case may be, and all fees and other amounts due
and payable to the Indenture Trustee;
(B) the Issuer has paid or caused to be paid all
other sums payable hereunder and under any of the other
Basic Documents by the Issuer;
(C) the Issuer has delivered to the Indenture
Trustee an Officer's Certificate, an Opinion of Counsel and
(if required by the TIA or the Indenture Trustee) an
Independent Certificate from a firm of certified public
accountants, each meeting the applicable requirements of
Section 11.1(a) and, subject to Section 11.2, each stating
that all conditions precedent herein provided for relating
to the satisfaction and discharge of this Indenture have
been complied with; and
(D) the Issuer has delivered to the Indenture
Trustee an Opinion of Counsel to the effect that the
satisfaction and discharge of the Notes pursuant to this
Section 4.1 will not cause any Noteholder to be treated as
having sold or exchanged any of its Notes for purposes of
Section 1001 of the Code.
Upon the satisfaction and discharge of the Indenture pursuant to this
Section 4.1, at the request of the Owner Trustee, the Indenture Trustee shall
deliver to the Owner Trustee a certificate of a Trustee Officer stating that
all Noteholders have been paid in full and stating
22
whether, to the best knowledge of such Trustee Officer, any claims remain
against the Issuer in respect of the Indenture and the Notes.
SECTION 4.2. Application of Trust Money. All monies deposited with
the Indenture Trustee pursuant to Section 4.1 shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Note Paying Agent,
as the Indenture Trustee may determine, to the Noteholders of the particular
Notes for the payment or redemption of which such monies have been deposited
with the Indenture Trustee, of all sums due and to become due thereon for
principal and interest, but such monies need not be segregated from other
funds except to the extent required herein or in the Sale and Servicing
Agreement or required by law.
SECTION 4.3. Repayment of Monies Held by Note Paying Agent. In
connection with the satisfaction and discharge of this Indenture with respect
to the Notes, all monies then held by any Note Paying Agent other than the
Indenture Trustee under the provisions of this Indenture with respect to such
Notes shall, upon demand of the Issuer, be paid to the Indenture Trustee to be
held and applied according to Section 3.3 and thereupon such Note Paying Agent
shall be released from all further liability with respect to such monies.
ARTICLE V
REMEDIES
SECTION 5.1. Events of Default. "Event of Default," wherever used
herein, means the occurrence of any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) default in the payment of any interest on any [Class [ ]
Note [or, if the Class [ ] Notes are no longer Outstanding, any Class
[ ]] Note when the same becomes due and payable on a Payment Date,
and such default shall continue for a period of [five (5)] days or
more; or
(ii) default in the payment of the principal of or any
installment of the principal of any Note when the same becomes due
and payable; or
(iii) default in the observance or performance of any
covenant or agreement of the Issuer made in this Indenture (other
than a covenant or agreement, a default in the observance or
performance of which is elsewhere in this Section 5.1 specifically
dealt with) that materially and adversely affects the Noteholders and
such default shall continue for a period of sixty (60) days, after
there shall have been given, by registered or certified mail, to the
Issuer by the Indenture Trustee or to the Issuer and the Indenture
Trustee by the holders of Notes evidencing not less than 25% of the
principal amount of the [Controlling Class] [Notes], a written notice
specifying such default and requiring it to be remedied and stating
that such notice is a "Notice of Default" hereunder; or
23
(iv) the filing of a decree or order for relief by a court
having jurisdiction in the premises in respect of the Issuer or any
substantial part of the Indenture Trust Estate in an involuntary case
under any applicable federal or State bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Issuer or for any substantial part of the Indenture
Trust Estate, or ordering the winding-up or liquidation of the
Issuer's affairs, and such decree or order shall remain unstayed and
in effect for a period of sixty (60) consecutive days; or
(v) the commencement by the Issuer of a voluntary case under
any applicable federal or State bankruptcy, insolvency or other
similar law now or hereafter in effect, or the consent by the Issuer
to the entry of an order for relief in an involuntary case under any
such law, or the consent by the Issuer to the appointment or taking
possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Issuer or for any substantial
part of the Indenture Trust Estate, or the making by the Issuer of
any general assignment for the benefit of creditors, or the failure
by the Issuer generally to pay its debts as such debts become due, or
the taking of any action by the Issuer in furtherance of any of the
foregoing.
The Issuer shall deliver to the Indenture Trustee, within five (5) days after
the occurrence thereof, written notice in the form of an Officer's Certificate
of any event which with the giving of notice and the lapse of time would
become an Event of Default under clause (iii) above, its status and what
action the Issuer is taking or proposes to take with respect thereto.
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment. (a)
If an Event of Default should occur and be continuing, then and in every such
case the Indenture Trustee or the holders of Notes evidencing not less than a
majority of the principal amount of the [Controlling Class] [Notes] may
declare all the Notes to be immediately due and payable, by a notice in
writing to the Issuer (and to the Indenture Trustee if given by Noteholders),
and upon any such declaration the unpaid principal amount of such Notes,
together with accrued and unpaid interest thereon through the date of
acceleration, shall become immediately due and payable.
(b) At any time after a declaration of acceleration of maturity has
been made and before a judgment or decree for payment of the amount due has
been obtained by the Indenture Trustee as hereinafter provided in this Article
V, the holders of Notes evidencing not less than a majority of the principal
amount of the [Controlling Class] [Notes], by written notice to the Issuer and
the Indenture Trustee, may rescind and annul such declaration and its
consequences if:
(i) the Issuer has paid or deposited with the Indenture
Trustee a sum sufficient to pay:
(A) all payments of principal of and interest on
all Notes and all other amounts that would then be due
hereunder or upon such Notes if the Event of Default giving
rise to such acceleration had not occurred; and
24
(B) all sums paid or advanced by the Indenture
Trustee hereunder and the reasonable compensation, expenses,
disbursements, indemnities and advances of the Indenture
Trustee and its agents and counsel; and
(ii) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such
acceleration, have been cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee. (a) The Issuer covenants that if (i) there is an Event of
Default relating to the nonpayment of any interest on any Note when the same
becomes due and payable, and such Event of Default continues for a period of
five (5) days, or (ii) there is an Event of Default relating to the nonpayment
in the payment of the principal of or any installment of the principal of any
Note when the same becomes due and payable, the Issuer shall, upon demand of
the Indenture Trustee, pay to the Indenture Trustee, for the benefit of the
Noteholders, the whole amount then due and payable on such Notes for principal
and interest, with interest upon the overdue principal and, to the extent
payment at such rate of interest shall be legally enforceable, upon overdue
installments of interest at the applicable Note Interest Rate borne by the
Notes and in addition thereto such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Indenture Trustee
and its agents, attorneys and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee, in its own name and as trustee of an
express trust, may institute a Proceeding for the collection of the sums so
due and unpaid, and may prosecute such Proceeding to judgment or final decree,
and may enforce the same against the Issuer or other obligor upon such Notes
and collect in the manner provided by law out of the property of the Issuer or
other obligor upon such Notes, wherever situated, the monies adjudged or
decreed to be payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee, as more particularly provided in Section 5.4, in its discretion, may
proceed to protect and enforce its rights and the rights of the Noteholders,
by such appropriate Proceedings as the Indenture Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy or
legal or equitable right vested in the Indenture Trustee by this Indenture or
by law.
(d) In case there shall be pending, relative to the Issuer or any
other obligor upon the Notes or any Person having or claiming an ownership
interest in the Indenture Trust Estate, Proceedings under Title 11 of the
United States Code or any other applicable federal or State bankruptcy,
insolvency or other similar law, or in case a receiver, assignee or trustee in
bankruptcy or reorganization, liquidator, sequestrator or similar official
shall have been appointed for or taken possession of the Issuer or its
property or such other obligor or Person, or in case of any other comparable
judicial Proceedings relative to the Issuer or other obligor upon the Notes,
or to the creditors or property of the Issuer or such other obligor, the
Indenture Trustee, irrespective of whether the principal of any Notes shall
then be due and payable as
25
therein expressed or by declaration or otherwise and irrespective of whether
the Indenture Trustee shall have made any demand pursuant to the provisions of
this Section 5.3, shall be entitled and empowered, by intervention in such
Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount
of principal and interest owing and unpaid in respect of the Notes
and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Indenture Trustee
(including any claim for reasonable compensation to the Indenture
Trustee and each predecessor Indenture Trustee, and their respective
agents, attorneys and counsel, and for reimbursement of all expenses
and liabilities incurred, and all advances and disbursements made, by
the Indenture Trustee and each predecessor Indenture Trustee, except
as a result of negligence or bad faith) and of the Noteholders
allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Noteholders in any election of a trustee, a
standby trustee or Person performing similar functions in any such
Proceedings;
(iii) to collect and receive any monies or other property
payable or deliverable on any such claims and to pay all amounts
received with respect to the claims of the Noteholders and of the
Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the
claims of the Indenture Trustee or the Noteholders allowed in any
judicial proceedings relative to the Issuer, its creditors and its
property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee and, in the event that the Indenture Trustee
shall consent to the making of payments directly to such Noteholders, to pay
to the Indenture Trustee such amounts as shall be sufficient to cover
reasonable compensation to the Indenture Trustee, each predecessor Indenture
Trustee and their respective agents, attorneys and counsel, and all other
expenses and liabilities incurred, and all advances and disbursements made, by
the Indenture Trustee and each predecessor Indenture Trustee, except as a
result of negligence or bad faith, and any other amounts due the Indenture
Trustee pursuant to Section 6.7.
(e) Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Noteholder any plan of reorganization, arrangement, adjustment
or composition affecting the Notes or the rights of any Noteholder or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the
election of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this
Indenture, or under any of the Notes, may be enforced by the Indenture Trustee
without the possession of any of the Notes or the production thereof in any
trial or other Proceedings relative thereto, and any such action or
26
Proceedings instituted by the Indenture Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment, subject to
the payment of the expenses, disbursements and compensation of the Indenture
Trustee, each predecessor Indenture Trustee and their respective agents,
attorneys and counsel, shall be for the ratable benefit of the Noteholders in
respect of which such judgment has been recovered.
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Noteholders, and it shall not be necessary to make
any Noteholder a party to any such Proceedings.
SECTION 5.4. Remedies; Priorities. (a) If an Event of Default shall
have occurred and be continuing, the Indenture Trustee may, or at the
direction of Noteholders of Notes evidencing not less than a majority of the
principal amount of the Controlling Class shall, do one or more of the
following (subject to Section 5.5):
(i) institute Proceedings in its own name and as trustee of
an express trust for the collection of all amounts then payable on
the Notes or under this Indenture with respect thereto, whether by
declaration or otherwise, enforce any judgment obtained, and collect
from the Issuer and any other obligor upon such Notes monies adjudged
due;
(ii) institute Proceedings from time to time for the
complete or partial foreclosure of this Indenture with respect to the
Indenture Trust Estate;
(iii) exercise any remedies of a secured party under the UCC
and take any other appropriate action to protect and enforce the
rights and remedies of the Indenture Trustee and the Noteholders; and
(iv) sell the Indenture Trust Estate or any portion thereof
or rights or interest therein, at one or more public or private sales
called and conducted in any manner permitted by law;
provided, however, the Indenture Trustee may not sell or otherwise liquidate
the Indenture Trust Estate unless:
(A) the holders of Notes evidencing 100% of the
principal amount of the Notes (excluding Notes held by the
Seller, the Servicer or any of their Affiliates) consent
thereto; or
(B) the proceeds of such sale or liquidation are
sufficient to pay in full the principal of and the accrued
interest on the Outstanding Notes; or
(C) if the Event of Default is of the type
described in Section 5.1(i) or (ii), the Indenture Trustee-
(1) determines (but shall have no
obligation to make such determination) that the
Indenture Trust Estate will not continue to provide
sufficient funds for the payment of principal of
and interest on the Notes
27
as they would have become due if the Notes had not
been declared due and payable; and
(2) the Indenture Trustee obtains the
consent of holders of Notes evidencing not less
than 66 2/3% of the principal amount of the
[Controlling Class] [Notes]; or
(D) with respect to an Event of Default described in
Section 5.1(iii):
(1) the holders of all Outstanding Notes [and the
Certificateholders of all Outstanding Certificates] consent
thereto; or
(2) the proceeds of such sale or liquidation are
sufficient to pay in full the principal of and accrued
interest on the Outstanding Notes [and Outstanding
Certificates].
In determining such sufficiency or insufficiency with respect to
clauses (C)(1) and (D)(2) above, the Indenture Trustee may (at other than its
own expense), 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 Indenture
Trust Estate for such purpose.
(b) Notwithstanding the provisions of Section 8.2 of this Indenture or
Section 4.6 of the Sale and Servicing Agreement, if the Indenture Trustee
collects any money or property (and other amounts including amounts held on
deposit in the Reserve Account) pursuant to this Article V, it shall pay out the
money or property in the following order of priority:
(i) first, to the Indenture Trustee and the Owner Trustee for
all amounts due for fees, expenses and indemnification under Section
6.7 of this Indenture, Article VII of the Trust Agreement and Section
6.2 of the Sale and Servicing Agreement, respectively, and not
previously paid;
(ii) second, to the Servicer for due and unpaid Servicing
Fees;
(iii) third, if an Event of Default specified in Section
5.1(i), (ii), (iv) or (v) has occurred, in the following order of
priority:
(A) first, to the Class A Noteholders, interest due
and payable on the Class A Notes (including interest at the
applicable Note Interest Rate on any overdue interest, to
the extent lawful), provided that if there are not
sufficient funds available to pay the entire amount of
interest due and payable on the Class A Notes, the amounts
available shall be applied to the payment of such interest
on the Class A Notes on a pro rata basis;
(B) second, to the holders of the Class [ ] Notes
in reduction of principal until the principal amount of the
Class [ ] Notes has been paid in full and then to the
holders of the Class [ ] Notes, the Class [ ] Notes and the
Class [ ]
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Notes on a pro rata basis in reduction of principal until
the principal amount of such Class A Notes has been paid in
full; [and]
(C) third, [to the holders of the Class B Notes,
first, interest due and payable on the Class B Notes
(including interest at the Class B Rate on any overdue
interest, to the extent lawful) and second, in reduction of
principal until the principal amount of the Class B Notes is
paid in full, and] [to the Certificate Distribution Account,
the sum of (x) accrued and unpaid interest on the Class B
Certificates (together with interest at the Class B Rate on
any overdue interest, to the extent lawful) and (y) the
Outstanding Certificate Balance];
(iv) fourth, if the only Event of Default that has occurred
is the Event of Default specified in Section 5.1(iii), in the
following order of priority:
(A) to the Class A Noteholders, accrued and unpaid
interest on the Class A Notes (together with interest on
overdue interest at the applicable Note Interest Rate, to
the extent lawful) provided that if there are not sufficient
funds available to pay the entire amount of such interest,
the amounts available shall be applied to the payment of
such interest on the Class A Notes on a pro rata basis;
(B) to the [Class A] Noteholders, the First
Priority Principal Payment, if any, to be distributed in the
same manner as described under Section 8.2(d) of this
Indenture;
(C) [to the holders of the Class B Notes, accrued
and unpaid interest on the Class B Notes (together with
interest on overdue interest at the Class B Rate, to the
extent lawful] [to the Certificate Distribution Account,
accrued and unpaid interest on the Class B Certificates
(together with interest at the Class B Rate on any overdue
interest, to the extent lawful)];
(D) to the holders of the Class [B] Notes in
reduction of principal until the principal amount of the
Class [B] Notes has been paid in full and then to the
holders of the Class [ ] Notes, the Class [ ] Notes and the
Class [ ] Notes on a pro rata basis in reduction of
principal until the principal amount of such Class A Notes
has been paid in full; and
(E) [to the holders of the Class [ ] Notes in
reduction of principal until the principal amount of the
Class [ ] Notes has been paid in full; and] [to the
Certificate Distribution Account for distribution to Class B
Certificateholders in reduction of the Certificate Balance
until the Certificate Balance is reduced to zero].
(v) fifth, [to the Certificate Distribution Account, any
money or property remaining after payment in full of the amount
described in clauses (i)-(iv) of this Section 5.4(b)] [to the
Depositor, any money or property remaining after payment in full of
the amounts described in clauses (i)-(iv) of this Section 5.4(b)].
[or provide for a different order of priority]
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The Indenture Trustee may fix a record date and payment date for any payment
to Noteholders pursuant to this Section 5.4. At least fifteen (15) days before
such record date, the Indenture Trustee shall mail to each Noteholder a notice
that states the record date, the payment date and the amount to be paid.
(c) Upon a sale or other liquidation of the Receivables in the manner
set forth in Section 5.4(a), the Indenture Trustee shall provide reasonable
prior notice of such sale or liquidation to each Noteholder and
Certificateholder. A Noteholder or Certificateholder may submit a bid with
respect to such sale.
