********************************************************************************
Indenture.rtf
********************************************************************************
KILPATRICK STOCKTON LLP
EXECUTION COPY
------------------------------------------------------------------------
PROJECT BRAVE LIMITED PARTNERSHIP
ASSET-BACKED NOTES
--------------------------------------------------------------------
INDENTURE
Dated as of August 8, 2000
--------------------------------------------------------------------
WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
Indenture Trustee
------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE........................3
SECTION 1.1 DEFINITIONS...................................................3
SECTION 1.2 OTHER TERMS..................................................13
SECTION 1.3 COMPUTATION OF TIME PERIODS..................................13
SECTION 1.4 INTERPRETATION...............................................13
ARTICLE II THE NOTES.......................................................14
SECTION 2.1 FORM.........................................................14
SECTION 2.2 EXECUTION, AUTHENTICATION AND DELIVERY.......................14
SECTION 2.3 [RESERVED]...................................................15
SECTION 2.4 REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE..........15
SECTION 2.5 MUTILATED, DESTROYED, LOST OR STOLEN NOTES...................16
SECTION 2.6 PERSONS DEEMED OWNER.........................................17
SECTION 2.7 PAYMENTS ON THE NOTES........................................17
SECTION 2.8 CANCELLATION.................................................18
SECTION 2.9 RELEASE OF COLLATERAL........................................19
SECTION 2.10. INCREASED COSTS; CAPITAL ADEQUACY; ILLEGALITY................19
SECTION 2.11. TAXES........................................................20
SECTION 2.12. [RESERVED]...................................................21
SECTION 2.13. [RESERVED]...................................................21
SECTION 2.14. CERTAIN TRANSFER RESTRICTIONS................................21
SECTION 2.15. LEGENDING OF NOTES...........................................23
SECTION 2.16. PROVISION OF INFORMATION TO PROSPECTIVE PURCHASERS; RULE
144A MATTERS.................................................24
ARTICLE III COVENANTS......................................................24
SECTION 3.1 DISTRIBUTIONS................................................24
SECTION 3.2 MAINTENANCE OF OFFICE OR AGENCY..............................27
SECTION 3.3 MONEY FOR PAYMENTS TO BE HELD IN TRUST.......................27
SECTION 3.4 EXISTENCE....................................................28
SECTION 3.5 PROTECTION OF COLLATERAL.....................................29
SECTION 3.6 OPINIONS AS TO COLLATERAL....................................30
SECTION 3.7 PERFORMANCE OF OBLIGATIONS; SERVICING OF CONTRACTS...........30
SECTION 3.8 HEDGE REQUIREMENTS...........................................31
SECTION 3.9 NEGATIVE COVENANTS...........................................32
SECTION 3.10. ANNUAL STATEMENT AS TO COMPLIANCE............................33
SECTION 3.11. ISSUER MAY NOT CONSOLIDATE...................................33
SECTION 3.12. AMENDMENT TO PARTNERSHIP AGREEMENT...........................33
SECTION 3.13. NO OTHER BUSINESS............................................33
SECTION 3.14. NO BORROWING.................................................33
SECTION 3.15. SERVICER'S OBLIGATIONS.......................................34
SECTION 3.16. GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES............34
SECTION 3.17. CAPITAL EXPENDITURES.........................................34
SECTION 3.18. COMPLIANCE WITH LAWS.........................................34
SECTION 3.19. RESTRICTED PAYMENTS..........................................34
SECTION 3.20. NOTICE OF EVENTS OF DEFAULT..................................35
SECTION 3.21. FURTHER INSTRUMENTS AND ACTS.................................35
SECTION 3.22. AMENDMENTS OF TRANSFER AND SERVICING AGREEMENT...............35
SECTION 3.23. INCOME TAX CHARACTERIZATION..................................35
SECTION 3.24. TRANSACTIONS WITH AFFILIATES.................................35
i
SECTION 3.25. LOCATION OF OFFICES; CORPORATE NAME..........................35
SECTION 3.26. [RESERVED]...................................................36
SECTION 3.27. MAINTENANCE OF BOOKS AND RECORDS; INSPECTIONS................36
SECTION 3.28. NO COMMINGLING...............................................36
SECTION 3.29. YEAR 2000 COMPATIBILITY......................................36
ARTICLE IV SATISFACTION AND DISCHARGE......................................36
SECTION 4.1 SATISFACTION AND DISCHARGE OF INDENTURE......................36
SECTION 4.2 APPLICATION OF MONEY HELD IN TRUST...........................37
SECTION 4.3 REPAYMENT OF MONIES HELD BY PAYING AGENT.....................37
ARTICLE V REMEDIES.........................................................38
SECTION 5.1 EVENTS OF DEFAULT............................................38
SECTION 5.2 REMEDIES UPON EVENT OF DEFAULT...............................40
SECTION 5.3 TRIGGER EVENTS...............................................40
SECTION 5.4 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
INDENTURE TRUSTEE..........................................41
SECTION 5.5 LIMITATION OF NOTEHOLDER RIGHTS..............................43
SECTION 5.6 [RESERVED]...................................................43
SECTION 5.7 [RESERVED]...................................................44
SECTION 5.8 LIMITATION OF SUITS..........................................44
SECTION 5.9 UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE PRINCIPAL AND
INTEREST....................................................44
SECTION 5.10. RESTORATION OF RIGHTS AND REMEDIES...........................45
SECTION 5.11. RIGHTS AND REMEDIES CUMULATIVE...............................45
SECTION 5.12. DELAY OR OMISSION NOT A WAIVER...............................45
SECTION 5.13. [RESERVED]...................................................45
SECTION 5.14. WAIVER OF PAST DEFAULTS......................................45
SECTION 5.15. UNDERTAKING FOR COSTS........................................46
SECTION 5.16. WAIVER OF STAY OR EXTENSION LAWS.............................46
SECTION 5.17. ACTION ON NOTES..............................................46
SECTION 5.18. PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS...........46
ARTICLE VI THE INDENTURE TRUSTEE..........................................47
SECTION 6.1 DUTIES OF INDENTURE TRUSTEE..................................47
SECTION 6.2 RIGHTS OF INDENTURE TRUSTEE..................................49
SECTION 6.3 INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE.......................50
SECTION 6.4 INDENTURE TRUSTEE'S DISCLAIMER...............................50
SECTION 6.5 NOTICE OF DEFAULTS...........................................51
SECTION 6.6 REPORTS BY PAYING AGENT TO HOLDERS...........................51
SECTION 6.7 COMPENSATION AND INDEMNITY...................................51
SECTION 6.8 REPLACEMENT OF INDENTURE TRUSTEE.............................52
SECTION 6.9 SUCCESSOR INDENTURE TRUSTEE BY MERGER........................54
SECTION 6.10 APPOINTMENT OF CO-INDENTURE TRUSTEE OR SEPARATE INDENTURE
TRUSTEE....................................................54
SECTION 6.11. ELIGIBILITY; DISQUALIFICATION................................55
SECTION 6.12. [RESERVED]...................................................55
SECTION 6.13. APPOINTMENT AND POWERS.......................................55
SECTION 6.14. PERFORMANCE OF DUTIES........................................56
SECTION 6.15. LIMITATION ON LIABILITY......................................56
SECTION 6.16. RELIANCE UPON DOCUMENTS......................................57
SECTION 6.17. SUCCESSOR INDENTURE TRUSTEE..................................57
SECTION 6.18. COMPENSATION.................................................58
SECTION 6.19. REPRESENTATIONS AND WARRANTIES OF THE INDENTURE TRUSTEE......58
SECTION 6.20. WAIVER OF SETOFFS............................................59
SECTION 6.21. CONTROL BY THE DEAL AGENT....................................59
ii
ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS.................................59
SECTION 7.1 ISSUER TO FURNISH TO NOTE REGISTRAR NAMES AND ADDRESSES OF
NOTEHOLDERS................................................59
SECTION 7.2 PRESERVATION OF INFORMATION: COMMUNICATIONS TO NOTEHOLDERS...59
ARTICLE VIII DISBURSEMENTS AND RELEASES....................................60
SECTION 8.1 COLLECTION OF MONEY..........................................60
SECTION 8.2 RELEASE OF COLLATERAL........................................60
SECTION 8.3 OPINION OF COUNSEL...........................................61
ARTICLE IX SUPPLEMENTAL INDENTURES.........................................61
SECTION 9.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS.......61
SECTION 9.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS..........62
SECTION 9.3 EXECUTION OF SUPPLEMENTAL INDENTURES.........................64
SECTION 9.4 EFFECT OF SUPPLEMENTAL INDENTURE.............................64
SECTION 9.5 [RESERVED]...................................................64
SECTION 9.6 REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES................64
ARTICLE X REDEMPTION OF NOTES..............................................65
SECTION 10.1. REDEMPTION...................................................65
SECTION 10.2. FORM OF REDEMPTION NOTICE....................................65
SECTION 10.3. NOTES PAYABLE ON REDEMPTION DATE.............................65
ARTICLE XI MISCELLANEOUS...................................................66
SECTION 11.1. COMPLIANCE CERTIFICATES AND OPINIONS, ETC....................66
SECTION 11.2. FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE.............67
SECTION 11.3. ACTS OF NOTEHOLDERS..........................................68
SECTION 11.4. NOTICES, ETC. TO INDENTURE TRUSTEE AND ISSUER................68
SECTION 11.5. NOTICES TO NOTEHOLDERS; WAIVER...............................69
SECTION 11.6. ALTERNATE PAYMENT AND NOTICE PROVISIONS......................69
SECTION 11.7. [RESERVED]...................................................70
SECTION 11.8. EFFECT OF HEADINGS AND TABLE OF CONTENTS.....................70
SECTION 11.9. SUCCESSORS AND ASSIGNS.......................................70
SECTION 11.10. [RESERVED]...................................................70
SECTION 11.11. BENEFITS OF INDENTURE........................................70
SECTION 11.12. LEGAL HOLIDAYS...............................................70
SECTION 11.13. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF
OBJECTION TO VENUE.........................................70
SECTION 11.14. WAIVER OF JURY TRIAL.........................................71
SECTION 11.15. EXECUTION IN COUNTERPARTS; SEVERABILITY; INTEGRATION.........71
SECTION 11.16. RECORDING OF INDENTURE.......................................71
SECTION 11.17. NO RECOURSE..................................................71
SECTION 11.18. NO PETITION..................................................72
SECTION 11.19. INSPECTION...................................................72
EXHIBITS AND SCHEDULES
Exhibit A Form of Class A Note
Exhibit B Form of Class B Note
Exhibit C Hedging Agreement
Exhibit D Partnership Agreement of Issuer
iii
INDENTURE dated as of August 8, 2000 between PROJECT BRAVE LIMITED
PARTNERSHIP, a Delaware limited partnership (the "ISSUER") and WELLS FARGO BANK
MINNESOTA, NATIONAL ASSOCIATION, a national banking association, as Indenture
Trustee (the "INDENTURE TRUSTEE").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Noteholders (as defined below);
As security for the payment and performance by the Issuer of its
obligations under this Indenture and the Notes, the Issuer has agreed to assign
the Collateral (as defined below) to the Collateral Agent on behalf of the
Indenture Trustee for the benefit of the Secured Parties.
GRANTING CLAUSE
The Issuer hereby Grants to the Collateral Agent on behalf of the
Indenture Trustee at the Closing Date for the benefit of the Class A Secured
Parties and the Class B Secured Parties, respectively as described below, all of
the Issuer's right, title and interest in and to the following, whether now
owned or hereafter acquired (collectively, the "COLLATERAL"):
(a) The Issuer hereby Grants to the Collateral Agent on behalf of the
Indenture Trustee at the Closing Date, for the benefit of the Class A Secured
Parties (and not the Class B Secured Parties), all of the Issuer's right, title
and interest in and to the following, whether now owned or hereafter acquired
(the "CLASS A COLLATERAL"):
(i) all Contracts (as the same may be amended, modified,
supplemented, restated or replaced from time to time);
(ii) all Contract Files, Charged Off Contract Lists and Contract
Lists, and all right, title and interest of the Issuer in and to the
documents, agreements and instruments included in the Contract Files,
including, without limitation, rights of recourse of the Issuer against
the Transferor;
(iii) all Insurance Policies and all rights of the Issuer in all
Insurance Policies;
(iv) all security interests, Liens, guaranties, mortgages and other
encumbrances in favor of or assigned or transferred to the Issuer in and
to Contracts and Financed Vehicles, and all accessions thereto and
replacements thereof;
(v) the Contract Purchase Agreement and all rights of the Issuer
thereunder;
(vi) Class A Hedge Transactions, and
(vii) all amounts and property from time to time in the Class A
Sub-Account and the Reserve Account from amounts received in connection
with the foregoing;
(viii) [RESERVED]
(ix) all present and future claims, demands, causes and chooses 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,
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.
(b) The Issuer hereby Grants to the Collateral Agent on behalf of the
Indenture Trustee at the Closing Date, for the benefit of the Class B Secured
Parties (and not the Class A Secured Parties), all of the Issuer's right, title
and interest in and to the following, whether now owned or hereafter acquired
(the "CLASS B COLLATERAL"):
(i) the NIM Collateral;
(ii) the Servicing Strip (Series 1997-1);
(iii) the Servicing Strip (Series 1998-1);
(iv) the Retained Pool Servicing Strip;
(v) the NIM Collateral Purchase Agreement and all rights of the
Issuer thereunder;
(vi) Class B Hedge Transactions;
(vii) all amounts and property from time to time in the Class B
Sub-Account from amounts received in connection with the foregoing items
in this clause (b); and
(viii) all present and future claims, demands, causes and chooses 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,
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 items in this clause (b).
2
(c) The Issuer hereby Grants to the Collateral Agent on behalf of the
Indenture Trustee for the benefit of the Secured Parties all of the Issuer's
right, title and interest in and to the Transfer and Servicing Agreement and all
rights of the Issuer thereunder, but none of its obligations or burdens
thereunder, including the delivery requirements, representations and warranties
and the cure and repurchase obligations of the Transferor and the Servicer under
the Transfer and Servicing Agreement.
The foregoing Grants are made in trust to the Collateral Agent on behalf
of the Indenture Trustee, for the benefit of the above-described Secured
Parties. The Collateral Agent on behalf of the Indenture Trustee hereby
acknowledges each 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 such parties, recognizing the priorities of their respective
interests may be adequately and effectively protected.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. DEFINITIONS.
Except as otherwise specified herein, the following terms have the
respective meanings set forth below for all purposes of this Indenture.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to them in the Transfer and Servicing Agreement.
ACT: As defined in SECTION 11.3(A).
ADDITIONAL AMOUNTS: As defined in SECTION 2.11(A).
ADJUSTED EURODOLLAR RATE: For any Interest Period, an interest rate per annum
equal to a fraction, expressed as a percentage and rounded upwards (if
necessary), to the nearest 1/100 of 1%, (i) the numerator of which is equal to
LIBOR for such Interest Period and (ii) the denominator of which is equal to
100% MINUS the Eurodollar Reserve Percentage for such Interest Period.
AFFECTED PARTY: Each of the Note Investors, each Liquidity Bank, any assignee or
participant of any Note Investor or Liquidity Bank, FUSI, any successor to FUSI
as the Deal Agent, any sub-agent of the Deal Agent, First Union and any
successor to First Union as the Liquidity Agent.
AFFILIATE: With respect to a Person, means any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person, or is a director or officer of such Person. For purposes of this
definition, "control" (including the terms "controlling," "controlled by" and
"under common control with") when used with respect to any specified Person
means the possession, direct or indirect, of the power to vote 5% or more of the
voting securities of such
3
Person or to direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities, by contract, or
otherwise.
ALTERNATIVE RATE: An interest rate per annum equal to the Adjusted Eurodollar
Rate; PROVIDED, HOWEVER, that the Alternative Rate shall be the Base Rate if a
Eurodollar Disruption Event occurs.
APPLICABLE LAW: For any Person, all existing and future applicable laws, rules,
regulations (including proposed, temporary and final income tax regulations),
statutes, treaties, codes ordinances, permits, certificates, orders and licenses
of and interpretations by any Governmental Authority (including, without
limitation, usury laws, the Federal Truth in Lending Act, and Regulation Z and
Regulation B of the Board of Governors of the Federal Reserve System), and
applicable judgments, decrees, injunctions, writs, orders, or other action of
any Court, arbitrator or other administrative, judicial, or quasi-judicial
tribunal or agency of competent jurisdiction.
AUTHORIZED OFFICER: With respect to the Issuer and the Servicer, any officer or
agent acting pursuant to a power of attorney of the Indenture Trustee or the
Servicer, as applicable, who is authorized to act for the Indenture Trustee or
the Servicer, as applicable, in matters relating to the Issuer and who is
identified on the list of Authorized Officers delivered by each of the Indenture
Trustee, the Deal Agent and the Servicer to the Indenture Trustee on the Closing
Date (as such list may be modified or supplemented from time to time
thereafter).
BASE RATE: On any date, a fluctuating interest rate per annum equal to the
higher of (i) the Prime Rate or (ii) the Federal Funds Rate plus 1.0%.
CLASS A COLLATERAL: As defined in the Granting Clause of this Indenture.
CLASS A COLLECTIONS: All amounts paid with respect to the Class A Collateral,
including the Contracts, either by the Obligor thereon, or any other Person
(including, without limitation, Recoveries and Net Liquidation Proceeds).
CLASS A DEFAULT RATE: As defined in SECTION 5.2(C).
CLASS A HEDGE TRANSACTIONS: Each Hedge Transaction that is entered into pursuant
to SECTION 3.8 in connection with the Class A Notes.
CLASS A NOTE: Any of the Class A Notes, substantially in the form of Exhibit A
of the Indenture.
CLASS A NOTE INVESTOR: VFCC and its successors and assigns.
CLASS A OUTSTANDING AMOUNT: The aggregate principal amount of all Class A Notes
that are Outstanding on any date of determination.
4
CLASS A SECURED OBLIGATIONS: All amounts and obligations which the Issuer may at
any time owe to or on behalf of the Indenture Trustee for the benefit of the
Holders of the Class A Notes and each Class A Hedge Counterparty under this
Indenture or the Class A Notes.
CLASS A SECURED PARTIES: The Class A Note Investor and each Class A Hedge
Counterparty.
CLASS A TARGETED PRINCIPAL AMOUNT: On any day, the amount necessary to reduce
the outstanding balance of the Class A Note on such day to 75% of the aggregate
Outstanding Principal Balance of the Contracts on such day.
CLASS B COLLATERAL: As defined in the Granting Clause of this Indenture.
CLASS B COLLECTIONS: All amounts paid with respect to the Class B Collateral.
CLASS B DEFAULT RATE: As defined in SECTION 5.2(C).
CLASS B HEDGE TRANSACTIONS: Each Hedge Transaction that is entered into pursuant
to SECTION 3.8 in connection with the Class B Notes.
CLASS B NOTE: Any of the Class B Notes, substantially in the form of Exhibit B.
CLASS B NOTE INVESTOR: VFCC and its successors and assigns.
CLASS B OUTSTANDING AMOUNT: The aggregate principal amount of all Class B Notes
that are Outstanding on any date of determination.
CLASS B SECURED OBLIGATIONS: All amounts and obligations which the Issuer may at
any time owe to or on behalf of the Indenture Trustee for the benefit of the
Holders of the Class B Notes and each Class B Hedge Counterparty under this
Indenture or the Class B Notes.
CLASS B SECURED PARTIES: The Class B Note Investor and each Class B Hedge
Counterparty.
CLOSING DATE: August 8, 2000.
CODE: The Internal Revenue Code of 1986 and Treasury Regulations promulgated
thereunder.
COLLATERAL: As defined in the Granting Clause of this Indenture.
COLLECTIONS: Collectively, the Class A Collections and the Class B Collections.
COMMERCIAL PAPER NOTES: On any day, any short-term promissory notes issued by a
Note Investor.
CORPORATE TRUST OFFICE: The principal corporate trust office of the Indenture
Trustee at MAC N9311-161, Sixth Street and Marquette Avenue, Minneapolis,
Minnesota 55479, or such other
5
address as the Indenture Trustee may designate from time to time in accordance
with SECTION 11.4(A), or the principal corporate trust office of any successor
Indenture Trustee.
CP RATE: For any day during any Interest Period, the per annum rate equivalent
to the weighted average of the per annum rates paid or payable by the Class A
Note Investor or the Class B Note Investor, as the case may be, from time to
time as interest on or otherwise (by means of interest rate hedges or otherwise
taking into consideration any incremental carrying costs associated with
short-term promissory notes issued by such Note Investor maturing on dates other
than those certain dates on which such Note Investor is to receive funds) in
respect of the promissory notes issued by such Note Investor that are allocated,
in whole or in part, by the Deal Agent (on behalf of such Note Investor) to fund
or maintain the Class A Outstanding Amount or the Class B Outstanding Amount, as
the case may be, during such period, as determined by the Deal Agent (on behalf
of such Note Investor) and reported to the Issuer and the Servicer, which rates
shall reflect and give effect to (i) the commissions of placement agents and
dealers in respect of such promissory notes, to the extent such commissions are
allocated, in whole or in part, to such promissory notes by the Deal Agent (on
behalf of such Note Investor) and (ii) other borrowings by such Note Investor,
including, without limitation, borrowings to fund small or odd dollar amounts
that are not easily accommodated in the commercial paper market; PROVIDED,
HOWEVER, that if any component of such rate is a discount rate, in calculating
the CP Rate, the Deal Agent shall for such component use the rate resulting from
converting such discount rate to an interest bearing equivalent rate per annum.
DEFAULT: Any occurrence that is, or with notice or the lapse of time or both
would become, an Event of Default.
DERIVATIVE: Any exchange-traded or over-the-counter (i) forward, future, option,
swap, cap, collar, floor or foreign exchange contract or any combination
thereof, whether for physical delivery or cash settlement, relating to any
interest rate, interest rate index, currency, currency exchange rate, currency
exchange rate index, debt instrument, debt price, debt index, depository
instrument, depository price, depository index, equity instrument, equity price,
equity index, commodity, commodity price or commodity index, (ii) any similar
transaction, contract, instrument, undertaking or security, or (iii) any
transaction, contract, instrument, undertaking or security containing any of the
foregoing.
EVENT OF DEFAULT: As defined in SECTION 5.1.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended from time to time,
together with the rules and regulations in effect from time to time thereunder.