SECTION 5.5. Optional Preservation of the Receivables. If the Notes
have been declared to be due and payable under Section 5.2 following an Event
of Default, and such declaration and its consequences have not been rescinded
and annulled, the Indenture Trustee may, but need not, elect to maintain
possession of the Indenture Trust Estate and apply proceeds as if there had
been no declaration of acceleration; provided, however, that funds on deposit
in the Collection Account at the time the Indenture Trustee makes such
election or deposited therein during the Collection Period in which such
election is made (including funds, if any, deposited therein from the Reserve
Account) shall be applied in accordance with such declaration of acceleration
in the manner specified in Section 4.6(c) of the Sale and Servicing Agreement.
It is the desire of the parties hereto and the Noteholders that there be at
all times sufficient funds for the payment of principal of and interest on the
Notes, and the Indenture Trustee shall take such desire into account when
determining whether or not to maintain possession of the Indenture Trust
Estate. In determining whether to maintain possession of the Indenture Trust
Estate, the Indenture Trustee may (at other than its own expense), 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 Indenture Trust Estate for such
purpose.
SECTION 5.6. Limitation of Suits. No Noteholder shall have any right
to institute any Proceeding, judicial or otherwise, with respect to this
Indenture or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(a) such Noteholder has previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(b) the holders of Notes evidencing not less than 25% of the
principal amount of the [Controlling Class] [Notes] have made written request
to the Indenture Trustee to institute such Proceeding in respect of such Event
of Default in its own name as Indenture Trustee hereunder;
(c) such Noteholder or Noteholders have offered to the Indenture
Trustee reasonable indemnity against the costs, expenses and liabilities to be
incurred in complying with such request;
(d) the Indenture Trustee for sixty (60) days after its receipt of
such notice, request and offer of indemnity has failed to institute such
Proceedings; and
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(e) no direction inconsistent with such written request has been
given to the Indenture Trustee during such sixty-day period by the Noteholders
of Notes evidencing not less than a majority of the principal amount of the
[Controlling Class] [Notes].
It is understood and intended that no one or more Noteholders shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Noteholders or to obtain or to seek to obtain priority or preference
over any other Noteholders or to enforce any right under this Indenture,
except in the manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Noteholders,
each evidencing less than a majority of the principal amount of the
[Controlling Class] [Notes], the Indenture Trustee shall act at the direction
of the group of Noteholders representing the greater principal amount of the
[Controlling Class] [Notes]. If the Indenture Trustee receives conflicting or
inconsistent requests and indemnity from two or more groups of Noteholders
representing an equal principal amount of the Notes, the Indenture Trustee in
its sole discretion may determine what action, if any, shall be taken,
notwithstanding any other provisions of this Indenture.
SECTION 5.7. Unconditional Rights of Noteholders To Receive Principal
and Interest. Notwithstanding any other provisions in this Indenture, any
Noteholder shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest, if any, on its Note on or
after the respective due dates thereof expressed in such Note or in this
Indenture (or, in the case of prepayment pursuant to Article X, on or after
the Prepayment Date) and to institute suit for the enforcement of any such
payment, and such right shall not be impaired without the consent of such
Noteholder.
SECTION 5.8. Restoration of Rights and Remedies. If the Indenture
Trustee or any Noteholder has instituted any Proceeding to enforce any right
or remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee and the Noteholders shall continue as though no such Proceeding had
been instituted.
SECTION 5.9. Rights and Remedies Cumulative. No right or remedy
herein conferred upon or reserved to the Indenture Trustee or to the
Noteholders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.
SECTION 5.10. Delay or Omission Not a Waiver. No delay or omission of
the Indenture Trustee or any Noteholder to exercise any right or remedy
accruing upon any Default or Event of Default shall impair any such right or
remedy or constitute a waiver of any such
31
Default or Event of Default or any acquiescence therein. Every right and
remedy given by this Article V or by law to the Indenture Trustee or to the
Noteholders may be exercised from time to time, and as often as may be deemed
expedient, by the Indenture Trustee or by the Noteholders, as the case may be.
SECTION 5.11. Control by [Controlling Class] [Noteholders]. The
Noteholders of Notes evidencing not less than a majority of the principal
amount of the [Controlling Class] [Notes] Outstanding shall have the right,
subject to Section 6.2(f), to direct the time, method and place of conducting
any Proceeding for any remedy available to the Indenture Trustee with respect
to the Notes or exercising any trust or power conferred on the Indenture
Trustee; provided that:
(a) such direction shall not be in conflict with any rule of law or
with this Indenture;
(b) subject to the express terms of Section 5.4, any direction to the
Indenture Trustee to sell or liquidate the Indenture Trust Estate shall be by
holders of Notes evidencing not less than 100% of the principal amount of the
Notes Outstanding;
(c) if the conditions set forth in Section 5.5 have been satisfied
and the Indenture Trustee elects to retain the Indenture Trust Estate pursuant
to such Section 5.5, then any direction to the Indenture Trustee by
Noteholders of Notes evidencing less than 100% of the principal amount of the
Notes Outstanding to sell or liquidate the Indenture Trust Estate shall be of
no force and effect; and
(d) the Indenture Trustee may take any other action deemed proper by
the Indenture Trustee that is not inconsistent with such direction.
Notwithstanding the rights of Noteholders set forth in this Section 5.11,
subject to Section 6.1, the Indenture Trustee need not take any action that it
determines might involve it in costs or expenses for which it would not be
adequately indemnified or expose it to personal liability or might materially
adversely affect or unduly prejudice the rights of any Noteholders not
consenting to such action.
SECTION 5.12. Waiver of Past Defaults. Prior to the declaration of
the acceleration of the maturity of the Notes as provided in Section 5.2, the
holders of Notes evidencing not less than a majority of the principal amount
of the [Controlling Class] [Notes] Outstanding may waive any past Default or
Event of Default and its consequences except a Default (a) in the payment of
principal of or interest on any of the Notes or (b) in respect of a covenant
or provision hereof that cannot be amended, supplemented or modified without
the consent of each Noteholder. In the case of any such waiver, the Issuer,
the Indenture Trustee and the Noteholders shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereto.
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SECTION 5.13. Undertaking for Costs. All parties to this Indenture
agree, and each Noteholder by such Noteholder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Indenture, or in
any suit against the Indenture Trustee for any action taken, suffered or
omitted by it as Indenture Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may
in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.13 shall not apply to (a) any suit instituted by
the Indenture Trustee, (b) any suit instituted by any Noteholder or group of
Noteholders, in each case holding in the aggregate more than 10% of the
principal amount of the Notes Outstanding [(or, in the case of a right or
remedy under this Indenture which is instituted by the Controlling Class, more
than 10% of the Controlling Class Outstanding] or (c) any suit instituted by
any Noteholder for the enforcement of the payment of principal of or interest
on any Note on or after the respective due dates expressed in such Note and in
this Indenture.
SECTION 5.14. Waiver of Stay or Extension Laws. The Issuer covenants
(to the extent that it may lawfully do so) that it shall not at any time
insist upon, or plead or in any manner whatsoever, claim or take the benefit
or advantage of, any stay or extension law wherever enacted, now or at any
time hereafter in force, that may affect the covenants or the performance of
this Indenture, and the Issuer (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and
covenants that it shall not hinder, delay or impede the execution of any power
herein granted to the Indenture Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
SECTION 5.15. Action on Notes. The Indenture Trustee's right to seek
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 Indenture Trust Estate or upon any of the assets of the Issuer. Any money
or property collected by the Indenture Trustee shall be applied in accordance
with Section 5.4(b).
SECTION 5.16. Performance and Enforcement of Certain Obligations. (a)
Promptly following a request from the Indenture Trustee to do so, and at the
Administrator's expense, the Issuer shall take all such lawful action as the
Indenture Trustee may request to compel or secure the performance and
observance by the Seller, the Depositor and the Servicer, as applicable, of
each of their obligations to the Issuer under or in connection with the Sale
and Servicing Agreement, or the performance and observance by the Seller of
each of its obligations to the Depositor under or in connection with the
Receivables Purchase Agreement, and to exercise any and all rights, remedies,
powers and privileges lawfully available to the Issuer under or in connection
with the Sale and Servicing Agreement or the Receivables Purchase 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, the Depositor or
the Servicer thereunder and the institution of legal or administrative actions
or proceedings to compel or secure performance by
33
the Seller, the Depositor or the Servicer of each of their obligations under
the Receivables Purchase Agreement and the Sale and Servicing Agreement.
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and at the direction (which direction shall be in
writing or by telephone, confirmed in writing promptly thereafter) of the
Noteholders of Notes evidencing not less than a majority of the principal
amount of the [Controlling Class] [Notes] shall, exercise all rights,
remedies, powers, privileges and claims of the Issuer against the Seller, the
Depositor or the Servicer under or in connection with the Receivables Purchase
Agreement and the Sale and Servicing Agreement, including the right or power
to take any action to compel or secure performance or observance by the
Seller, the Depositor, the Servicer or the Bank, as the case may be, of each
of their obligations to the Issuer thereunder and to give any consent,
request, notice, direction, approval, extension, or waiver under the
Receivables Purchase Agreement and the Sale and Servicing Agreement and any
right of the Issuer to take such action shall be suspended.
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.1. Duties of Indenture Trustee. (a) If an Event of Default
has occurred and is continuing, the Indenture Trustee shall exercise the
rights and powers vested in it by this Indenture and use the same degree of
care and skill in their exercise as a prudent Person would exercise or use
under the circumstances in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture
and no implied covenants or obligations shall be read into this
Indenture or the other Basic Documents against the Indenture Trustee;
and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates
or opinions furnished to the Indenture Trustee and, if required by
the terms of this Indenture or the other Basic Documents, conforming
to the requirements of this Indenture; provided, however, that the
Indenture Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph
(b) of this Section 6.1;
(ii) the Indenture Trustee shall not be liable for any error
of judgment made in good faith by a Trustee Officer unless it is
proved that the Indenture Trustee was negligent in ascertaining the
pertinent facts;
34
(iii) the Indenture Trustee shall not be liable with respect
to any action it takes or omits to take in good faith at the
direction of the Noteholders in accordance with the terms of this
Indenture; and
(iv) the Indenture Trustee shall have no duty (A) to see to
any recording, filing, or depositing of this Indenture or any
agreement referred to herein or any financing statement or
continuation statement evidencing a security interest, or to see to
the maintenance of any such recording or filing or depositing or to
any re-recording, refiling or redepositing of any thereof, (B) to see
to any insurance, (C) to see to the payment or discharge of any tax,
assessment, or other governmental charge or any lien or encumbrance
of any kind owing with respect to, assessed or levied against, any
part of the Trust Estate other than as directed by the Servicer or
the Administrator, in either case, from funds available in the
Collection Account, (D) except as otherwise set forth in Section
6.1(b)(ii), to confirm or verify the contents of any reports or
certificates of the Servicer delivered to the Indenture Trustee
pursuant to this Indenture believed by the Indenture Trustee to be
genuine and to have been signed or presented by the proper party or
parties, or (E) to execute any certificates or other documents
required pursuant to the Xxxxxxxx-Xxxxx Act of 2002 or the rules and
regulations promulgated thereunder, except with respect to the
back-up certification provided pursuant to Article X of the Sale and
Servicing Agreement.
(d) The Indenture Trustee shall not be liable for interest on any
money received by it except as the Indenture Trustee may agree in writing with
the Issuer.
(e) Money held in trust by the Indenture Trustee need not be
segregated from other funds except to the extent required by law or the terms
of this Indenture or the Sale and Servicing Agreement.
(f) No provision of this Indenture shall require the Indenture
Trustee to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties hereunder or in the exercise of any of
its rights or powers, if it shall have reasonable grounds to believe that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it, and none of the provisions contained in this
Indenture shall in any event require the Indenture Trustee to perform, or be
responsible for the manner of performance of, any of the obligations of the
Servicer under this Indenture except during such time, if any, as the
Indenture Trustee shall be the successor to, and be vested with the rights,
duties, powers and privileges of the Servicer in accordance with the terms of
this Indenture.
(g) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section 6.1 and to the provisions
of the TIA.
(h) The Indenture Trustee shall not be charged with knowledge of any
Event of Default unless either (i) a Trustee Officer shall have actual
knowledge of such Event of Default or (ii) written notice of such Event of
Default shall have been given to the Indenture Trustee in accordance with the
provisions of this Indenture.
35
SECTION 6.2. Rights of Indenture Trustee. (a) The Indenture Trustee
may rely and shall be protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper Person. The Indenture Trustee need not investigate any facts or matters
stated in any such document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on an Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or under the Basic Documents or perform any duties hereunder or
thereunder 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 or to institute,
conduct or defend any litigation hereunder or in relation hereto or to honor
the request or direction of any of the Noteholders pursuant to this Indenture
unless such Noteholders shall have offered to the Indenture Trustee reasonable
security or indemnity against the reasonable costs, expenses, disbursements,
advances and liabilities which might be incurred by it, its agents and its
counsel in compliance with such request or direction.
(g) Any request or direction of the Issuer mentioned herein shall be
sufficiently evidenced by an Issuer Request.
(h) The right of the Indenture Trustee to perform any discretionary
act enumerated in this Indenture shall not be construed as a duty, and the
Indenture Trustee shall not be answerable for other than its negligence or
willful misconduct in the performance of such act.
(i) The Indenture Trustee shall not be required to give any bond or
surety in respect of the execution of the Trust Estate created hereby or the
powers granted hereunder.
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SECTION 6.3. Individual Rights of Indenture Trustee. The Indenture
Trustee, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with the Issuer or its Affiliates with
the same rights it would have if it were not Indenture Trustee. Any Note
Paying Agent, Note Registrar, co-registrar or co-paying agent hereunder may do
the same with like rights.
SECTION 6.4. Indenture Trustee's Disclaimer. The Indenture Trustee
(i) shall not be responsible for, and makes no representation as to, the
validity or adequacy of this Indenture, the Notes or any other Basic Document
and (ii) shall not be accountable for the Issuer's use of the proceeds from
the Notes, or responsible for any statement or omission of the Issuer in this
Indenture or any other Basic Document or in any document issued in connection
with the sale of the Notes or in the Notes (all of which shall be taken as
statements of the Issuer) other than the Indenture Trustee's certificate of
authentication.
SECTION 6.5. Notice of Defaults; Insolvency or Dissolution of
Depositor or the Seller. If a Default occurs and is continuing and if it is
actually known to a Trustee Officer of the Indenture Trustee, the Indenture
Trustee shall mail to each Noteholder notice of such Default within ninety
(90) days after it occurs. Except in the case of a Default in payment of
principal of or interest on any Note (including payments pursuant to the
redemption provisions of such Note), the Indenture Trustee may withhold the
notice if and so long as a committee of its Trustee Officers in good faith
determines that withholding the notice is in the interests of Noteholders.
SECTION 6.6. Reports by Indenture Trustee to Noteholders. Upon
delivery to the Indenture Trustee by the Servicer of such information prepared
by the Servicer pursuant to Section 3.9 of the Sale and Servicing Agreement as
may be required to enable each Noteholder to prepare its federal and State
income tax returns, the Indenture Trustee shall deliver such information to
the Noteholders by mail, e-mail, courier, fax, or the Indenture Trustee's
website at ____________________________.
SECTION 6.7. Compensation and Indemnity. (a) The Issuer shall cause
the Administrator to pay to the Indenture Trustee from time to time reasonable
compensation for its services. The Indenture Trustee's compensation shall not
be limited by any law on compensation of a trustee of an express trust. The
Issuer shall cause the Administrator to reimburse the Indenture Trustee for
all reasonable out-of-pocket expenses incurred or made by it, including costs
of collection, in addition to the compensation for its services. Such expenses
shall include the reasonable compensation and expenses, disbursements and
advances of the Indenture Trustee's agents, counsel, accountants and experts.
The Issuer shall cause the Administrator to indemnify the Indenture Trustee,
its directors, officers and agents for, and to hold it harmless against, any
and all loss, liability or expense (including attorneys' fees and
disbursements) incurred by it in connection with the administration of this
trust and the performance of its duties hereunder, including the costs and
expenses of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder. The
Indenture Trustee shall notify the Issuer and the Administrator promptly of
any claim for which it may seek indemnity. Failure by the Indenture Trustee to
so notify the Issuer and the Administrator shall not relieve the Issuer or the
Administrator of its obligations hereunder. The Issuer shall cause the
Administrator to defend any such claim, and the Indenture Trustee may have
separate counsel and the Issuer shall cause the Administrator to pay the fees
37
and expenses of such counsel. Neither the Issuer nor the Administrator need
reimburse any expense or indemnity against any loss, liability or expense
incurred by the Indenture Trustee through the Indenture Trustee's own willful
misconduct, negligence or bad faith.
(b) The Issuer's payment obligations to the Indenture Trustee
pursuant to this Section 6.7 shall survive the resignation or removal of the
Indenture Trustee and the discharge of this Indenture. When the Indenture
Trustee incurs expenses after the occurrence of a Default specified in Section
5.1(iv) or (v) with respect to the Issuer, the expenses are intended to
constitute expenses of administration under Title 11 of the United States Code
or any other applicable federal or State bankruptcy, insolvency or similar
law.