EXECUTIVE OFFICER: With respect to any corporation, the chief executive officer,
chief operating officer, chief financial officer, president, executive vice
president, any vice president, the secretary or the treasurer of such
corporation.
EURODOLLAR DISRUPTION EVENT: The occurrence of any of the following: (i) a
determination by a Note Investor that it would be contrary to law or to the
directive of any central bank or other
6
governmental authority (whether or not having the force of law) to obtain United
States dollars in the London interbank market to maintain any Note, (ii) the
failure of one or more of the reference banks to furnish timely information for
purposes of determining the Adjusted Eurodollar Rate, (iii) a determination by a
Note Investor that the rate at which deposits of United States dollars are being
offered to such Note Investor in the London interbank market does not accurately
reflect the cost to such Note Investor of maintaining any Note or (iv) the
inability of a Note Investor to obtain United States dollars in the London
interbank market to maintain any Note.
EURODOLLAR RESERVE PERCENTAGE: Of any reference bank for any period, means the
percentage applicable during such period (or, if more than one such percentage
shall be so applicable, the daily average of such percentages for those days in
such period during which any such percentage shall be so applicable) under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for such reference bank with respect to
liabilities or assets consisting of or including eurocurrency liabilities having
a term of one month.
FEDERAL FUNDS RATE: For any period, a fluctuating interest rate per annum equal
for each day during such period to the weighted average of the federal funds
rates as quoted by First Union and confirmed in Federal Reserve Board
Statistical Release H.15 (519) or any successor or substitute publication
selected by First Union (or, if such day is not a Business Day, for the next
preceding Business Day), or if for any reason such rate is not available on any
day, the rate determined, in the sole opinion of First Union, to be the rate at
which federal funds are being offered for sale in the national federal funds
market at 9:00 a.m. Charlotte, North Carolina time.
GOVERNMENTAL AUTHORITY: Any nation or government, any state or other political
subdivision thereof, any central bank (or similar monetary or regulatory
authority) thereof, any body or entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government
and any court or arbitrator.
GRANT: Mortgage, pledge, bargain, sell, warrant, alienate, remise, release,
convey, assign, transfer, create, grant a lien upon and a security interest in
and right of set-off against, deposit, set over and confirm pursuant to this
Indenture. A Grant of the Collateral or of any other agreement or instrument
shall include all rights, powers and options (but none of the obligations) of
the Granting party thereunder, including the immediate and continuing right to
claim for, collect, receive and give receipt for principal and interest payments
in respect of the Collateral and all other moneys payable thereunder, to give
and receive notices and other communications, to make waivers or other
agreements, to exercise all rights and options, to bring proceedings in the name
of the Granting party or otherwise and generally to do and receive anything that
the Granting party is or may be entitled to do or receive thereunder or with
respect thereto.
HEDGE BREAKAGE COSTS: For any Hedge Transaction, any amount payable by the
Issuer for the early termination of that Hedge Transaction or any portion
thereof.
7
HEDGE COUNTERPARTY: Any entity that (i) on the date of entering into any Hedge
Transaction (A) is an interest rate swap dealer that is either a Note Investor
or an Affiliate of a Note Investor, or has been approved in writing by the Deal
Agent (which approval shall not unreasonably be withheld), and (B) has a
long-term unsecured debt rating of not less than "A" by S&P and not less than
"A-2" by Moody's ("LONG-TERM RATING REQUIREMENT") and a short-term unsecured
debt rating of not less than "A-1" by S&P and not less than "P-1" by Moody's
("SHORT-TERM RATING REQUIREMENT"), and (ii) in a Hedging Agreement (A) consents
to the assignment of the Issuer's rights under the Hedging Agreement to the Deal
Agent pursuant to SECTION 3.8 and (B) agrees that in the event that Moody's or
S&P reduces its long-term unsecured debt rating below the Long-term Rating
Requirement, or reduces its short-term unsecured debt rating below the
Short-term Rating Requirement, it shall transfer its rights and obligations
under each Hedge Transaction to another entity that meets the requirements of
clauses (i) and (ii) hereof and has entered into a Hedging Agreement with the
Issuer on or prior to the date of such transfer.
HEDGE TRANSACTION: Each interest rate swap transaction between the Issuer and a
Hedge Counterparty that is entered into pursuant to SECTION 3.8 and is governed
by a Hedging Agreement.
HEDGING AGREEMENT: Each agreement between the Issuer and a Hedge Counterparty
that governs one or more Hedge Transactions entered into pursuant to SECTION
3.8, which agreement shall consist of a "Master Agreement" in a form published
by the International Swaps and Derivatives Association, Inc., together with a
"Schedule" thereto substantially in the form of EXHIBIT D hereto or such other
form as the Deal Agent shall approve in writing, and each "Confirmation"
thereunder confirming the specific terms of each such Hedge Transaction.
HOLDER or NOTEHOLDER: The Person in whose name a Note is registered on the Note
Register.
INCREASED COSTS: Any amounts required to be paid by the Issuer to an Affected
Party pursuant to SECTION 2.11.
INDEBTEDNESS: With respect to any Person at any date, (i) all indebtedness of
such Person for borrowed money or for the deferred purchase price of property or
services (other than current liabilities incurred in the ordinary course of
business and payable in accordance with customary trade practices) or that is
evidenced by a note, bond, debenture or similar instrument, (ii) all obligations
of such Person under leases that shall have been or should be, in accordance
with generally accepted accounting principles, recorded as capital leases, (iii)
all obligations of such Person in respect of acceptances issued or created for
the account of such Person, (iv) all liabilities secured by any Lien on any
property owned by such Person even though such Person has not assumed or
otherwise become liable for the payment thereof, (v) all indebtedness,
obligations or liabilities of that Person in respect of Derivatives, and (vi)
all obligations under direct or indirect guaranties in respect of obligations
(contingent or otherwise) to purchase or otherwise acquire, or to otherwise
assure a creditor against loss in respect of, indebtedness or obligations of
others of the kind referred to in clauses (i) through (v) above.
INDENTURE: This Indenture as amended and supplemented from time to time.
8
INDENTURE TRUSTEE: Wells Fargo Bank Minnesota, National Association, a national
banking association, not in its individual capacity but as Indenture Trustee
under this Indenture, or any successor Indenture Trustee under this Indenture.
INITIAL CLASS A NOTEHOLDER: The Class A Note Investor, excluding all Issuer
Affiliates.
INITIAL CLASS B NOTEHOLDER: The Class B Note Investor, excluding all Issuer
Affiliates.
INITIAL RESERVE ACCOUNT DEPOSIT AMOUNT: 2% of the Outstanding Principal Balance
of Contracts as of the Closing Date.
INSOLVENCY PROCEEDS: As defined in Section 11.1(b) of the Transfer and Servicing
Agreement.
INTEREST PERIOD: For any Distribution Date, the Collection Period that ended on
the last day of the calendar month immediately preceding such Distribution Date.
ISSUER: The party named as such in this Indenture until a successor replaces it
and, thereafter, means the successor.
ISSUER AFFILIATES: The Issuer and all Affiliates of the Issuer, excluding First
Union Investors, Inc. and its Affiliates.
ISSUER ORDER and ISSUER REQUEST: A written order or request signed in the name
of the Issuer by any one of its Authorized Officers and delivered to the
Indenture Trustee.