SECTION 6.8. Replacement of Indenture Trustee. (a) No resignation or
removal of the Indenture Trustee, and no appointment of a successor Indenture
Trustee, shall become effective until the acceptance of appointment by the
successor Indenture Trustee pursuant to this Section 6.8 and payment in full
of all sums due to the Indenture Trustee pursuant to Section 6.7. The
Indenture Trustee may resign at any time by so notifying the Issuer and the
Depositor, and will provide all information reasonably requested by the
Depositor in order to comply with its reporting obligation under Item 6.02 of
Form 8-K with respect to the resignation of the Indenture Trustee. The holders
of Notes evidencing not less than a majority in principal amount of the
[Controlling Class] [Notes] may remove the Indenture Trustee without cause by
so notifying the Indenture Trustee, the Issuer and the Depositor and may
appoint a successor Indenture Trustee. The Administrator 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.
The Depositor may remove the Indenture Trustee if the Indenture Trustee fails
to comply with Section 3.7(e), Section 6.8 or Section 6.9 of the Indenture
with respect to notice to or providing information to the Depositor, or with
Article X of the Sale and Servicing Agreement, in each case if such failure
continues for the lesser or 10 days or such period in which the applicable
Exchange Act Report can be filed timely (without taking into account any
extensions). If the Indenture Trustee resigns or is removed or if a vacancy
exists in the office of Indenture Trustee for any reason (the Indenture
Trustee in such event being referred to herein as the retiring Indenture
Trustee), the Administrator shall promptly appoint a successor Indenture
Trustee and notify the Depositor of such appointment.
(b) Any successor Indenture Trustee shall deliver a written
acceptance of its appointment to the retiring Indenture Trustee and to the
Issuer and shall also provide all information reasonably requested by the
Depositor in order to comply with its reporting obligation under the Exchange
Act with respect to the replacement Indenture Trustee. Thereupon, if all sums
due the retiring Indenture Trustee pursuant to Section 6.7 have been paid in
full, the resignation or removal of the retiring Indenture Trustee shall
become effective, and
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the successor Indenture Trustee shall have all the rights, powers and duties
of the Indenture Trustee under this Indenture. The successor Indenture Trustee
shall mail a notice of its succession to Noteholders. If all sums due the
retiring Indenture Trustee pursuant to Section 6.7 have been paid in full, the
retiring Indenture Trustee shall promptly transfer all property held by it as
Indenture Trustee to the successor Indenture Trustee.
(c) If a successor Indenture Trustee does not take office within
sixty (60) days after the retiring Indenture Trustee resigns or is removed,
the retiring Indenture Trustee, the Issuer or the holders of Notes evidencing
not less than a majority in principal amount of the [Controlling Class]
[Notes] may petition any court of competent jurisdiction for the appointment
of a successor Indenture Trustee. If the Indenture Trustee fails to comply
with Section 6.11, any Noteholder who has been a bona fide Noteholder for at
least six (6) months may petition any court of competent jurisdiction for the
removal of the Indenture Trustee and the appointment of a successor Indenture
Trustee.
(d) Notwithstanding the replacement of the Indenture Trustee pursuant
to this Section 6.8, the obligations of the Issuer and the Administrator under
Section 6.7 shall continue for the benefit of the retiring Indenture Trustee.
SECTION 6.9. Successor Indenture Trustee by Merger. (a) If the
Indenture Trustee consolidates with, merges or converts into, or transfers all
or substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation or banking association without any further act shall be the
successor Indenture Trustee; provided that such corporation or banking
association shall be otherwise qualified and eligible under Section 6.11. The
Indenture Trustee shall provide the Rating Agencies and the Depositor with
written notice of any such transaction and shall provide the Depositor with
written notice of such event no later than one (1) Business Day after the
effective date of such merger, together with the information reasonably
requested by the Depositor in order to comply with its reporting obligation
under the Exchange Act with respect to a successor Indenture Trustee.
(b) In case at the time such successor or successors by merger,
conversion or consolidation to the Indenture Trustee shall succeed to the
trusts created by this Indenture any of the Notes shall have been
authenticated but not delivered, any such successor to the Indenture Trustee
may adopt the certificate of authentication of any predecessor trustee, and
deliver such Notes so authenticated; and in case at that time any of the Notes
shall not have been authenticated, any successor to the Indenture Trustee may
authenticate such Notes either in the name of any predecessor hereunder or in
the name of the successor to the Indenture Trustee. In all such cases such
certificates shall have the full force which it is provided anywhere in the
Notes or in this Indenture that the certificate of the Indenture Trustee shall
have.
SECTION 6.10. Appointment of Co-Indenture Trustee or Separate
Indenture Trustee. (a) Notwithstanding any other provisions of this Indenture,
at any time, for the purpose of meeting any legal requirement of any
jurisdiction in which any part of the Indenture Trust Estate may at the time
be located, the Indenture Trustee shall have the power and may execute and
deliver an instrument to appoint one or more Persons to act as a co-trustee or
co-trustees, or separate trustee or separate trustees, of all or any part of
the Trust, and to vest in such Person or
39
Persons, in such capacity and for the benefit of the Noteholders, such title
to the Indenture Trust Estate, or any part hereof, and, subject to the other
provisions of this Section 6.10, such powers, duties, obligations, rights and
trusts as the Indenture Trustee may consider necessary or desirable. No
co-trustee or separate trustee hereunder shall be required to meet the terms
of eligibility as a successor trustee under Section 6.11 and no notice to
Noteholders of the appointment of any co-trustee or separate trustee shall be
required under Section 6.8.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon
and exercised or performed by the Indenture Trustee and such separate
trustee or co-trustee jointly (it being understood that such separate
trustee or co-trustee shall not be authorized to act separately
without the Indenture Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any particular
act or acts are to be performed the Indenture Trustee shall be
incompetent or unqualified to perform such act or acts, in which
event such rights, powers, duties and obligations (including the
holding of title to the Indenture Trust Estate or any portion thereof
in any such jurisdiction) shall be exercised and performed singly by
such separate trustee or co-trustee, but solely at the direction of
the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture
Trustee shall be deemed to have been given to each of the then separate
trustees and co-trustees, as effectively as if given to each of them. Every
instrument appointing any separate trustee or co-trustee shall refer to this
Indenture and the conditions of this Article VI. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Indenture Trustee or separately, as may be provided therein,
subject to all the provisions of this Indenture, specifically including every
provision of this Indenture relating to the conduct of, affecting the
liability of, or affording protection to, the Indenture Trustee. Every such
instrument shall be filed with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect
of this 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.
40
SECTION 6.11. Eligibility; Disqualification. (a) The Indenture
Trustee shall at all times satisfy the requirements of TIA Section 310(a). The
Indenture Trustee or its parent shall have a combined capital and surplus of
at least $50,000,000 as set forth in its most recent published annual report
of condition and shall have a long-term debt rating of investment grade by
each of the Rating Agencies or shall otherwise be acceptable to each of the
Rating Agencies. The Indenture Trustee shall comply with TIA Section 310(b).
(b) Preferential Collection of Claims Against Issuer. The Indenture
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). An Indenture Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.1. Issuer To Furnish Indenture Trustee Names and Addresses
of Noteholders. The Issuer shall furnish or cause to be furnished to the
Indenture Trustee (a) not more than five (5) days after each Record Date, a
list, in such form as the Indenture Trustee may reasonably require, of the
names and addresses of the Noteholders as of such Record Date and (b) at such
other times as the Indenture Trustee may request in writing, within thirty
(30) days after receipt by the Issuer of any such request, a list of similar
form and content as of a date not more than ten (10) days prior to the time
such list is furnished; provided, however, that (i) so long as the Indenture
Trustee is the Note Registrar, no such list shall be required to be furnished
and (ii) no such list shall be required to be furnished with respect to
Noteholders of Book-Entry Notes.
SECTION 7.2. Preservation of Information; Communications to
Noteholders. (a) The Indenture Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of the Noteholders
contained in the most recent list furnished to the Indenture Trustee as
provided in Section 7.1 and the names and addresses of Noteholders received by
the Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee
may destroy any list furnished to it as provided in such Section 7.1 upon
receipt of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA Section 312(b) with
other Noteholders with respect to their rights under this Indenture or under
the Notes. Upon receipt by the Indenture Trustee of any request by three or
more Noteholders or by one or more holders of Notes evidencing not less than
25% of the Notes Outstanding to receive a copy of the current list of
Noteholders (whether or not made pursuant to TIA Section 312(b)), the
Indenture Trustee shall promptly notify the Administrator thereof by providing
to the Administrator a copy of such request and a copy of the list of
Noteholders produced in response thereto.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall
have the protection of TIA Section 312(c).
41
SECTION 7.3. Reports by Issuer. (a) The Issuer shall:
(i) file with the Indenture Trustee, within fifteen (15)
days after the Issuer is required to file the same with the
Commission, copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the
foregoing as the Commission may from time to time by rules and
regulations prescribe) that the Issuer may be required to file with
the Commission pursuant to Section 13 or 15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the Commission in
accordance with the rules and regulations prescribed from time to
time by the Commission such additional information, documents and
reports with respect to compliance by the Issuer with the conditions
and covenants of this Indenture as may be required from time to time
by such rules and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture
Trustee shall transmit by mail to all Noteholders described in TIA
Section 313(c)) such summaries of any information, documents and
reports required to be filed by the Issuer pursuant to clauses (i)
and (ii) of this Section 7.3(a) and by rules and regulations
prescribed from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year
of the Issuer shall correspond to the calendar year.
SECTION 7.4. Reports by Indenture Trustee. (a) If required by TIA
Section 313(a), within sixty (60) days after each May 15, beginning with May
15, 200__, the Indenture Trustee shall mail to each Noteholder as required by
TIA Section 313(c) a brief report dated as of such date that complies with TIA
Section 313(a). The Indenture Trustee also shall comply with TIA Section
313(b).
(b) A copy of each report at the time of its mailing to Noteholders
shall be filed by the Indenture Trustee with the Commission and each stock
exchange, if any, on which the Notes are listed. The Issuer shall notify the
Indenture Trustee if and when the Notes are listed on any stock exchange.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1. Collection of Money. Except as otherwise expressly
provided herein, the Indenture Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable
to or receivable by the Indenture Trustee pursuant to this Indenture and the
Sale and Servicing Agreement. The Indenture Trustee shall apply all such money
received by it as provided in this Indenture and the Sale and Servicing
Agreement. Except as otherwise expressly provided in this Indenture, if any
default occurs in the making of any payment or performance under any agreement
or instrument that is part of the Indenture Trust Estate, the Indenture
Trustee may take such action as may be appropriate to enforce such payment or
42
performance, including the institution and prosecution of appropriate
Proceedings. Any such action shall be without prejudice to any right to claim
a Default or Event of Default under this Indenture and any right to proceed
thereafter as provided in Article V.
SECTION 8.2. Trust Accounts. (a) On or prior to the Closing Date, the
Issuer shall cause the Servicer to establish and maintain the Trust Accounts as
provided in Sections 4.1 and 4.7 of the Sale and Servicing Agreement.
(b) On or before each Payment Date, the Servicer shall deposit all
Available Collections with respect to the Collection Period preceding such
Payment Date in the Collection Account as provided in Sections 4.2, 4.3, 4.4
and 4.5 of the Sale and Servicing Agreement. On or before each Payment Date,
all amounts required to be withdrawn from the Reserve Account and deposited in
the Collection Account pursuant to Section 4.5 of the Sale and Servicing
Agreement shall be withdrawn by the Indenture Trustee (based on the
information contained in the Servicer's Certificate delivered on or before the
related Determination Date pursuant to Section 3.9 of the Sale and Servicing
Agreement) from the Reserve Account and deposited to the Collection Account.
(c) On each Payment Date, the Indenture Trustee (based on the
information contained in the Servicer's Certificate delivered on or before the
related Determination Date pursuant to Section 3.9 of the Sale and Servicing
Agreement) shall make the following withdrawals from the Collection Account
and make deposits, distributions and payments, to the extent of Available
Funds for such Payment Date (including funds, if any, deposited therein from
the Reserve Account), in the following order of priority:
(i) first, to the Servicer, the Servicing Fee and all unpaid
Servicing Fees from prior Collection Periods;
(ii) second, to the [Class A] Noteholders, the Accrued Class
A Note Interest for such Payment Date; provided that if there are not
sufficient funds available to pay the entire amount of the Accrued
Class A Note Interest, the amounts available shall be applied to the
payment of such interest on the Class A Notes on a pro rata basis;
(iii) third, to the [Class A] Noteholders, the First
Priority Principal Payment for such Payment Date, if any, to be
distributed in the same priority as described under Section 8.2(d) of
this Indenture;
(iv) fourth, [to the Class B Noteholders, the Accrued Class
B Note Interest for such Payment Date] [to the Certificate
Distribution Account, the Accrued Class B Certificate Interest for
such Payment Date];
(v) fifth, to the Principal Distribution Account, the
Regular Principal Distribution Amount (less any amounts distributed
under clause (iii) above) for such Payment Date;
(vi) sixth, if such Payment Date is a Final Scheduled
Payment Date for any Class, the amount necessary to reduce the
remaining principal amount of such Class to
43
zero after giving effect to the amount, if any, to be applied on such
Payment Date to such Class from funds deposited pursuant to clauses
(iii) and (v) above;
(vii) seventh, to the Reserve Account, the amount, if any,
required to reinstate the amount in the Reserve Account up to the
Specified Reserve Balance for such Payment Date;
(viii) eighth, to the Indenture Trustee and the Owner
Trustee, all amounts for fees, expenses and indemnification due under
Section 6.7 of this Indenture and Section 7.1 of the Trust Agreement,
respectively, and not previously paid; and
(ix) ninth, [to the Certificate Distribution Account, any
remaining Available Funds for such Payment Date] [to the Depositor,
any remaining Available Funds for such Payment Date].
Notwithstanding the foregoing in this Section 8.2(c),
(A) if the Notes have been accelerated after an
Event of Default specified in Section 5.1(iii), then the
Indenture Trustee shall instead apply Available Funds in the
following order of priority:
(1) to the Indenture Trustee and the Owner
Trustee, all amounts for fees, expenses and
indemnification due under Section 6.7 of this
Indenture and Section 7.1 of the Trust Agreement
and not previously paid and to the Owner Trustee
all amounts for fees, expenses and indemnification
due under Section 6.2 of the Sale and Servicing
Agreement and not previously paid;
(2) to the Servicer, the Servicing Fee and
all unpaid Servicing Fees from prior Collection
Periods;
(3) to the [Class A] Noteholders, the
Accrued Class A Note Interest for such Payment
Date; provided that if there are not sufficient
funds available to pay the entire amount of the
Accrued Class A Note Interest, the amounts
available shall be applied to the payment of such
interest on the Class A Notes on a pro rata basis;
(4) to the [Class A] Noteholders, the
First Priority Principal Payment, if any, for such
Payment Date, if any, to be distributed in the same
priority as described under Section 8.2(d) of this
Indenture;
(5) [to the Class B Noteholders, the
Accrued Class B Note Interest for such Payment
Date] [to the Certificate Distribution Account, the
Accrued Class B Certificate Interest for such
Payment Date];
(6) to the Principal Distribution Account,
until the principal amount of the Notes has been
paid in full;
44
(7) [to the Certificate Distribution
Account, the Certificate Balance of the Class B
Certificates]; and
(8) [to the Certificate Distribution
Account, any remaining Available Funds for such
Payment Date] [to the Depositor, any remaining
Available Funds for such Payment Date]; and
(B) if the Notes have been accelerated after an
Event of Default specified in Section 5.1(i), (ii), (iv) or
(v), then the Indenture Trustee shall instead apply
Available Funds in the following order of priority:
(1) to the Indenture Trustee and the Owner
Trustee, all amounts due for fees, expenses and
indemnification under Section 6.7 of this
Indenture, Section 7.1 of the Trust Agreement and
Section 6.2 of the Sale and Servicing Agreement,
respectively, and not previously paid;
(2) to the Servicer, the Servicing Fee and
all unpaid Servicing Fees from prior Collection
Periods;
(3) to the [Class A] Noteholders, the
Accrued Class A Note Interest for such Payment
Date; provided that if there are not sufficient
funds available to pay the entire amount of the
Accrued Class A Note Interest, the amounts
available shall be applied to the payment of such
interest on the Class A Notes on a pro rata basis;
(4) to the Principal Distribution Account,
until the principal amount of the Class A Notes has
been paid in full;
(5) [first, to the Class B Noteholders,
the Accrued Class B Note Interest for such Payment
Date and second, to the Principal Distribution
Account, until the principal amount of the Class B
Notes has been paid in full] [to the Certificate
Distribution Account, the sum of the Accrued Class
B Certificate Interest for such Payment Date and
the Certificate Balance of the Class B
Certificates]; and
(6) [to the Certificate Distribution
Account, any remaining Available Funds for such
Payment Date] [to the Depositor, any remaining
Available Funds for such Payment Date].