LIBOR: For any day during any Interest Period, an interest rate per annum equal
to:
(i) the posted rate for 30-day deposits in United States Dollars appearing
on Telerate page 3750 as of 11:00 a.m. (London time) on the Business Day
which is the second Business Day immediately preceding the first day of
the applicable Interest Period; or
(ii) if no such rate appears on Telerate page 3750 at such time and day,
then LIBOR shall be determined by First Union at its principal office in
Charlotte, North Carolina as its rate (each such determination, absent
manifest error, to be conclusive and binding on all parties hereto and
their assignees) at which 30-day deposits in United States Dollars are
being, have been, or would be offered or quoted by First Union to major
banks in the applicable interbank market for Eurodollar deposits at or
about 11:00 a.m. (Charlotte, North Carolina time) on such day.
LIQUIDITY AGENT: First Union National Bank.
LIQUIDITY AGREEMENT: The Liquidity Purchase Agreement, dated as of the date
hereof among VFCC, as borrower, the investors named therein, FUSI, as deal agent
and documentation agent, and First Union, as liquidity agent.
9
LIQUIDITY BANK: Each liquidity bank that is a party to the Liquidity Agreement.
NOTE INTEREST: For any Interest Period with respect to each of the Class A Notes
and the Class B Notes, respectively, the sum of the products (for each day
during such Interest Period) of:
NIR x P x 1
----
360
where:
NIR = the Note Interest Rate applicable to such Note; and
P = the outstanding principal amount of such Note on such day.
NOTE INTEREST RATE:
(a) With respect to the Class A Notes, on any day, (i) for the
portion of the Class A Outstanding Amount that the Class A Note Investor
funds on such day through the issuance of commercial paper, the CP Rate
plus 0.95% per annum and (ii) for the portion of the outstanding principal
amount that the Class A Note Investor does not fund on such day through
the issuance of commercial paper, the Alternative Rate plus 0.95% per
annum; and
(b) With respect to the Class B Notes, on any day, (i) for the
portion of the Class B Outstanding Amount that the Class B Note Investor
funds on such day through the issuance of commercial paper, the CP Rate
plus 5.38% per annum and (ii) for the portion of the outstanding principal
amount that the Class A Note Investor does not fund on such day through
the issuance of commercial paper, the Alternative Rate plus 5.38% per
annum;
PROVIDED, HOWEVER, the Note Interest Rate shall be the Base Rate for any
Interest Period for any Note as to which the related Note Investor has funded
the acquisition or maintenance thereof by a sale of an interest therein to any
Liquidity Bank under the Liquidity Agreement on any day other than the first day
of such Interest Period and without giving such Liquidity Bank(s) at least two
(2) Business Days prior notice of such assignment.
NOTE INVESTOR: Any Class A Note Investor or Class B Note Investor, as the case
may be.
NOTE OWNER: With respect to any Note, the Person who is the beneficial owner of
such Note, as reflected on the books of the Note Registrar.
NOTE REGISTER and NOTE REGISTRAR: As defined in SECTION 2.4.
NOTES: Collectively, the Class A Notes and the Class B Notes.
10
NOTE PURCHASE AGREEMENT: The Note Purchase Agreement dated as of the date hereof
by and between the Initial Class A Note Investor, the Initial Class B Note
Investor, the Deal Agent, the Liquidity Agent and the Issuer.
OFFICER'S CERTIFICATE: A certificate signed by any Authorized Officer of the
Issuer, under the circumstances described in, and otherwise complying with, the
applicable requirements of SECTION 11.1, and delivered to the Indenture Trustee.
Unless otherwise specified, any reference in this Indenture to an Officer's
Certificate shall be to an Officer's Certificate of any Authorized Officer of
the Issuer.
OPINION OF COUNSEL: One or more written opinions of counsel who may, except as
otherwise expressly provided in this Indenture, be employees of or counsel to
the Issuer and who shall be satisfactory to the Indenture Trustee and which
shall comply with any applicable requirements of SECTION 11.1, and shall be in
form and substance satisfactory to the Indenture Trustee.
OUTSTANDING: Subject to the provisions of SECTION 5.5(C), as of the date of
determination, all Notes theretofore authenticated and delivered under this
Indenture except:
(i) Notes theretofore canceled by the Note Registrar or
delivered to the Note Registrar for cancellation;
(ii) Notes (or portions thereof) for the payment of which money in
the necessary amount has been theretofore deposited with the Paying Agent
in trust for the Holders of such Notes (PROVIDED, HOWEVER, that if such
Notes are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor, satisfactory to the
Indenture Trustee and the Paying Agent);
(iii) Notes in exchange for or in lieu of other Notes which have
been authenticated and delivered pursuant to this Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Notes are
held by a bona fide purchaser; PROVIDED, HOWEVER, that in determining
whether the Holders of the requisite Outstanding Amount of the Notes have
given any request, demand, authorization, direction, notice, consent or
waiver hereunder or under any Basic Document, Notes owned by the Issuer,
any other obligor upon the Notes, the Transferor or any Affiliate of any
of the foregoing Persons shall be disregarded and deemed not to be
outstanding, except that, in determining whether the Indenture Trustee
shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Notes that a
Responsible Officer of the Indenture Trustee either actually knows to be
so owned or has received written notice thereof shall be so disregarded.
Notes so owned that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the
Indenture Trustee the pledgee's right so to act with respect to such Notes
and that the pledgee is not the Issuer, any other obligor upon the Notes,
the Transferor or any Affiliate of any of the foregoing Persons; and
11
EXCLUDING, in the cases of (i), (ii) and (iii) above, any amounts previously
paid to Holders which payments have been rescinded or recovered from or
otherwise required to be returned or repaid by any such Holder as a result of or
in connection with any proceeding of the type described in SECTION 5.1(D).
OUTSTANDING AMOUNT: The aggregate principal amount of all Notes that are
Outstanding at the date of determination.
PAYING AGENT: First Union, acting in such capacity.
PREDECESSOR NOTE: With respect to any particular Note, every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purpose of this definition, any Note authenticated
and delivered under SECTION 2.5 in lieu of a mutilated, lost, destroyed or
stolen Note shall be deemed to evidence the same debt as the mutilated, lost,
destroyed or stolen Note.
PRIME RATE: The rate announced by First Union from time to time as its prime
rate in the United States, such rate to change as and when such designated rate
changes. The Prime Rate is not intended to be the lowest rate of interest
charged by First Union in connection with extensions of credit to debtors.
PROCEEDING: Any suit in equity, action at law or other judicial or
administrative proceeding.
RATING AGENCY: Each of Moody's and Standard & Poor's and any other rating agency
that has been requested to issue a rating with respect to the commercial paper
notes issued by any Note Investor.
REDEMPTION DATE: The Distribution Date specified by the Servicer or the Issuer
pursuant to SECTION 10.1.
REDEMPTION PRICE: An amount equal to the then Outstanding Amount of each class
of Notes being redeemed plus accrued and unpaid interest thereon, including any
Hedge Breakage Costs.
RESERVE ACCOUNT REQUIRED AMOUNT: 2.0% of the aggregate outstanding principal
balance of the Contracts as of July 31, 2000; PROVIDED, HOWEVER, that if both
the Class A Note Investor and the Class B Note Investor is an Issuer Affiliate,
the Reserve Account Required Amount shall be zero.
RESPONSIBLE OFFICER: (i) With respect to the Indenture Trustee, any officer
within the Corporate Trust Office of the Indenture Trustee, including any
managing director, vice president, assistant vice president, assistant
treasurer, assistant secretary, or any other officer of the Indenture Trustee
customarily performing functions similar to those performed by any of the above
designated officers and (ii) when used with respect to any other Person that is
not an individual, the president, any vice president or assistant vice president
or the controller of such Person, or any other officer or employee having
similar functions.
12
SECURED OBLIGATIONS: As the context may require, each of the Class A Secured
Obligations and/or the Class B Secured Obligations.
SECURED PARTIES: As the context may require, each of the Class A Secured Parties
and/or the Class B Secured Parties.
SECURITIES ACT: The Securities Act of 1933, as amended from time to time,
together with the rules and regulations in effect from time to time thereunder.
STATE: Any one of the 50 states of the United States of America or the District
of Columbia.
TERMINATION DATE: The earliest of (i) the day on which an Event of Default
occurs, or (ii) July 31, 2001 or such later date to which the Termination Date
may be extended, if extended, in the sole discretion of each Noteholder.
TRANSFER AND SERVICING AGREEMENT: The Transfer and Servicing Agreement dated as
of August 8, 2000, among the Issuer, the Transferor, the Servicer, ALACRC and
Wells Fargo Bank Minnesota, National Association as Backup Servicer Collateral
Custodian and Indenture Trustee.
TRIGGER EVENT: As defined in SECTION 5.3.
UCC: Unless the context otherwise requires, the Uniform Commercial Code, as in
effect in the relevant jurisdiction.
SECTION 1.2 OTHER TERMS.
All accounting terms used but not specifically defined herein shall be
construed in accordance with GAAP. All terms used in Article 9 of the UCC in the
State of New York, and used but not specifically defined herein, are used herein
as defined in such Article 9.
SECTION 1.3 COMPUTATION OF TIME PERIODS.
Unless otherwise stated in this Indenture, in the computation of a period
of time from a specified date to a later specified date, the word "from" means
"from and including" and the words "to" and "until" each mean "to but
excluding."
SECTION 1.4 INTERPRETATION.
In each Basic Document, unless a contrary intention appears:
(a) the singular number includes the plural number and vice versa;
(b) reference to any Person includes such Person's successors and assigns
but, if applicable, only if such successors and assigns are permitted by the
Basic Documents;
13
(c) reference to any gender includes each other gender;
(d) reference to any agreement (including any Basic Document), document or
instrument means such agreement, document or instrument as amended, supplemented
or modified and in effect from time to time in accordance with the terms thereof
and, if applicable, the terms of the other Basic Documents, and reference to any
promissory note includes any promissory note that is an extension or renewal
thereof or a substitute or replacement therefor; and
(e) reference to any Applicable Law means such Applicable Law as amended,
modified, codified, replaced or reenacted, in whole or in part, and in effect
from time to time, including rules and regulations promulgated thereunder and
reference to any section or other provision of any Applicable Law means that
provision of such Applicable Law from time to time in effect and constituting
the substantive amendment, modification, codification, replacement or
reenactment of such section or other provision.
ARTICLE II
THE NOTES
SECTION 2.1 FORM.
The Notes, together with the Indenture Trustee's certificate of
authentication, shall be in substantially the form set forth in EXHIBIT A 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 of the Notes. Any portion of the text of any Note may be set forth on
the reverse thereof, with an appropriate reference thereto on the face of the
Note.
Each Note shall be dated the date of its authentication. The terms of the
Notes set forth in EXHIBIT A and EXHIBIT B, respectively are part of the terms
of this Indenture.
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 original or facsimile.
(b) Notes bearing the original 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.
14
(c) The Indenture Trustee shall upon receipt of the Issuer Order,
authenticate and deliver the Class A Note and the Class B Note for original
issue in an aggregate principal amount of $19,204,362.00 and $979,453.00,
respectively. The Class A Notes and the Class B Notes outstanding at any time
may not exceed such respective amounts.
(d) Each Note shall be dated the date of its authentication. The Notes
shall be issuable as registered Notes in the minimum denomination of $100,000
and in integral multiples of $1,000 in excess thereof (except for one Note which
may be issued in a denomination other than an integral multiple of $1,000 in
excess thereof).
(e) No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears attached to 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 attached to any Note shall be
conclusive evidence, and the only evidence, that such Note has been duly
authenticated and delivered hereunder.
SECTION 2.3 [RESERVED].
SECTION 2.4 REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE.
(a) The Issuer shall cause to be maintained 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 Paying Agent shall be "NOTE REGISTRAR" for the purpose
of registering Notes and transfers of Notes as herein provided. Upon any
resignation of any Note Registrar, the Issuer shall promptly appoint a successor
or, if it elects not to make such an appointment, assume the duties of Note
Registrar.
(b) If a Person other than the Paying Agent is appointed by the Issuer as
Note Registrar, the Issuer will give the Indenture Trustee and the Paying Agent
prompt written notice of the appointment of such Note Registrar and of the
location, and any change in the location, of the Note Register, and the
Indenture Trustee and the Paying Agent shall have the right to inspect the Note
Register at all reasonable times and to obtain copies thereof. The Indenture
Trustee and the Paying Agent 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 Holders of the Notes and the principal amounts
and number of such Notes.
(c) Upon surrender for registration or transfer of any Note at the office
or agency of the Issuer to be maintained as provided in SECTION 3.2, and if the
requirements of Section 8-401(1) of the UCC are met, the Issuer shall execute
and cause the Indenture Trustee to authenticate one or more new Notes, in any
authorized denominations, and a like aggregate principal amount. A Noteholder
may also obtain from the Indenture Trustee, in the name of the designated
transferee or transferees one or more new Notes, in any authorized
denominations, and a like aggregate principal amount.
15
(d) At the option of the Holder, Notes may be exchanged for other Notes in
any authorized denominations, and a like aggregate principal amount, upon
surrender of the Notes to be exchanged at such office or agency. Whenever any
Notes are so surrendered for exchange, and if the requirements of Section
8-401(1) of the UCC are met, the Issuer shall execute and upon its request the
Indenture Trustee shall authenticate the Notes which the Noteholder making the
exchange is entitled to receive.
(e) All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
(f) Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument of
transfer in the form attached to EXHIBIT A and EXHIBIT B, as the case may be,
duly executed by the Holder thereof or such Holder's attorney duly authorized in
writing, with such signature guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar which requirements include
membership or participation in Securities Transfer Agents Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Note Registrar in addition to, or in substitution for, Stamp, all in
accordance with the Exchange Act, and (ii) accompanied by such other documents
as the Paying Agent may require.
(g) No service charge shall be made to a Holder 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 9.6 not involving any transfer.
(h) Notwithstanding, the preceding provisions of this Section, the Issuer
shall not be required to make, and the Note Registrar shall not register,
transfers or exchanges of Notes selected for redemption for a period of 15 days
preceding the due date for any payment with respect to the Note.
(i) Each transfer of a Note pursuant to this SECTION 2.4 shall comply in
all respects with the requirements of SECTION 2.14. The Note Registrar shall not
register any transfer of any Note that is not made in compliance with the
provisions of SECTION 2.14 and any transfer purported to be made that is not in
compliance with the provisions of SECTION 2.14 shall be null and void.
SECTION 2.5 MUTILATED, DESTROYED, LOST OR STOLEN NOTES.
(a) If (i) any mutilated Note is surrendered to the Indenture Trustee, or
the Indenture Trustee receives evidence to its satisfaction of the destruction,
loss or theft of any Note, and (ii) there is delivered to the Indenture Trustee
and the Issuer such security or indemnity as may be required by them 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
16
by a bona fide purchaser, and provided that the requirements of Section 8-405 of
the UCC are met, the Issuer shall execute and upon its request the Indenture
Trustee shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Note, a replacement Note; PROVIDED,
HOWEVER, that if any such destroyed, lost or stolen Note, but not a mutilated
Note, shall have become or within seven days shall be due and payable, or shall
have been called for redemption, the Issuer may, instead of issuing a
replacement Note, direct the Indenture Trustee, in writing, to pay such
destroyed, lost or stolen Note when so due or payable or upon the Redemption
Date without surrender thereof. If, after the delivery of such replacement Note
or payment of a destroyed, lost or stolen Note pursuant to the proviso to the
preceding sentence, a bona fide purchaser of the original Note in lieu of which
such replacement Note was issued presents such original Note for payment, 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 bona fide purchaser, and
shall be entitled to recover upon the security or indemnity provided therefor to
the extent of any loss, damage, cost or expense incurred by the Issuer or the
Indenture Trustee in connection therewith.