[or provide for a different order of priority]
(d) If the Notes have not been accelerated because of an Event of
Default, on each Payment Date, the Indenture Trustee (based on the information
contained in the Servicer's Certificate delivered on or before the related
Determination Date pursuant to Section 3.9 of the Sale and Servicing
Agreement) shall withdraw the funds deposited in the Principal Distribution
Account on such Payment Date and make distributions and payments in the
following order of priority:
45
(i) first, to the holders of the Class [ ] Notes on a pro
rata basis in reduction of principal until the principal amount of
the Class [ ] Notes has been paid in full;
(ii) second, to the holders of the Class [ ] Notes on a pro
rata basis in reduction of principal until the principal amount of
the Class [ ] Notes has been paid in full;
(iii) third, to the holders of the Class [ ] Notes on a pro
rata basis in reduction of principal until the principal amount of
the Class [ ] Notes have been paid in full;
(iv) fourth, to the holders of the Class [ ] Notes on a pro
rata basis in reduction of principal until the principal amount of
the Class [ ] Notes have been paid in full; and
(v) fifth, [to the holders of the Class [ ] Notes on a pro
rata basis in reduction of principal until the principal amount of
the Class [ ] Notes have been paid in full] [to the Certificate
Distribution Account in reduction of the Certificate Balance of the
Class B Certificates until the Certificate Balance of the Class B
Certificates has been reduced to zero].
[or provide for a different order of priority]
Any funds remaining on deposit in the Principal Distribution Account shall be
paid to the Indenture Trustee and the Owner Trustee to the extent, if any, of
amounts due to them under the Sale and Servicing Agreement that are unpaid and
then [to the Certificate Distribution Account] [to the Depositor].
Notwithstanding the foregoing in this Section 8.2(d), if the Notes
have been accelerated after an Event of Default, then the Indenture Trustee
shall (based on the information contained in the Servicer's Certificate
delivered on or before the related Determination Date pursuant to Section 3.9
of the Sale and Servicing Agreement) withdraw the funds deposited in the
Principal Distribution Account on each Payment Date and pay them, first, to
the holders of the Class [ ] Notes until the principal amount of the Class [ ]
Notes have been paid in full[,] [and] then to the holders of the Class [ ]
Notes, Class [ ] Notes and Class [ ] Notes on a pro rata basis in reduction of
principal until the principal amount of such Notes has been paid in full [and
then to the Class [ ] Notes until the principal amount of such Notes has been
paid in full].
SECTION 8.3. General Provisions Regarding Accounts. (a) So long as no
Default or Event of Default shall have occurred and be continuing, all or a
portion of the funds in the Collection Account and the Reserve Account shall
be invested by the Indenture Trustee at the written direction of the Servicer,
in the case of the Collection Account, and at the written direction of the
[holders of Certificates evidencing not less than a majority of the Percentage
Interests evidenced by the Certificates] [Depositor], in the case of the
Reserve Account, in Permitted Investments as provided in Sections 4.1 and 4.7
of the Sale and Servicing Agreement. All income or other gain (net of losses
and investment expenses) from investments of monies deposited in the
Collection Account shall be withdrawn by the Indenture Trustee from such
accounts and distributed as provided in Section 4.1 of the Sale and Servicing
Agreement. Amounts in the Reserve Account (including net income and gain)
shall be applied as provided in Section 4.7 of the Sale and Servicing
Agreement. The Servicer or the [holders of the requisite
46
Percentage Interest evidencing the Certificates] [Depositor] as applicable,
shall not direct the Indenture Trustee to make any investment of any funds or
to sell any investment held in any of the Trust Accounts unless the security
interest Granted and perfected in such account will continue to be perfected
in such investment or the proceeds of such sale, in either case without any
further action by any Person, and, in connection with any direction to the
Indenture Trustee to make any such investment or sale, if requested by the
Indenture Trustee, the Issuer shall deliver to the Indenture Trustee an
Opinion of Counsel, acceptable to the Indenture Trustee, to such effect.
(b) Subject to Section 6.1(c), the Indenture Trustee shall not in any
way be held liable by reason of any insufficiency in any of the Trust Accounts
resulting from any loss on any Permitted Investment included therein, except
for losses attributable to the Indenture Trustee's failure to make payments on
such Permitted Investments issued by the Indenture Trustee, in its commercial
capacity as principal obligor and not as trustee, in accordance with their
terms.
(c) If (i) the Servicer or the [holders of the requisite Percentage
Interests evidencing the Certificates] [Depositor], as applicable, shall have
failed to give investment directions for any funds on deposit in the
Collection Account or the Reserve Account to the Indenture Trustee or (ii) to
the actual knowledge of a Trustee Officer of the Indenture Trustee, a Default
or Event of Default shall have occurred and be continuing with respect to the
Notes but the Notes shall not have been declared due and payable pursuant to
Section 5.2 or (iii) if such Notes shall have been declared due and payable
following an Event of Default, amounts collected or receivable from the
Indenture Trust Estate are being applied in accordance with Section 5.4 as if
there had not been such a declaration, then the Indenture Trustee shall, to
the fullest extent practicable, retain funds in the Collection Account or the
Reserve Account, as the case may be, uninvested.
SECTION 8.4. Release of Indenture Trust Estate. (a) Subject to the
payment of its fees and expenses pursuant to Section 6.7, the Indenture
Trustee may, and when required by the provisions of this Indenture shall,
execute instruments to release property from the lien of this Indenture, or
convey the Indenture Trustee's interest in the same, in a manner and under
circumstances that are not inconsistent with the provisions of this Indenture.
No party relying upon an instrument executed by the Indenture Trustee as
provided in this Article VIII shall be bound to ascertain the Indenture
Trustee's authority, inquire into the satisfaction of any conditions precedent
or see to the application of any monies.
(b) The Indenture Trustee shall, at such time as there are no Notes
Outstanding and all sums due the Indenture Trustee pursuant to Section 6.7
have been paid in full, release any remaining portion of the Indenture Trust
Estate that secured the Notes from the lien of this Indenture and release to
the Issuer or any other Person entitled thereto any funds then on deposit in
the Trust Accounts. The Indenture Trustee shall release property from the lien
of this Indenture pursuant to this Section 8.4(b) only upon receipt of an
Issuer Request accompanied by an Officer's Certificate, an Opinion of Counsel
and (if required by the TIA) Independent Certificates in accordance with TIA
Sections 314(c) and 314(d)(1) meeting the applicable requirements of Section
11.1.
(c) Each Noteholder or Note Owner, by its acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, acknowledges that
from time to time the Indenture
47
Trustee shall release the lien of this Indenture on any Receivable to be sold
to (i) the Depositor in accordance with Section 2.3 of the Sale and Servicing
Agreement and (ii) to the Servicer in accordance with Section 3.7 of the Sale
and Servicing Agreement.
SECTION 8.5. Opinion of Counsel. The Indenture Trustee shall receive
at least seven (7) days' notice when requested by the Issuer to take any
action pursuant to Section 8.4(a), accompanied by copies of any instruments
involved, and the Indenture Trustee shall also require, except in connection
with any action contemplated by Section 8.4(c), as a condition to such action,
an Opinion of Counsel, in form and substance satisfactory to the Indenture
Trustee, stating the legal effect of any such action, outlining the steps
required to complete the same, and concluding that all conditions precedent to
the taking of such action have been complied with and such action will not
materially and adversely impair the security for the Notes or the rights of
the Noteholders in contravention of the provisions of this Indenture;
provided, however, that such Opinion of Counsel shall not be required to
express an opinion as to the fair value of the Indenture Trust Estate. Counsel
rendering any such opinion may rely, without independent investigation, on the
accuracy and validity of any certificate or other instrument delivered to the
Indenture Trustee in connection with any such action.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Noteholders but with prior notice to the Rating
Agencies, the Issuer and the Indenture Trustee, when authorized by an Issuer
Order, at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at
any time subject to the lien of this Indenture, or better to assure,
convey and confirm unto the Indenture Trustee any property subject or
required to be subjected to the lien of this Indenture, or to subject
to the lien of this Indenture additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another Person to the Issuer, and
the assumption by any such successor of the covenants of the Issuer
herein and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit
of the Noteholders, or to surrender any right or power herein
conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any
provision herein or in any supplemental indenture that may be
inconsistent with any other provision herein or in any supplemental
indenture or to make any other provisions with respect to matters or
questions arising under this Indenture or under any supplemental
indenture which shall
48
not be inconsistent with the provisions of the Indenture; provided
that such action shall not materially adversely affect the interests
of the Noteholders;
(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to the
Notes and to add to or change any of the provisions of this Indenture
as shall be necessary to facilitate the administration of the trusts
hereunder by more than one trustee, pursuant to the requirements of
Article VI; or
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to affect the
qualification of this Indenture under the TIA or under any similar
federal statute hereafter enacted and to add to this Indenture such
other provisions as may be expressly required by the TIA.
With respect to (iv) above, prior to the execution of such
supplemental indenture, the Rating Agency Condition shall have been satisfied.
The Indenture Trustee is hereby authorized to join in the execution
of any such supplemental indenture and to make any further appropriate
agreements and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an
Issuer Order, may, also without the consent of any of the Noteholders but with
prior notice to the Rating Agencies, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing
in any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner (other than the modifications set forth in Section
9.2) the rights of the Noteholders under this Indenture; provided, however,
that (i) such action shall not, as evidenced by an Opinion of Counsel,
adversely affect in any material respect the interests of any Noteholder, (ii)
the Rating Agency Condition shall have been satisfied with respect to such
action and (iii) such action shall not, as evidenced by an Opinion of Counsel,
cause the Issuer to be characterized for federal or any then Applicable Tax
State income tax purposes as an association taxable as a corporation or
otherwise have any material adverse impact on the federal or any then
Applicable Tax State income taxation of any Notes Outstanding or Outstanding
Certificates or any Noteholder or Certificateholder.
SECTION 9.2. Supplemental Indentures with Consent of Noteholders. The
Issuer and the Indenture Trustee, when authorized by an Issuer Order, also
may, with prior notice to the Rating Agencies, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to, or
changing in any manner or eliminating any of the provisions of, this Indenture
or modifying in any manner the rights of the Noteholders under this Indenture;
provided, however, that (i) the Rating Agency Condition shall have been
satisfied with respect to such action and (ii) such action shall not, as
evidenced by an Opinion of Counsel, cause the Issuer to be characterized for
federal or any then Applicable Tax State income tax purposes as an association
taxable as a corporation or otherwise have any material adverse impact on the
federal or any then Applicable Tax State income taxation of any Notes
Outstanding or Outstanding Certificates or any Noteholder or
Certificateholder, and (iii) (x) such action shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the interests of
any Noteholder, with respect to supplemental indentures relating to matters
other than those specified
49
in clause (y) below or (y) the Noteholders of each Outstanding Note affected
thereby shall have consented thereto, with respect to any supplemental
indenture which would:
(i) modify or alter provisions of this Section 9.2;
(ii) change the Final Scheduled Payment Date or the date of
payment of any installment of principal of or interest on any Note,
or reduce the principal amount thereof, the interest rate thereon or
the Prepayment Price with respect thereto, change the provisions of
this Indenture relating to the application of collections on, or the
proceeds of the sale of, the Indenture Trust Estate to payment of
principal of or interest on the Notes, or change any place of payment
where, or the coin or currency in which, any Note or the interest
thereon is payable, or impair the right to institute suit for the
enforcement of the provisions of this Indenture requiring the
application of funds available therefor, as provided in Article V, to
the payment of any such amount due on the Notes on or after the
respective due dates thereof (or, in the case of redemption, on or
after the Prepayment Date);
(iii) reduce the percentage of the principal amount of the
[Controlling Class or of the] Notes Outstanding, the consent of the
Noteholders of which is required for any such supplemental indenture,
or the consent of the Noteholders of which is required for any waiver
of compliance with certain provisions of this Indenture or certain
Defaults or Events of Default hereunder and their consequences
provided for in this Indenture;
(iv) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(v) reduce the percentage of the principal amount of the
[Controlling Class or the] Notes Outstanding required to direct or
consent to a sale or liquidation by the Indenture Trustee of the
Indenture Trust Estate pursuant to Section 5.4 if the proceeds of
such sale or liquidation would be insufficient to pay the principal
amount and accrued but unpaid interest on the Notes [and/or the
Certificates, as applicable];
(vi) modify any provision of this Indenture specifying a
percentage of the aggregate principal amount of the [Controlling
Class or of the] Notes necessary to amend this Indenture or the other
Basic Documents except to increase any percentage specified herein or
to provide that certain additional provisions of this Indenture or
the other Basic Documents cannot be modified or waived without the
consent of the holder of each Outstanding Note affected thereby;
(vii) modify any of the provisions of this Indenture in such
manner as to affect the calculation of the amount of any payment of
interest or principal due on any Note on any Payment Date (including
the calculation of any of the individual components of such
calculation) or to affect the rights of the Noteholders to the
benefit of any provisions for the redemption of the Notes contained
herein; or
(viii) permit the creation of any lien ranking prior to or
on a parity with the lien of this Indenture with respect to any part
of the Indenture Trust Estate or, except as otherwise permitted or
contemplated herein, terminate the lien of this Indenture on any
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such collateral at any time subject hereto or deprive any Noteholder
of the security provided by the lien of this Indenture.
The Indenture Trustee may in its discretion or upon receipt of an Opinion of
Counsel determine whether or not any Notes would be affected by any
supplemental indenture and any such determination shall be conclusive upon the
Noteholders of all Notes, whether theretofore or thereafter authenticated and
delivered hereunder. The Indenture Trustee shall not be liable for any such
determination made in good faith.
It shall not be necessary for any Act of Noteholders under this
Section 9.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
Promptly after the execution by the Issuer and the Indenture Trustee
of any supplemental indenture pursuant to this Section 9.2, the Indenture
Trustee shall mail to the Noteholders of the Notes to which such amendment or
supplemental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Indenture Trustee
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
SECTION 9.3. Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.1 and 6.2, shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture
is authorized or permitted by this Indenture and that all conditions precedent
to the execution and delivery of such supplemental indenture have been
satisfied. The Indenture Trustee may, but shall not be obligated to, enter
into any such supplemental indenture that affects the Indenture Trustee's own
rights, duties, liabilities or immunities under this Indenture or otherwise.
SECTION 9.4. Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and shall be deemed to be modified and amended in accordance
therewith with respect to the Notes affected thereby, and the respective
rights, limitations of rights, obligations, duties, liabilities and immunities
under this Indenture of the Indenture Trustee, the Issuer and the Noteholders
shall thereafter be determined, exercised and enforced hereunder subject in
all respects to such modifications and amendments, and all the terms and
conditions of any such supplemental indenture shall be and be deemed to be
part of the terms and conditions of this Indenture for any and all purposes.
SECTION 9.5. Conformity with Trust Indenture Act. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as
then in effect so long as this Indenture shall then be qualified under the
Trust Indenture Act.
SECTION 9.6. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may,
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and if required by the Indenture Trustee shall, bear a notation in form
approved by the Indenture Trustee as to any matter provided for in such
supplemental indenture. If the Issuer or the Indenture Trustee shall so
determine, new Notes so modified as to conform, in the opinion of the
Indenture Trustee and the Issuer, to any such supplemental indenture may be
prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes.
ARTICLE X
PREPAYMENT
SECTION 10.1. Prepayment. The Class A [and Class B] Notes are subject
to prepayment on any Payment Date on which the Servicer exercises its option
to purchase the assets of the Issuer pursuant to Section 8.1 of the Sale and
Servicing Agreement, and the amount paid by the Servicer shall be treated as
collections of Receivables and applied to pay the unpaid principal amount of
the Notes [and the Certificate Balance of the Certificates] plus accrued and
unpaid interest thereon. If the Notes are to be prepaid pursuant to this
Section 10.1, the Servicer or the Issuer shall furnish notice of such election
to the Indenture Trustee and the Rating Agencies not later than forty (40)
days prior to the Prepayment Date (and the Indenture Trustee shall promptly
furnish notice to the Noteholders) and the Servicer or the Issuer shall
deposit by 10:00 a.m. (New York City time) on the Prepayment Date with the
Indenture Trustee in the Collection Account the Prepayment Price of the Notes,
whereupon all Notes shall be due and payable on the Prepayment Date.
SECTION 10.2. Form of Prepayment Notice. Notice of prepayment under
Section 10.1 shall be given by the Indenture Trustee by first-class mail,
postage prepaid, or by facsimile mailed or transmitted promptly following
receipt of notice from the Issuer or Servicer pursuant to Section 10.1, but
not later than thirty (30) days prior to the applicable Prepayment Date, to
each Noteholder as of the close of business on the Record Date preceding the
applicable Prepayment Date, at such Noteholder's address or facsimile number
appearing in the Note Register.
All notices of prepayment shall state:
(i) the Prepayment Date;
(ii) the Prepayment Price;
(iii) the place where such Notes are to be surrendered for
payment of the Prepayment Price (which shall be the office or agency
of the Issuer to be maintained as provided in Section 3.2); and
(iv) that on the Prepayment Date, the Prepayment Price will
become due and payable upon each such Note and that interest thereon
shall cease to accrue for and after said date.