(b) Upon the issuance of any replacement Note under this Section, the
Issuer or the Indenture Trustee may require the payment by the Holder of such
Note of a sum sufficient to cover any tax or other governmental charge that may
be imposed in relation thereto and any other reasonable expenses (including the
fees and expenses of the Indenture Trustee or the Note Registrar) connected
therewith.
(c) Every replacement Note issued pursuant to this Section 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 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.6 PERSONS DEEMED OWNER.
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
Record Date) as the owner of such Note for the purpose of receiving payments of
principal of and interest, if any on such Note and for all other purposes
whatsoever, whether or not such Note be overdue, and none of the Issuer, the
Indenture Trustee nor any agent of the Issuer or the Indenture Trustee shall be
affected by notice to the contrary.
17
SECTION 2.7 PAYMENTS ON THE NOTES.
(a) The Notes shall accrue interest daily and such interest shall be
payable to the respective Noteholders on each Distribution Date. The Deal Agent
shall determine the Note Interest to be due on each Distribution Date and shall
advise the Servicer, the Paying Agent and the Indenture Trustee thereof on the
third Business Day preceding such Distribution Date. All payments of interest or
principal payable on any Note shall be paid to the Person in whose name such
Note (or one or more Predecessor Notes) is registered on the Record Date no
later than 11:00 am by wire transfer of immediately available funds to the
account specified by such Person on the Note Register. Notwithstanding the
foregoing, the final distribution in respect of any Note will be payable only
upon presentation and surrender of such Note at the office or agency maintained
for that purpose by the Note Registrar pursuant to SECTION 3.2 hereof. Any funds
represented by any such checks returned undelivered shall be held in accordance
with SECTION 3.3.
(b) 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 Note Interest Rate to the extent lawful. The Issuer
may pay such defaulted interest to the Persons who are Noteholders on a special
record date, which date shall be at least five Business Days prior to the
Distribution Date. The Issuer shall fix or cause to be fixed any such special
record date and Distribution Date, and, at least 15 days before any such special
record date, the Issuer shall mail to each Noteholder, the Paying Agent and the
Indenture Trustee a notice that states the special record date, the Distribution
Date and the amount of defaulted interest to be paid. The Issuer, the Indenture
Trustee and the other parties to the Basic Documents intend to contract in
strict compliance with applicable usury law from time to time in effect. In
furtherance thereof such Persons stipulate and agree that none of the terms and
provisions contained in the Basic Documents shall ever be construed to provide
for interest in excess of the maximum amount of interest permitted to be
contracted for, charged, or received by Applicable Law from time to time in
effect. Neither the Issuer nor any present or future guarantors, endorsers, or
other Persons hereafter becoming liable for payment of any Outstanding Amount or
any other obligation hereunder or under the Notes shall ever be liable for
unearned interest thereon or shall ever be required to pay interest thereon in
excess of the maximum amount that may be lawfully contracted for, charged, or
received under Applicable Law from time to time in effect, and the provisions of
this section shall control over all other provisions of the Basic Documents
which may be in conflict or apparent conflict herewith.
SECTION 2.8 CANCELLATION.
All Notes surrendered for payment, registration of transfer, exchange or
redemption shall, if surrendered to any Person other than the Indenture Trustee,
be delivered to the Indenture Trustee and shall be promptly canceled 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 canceled by the Indenture Trustee. No Notes shall be
authenticated in lieu of or in exchange for any Notes canceled as provided in
this Section, except as expressly permitted by this Indenture. All canceled
Notes may be held or disposed of by the Indenture Trustee in accordance with its
standard retention or disposal policy as in effect at the time unless
18
the Issuer shall direct by an Issuer Order that they be destroyed or returned to
it; provided that such Issuer Order is timely and the Notes have not been
previously disposed of by the Indenture Trustee.
SECTION 2.9 RELEASE OF COLLATERAL.
The Indenture Trustee shall, on or after the date on which the Notes have
been paid in full, release any remaining portion of the Collateral from the lien
created by this Indenture. The Indenture Trustee shall release property from the
lien created by this Indenture pursuant to this SECTION 2.9 only upon receipt of
an Issuer Request accompanied by an Officer's Certificate meeting the applicable
requirements of SECTION 11.1.
SECTION 2.10 INCREASED COSTS; CAPITAL ADEQUACY; ILLEGALITY.
(a) If either (i) the introduction of, any change (including, without
limitation, any change by way of imposition or increase of reserve requirements)
in, or any change in the interpretation of, any law or regulation or (ii) the
compliance by an Affected Party with any guideline or request, from any central
bank or other Governmental Authority (whether or not having the force of law),
shall (A) subject an Affected Party to any Tax (except for Taxes on the overall
net income of such Affected Party), duty or other charge with respect to the
Indenture or the Notes, or on any payment made hereunder, (B) impose, modify or
deem applicable any reserve requirement (including, without limitation, any
reserve requirement imposed by the Board of Governors of the Federal Reserve
System, but excluding any reserve requirement, if any, included in the
determination of Interest), special deposit or similar requirement against
assets of, deposits with or for the amount of, or credit extended by, any
Affected Party or (C) impose any other condition affecting a Note Investor's
rights hereunder, the result of which is to increase the cost to any Affected
Party or to reduce the amount of any sum received or receivable by an Affected
Party under this Agreement, then within ten days after demand by such Affected
Party (which demand shall be accompanied by a statement setting forth the basis
for such demand), the Issuer shall pay directly to such Affected Party such
additional amount or amounts as will compensate such Affected Party for such
additional or increased cost incurred or such reduction suffered.
(b) If either (i) the introduction of or any change in or in the
interpretation of any law, guideline, rule, regulation, directive or request or
(ii) compliance by any Affected Party with any law, guideline, rule, regulation,
directive or request from any central bank or other governmental authority or
agency (whether or not having the force of law), including, without limitation,
compliance by an Affected Party with any request or directive regarding capital
adequacy, has or would have the effect of reducing the rate of return on the
capital of any Affected Party as a consequence of its obligations hereunder or
arising in connection herewith to a level below that which any such Affected
Party could have achieved but for such introduction, change or compliance
(taking into consideration the policies of such Affected Party with respect to
capital adequacy) by an amount deemed by such Affected Party to be material,
then from time to time, within ten days after demand by such Affected Party
(which demand shall be accompanied by a statement setting forth the basis for
such demand), the Issuer shall pay directly to such Affected
19
Party such additional amount or amounts as will compensate such Affected Party
for such reduction.
(c) If as a result of any event or circumstance similar to those described
in clauses (a) or (b) of this section, any Affected Party is required to
compensate a bank or other financial institution providing liquidity support,
credit enhancement or other similar support to such Affected Party in connection
with this Agreement or the funding or maintenance of the Notes hereunder, then
within ten days after demand by such Affected Party, the Issuer shall pay to
such Affected Party such additional amount or amounts as may be necessary to
reimburse such Affected Party for any amounts payable or paid by it.
(d) In determining any amount provided for in this section, the Affected
Party may use any reasonable averaging and attribution methods. Any Affected
Party making a claim under this section shall submit to the Servicer a written
description as to such additional or increased cost or reduction and the
calculation thereof, which written description shall be conclusive absent
demonstrable error.