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Notice of prepayment of the Notes shall be given by the Indenture Trustee in
the name and at the expense of the Issuer. Failure to give notice of
prepayment, or any defect therein, to any Noteholder shall not impair or
affect the validity of the prepayment of any other Note.
SECTION 10.3. Notes Payable on Prepayment Date. The Notes shall,
following notice of prepayment as required by Section 10.2, shall on the
Prepayment Date become due and payable at the Prepayment Price and (unless the
Issuer shall default in the payment of the Prepayment Price) no interest shall
accrue on the Prepayment Price for any period after the date to which accrued
interest is calculated for purposes of calculating the Prepayment Price.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Compliance Certificates and Opinions, etc. (a) Upon any
application or request by the Issuer to the Indenture Trustee to take any
action under any provision of this Indenture, the Issuer shall furnish to the
Indenture Trustee (i) an Officer's Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with, (ii) an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with and (iii) (if required by the TIA) an Independent Certificate
from a firm of certified public accountants meeting the applicable
requirements of this Section 11.1, except that, in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(A) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
(B) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(C) a statement that, in the opinion of each such signatory,
such signatory has made such examination or investigation as is
necessary to enable such signatory to express an informed opinion as
to whether or not such covenant or condition has been complied with;
and
(D) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture,
the Issuer shall, in addition to any obligation imposed in Section 11.1(a) or
elsewhere in this Indenture, furnish to the Indenture Trustee an Officer's
Certificate
53
certifying or stating the opinion of each person signing such certificate as
to the fair value (within ninety (90) days of such deposit) to the Issuer of
the Collateral or other property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause
(i) above, the Issuer shall also deliver to the Indenture Trustee an
Independent Certificate as to the same matters, if the fair value to
the Issuer of the securities to be so deposited and of all other such
securities made the basis of any such withdrawal or release since the
commencement of the then-current fiscal year of the Issuer, as set
forth in the certificates delivered pursuant to clause (i) above and
this clause (ii), is ten percent (10%) or more of the principal
amount of the Notes Outstanding, but such a certificate need not be
furnished with respect to any securities so deposited, if the fair
value thereof to the Issuer as set forth in the related Officer's
Certificate is less than $25,000 or less than one percent (1%) of the
principal amount of the Notes Outstanding.
(iii) 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.
(iv) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause
(iii) above, the Issuer shall also furnish to the Indenture Trustee
an Independent Certificate as to the same matters if the fair value
of the property or securities and of all other property, other than
property as contemplated by clause (v) below or securities released
from the lien of this Indenture since the commencement of the
then-current calendar year, as set forth in the certificates required
by clause (iii) above and this clause (iv), equals ten percent (10%)
or more of the principal amount of the Notes Outstanding, but such
certificate need not be furnished in the case of any release of
property or securities if the fair value thereof as set forth in the
related Officer's Certificate is less than $25,000 or less than one
percent (1%) of the principal amount of the Notes Outstanding.
(v) Notwithstanding Section 2.10 or any other provisions of
this Section 11.1, the Issuer may, without compliance with the
requirements of the other provisions of this Section 11.1, (A)
collect, liquidate, sell or otherwise dispose of Receivables and
Financed Vehicles as and to the extent permitted or required by the
Basic Documents and (B) make cash payments out of the Trust Accounts
as and to the extent permitted or required by the Basic Documents.
SECTION 11.2. Form of Documents Delivered to Indenture Trustee. (a)
In any case where several matters are required to be certified by, or covered
by an opinion of, any specified Person, it is not necessary that all such
matters be certified by, or covered by the opinion of, only one such Person,
or that they be so certified or covered by only one document, but one such
54
Person may certify or give an opinion with respect to some matters and one or
more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
(b) Any certificate or opinion of an Authorized Officer of the Issuer
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion
or representations with respect to the matters upon which such officer's
certificate or opinion is based are erroneous. Any such certificate of an
Authorized Officer or opinion of counsel may be based, insofar as it relates
to factual matters, upon a certificate or opinion of, or representations by,
an officer or officers of the Servicer, the Depositor, 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 Depositor, the
Seller, the Administrator or the Issuer, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect
to such matters are erroneous.
(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.
SECTION 11.3. Acts of Noteholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders in person or by agents duly appointed in writing; and except
as herein otherwise expressly provided such action shall become effective when
such instrument or instruments are delivered to the Indenture Trustee, and,
where it is hereby expressly required, to the Issuer. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Noteholders signing such instrument
or instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 6.1) conclusive in favor of the Indenture
Trustee and the Issuer, if made in the manner provided in this Section 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.
55
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Noteholder of any Notes shall bind the
Noteholder of every Note issued upon the registration thereof or in exchange
therefor or in lieu thereof, in respect of anything done, omitted or suffered
to be done by the Indenture Trustee or the Issuer in reliance thereon, whether
or not notation of such action is made upon such Note.
SECTION 11.4. Notices, etc., to Indenture Trustee, Issuer and Rating
Agencies. Any request, demand, authorization, direction, notice, consent,
waiver or Act of Noteholders or other documents provided or permitted by this
Indenture shall be in writing and if such request, demand, authorization,
direction, notice, consent, waiver or Act of Noteholders is to be made upon,
given or furnished to or filed with:
(i) the Indenture Trustee by any Noteholder, the Servicer,
the Administrator or the Issuer shall be sufficient for every purpose
hereunder if made, given, furnished or filed in writing to or with
the Indenture Trustee at its Corporate Trust office; or
(ii) the Issuer by the Indenture Trustee or by any
Noteholder shall be sufficient for every purpose hereunder if in
writing and mailed first-class, postage prepaid to the Issuer
addressed to: USAA Auto Owner Trust 200_-[ ], in care of __________,
with a copy to the Administrator at 00000 XxXxxxxxx Xxxxxxx, Xxx
Xxxxxxx, XX 00000, Attention: Secretary, or at any other address
previously furnished in writing to the Indenture Trustee by the
Issuer or the Administrator. The Issuer shall promptly transmit any
notice received by it from the Noteholders to the Indenture Trustee.
Notices required to be given to the Rating Agencies by the Issuer,
the Indenture Trustee or the Owner Trustee shall be in writing, personally
delivered, telecopied or mailed by certified mail, return receipt requested,
to (i) in the case of Moody's, at the following address: Xxxxx'x Investors
Service, Inc., ABS Monitoring Department, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 and (ii) in case of Standard & Poor's, at the following address:
Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx Companies,
Inc., 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Asset
Backed Surveillance Department.
SECTION 11.5. Notices to Noteholders; Waiver. (a) Where this
Indenture provides for notice to Noteholders of any event, such notice shall
be sufficiently given (unless otherwise herein expressly provided) if in
writing and mailed, first-class, postage prepaid to each Noteholder affected
by such event, at his address as it appears on the Note Register, not later
than the latest date, and not earlier than the earliest date, prescribed for
the giving of such notice. In any case where notice to Noteholders is given by
mail, neither the failure to mail such notice nor any defect in any notice so
mailed to any particular Noteholder shall affect the sufficiency of such
notice with respect to other Noteholders, and any notice that is mailed in the
manner herein provided shall conclusively be presumed to have been duly given.
(b) Where this Indenture provides for notice in any manner, such
notice may be waived in writing by any Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Noteholders shall
56
be filed with the Indenture Trustee but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such a waiver.
(c) In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed
to be a sufficient giving of such notice.
(d) Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute a Default
or Event of Default.
SECTION 11.6. Alternate Payment and Notice Provisions.
Notwithstanding any provision of this Indenture or any of the Notes to the
contrary, the Issuer may enter into any agreement with any Noteholder
providing for a method of payment, or notice by the Indenture Trustee or any
Note Paying Agent to such Noteholder, that is different from the methods
provided for in this Indenture for such payments or notices. The Issuer shall
furnish to the Indenture Trustee a copy of each such agreement and the
Indenture Trustee shall cause payments to be made and notices to be given in
accordance with such agreements.
SECTION 11.7. Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required or deemed to be included in this Indenture by any of the provisions
of the Trust Indenture Act, such required or deemed provision shall control.
The provisions of TIA Sections 310 through 317 that impose duties on
any Person (including the provisions automatically deemed included herein
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
SECTION 11.8. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 11.9. Successors and Assigns. All covenants and agreements in
this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee
in this Indenture shall bind its successors, co-trustees and agents.
SECTION 11.10. Separability. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality, and enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
SECTION 11.11. Benefits of Indenture. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, and the Noteholders, and any
other party secured hereunder, and any other Person
57
with an ownership interest in any part of the Indenture Trust Estate, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
SECTION 11.12. Legal Holidays. In any case where the date on which
any payment is due shall not be a Business Day, then (notwithstanding any
other provision of the Notes or this Indenture) payment need not be made on
such date, but may be made on the next succeeding Business Day with the same
force and effect as if made on the date on which nominally due, and no
interest shall accrue for the period from and after any such nominal date.
SECTION 11.13. GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICTS OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.14. Counterparts. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 11.15. Recording of Indenture. If this Indenture is subject
to recording in any appropriate public recording offices, such recording is to
be effected by the Issuer and at its expense accompanied by an Opinion of
Counsel (which shall be counsel reasonably acceptable to the Indenture
Trustee) to the effect that such recording is necessary either for the
protection of the Noteholders or any other Person secured hereunder or for the
enforcement of any right or remedy granted to the Indenture Trustee under this
Indenture.
SECTION 11.16. Trust Obligation. No recourse may be taken, directly
or indirectly, with respect to the obligations of the Issuer, the Owner
Trustee or the Indenture Trustee on the Notes or under this Indenture or any
certificate or other writing delivered in connection herewith or therewith,
against (i) the Indenture Trustee or the Owner Trustee in their individual
capacities, (ii) any owner of a beneficial interest in the Issuer or (iii) any
partner, owner, beneficiary, agent, officer, director, employee or agent of
the Indenture Trustee or the Owner Trustee in their individual capacities, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or
the Owner Trustee in their individual capacities, except as any such Person
may have expressly agreed (it being understood that the Indenture Trustee and
the Owner Trustee have no such obligations in their individual capacities),
and except that any such partner, owner or beneficiary shall be fully liable,
to the extent provided by applicable law, for any unpaid consideration for
stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity. For all purposes of this Indenture, in the performance
of any duties or obligations of the Issuer hereunder, the Owner Trustee shall
be subject to, and entitled to the benefits of, the terms and provisions of
Article VI and VII of the Trust Agreement.
SECTION 11.17. No Petition. The Indenture Trustee, by entering into
this Indenture, and each Noteholder or Note Owner, by accepting a Note or, in
the case of a Note Owner, a beneficial interest in a Note, hereby covenant and
agree that prior to the end of the period that is
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one year and one day after there has been paid in full all debt issued by any
securitization vehicle in respect of which the Seller or the Depositor holds
any interest, they will not institute against the Issuer, or join in, or
assist or encourage others to institute any institution against the Issuer of,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or State
bankruptcy or similar law in connection with any obligations relating to the
Notes, this Indenture or any of the other Basic Documents.
SECTION 11.18. Subordination Agreement. Each [Class A] Noteholder, by
accepting a [Class A] Note, hereby covenants and agrees that, to the extent it
is deemed to have any interest in any assets of the Seller or the Depositor,
or a securitization vehicle (other than the Trust) related to the Seller or
the Depositor, dedicated to other debt obligations of the Seller or the
Depositor or debt obligations of any other securitization vehicle (other than
the Trust) related to the Seller or the Depositor, its interest in those
assets is subordinate to claims or rights of such other debtholders to those
other assets. Furthermore, each [Class A] Noteholder, by accepting a [Class A]
Note, hereby covenants and agrees that such agreement constitutes a
subordination agreement for purposes of Section 510(a) of the Bankruptcy Code.
SECTION 11.19. No Recourse. Notwithstanding any provisions herein to
the contrary, all of the obligations of the Issuer under or in connection with
the [Class A] Notes and this Indenture are nonrecourse obligations of the
Issuer payable solely from the Collateral and following realization of the
Collateral and its reduction to zero, any claims of the [Class A] Noteholders
and the Indenture Trustee (other than in respect of Section 6.7) against the
Issuer shall be extinguished and shall not thereafter revive. It is understood
that the foregoing provisions of this Section 11.19 shall not (i) prevent
recourse to the Collateral for the sums due or to become due under any
security, instrument or agreement which is part of the Collateral or (ii)
constitute a waiver, release or discharge of any indebtedness or obligation
evidenced by the [Class A] Notes or secured by this Indenture (to the extent
it relates to the obligation to make payments on the [Class A] Notes) until
such Collateral has been realized and reduced to zero, whereupon any
Outstanding indebtedness or obligation in respect of the [Class A] Notes shall
be extinguished and shall not thereafter revive. It is further understood that
the foregoing provisions of this Section 11.19 shall not limit the right of
any Person to name the Issuer as a party defendant in any Proceeding or in the
exercise of any other remedy under the [Class A] Notes or this Indenture, so
long as no judgment in the nature of a deficiency judgement shall be asked for
or (if obtained) enforced against any such Person or entity.
SECTION 11.20. Inspection. The Issuer agrees that, with reasonable
prior notice, it will permit any representative of the Indenture Trustee,
during the Issuer's normal business hours, to examine all the books of
account, records, reports and other papers of the Issuer, to make copies and
extracts therefrom, to cause such books to be audited by Independent certified
public accountants, and to discuss the Issuer's affairs, finances and accounts
with the Issuer's officers, employees, and Independent certified public
accountants, all at such reasonable times and as often as may be reasonably
requested. The Indenture Trustee shall and shall cause its representatives to
hold in confidence all such information except to the extent disclosure may be
required by law (and all reasonable applications for confidential treatment
are unavailing) and except to the extent that the Indenture Trustee may
reasonably determine that such disclosure is consistent with its obligations
hereunder.
59
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers, thereunto
duly authorized, all as of the day and year first above written.
USAA AUTO OWNER TRUST 200_-[ ]
By: __________, not in its individual
capacity but solely as Owner
Trustee of USAA Auto Owner Trust
200_-[ ]
By: ____________________________
Name:
Title:
__________, not in its individual capacity
but solely as Indenture Trustee
By: ____________________________
Name:
Title:
EXHIBIT A-1
FORM OF CLASS [ ] NOTE
[FOR BOOK ENTRY NOTES] [UNLESS THIS NOTE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $
No. A-[ ] CUSIP NO. [ ]
USAA AUTO OWNER TRUST 200_-[ ]
CLASS [ ] [o]% ASSET BACKED NOTES
USAA Auto Owner Trust 200_-[ ], a statutory trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of _______________ dollars payable on
each Payment Date in an amount equal to the result obtained by multiplying (i)
a fraction the numerator of which is $___________ (the original face amount of
this Note) and the denominator of which is $____________ by (ii) the aggregate
amount, if any, payable to holders of Class [ ] Notes on such Payment Date
from the Principal Distribution Account or otherwise in respect of principal
on the Class [ ] Notes pursuant to Section 3.1 of the Indenture dated as of
________, 200_ (as from time to time amended, supplemented or otherwise
modified and in effect, the "Indenture"), between the Issuer and __________,
as Indenture Trustee (in such capacity the "Indenture Trustee"); provided,
however, that the entire unpaid principal amount of this Note shall be due and
payable on the __________, 200__ Payment Date (the "Class [ ] Final Scheduled
Payment Date"). Capitalized terms used but not defined herein are defined in
Article I of the Indenture, which also contains rules as to construction that
shall be applicable herein.
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 or the Closing Date in the case of the first
Payment Date (after giving effect to all payments of principal made on such
A-1-1
preceding Payment Date), subject to certain limitations contained in Section
3.1 of the Indenture. Interest on this Note will accrue for each Payment Date
from and including the previous Payment Date on which interest has been paid
(or, in the case of the initial Payment Date, from the Closing Date) to but
excluding such Payment Date. Interest will be computed on the basis of actual
days elapsed and a 360-day year. Such principal of and interest on this Note
shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of
this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
A-1-2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer, as of the date
set forth below.
Date:
USAA AUTO OWNER TRUST 200_-[ ]
By: __________, not in its individual
capacity but solely as Owner
Trustee of USAA Auto Owner Trust
200_-[ ]
By: ________________________________
Authorized Officer
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class [ ] Notes designated above and referred to in
the within-mentioned Indenture.
Date:
__________, not in its individual capacity but solely
as Indenture Trustee
By: ________________________________
Authorized Officer
A-1-3
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class [ ] [o]% Asset Backed Notes (the "Class [ ] Notes")
which, together with the Issuer's Class [ ] [o]% Asset Backed Notes (the
"Class [ ] Notes"), Class [ ] [o]% Asset Backed Notes (the "Class [ ]
Notes")[,] [and] Class [ ] [o]% Asset Backed Notes (the "Class [ ] Notes" and,
together with the Class [ ] Notes, the Class [ ] Notes and the Class [ ]
Notes, the "Class A Notes") [and the Class [o]% Asset Backed Notes (the "Class
[ ] Notes" and together with the Class A Notes], the "Notes"), are issued
under the Indenture, to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the
Noteholders. The Notes are subject to all terms of the Indenture.
Subject to the subordination provisions of the Indenture, the Class [
] Notes, Class [ ] Notes, Class [ ] Notes[,] [and] Class [ ] Notes [and Class
[ ] Notes] are and will be equally and ratably secured by the collateral
pledged as security therefor as provided in the Indenture.
Principal of the Class [ ] Notes will be payable on each Payment Date
in an amount described on the face hereof. "Payment Date" means the 15th day
of each month, or, if any such day is not a Business Day, the next succeeding
Business Day, commencing ____________, 200_.
As described on the face hereof, the entire unpaid principal amount
of this Note shall be due and payable on the Class [ ] Final Scheduled Payment
Date. Notwithstanding the foregoing, the entire unpaid principal amount of the
Notes shall be due and payable on the date on which an Event of Default shall
have occurred and be continuing and the Indenture Trustee or the Noteholders
of Notes evidencing not less than a majority of the principal amount of the
[Controlling Class] [Notes] have declared the Notes to be immediately due and
payable in the manner provided in Section 5.2 of the Indenture. All principal
payments on the Class [ ] Notes shall be made pro rata to the Noteholders
entitled thereto.
Payments of interest on this Note on each Payment Date, together with
the installment of principal, if any, to the extent not in full payment of
this Note, shall be made to the Person whose name appears as the Registered
Noteholder of the Note (or one or more Predecessor Notes) on the Note Register
as of the close of business on each Record Date either by wire transfer in
immediately available funds, to the account of such Noteholder at a bank or
other entity having appropriate facilities therefor, if such Noteholder shall
have provided to the Note Registrar appropriate written instructions at least
five Business Days prior to such Payment Date and such Noteholder's Notes in
the aggregate evidence a denomination of not less than $1,000,000, or, if not,
by check mailed first-class postage prepaid to such Person's address as it
appears on the Note Register on such Record Date; provided that, unless
Definitive Notes have been issued to Note Owners, with respect to Notes
registered on the Record Date in the name of the nominee of the Clearing
Agency (initially, such nominee to be Cede & Co.), payments will be made by
wire transfer in immediately available funds to the account designated by such
nominee. Such payments will be made without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of
this Note (or any one or more Predecessor Notes) effected by any payments made
on any Payment Date shall be binding upon all future
A-1-4
Noteholders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not noted
hereon. If funds are expected to be available, as provided in the Indenture,
for payment in full of the then remaining unpaid principal amount of this Note
on a Payment Date, then the Indenture Trustee, in the name of and on behalf of
the Issuer, will notify the Person who was the Registered Noteholder hereof as
of the Record Date preceding such Payment Date by notice mailed or transmitted
by facsimile prior to such Payment Date, and the amount then due and payable
shall be payable only upon presentation and surrender of this Note at the
Indenture Trustee's principal Corporate Trust Office or at the office of the
Indenture Trustee's agent appointed for such purposes located in The City of
New York.
The Issuer shall pay interest on overdue installments of interest at
the Class [ ] Rate to the extent lawful.
As provided in the Indenture, the Notes may be prepaid, in whole but
not in part, in the manner and to the extent described in the Indenture and
the Sale and Servicing Agreement.
As provided in the Indenture, and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note
Register upon surrender of this Note for registration of transfer at the
office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Noteholder hereof
or such Noteholder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, and thereupon one or more new Notes of the same Class in
authorized denominations and in the same aggregate principal amount will be
issued to the designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Note, but the
transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such
registration of transfer or exchange.
Each Noteholder or Note Owner, by its acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee,
each in its individual capacity, (ii) any owner of a beneficial interest in
the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director
or employee of the Indenture Trustee or the Owner Trustee, each in its
individual capacity, any holder of a beneficial interest in the Issuer, the
Owner Trustee or the Indenture Trustee or of any successor or assign of the
Indenture Trustee or the Owner Trustee, each in its individual capacity,
except as any such Person may have expressly agreed and except that any such
partner, owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner
will not at any time institute against the Issuer, or
A-1-5
join in any institution against the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under any United States
federal or State bankruptcy or similar law in connection with any obligations
relating to the Notes, the Indenture or the other Basic Documents.
The Issuer has entered into the Indenture and this Note is issued
with the intention that, for federal, State and local income, and franchise
tax purposes, the Notes will qualify as indebtedness of the Issuer secured by
the Indenture Trust Estate. Each Noteholder, by its acceptance of a Note (and
each Note Owner by its acceptance of a beneficial interest in a Note), will be
deemed to agree to treat the Notes for federal, State and local income and
franchise tax purposes as indebtedness of the Issuer.
Each Noteholder or Note Owner, by its acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, will be deemed to have
represented that (x) it is not, and is not acquiring the Note on behalf of, or
with "plan assets" (as determined under Department of Labor Regulation
ss.2510.3-101 or otherwise) of, a Plan, or any employee benefit plan subject
to Similar Law, or (y) its acquisition and holding of the Note satisfy the
requirements for relief under Prohibited Transaction Class Exemption ("PTCE")
00-00, XXXX 00-0, XXXX 91-38, XXXX 00-00, XXXX 96-23 or a similar exemption,
or, in the case of an employee benefit plan subject to Similar Law, do not
result in a nonexempt violation of Similar Law.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day
of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and none of the Issuer, the Indenture Trustee or any
such agent shall be affected by notice to the contrary.
The Indenture permits (with certain exceptions requiring the consent
of all Noteholders adversely affected) the amendment thereof by the Issuer and
the Indenture Trustee without the consent of the Noteholders provided certain
conditions are satisfied. The Indenture also contains provisions permitting
the Noteholders of Notes evidencing specified percentages of the principal
amount of the [Controlling Class] [Notes] Outstanding, on behalf of all
Noteholders, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Noteholder of this Note (or
any one or more Predecessor Notes) shall be conclusive and binding upon such
Noteholder and upon all future Noteholders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof whether or not notation of such consent or waiver is made upon this
Note.
The term "Issuer", as used in this Note, includes any successor to
the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Noteholders under the Indenture.
A-1-6
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be governed by, and construed in
accordance with the laws of the State of New York, without reference to its
conflicts of law provisions.
No reference herein to the Indenture, and no provision of this Note
or of the Indenture, shall alter or impair the obligation of the Issuer, which
is absolute and unconditional, to pay the principal of and interest on this
Note at the times, place and rate, and in the coin or currency herein
prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of Indenture Trustee, in its individual
capacity, Owner Trustee, in its individual capacity, any owner of a beneficial
interest in the Issuer, or any of their respective partners, beneficiaries,
agents, officers, directors, employees or successors or assigns shall be
personally liable for, nor shall recourse be had to any of them for, the
payment of principal or of interest on this Note or performance of, or
omission to perform, any of the covenants, obligations or indemnifications
contained in the Indenture. The holder of this Note, by such holder's
acceptance hereof, agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, the
Noteholder shall have no claim against any of the foregoing for any
deficiency, loss or claim therefrom; provided, however, that nothing contained
herein shall be taken to prevent recourse to, and enforcement against, the
assets of the Issuer for any and all liabilities, obligations and undertakings
contained in the Indenture or in this Note.
A-1-7
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
-----------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto:
____________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ____________________________________, attorney, to transfer said
Note on the books kept for registration thereof, with full power of
substitution in the premises.
Dated: _____________________ ____________________________*/
Signature Guaranteed
____________________________*/
---------------------------
*/ NOTICE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Note Registrar.
A-1-8
EXHIBIT A-2
FORM OF CLASS [ ] NOTE
[FOR BOOK-ENTRY NOTES] [UNLESS THIS NOTE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $
No. A-[ ] CUSIP NO. [ ]
USAA AUTO OWNER TRUST 200_-[ ]
CLASS [ ] [o]% ASSET BACKED NOTES
USAA Auto Owner Trust 200_-[ ], a statutory trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of ______________________ dollars
payable on each Payment Date in an amount equal to the result obtained by
multiplying (i) a fraction the numerator of which is $___________ (the
original face amount of this Note) and the denominator of which is
$____________ by (ii) the aggregate amount, if any, payable to holders of
Class [ ] Notes on such Payment Date from the Principal Distribution Account
or otherwise in respect of principal on the Class [ ] Notes pursuant to
Section 3.1 of the Indenture dated as of ________, 200_ (as from time to time
amended, supplemented or otherwise modified and in effect, the "Indenture"),
between the Issuer and __________, as Indenture Trustee (in such capacity the
"Indenture Trustee"); provided, however, that the entire unpaid principal
amount of this Note shall be due and payable on the __________, 200__ Payment
Date (the "Class [ ] Final Scheduled Payment Date"). No payments of principal
of the Class [ ] Notes will be made until the Class [ ] Notes have been paid
in full. Capitalized terms used but not defined herein are defined in Article
I of the Indenture, which also contains rules as to construction that shall be
applicable herein.
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
A-2-1
principal amount of this Note Outstanding on the preceding Payment Date or the
Closing Date in the case of the first Payment Date (after giving effect to all
payments of principal made on such preceding Payment Date), subject to certain
limitations contained in Section 3.1 of the Indenture. Interest on this Note
will accrue for each Payment Date from and including the fifteenth day of the
calendar month immediately preceding such Payment Date (or, in the case of the
initial Payment Date, from the Closing Date) to but excluding the fifteenth
day of the calendar month of the Payment Date. Interest will be computed on
the basis of a 360-day year of twelve 30-day months. Such principal of and
interest on this Note shall be paid in the manner specified on the reverse
hereof.
The principal of and interest on this Note are payable in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of
this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
A-2-2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer, as of the date
set forth below.
Date:
USAA AUTO OWNER TRUST 200_-[ ]
By: __________, not in its individual
capacity but solely as Owner
Trustee of USAA Auto Owner Trust
200_-[ ]
By: _______________________________
Authorized Officer
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class [ ] Notes designated above and referred to
in the within-mentioned Indenture.
Date:
__________, not in its individual capacity
but solely as Indenture Trustee
By: _______________________________
Authorized Officer
A-2-3
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class [ ] [o]% Asset Backed Notes (the "Class [ ] Notes")
which, together with the Issuer's Class [ ] [o]% Asset Backed Notes (the
"Class [ ] Notes"), Class [ ] [o]% Asset Backed Notes (the "Class [ ]
Notes")[,] [and] Class [ ] [o]% Asset Backed Notes (the "Class [ ] Notes" and,
together with the Class [ ] Notes, the Class [ ] Notes and the Class [ ]
Notes, the "Class A Notes") [and the Class [o]% Asset Backed Notes (the "Class
[ ] Notes" and together with the Class A Notes], the "Notes"), are issued
under the Indenture, to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the
Noteholders. The Notes are subject to all terms of the Indenture.
Subject to the subordination provisions of the Indenture, the Class [
] Notes, Class [ ] Notes, Class [ ] Notes[,] [and] Class [ ] Notes [and Class
[ ] Notes] are and will be equally and ratably secured by the collateral
pledged as security therefor as provided in the Indenture.
Principal of the Class [ ] Notes will be payable on each Payment Date
in an amount described on the face hereof. "Payment Date" means the 15th day
of each month, or, if any such day is not a Business Day, the next succeeding
Business Day, commencing ________, 200_.
As described on the face hereof, the entire unpaid principal amount
of this Note shall be due and payable on the Class [ ] Final Scheduled Payment
Date. Notwithstanding the foregoing, the entire unpaid principal amount of the
Notes shall be due and payable on the date on which an Event of Default shall
have occurred and be continuing and the Indenture Trustee or the Noteholders
of Notes evidencing not less than a majority of the principal amount of the
[Controlling Class] [Notes] have declared the Notes to be immediately due and
payable in the manner provided in Section 5.2 of the Indenture. All principal
payments on the Class [ ] Notes shall be made pro rata to the Noteholders
entitled thereto.
Payments of interest on this Note on each Payment Date, together with
the installment of principal, if any, to the extent not in full payment of
this Note, shall be made to the Person whose name appears as the Registered
Noteholder of the Note (or one or more Predecessor Notes) on the Note Register
as of the close of business on each Record Date either by wire transfer in
immediately available funds, to the account of such Noteholder at a bank or
other entity having appropriate facilities therefor, if such Noteholder shall
have provided to the Note Registrar appropriate written instructions at least
five Business Days prior to such Payment Date and such Noteholder's Notes in
the aggregate evidence a denomination of not less than $1,000,000, or, if not,
by check mailed first-class postage prepaid to such Person's address as it
appears on the Note Register on such Record Date; provided that, unless
Definitive Notes have been issued to Note Owners, with respect to Notes
registered on the Record Date in the name of the nominee of the Clearing
Agency (initially, such nominee to be Cede & Co.), payments will be made by
wire transfer in immediately available funds to the account designated by such
nominee. Such payments will be made without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of
this Note (or any one or more Predecessor Notes) effected by any payments made
on any Payment Date shall be binding upon all future Noteholders of this Note
and of any Note issued upon the registration of transfer hereof or in
A-2-4
exchange hereof or in lieu hereof, whether or not noted hereon. If funds are
expected to be available, as provided in the Indenture, for payment in full of
the then remaining unpaid principal amount of this Note on a Payment Date,
then the Indenture Trustee, in the name of and on behalf of the Issuer, will
notify the Person who was the Registered Noteholder hereof as of the Record
Date preceding such Payment Date by notice mailed or transmitted by facsimile
prior to such Payment Date, and the amount then due and payable shall be
payable only upon presentation and surrender of this Note at the Indenture
Trustee's principal Corporate Trust Office or at the office of the Indenture
Trustee's agent appointed for such purposes located in The City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Class [ ] Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed, in whole but
not in part, in the manner and to the extent described in the Indenture and
the Sale and Servicing Agreement.
As provided in the Indenture, and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note
Register upon surrender of this Note for registration of transfer at the
office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Noteholder hereof
or such Noteholder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, and thereupon one or more new Notes of the same Class in
authorized denominations and in the same aggregate principal amount will be
issued to the designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Note, but the
transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such
registration of transfer or exchange.
Each Noteholder or Note Owner, by its acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee,
each in its individual capacity, (ii) any owner of a beneficial interest in
the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director
or employee of the Indenture Trustee or the Owner Trustee, each in its
individual capacity, any holder of a beneficial interest in the Issuer, the
Owner Trustee or the Indenture Trustee or of any successor or assign of the
Indenture Trustee or the Owner Trustee, each in its individual capacity,
except as any such Person may have expressly agreed and except that any such
partner, owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner
will not at any time institute against the Issuer, or join in any institution
against the Issuer of, any bankruptcy, reorganization, arrangement,
A-2-5
insolvency or liquidation proceedings under any United States federal or State
bankruptcy or similar law in connection with any obligations relating to the
Notes, the Indenture or the other Basic Documents.
The Issuer has entered into the Indenture and this Note is issued
with the intention that, for federal, State and local income, and franchise
tax purposes, the Notes will qualify as indebtedness of the Issuer secured by
the Indenture Trust Estate. Each Noteholder, by its acceptance of a Note (and
each Note Owner by its acceptance of a beneficial interest in a Note), will be
deemed to agree to treat the Notes for federal, State and local income and
franchise tax purposes as indebtedness of the Issuer.
Each Noteholder or Note Owner, by its acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, will be deemed to have
represented that (x) it is not, and is not acquiring the Note on behalf of, or
with "plan assets" (as determined under Department of Labor Regulation
ss.2510.3-101 or otherwise) of, a Plan, or any employee benefit plan subject
to Similar Law, or (y) its acquisition and holding of the Note satisfy the
requirements for relief under Prohibited Transaction Class Exemption ("PTCE")
00-00, XXXX 00-0, XXXX 91-38, XXXX 00-00, XXXX 96-23 or a similar exemption,
or, in the case of an employee benefit plan subject to Similar Law, do not
result in a nonexempt violation of Similar Law.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day
of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and none of the Issuer, the Indenture Trustee or any
such agent shall be affected by notice to the contrary.
The Indenture permits (with certain exceptions requiring the consent
of all Noteholders adversely affected) the amendment thereof by the Issuer and
the Indenture Trustee without the consent of the Noteholders provided certain
conditions are satisfied. The Indenture also contains provisions permitting
the Noteholders of Notes evidencing specified percentages of the principal
amount of the [Controlling Class] [Notes] Outstanding, on behalf of all
Noteholders, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Noteholder of this Note (or
any one or more Predecessor Notes) shall be conclusive and binding upon such
Noteholder and upon all future Noteholders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof whether or not notation of such consent or waiver is made upon this
Note.
The term "Issuer", as used in this Note, includes any successor to
the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Noteholders under the Indenture.
A-2-6
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be governed by, and construed in
accordance with the laws of the State of New York, without reference to its
conflicts of law provisions.
No reference herein to the Indenture, and no provision of this Note
or of the Indenture, shall alter or impair the obligation of the Issuer, which
is absolute and unconditional, to pay the principal of and interest on this
Note at the times, place and rate, and in the coin or currency herein
prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of Indenture Trustee, in its individual
capacity, Owner Trustee, in its individual capacity, any owner of a beneficial
interest in the Issuer, or any of their respective partners, beneficiaries,
agents, officers, directors, employees or successors or assigns shall be
personally liable for, nor shall recourse be had to any of them for, the
payment of principal or of interest on this Note or performance of, or
omission to perform, any of the covenants, obligations or indemnifications
contained in the Indenture. The holder of this Note, by such holder's
acceptance hereof, agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, the
Noteholder shall have no claim against any of the foregoing for any
deficiency, loss or claim therefrom; provided, however, that nothing contained
herein shall be taken to prevent recourse to, and enforcement against, the
assets of the Issuer for any and all liabilities, obligations and undertakings
contained in the Indenture or in this Note.
A-2-7
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
-----------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto:
_______________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ________________________________, attorney, to transfer said Note
on the books kept for registration thereof, with full power of substitution in
the premises.
Dated: _____________________ ____________________________*/
Signature Guaranteed
____________________________*/
---------------------------
*/ NOTICE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Note Registrar.
A-2-8
EXHIBIT A-3
FORM OF CLASS [ ] NOTE
[FOR BOOK-ENTRY NOTES] [UNLESS THIS NOTE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $
No. A-[ ] CUSIP NO. [ ]
USAA AUTO OWNER TRUST 200_-[ ]
CLASS [ ] [o]% ASSET BACKED NOTES
USAA Auto Owner Trust 200_-[ ], a statutory trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of ____________________ dollars payable
on each Payment Date in an amount equal to the result obtained by multiplying
(i) a fraction the numerator of which is $__________ (the original face amount
of this Note) and the denominator of which is $____________ by (ii) the
aggregate amount, if any, payable to holders of Class [ ] Notes on such
Payment Date from the Principal Distribution Account or otherwise in respect
of principal on the Class [ ] Notes pursuant to Section 3.1 of the Indenture
dated as of ________, 200_ (as from time to time amended, supplemented or
otherwise modified and in effect, the "Indenture"), between the Issuer and
__________, as Indenture Trustee (in such capacity the "Indenture Trustee");
provided, however, that the entire unpaid principal amount of this Note shall
be due and payable on the __________, 200__ Payment Date (the "Class [ ] Final
Scheduled Payment Date"). No payments of principal of the Class [ ] Notes will
be made until the Class [ ] Notes and, except in the case of an Event of
Default, Class [ ] Notes have been paid in full. Capitalized terms used but
not defined herein are defined in Article I of the Indenture, which also
contains rules as to construction that shall be applicable herein.
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
A-3-1
principal amount of this Note Outstanding on the preceding Payment Date or the
Closing Date in the case of the first Payment Date (after giving effect to all
payments of principal made on such preceding Payment Date), subject to certain
limitations contained in Section 3.1 of the Indenture. Interest on this Note
will accrue for each Payment Date from and including the fifteenth day of the
calendar month immediately preceding such Payment Date (or, in the case of the
initial Payment Date, from the Closing Date) to but excluding the fifteenth
day of the calendar month of the Payment Date. Interest will be computed on
the basis of a 360-day year of twelve 30-day months. Such principal of and
interest on this Note shall be paid in the manner specified on the reverse
hereof.
The principal of and interest on this Note are payable in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of
this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
A-3-2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer, as of the date
set forth below.
Date: USAA AUTO OWNER TRUST 200_-[ ]
By: __________, not in its individual
capacity but solely as Owner
Trustee of USAA Auto Owner Trust
200_-[ ]
By: _________________________________
Authorized Officer
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class [ ] Notes designated above and referred to in
the within-mentioned Indenture.
Date:
__________, not in its individual capacity
but solely as Indenture Trustee
By: _________________________________
Authorized Officer
A-3-3
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class [ ] [o]% Asset Backed Notes (the "Class [ ] Notes")
which, together with the Issuer's Class [ ] [o]% Asset Backed Notes (the
"Class [ ] Notes"), Class [ ] [o]% Asset Backed Notes (the "Class [ ]
Notes")[,] [and] Class [ ] [o]% Asset Backed Notes (the "Class [ ] Notes" and,
together with the Class [ ] Notes, the Class [ ] Notes and the Class [ ]
Notes, the "Class A Notes") [and the Class [o]% Asset Backed Notes (the "Class
[ ] Notes" and together with the Class A Notes], the "Notes"), are issued
under the Indenture, to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the
Noteholders. The Notes are subject to all terms of the Indenture.
Subject to the subordination provisions of the Indenture, the Class
[ ] Notes, Class [ ] Notes, Class [ ] Notes[,] [and] Class [ ] Notes [and Class
[ ] Notes] are and will be equally and ratably secured by the collateral
pledged as security therefor as provided in the Indenture.
Principal of the Class [ ] Notes will be payable on each Payment Date
in an amount described on the face hereof. "Payment Date" means the 15th day
of each month, or, if any such day is not a Business Day, the next succeeding
Business Day, commencing ________, 200_.
As described on the face hereof, the entire unpaid principal amount
of this Note shall be due and payable on the Class [ ] Final Scheduled Payment
Date. Notwithstanding the foregoing, the entire unpaid principal amount of the
Notes shall be due and payable on the date on which an Event of Default shall
have occurred and be continuing and the Indenture Trustee or the Noteholders
of Notes evidencing not less than a majority of the principal amount of the
[Controlling Class] [Notes] have declared the Notes to be immediately due and
payable in the manner provided in Section 5.2 of the Indenture. All principal
payments on the Class [ ] Notes shall be made pro rata to the Noteholders
entitled thereto.
Payments of interest on this Note on each Payment Date, together with
the installment of principal, if any, to the extent not in full payment of
this Note, shall be made to the Person whose name appears as the Registered
Noteholder of the Note (or one or more Predecessor Notes) on the Note Register
as of the close of business on each Record Date either by wire transfer in
immediately available funds, to the account of such Noteholder at a bank or
other entity having appropriate facilities therefor, if such Noteholder shall
have provided to the Note Registrar appropriate written instructions at least
five Business Days prior to such Payment Date and such Noteholder's Notes in
the aggregate evidence a denomination of not less than $1,000,000, or, if not,
by check mailed first-class postage prepaid to such Person's address as it
appears on the Note Register on such Record Date; provided that, unless
Definitive Notes have been issued to Note Owners, with respect to Notes
registered on the Record Date in the name of the nominee of the Clearing
Agency (initially, such nominee to be Cede & Co.), payments will be made by
wire transfer in immediately available funds to the account designated by such
nominee. Such payments will be made without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of
this Note (or any one or more Predecessor Notes) effected by any payments made
on any Payment Date shall be binding upon all future Noteholders of this Note
and of any Note issued upon the registration of transfer hereof or in
A-3-4
exchange hereof or in lieu hereof, whether or not noted hereon. If funds are
expected to be available, as provided in the Indenture, for payment in full of
the then remaining unpaid principal amount of this Note on a Payment Date,
then the Indenture Trustee, in the name of and on behalf of the Issuer, will
notify the Person who was the Registered Noteholder hereof as of the Record
Date preceding such Payment Date by notice mailed or transmitted by facsimile
prior to such Payment Date, and the amount then due and payable shall be
payable only upon presentation and surrender of this Note at the Indenture
Trustee's principal Corporate Trust Office or at the office of the Indenture
Trustee's agent appointed for such purposes located in The City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Class [ ] Rate to the extent lawful.
As provided in the Indenture, the Notes may be prepaid, in whole but
not in part, in the manner and to the extent described in the Indenture and
the Sale and Servicing Agreement.
As provided in the Indenture, and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note
Register upon surrender of this Note for registration of transfer at the
office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Noteholder hereof
or such Noteholder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, and thereupon one or more new Notes of the same Class in
authorized denominations and in the same aggregate principal amount will be
issued to the designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Note, but the
transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such
registration of transfer or exchange.
Each Noteholder or Note Owner, by its acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee,
each in its individual capacity, (ii) any owner of a beneficial interest in
the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director
or employee of the Indenture Trustee or the Owner Trustee, each in its
individual capacity, any holder of a beneficial interest in the Issuer, the
Owner Trustee or the Indenture Trustee or of any successor or assign of the
Indenture Trustee or the Owner Trustee, each in its individual capacity,
except as any such Person may have expressly agreed and except that any such
partner, owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner
will not at any time institute against the Issuer, or join in any institution
against the Issuer of, any bankruptcy, reorganization, arrangement,
A-3-5
insolvency or liquidation proceedings under any United States federal or State
bankruptcy or similar law in connection with any obligations relating to the
Notes, the Indenture or the other Basic Documents.
The Issuer has entered into the Indenture and this Note is issued
with the intention that, for federal, State and local income, and franchise
tax purposes, the Notes will qualify as indebtedness of the Issuer secured by
the Indenture Trust Estate. Each Noteholder, by its acceptance of a Note (and
each Note Owner by its acceptance of a beneficial interest in a Note), will be
deemed to agree to treat the Notes for federal, State and local income and
franchise tax purposes as indebtedness of the Issuer.
Each Noteholder or Note Owner, by its acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, will be deemed to have
represented that (x) it is not, and is not acquiring the Note on behalf of, or
with "plan assets" (as determined under Department of Labor Regulation
ss.2510.3-101 or otherwise) of, a Plan, or any employee benefit plan subject
to Similar Law, or (y) its acquisition and holding of the Note satisfy the
requirements for relief under Prohibited Transaction Class Exemption ("PTCE")
00-00, XXXX 00-0, XXXX 91-38, XXXX 00-00, XXXX 96-23 or a similar exemption,
or, in the case of an employee benefit plan subject to Similar Law, do not
result in a nonexempt violation of Similar Law.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day
of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and none of the Issuer, the Indenture Trustee or any
such agent shall be affected by notice to the contrary.
The Indenture permits (with certain exceptions requiring the consent
of all Noteholders adversely affected) the amendment thereof by the Issuer and
the Indenture Trustee without the consent of the Noteholders provided certain
conditions are satisfied. The Indenture also contains provisions permitting
the Noteholders of Notes evidencing specified percentages of the principal
amount of the [Controlling Class] [Notes] Outstanding, on behalf of all
Noteholders, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Noteholder of this Note (or
any one or more Predecessor Notes) shall be conclusive and binding upon such
Noteholder and upon all future Noteholders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof whether or not notation of such consent or waiver is made upon this
Note.
The term "Issuer," as used in this Note, includes any successor to
the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Noteholders under the Indenture.
A-3-6
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be governed by, and construed in
accordance with the laws of the State of New York, without reference to its
conflicts of law provisions.
No reference herein to the Indenture, and no provision of this Note
or of the Indenture, shall alter or impair the obligation of the Issuer, which
is absolute and unconditional, to pay the principal of and interest on this
Note at the times, place and rate, and in the coin or currency herein
prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of Indenture Trustee, in its individual
capacity, Owner Trustee, in its individual capacity, any owner of a beneficial
interest in the Issuer, or any of their respective partners, beneficiaries,
agents, officers, directors, employees or successors or assigns shall be
personally liable for, nor shall recourse be had to any of them for, the
payment of principal or of interest on this Note or performance of, or
omission to perform, any of the covenants, obligations or indemnifications
contained in the Indenture. The holder of this Note, by such holder's
acceptance hereof, agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, the
Noteholder shall have no claim against any of the foregoing for any
deficiency, loss or claim therefrom; provided, however, that nothing contained
herein shall be taken to prevent recourse to, and enforcement against, the
assets of the Issuer for any and all liabilities, obligations and undertakings
contained in the Indenture or in this Note.
A-3-7
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto:
_______________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ________________________________, attorney, to transfer said Note
on the books kept for registration thereof, with full power of substitution in
the premises.
Dated: _____________________ ____________________________*/
Signature Guaranteed
____________________________*/
---------------------------
*/ NOTICE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Note Registrar.
A-3-8
EXHIBIT A-4
FORM OF CLASS [ ] NOTE
[FOR BOOK-ENTRY NOTES] [UNLESS THIS NOTE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $
No. A-[ ] CUSIP NO. [ ]
USAA AUTO OWNER TRUST 200_-[ ]
CLASS [ ] [o]% ASSET BACKED NOTES
USAA Auto Owner Trust 200_-[ ], a statutory trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of _____________________ dollars payable
on each Payment Date in an amount equal to the result obtained by multiplying
(i) a fraction the numerator of which is $__________ (the original face amount
of this Note) and the denominator of which is $___________ by (ii) the
aggregate amount, if any, payable to holders of Class [ ] Notes on such
Payment Date from the Principal Distribution Account or otherwise in respect
of principal on the Class [ ] Notes pursuant to Section 3.1 of the Indenture
dated as of _________, 200_ (as from time to time amended, supplemented or
otherwise modified and in effect, the "Indenture"), between the Issuer and
__________, as Indenture Trustee (in such capacity the "Indenture Trustee");
provided, however, that the entire unpaid principal amount of this Note shall
be due and payable on the ____________, 20__ Payment Date (the "Class [ ]
Final Scheduled Payment Date"). No payments of principal of the Class [ ]
Notes will be made until the Class [ ] Notes and, except in the case of an
Event of Default, the Class [ ] Notes and Class [ ] Notes have been paid in
full. Capitalized terms used but not defined herein are defined in Article I
of the Indenture, which also contains rules as to construction that shall be
applicable herein.
A-4-1
The Issuer shall pay interest on this Note at the rate per annum
shown above on each Payment Date until the principal of this Note is paid or
made available for payment, on the principal amount of this Note Outstanding
on the preceding Payment Date or the Closing Date in the case of the first
Payment Date (after giving effect to all payments of principal made on such
preceding Payment Date), subject to certain limitations contained in Section
3.1 of the Indenture. Interest on this Note will accrue for each Payment Date
from and including the fifteenth day of the calendar month immediately
preceding such Payment Date (or, in the case of the initial Payment Date, from
the Closing Date) to but excluding the fifteenth day of the calendar month of
the Payment Date. Interest will be computed on the basis of a 360-day year of
twelve 30-day months. Such principal of and interest on this Note shall be
paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of
this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
A-4-2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer, as of the date
set forth below.
Date: USAA AUTO OWNER TRUST 200_-[ ]
By: __________, not in its individual
capacity but solely as Owner
Trustee of USAA Auto Owner Trust
200_-[ ]
By:
--------------------------------------
Authorized Officer
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class [ ] Notes designated above and referred to in
the within-mentioned Indenture.
Date:
__________, not in its individual
capacity but solely as Indenture
Trustee
By:
----------------------------------------
Authorized Officer
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[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class [ ] [o]% Asset Backed Notes (the "Class [ ] Notes")
which, together with the Issuer's Class [ ] [o]% Asset Backed Notes (the
"Class [ ] Notes"), Class [ ] [o]% Asset Backed Notes (the "Class [ ]
Notes")[,] [and] Class [ ] [o]% Asset Backed Notes (the "Class [ ] Notes" and,
together with the Class [ ] Notes, the Class [ ] Notes and the Class [ ]
Notes, the "Class A Notes") [and the Class [o]% Asset Backed Notes (the "Class
[ ] Notes" and together with the Class A Notes], the "Notes"), are issued
under the Indenture, to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the
Noteholders. The Notes are subject to all terms of the Indenture.
Subject to the subordination provisions of the Indenture, the Class [
] Notes, Class [ ] Notes, Class [ ] Notes[,] [and] Class [ ] Notes [and Class
[ ] Notes] are and will be equally and ratably secured by the collateral
pledged as security therefor as provided in the Indenture.
Principal of the Class [ ] Notes will be payable on each Payment Date
in an amount described on the face hereof. "Payment Date" means the 15th day
of each month, or, if any such day is not a Business Day, the next succeeding
Business Day, commencing _________, 200_.
As described on the face hereof, the entire unpaid principal amount
of this Note shall be due and payable on the Class [ ] Final Scheduled Payment
Date. Notwithstanding the foregoing, the entire unpaid principal amount of the
Notes shall be due and payable on the date on which an Event of Default shall
have occurred and be continuing and the Indenture Trustee or the Noteholders
of Notes evidencing not less than a majority of the principal amount of the
[Controlling Class] [Notes] have declared the Notes to be immediately due and
payable in the manner provided in Section 5.2 of the Indenture. All principal
payments on the Class [ ] Notes shall be made pro rata to the Noteholders
entitled thereto.
Payments of interest on this Note on each Payment Date, together with
the installment of principal, if any, to the extent not in full payment of
this Note, shall be made to the Person whose name appears as the Registered
Noteholder of the Note (or one or more Predecessor Notes) on the Note Register
as of the close of business on each Record Date either by wire transfer in
immediately available funds, to the account of such Noteholder at a bank or
other entity having appropriate facilities therefor, if such Noteholder shall
have provided to the Note Registrar appropriate written instructions at least
five Business Days prior to such Payment Date and such Noteholder's Notes in
the aggregate evidence a denomination of not less than $1,000,000, or, if not,
by check mailed first-class postage prepaid to such Person's address as it
appears on the Note Register on such Record Date; provided that, unless
Definitive Notes have been issued to Note Owners, with respect to Notes
registered on the Record Date in the name of the nominee of the Clearing
Agency (initially, such nominee to be Cede & Co.), payments will be made by
wire transfer in immediately available funds to the account designated by such
nominee. Such payments will be made without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of
this Note (or any one or more Predecessor Notes) effected by any payments made
on any Payment Date shall be binding upon all future Noteholders of this Note
and of any Note issued upon the registration of transfer hereof or in
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exchange hereof or in lieu hereof, whether or not noted hereon. If funds are
expected to be available, as provided in the Indenture, for payment in full of
the then remaining unpaid principal amount of this Note on a Payment Date,
then the Indenture Trustee, in the name of and on behalf of the Issuer, will
notify the Person who was the Registered Noteholder hereof as of the Record
Date preceding such Payment Date by notice mailed or transmitted by facsimile
prior to such Payment Date, and the amount then due and payable shall be
payable only upon presentation and surrender of this Note at the Indenture
Trustee's principal Corporate Trust Office or at the office of the Indenture
Trustee's agent appointed for such purposes located in The City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Class [ ] Rate to the extent lawful.
As provided in the Indenture, the Notes may be prepaid, in whole but
not in part, in the manner and to the extent described in the Indenture and
the Sale and Servicing Agreement.
As provided in the Indenture, and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note
Register upon surrender of this Note for registration of transfer at the
office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Noteholder hereof
or such Noteholder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, and thereupon one or more new Notes of the same Class in
authorized denominations and in the same aggregate principal amount will be
issued to the designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Note, but the
transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such
registration of transfer or exchange.
Each Noteholder or Note Owner, by its acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee,
each in its individual capacity, (ii) any owner of a beneficial interest in
the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director
or employee of the Indenture Trustee or the Owner Trustee, each in its
individual capacity, any holder of a beneficial interest in the Issuer, the
Owner Trustee or the Indenture Trustee or of any successor or assign of the
Indenture Trustee or the Owner Trustee, each in its individual capacity,
except as any such Person may have expressly agreed and except that any such
partner, owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner
will not at any time institute against the Issuer, or join in any institution
against the Issuer of, any bankruptcy, reorganization, arrangement,
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insolvency or liquidation proceedings under any United States federal or State
bankruptcy or similar law in connection with any obligations relating to the
Notes, the Indenture or the other Basic Documents.
The Issuer has entered into the Indenture and this Note is issued
with the intention that, for federal, State and local income, and franchise
tax purposes, the Notes will qualify as indebtedness of the Issuer secured by
the Indenture Trust Estate. Each Noteholder, by its acceptance of a Note (and
each Note Owner by its acceptance of a beneficial interest in a Note), will be
deemed to agree to treat the Notes for federal, State and local income and
franchise tax purposes as indebtedness of the Issuer.
Each Noteholder or Note Owner, by its acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, will be deemed to have
represented that (x) it is not, and is not acquiring the Note on behalf of, or
with "plan assets" (as determined under Department of Labor Regulation
ss.2510.3-101 or otherwise) of, a Plan, or any employee benefit plan subject
to Similar Law, or (y) its acquisition and holding of the Note satisfy the
requirements for relief under Prohibited Transaction Class Exemption ("PTCE")
00-00, XXXX 00-0, XXXX 91-38, XXXX 00-00, XXXX 96-23 or a similar exemption,
or, in the case of an employee benefit plan subject to Similar Law, do not
result in a nonexempt violation of Similar Law.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day
of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and none of the Issuer, the Indenture Trustee or any
such agent shall be affected by notice to the contrary.
The Indenture permits (with certain exceptions requiring the consent
of all Noteholders adversely affected) the amendment thereof by the Issuer and
the Indenture Trustee without the consent of the Noteholders provided certain
conditions are satisfied. The Indenture also contains provisions permitting
the Noteholders of Notes evidencing specified percentages of the principal
amount of the [Controlling Class] [Notes] Outstanding, on behalf of all
Noteholders, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Noteholder of this Note (or
any one or more Predecessor Notes) shall be conclusive and binding upon such
Noteholder and upon all future Noteholders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof whether or not notation of such consent or waiver is made upon this
Note.
The term "Issuer," as used in this Note, includes any successor to
the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Noteholders under the Indenture.
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The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be governed by, and construed in
accordance with the laws of the State of New York, without reference to its
conflicts of law provisions.
No reference herein to the Indenture, and no provision of this Note
or of the Indenture, shall alter or impair the obligation of the Issuer, which
is absolute and unconditional, to pay the principal of and interest on this
Note at the times, place and rate, and in the coin or currency herein
prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of Indenture Trustee, in its individual
capacity, Owner Trustee, in its individual capacity, any owner of a beneficial
interest in the Issuer, or any of their respective partners, beneficiaries,
agents, officers, directors, employees or successors or assigns shall be
personally liable for, nor shall recourse be had to any of them for, the
payment of principal or of interest on this Note or performance of, or
omission to perform, any of the covenants, obligations or indemnifications
contained in the Indenture. The holder of this Note, by such holder's
acceptance hereof, agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, the
Noteholder shall have no claim against any of the foregoing for any
deficiency, loss or claim therefrom; provided, however, that nothing contained
herein shall be taken to prevent recourse to, and enforcement against, the
assets of the Issuer for any and all liabilities, obligations and undertakings
contained in the Indenture or in this Note.
A-4-7
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
----------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto:
_____________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ________________________________, attorney, to transfer said Note
on the books kept for registration thereof, with full power of substitution in
the premises.
Dated: _____________________ ____________________________*/
Signature Guaranteed
____________________________*/
---------------------------
*/ NOTICE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Note Registrar.
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EXHIBIT B
FORM OF CLASS [ ] NOTE
[FOR BOOK-ENTRY NOTES] [UNLESS THIS NOTE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
PAYMENTS ON THIS NOTE ARE SUBORDINATE TO THE PAYMENT OF PRINCIPAL OF
AND INTEREST ON THE CLASS A NOTES.
REGISTERED $
No. B-[ ] CUSIP NO. [ ]
USAA AUTO OWNER TRUST 200_-[ ]
CLASS [ ] [o]% ASSET BACKED NOTES
USAA Auto Owner Trust 200_-[ ], a statutory trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of _____________________ dollars payable
on each Payment Date in an amount equal to the result obtained by multiplying
(i) a fraction the numerator of which is $__________ (the original face amount
of this Note) and the denominator of which is $___________ by (ii) the
aggregate amount, if any, payable to holders of Class [ ] Notes on such
Payment Date from the Principal Distribution Account or otherwise in respect
of principal on the Class [ ] Notes pursuant to Section 3.1 of the Indenture
dated as of _________, 200_ (as from time to time amended, supplemented or
otherwise modified and in effect, the "Indenture"), between the Issuer and
__________, as Indenture Trustee (in such capacity the "Indenture Trustee");
provided, however, that the entire unpaid principal amount of this Note shall
be due and payable on the ____________, 20__ Payment Date (the "Class [ ]
Final Scheduled Payment Date"). No payments of principal of the Class [ ]
Notes will be made until the Class [ ] Notes and, except in the case of an
Event of Default, the Class [ ] Notes and Class [ ] Notes have been paid in
full. Capitalized terms used but not defined
B-1
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 or the Closing Date in the case of the first
Payment Date (after giving effect to all payments of principal made on such
preceding Payment Date), subject to certain limitations contained in Section
3.1 of the Indenture. Interest on this Note will accrue for each Payment Date
from and including the fifteenth day of the calendar month immediately
preceding such Payment Date (or, in the case of the initial Payment Date, from
the Closing Date) to but excluding the fifteenth day of the calendar month of
the Payment Date. Interest will be computed on the basis of a 360-day year of
twelve 30-day months. Such principal of and interest on this Note shall be
paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of
this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer, as of the date
set forth below.
Date: USAA AUTO OWNER TRUST 200_-[ ]
By: __________, not in its individual
capacity but solely as Owner
Trustee of USAA Auto Owner Trust
200_-[ ]
By:
------------------------------------
Authorized Officer
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class [ ] Notes designated above and referred to
in the within-mentioned Indenture.
Date:
__________, not in its individual
capacity but solely as Indenture
Trustee
By:
----------------------------------
Authorized Officer
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[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class [ ] [o]% Asset Backed Notes (the "Class [ ] Notes")
which, together with the Issuer's Class [ ] [o]% Asset Backed Notes (the
"Class [ ] Notes"), Class [ ] [o]% Asset Backed Notes (the "Class [ ] Notes")
and Class [ ] [o]% Asset Backed Notes (the "Class [ ] Notes" and, together
with the Class A] Notes or the "Notes"), are issued under the Indenture, to
which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights and obligations thereunder of
the Issuer, the Indenture Trustee and the Noteholders. The Notes are subject
to all terms of the Indenture.
Subject to the subordination provisions of the Indenture, the Class [
] Notes, Class [ ] Notes, Class [ ] Notes[,] [and] Class [ ] Notes [and Class
[ ] Notes] are and will be equally and ratably secured by the collateral
pledged as security therefor as provided in the Indenture.
Principal of the Class [ ] Notes will be payable on each Payment Date
in an amount described on the face hereof. "Payment Date" means the 15th day
of each month, or, if any such day is not a Business Day, the next succeeding
Business Day, commencing _________, 200_.
As described on the face hereof, the entire unpaid principal amount
of this Note shall be due and payable on the Class [ ] Final Scheduled Payment
Date. Notwithstanding the foregoing, the entire unpaid principal amount of the
Notes shall be due and payable on the date on which an Event of Default shall
have occurred and be continuing and the Indenture Trustee or the Noteholders
of Notes evidencing not less than a majority of the principal amount of the
[Controlling Class] [Notes] have declared the Notes to be immediately due and
payable in the manner provided in Section 5.2 of the Indenture. All principal
payments on the Class [ ] Notes shall be made pro rata to the Noteholders
entitled thereto.
Payments of interest on this Note on each Payment Date, together with
the installment of principal, if any, to the extent not in full payment of
this Note, shall be made to the Person whose name appears as the Registered
Noteholder of the Note (or one or more Predecessor Notes) on the Note Register
as of the close of business on each Record Date either by wire transfer in
immediately available funds, to the account of such Noteholder at a bank or
other entity having appropriate facilities therefor, if such Noteholder shall
have provided to the Note Registrar appropriate written instructions at least
five Business Days prior to such Payment Date and such Noteholder's Notes in
the aggregate evidence a denomination of not less than $1,000,000, or, if not,
by check mailed first-class postage prepaid to such Person's address as it
appears on the Note Register on such Record Date; provided that, unless
Definitive Notes have been issued to Note Owners, with respect to Notes
registered on the Record Date in the name of the nominee of the Clearing
Agency (initially, such nominee to be Cede & Co.), payments will be made by
wire transfer in immediately available funds to the account designated by such
nominee. Such payments will be made without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of
this Note (or any one or more Predecessor Notes) effected by any payments made
on any Payment Date shall be binding upon all future Noteholders of this Note
and of any Note issued upon the registration of transfer hereof or in exchange
hereof or in lieu hereof, whether or not noted hereon. If funds are expected
to be available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal
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amount of this Note on a Payment Date, then the Indenture Trustee, in the name
of and on behalf of the Issuer, will notify the Person who was the Registered
Noteholder hereof as of the Record Date preceding such Payment Date by notice
mailed or transmitted by facsimile prior to such Payment Date, and the amount
then due and payable shall be payable only upon presentation and surrender of
this Note at the Indenture Trustee's principal Corporate Trust Office or at
the office of the Indenture Trustee's agent appointed for such purposes
located in The City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Class [ ] Rate to the extent lawful.
As provided in the Indenture, the Notes may be prepaid, in whole but
not in part, in the manner and to the extent described in the Indenture and
the Sale and Servicing Agreement.
As provided in the Indenture, and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note
Register upon surrender of this Note for registration of transfer at the
office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Noteholder hereof
or such Noteholder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, and thereupon one or more new Notes of the same Class in
authorized denominations and in the same aggregate principal amount will be
issued to the designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Note, but the
transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such
registration of transfer or exchange.
[The Class [ ] Notes may be acquired only by an entity that either:
(A) (x) for the entire period during which such purchaser or transferee holds
its interest in the Class B Notes, no portion of such purchaser's or
transferee's assets constitutes assets of any Benefit Plan Investor or (B) (1)
the assets used by such purchaser or transferee to acquire the Class [ ] Notes
(or any interest therein) constitute assets of an insurance company general
account, (2) for the entire period during which such purchaser or transferee
holds its interest in the Class [ ] Notes, less than 25% of the assets of such
insurance company general account will constitute "plan assets" of any Benefit
Plan Investors, (3) neither such purchaser or transferee nor any affiliate is
a Controlling Person of the Trust and (4) the acquisition and holding of the
Class [ ] Notes by such purchaser or transferee will satisfy the requirements
of Section I of PTCE 95-60 and will not constitute a non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code or a
violation of any applicable Similar Law.]
[In addition, the Class [ ] Notes may not be acquired by or on behalf
of a Person other than (A) a citizen or resident of the United States, (B) a
corporation or partnership organized in or under the laws of the United
States, any state thereof or the District of Columbia, (C) an estate the
income of which is includible in gross income for United States tax purposes,
regardless of its source, (D) a trust with respect to which a U.S. court is
able to exercise primary supervision over the administration of such trust and
one or more Persons meeting the conditions of this paragraph has the authority
to control all substantial decisions of the trust or (E) a Person not
described in clauses (A) through (D) above whose ownership of the Class [ ]
Notes is effectively
B-5
connected with such Person's conduct of a trade or business within the United
States (within the meaning of the Code) and who provides the Indenture Trustee
and the Depositor with an IRS Form W-8 ECI (and such other certifications,
representations, or opinions of counsel as may be requested by the Indenture
Trustee or the Depositor).]
Each Noteholder or Note Owner, by its acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee,
each in its individual capacity, (ii) any owner of a beneficial interest in
the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director
or employee of the Indenture Trustee or the Owner Trustee, each in its
individual capacity, any holder of a beneficial interest in the Issuer, the
Owner Trustee or the Indenture Trustee or of any successor or assign of the
Indenture Trustee or the Owner Trustee, each in its individual capacity,
except as any such Person may have expressly agreed and except that any such
partner, owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner
will not at any time institute against the Issuer, or join in any institution
against the Issuer of, any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings under any United States federal or State bankruptcy
or similar law in connection with any obligations relating to the Notes, the
Indenture or the other Basic Documents.
The Issuer has entered into the Indenture and this Note is issued
with the intention that, for federal, State and local income, and franchise
tax purposes, the Notes will qualify as indebtedness of the Issuer secured by
the Indenture Trust Estate. Each Noteholder, by its acceptance of a Note (and
each Note Owner by its acceptance of a beneficial interest in a Note), will be
deemed to agree to treat the Notes for federal, State and local income and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day
of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and none of the Issuer, the Indenture Trustee or any
such agent shall be affected by notice to the contrary.
The Indenture permits (with certain exceptions requiring the consent
of all Noteholders adversely affected) the amendment thereof by the Issuer and
the Indenture Trustee without the consent of the Noteholders provided certain
conditions are satisfied. The Indenture also contains provisions permitting
the Noteholders of Notes evidencing specified percentages of the principal
amount of the [Controlling Class] [Notes] Outstanding, on behalf of all
Noteholders, to waive
B-6
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Noteholder of this Note (or any one or more Predecessor Notes)
shall be conclusive and binding upon such Noteholder and upon all future
Noteholders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not
notation of such consent or waiver is made upon this Note.
The term "Issuer," as used in this Note, includes any successor to
the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be governed by, and construed in
accordance with the laws of the State of New York, without reference to its
conflicts of law provisions.
No reference herein to the Indenture, and no provision of this Note
or of the Indenture, shall alter or impair the obligation of the Issuer, which
is absolute and unconditional, to pay the principal of and interest on this
Note at the times, place and rate, and in the coin or currency herein
prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of Indenture Trustee, in its individual
capacity, Owner Trustee, in its individual capacity, any owner of a beneficial
interest in the Issuer, or any of their respective partners, beneficiaries,
agents, officers, directors, employees or successors or assigns shall be
personally liable for, nor shall recourse be had to any of them for, the
payment of principal or of interest on this Note or performance of, or
omission to perform, any of the covenants, obligations or indemnifications
contained in the Indenture. The holder of this Note, by such holder's
acceptance hereof, agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, the
Noteholder shall have no claim against any of the foregoing for any
deficiency, loss or claim therefrom; provided, however, that nothing contained
herein shall be taken to prevent recourse to, and enforcement against, the
assets of the Issuer for any and all liabilities, obligations and undertakings
contained in the Indenture or in this Note.
B-7
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
----------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto:
__________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ________________________________, attorney, to transfer said Note
on the books kept for registration thereof, with full power of substitution in
the premises.
Dated: _____________________ ____________________________*/
Signature Guaranteed
____________________________*/
---------------------------
*/ NOTICE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Note Registrar.
B-8
SCHEDULE A
Schedule of Receivables
[On file with Indenture Trustee]
SA-1
APPENDIX A
Definitions and Usage
Appendix A-1
(Attached to Sale and Servicing Agreement as Appendix A)