(e) If a Note Investor shall notify the Deal Agent that a Eurodollar
Disruption Event as described in clause (i) of the definition of "Eurodollar
Disruption Event" has occurred, the Deal Agent shall in turn so notify the
Issuer, whereupon the Outstanding Amount in respect of which interest accrues at
the Adjusted Eurodollar Rate shall immediately accrue at the Base Rate.
SECTION 2.11 TAXES.
(a) All payments made by the Issuer or the Servicer under this Indenture
will be made free and clear of and without deduction or withholding for or on
account of any Taxes. If any Taxes are required to be withheld from any amounts
payable to the Deal Agent, the Liquidity Agent or any Secured Party, then the
amount payable to such Person will be increased (such increase, the "ADDITIONAL
AMOUNT") such that every net payment made under this Agreement after withholding
for or on account of any Taxes (including, without limitation, any Taxes on such
increase) is not less than the amount that would have been paid had no such
deduction or withholding been deducted or withheld. The foregoing obligation to
pay Additional Amounts, however, will not apply with respect to net income or
franchise taxes imposed on a Note Investor or the Deal Agent, respectively, with
respect to payments required to be made by the Issuer or the Servicer under this
Indenture, by a taxing jurisdiction in which such Note Investor or the Deal
Agent is organized, conducts business or is paying taxes as of the Closing Date
(as the case may be).
(b) The Issuer will indemnify each Affected Party for the full amount of
Taxes payable by such Person in addition to Additional Amounts and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto. All payments in respect of this indemnification shall be made within
ten days from the date a written invoice therefor is delivered to the Issuer.
20
(c) Within 30 days after the date of any payment by the Issuer of any
Taxes in connection with a deduction or withholding described in subsection (a)
above, the Issuer will furnish to the Deal Agent, at its address set forth under
its name on the signature pages hereof, appropriate evidence of payment thereof.
(d) If a Note Investor is not created or organized under the laws of the
United States or a political subdivision thereof, such Note Investor shall
deliver to the Issuer, with a copy to the Deal Agent, (i) within 15 days after
the date hereof, or, if such Note Investor becomes a Note Investor after the
Closing Date, the date on which such Note Investor becomes a Note Investor
hereunder, two (or such other number as may from time to time be prescribed by
Applicable Law) duly completed copies of IRS Form W-8BEN or Form W-8ECI (or any
successor forms or other certificates or statements that may be required from
time to time by the relevant United States taxing authorities or Applicable
Law), as appropriate, to permit the Issuer to make payments hereunder for the
account of such Note Investor, as the case may be, without deduction or
withholding of United States federal income or similar Taxes and (ii) upon the
obsolescence of or after the occurrence of any event requiring a change in, any
form or certificate previously delivered pursuant to this SECTION 2.11(D),
copies (in such numbers as may from time to time be prescribed by Applicable
Law) of such additional, amended or successor forms, certificates or statements
as may be required under Applicable Law to permit the Issuer to make payments
hereunder for the account of such Note Investor, without deduction or
withholding of United States federal income or similar Taxes.
(e) If, in connection with an agreement or other document providing
liquidity support, credit enhancement or other similar support to the Note
Investors in connection with this Indenture or the funding or maintenance of the
Outstanding Amount hereunder, the Note Investors are required to compensate a
bank or other financial institution in respect of Taxes under circumstances
similar to those described in this section, then within 10 days after demand by
the Note Investors, the Issuer shall pay to the Note Investors such additional
amount or amounts as may be necessary to reimburse the Note Investors for any
amounts paid by them.
(f) Without prejudice to the survival of any other agreement of the Issuer
hereunder, the agreements and obligations of the Issuer contained in this
section shall survive the termination of this Indenture.
SECTION 2.12 [RESERVED].
SECTION 2.13 [RESERVED].
SECTION 2.14 CERTAIN TRANSFER RESTRICTIONS.
No Note may be sold or transferred (including, without limitation, by
pledge or hypothecation) unless such sale or transfer is (i) pursuant to a valid
registration under the Securities Act and any applicable state securities or
"Blue Sky" laws, (ii) pursuant to Rule 144A or (iii) pursuant to another
exemption from the registration requirements of the Securities Act, and, in each
case, in compliance with any applicable state securities or "Blue Sky" laws.
Prior to
21
any sale or transfer of the Notes described in clauses (ii) and (iii) above,
each prospective purchaser of the Notes will be deemed to have represented to
the Indenture Trustee and the Note Registrar and agreed as follows:
(1) It is a qualified institutional buyer as defined in Rule 144A and is
acquiring the Notes for its own institutional account or for the account of a
qualified institutional buyer.
(2) The purchaser understands that the Notes are being offered in a
transaction not involving any public offering in the United States within the
meaning of the Securities Act, that the Notes have not been registered under the
Securities Act and that (A) the Notes may be offered, resold, pledged or
otherwise transferred only (i) to a person who the seller reasonably believes is
a qualified institutional buyer in a transaction meeting the requirements of
Rule 144A, in a transaction meeting the requirements of Rule 144A under the
Securities Act, (ii) to the Transferor or (iii) pursuant to an effective
registration statement, and in each case, in accordance with any applicable laws
of any State of the United States or any other applicable jurisdiction and (B)
the purchaser will, and each subsequent holder is required to, notify any
subsequent purchaser from it of the resale restrictions set forth in (A) above.
(3) It understands that the Notes will bear a legend substantially as set
forth in SECTION 2.15.
(4) It acknowledges that the Indenture Trustee, the Issuer, and their
Affiliates, and others will rely upon the truth and accuracy of the foregoing
acknowledgments, representations and agreements. If it is acquiring any Notes
for the account of one or more qualified institutional buyers, it represents
that it has sole investment discretion with respect to each such account and
that it has full power to make the foregoing acknowledgments, representations
and agreements on behalf of each such account.
(5) It is not acquiring the Notes with plan assets of any "employee
benefit plan" subject to Title I of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), or any "plan" subject to Section 4975 of the Code
(a "PLAN ENTITY") unless its purchase and holding of the Notes will not result
in a non-exempt prohibited transaction under Section 406(a) of ERISA or Section
4975 of the Code.
In addition, such prospective purchaser shall be responsible for providing
additional information or certification, as shall be reasonably requested by the
Indenture Trustee or the Issuer, to support the truth and accuracy of the
foregoing acknowledgments, representations and agreements, it being understood
that such additional information is not intended to create additional
restrictions on the transfer of the Notes. Neither the Issuer nor the Indenture
Trustee is obligated to register the Notes under the Securities Act or any state
securities laws.
In determining compliance with the transfer restrictions contained in this
SECTION 2.14, the Indenture Trustee may rely upon a written opinion of counsel
(which may include in-house counsel of the transferor), the cost of obtaining
which shall be an expense of the Holder of the Note to be transferred.
22
Notwithstanding any provision to the contrary herein contained, each of
the parties recognize and hereby agree that the Initial Class A Noteholder and
the Initial Class B Noteholder may each transfer any portion or all of its
respective right, title and interest in, to and under any Note owned by it to
any Person from time to time providing liquidity or credit support to such
Noteholder without compliance with the provisions of this SECTION 2.14 (other
than the provisions set forth in the first sentence of this SECTION 2.14);
PROVIDED, HOWEVER, that no such transferee may be an employee benefit plan,
trust, annuity or account subject to ERISA or a plan described in SECTION
4975(E)(1) of the code, an indenture trustee of any of the foregoing, or an
entity, account or other pooled investment fund the underlying assets of which
include or are deemed to include assets of any of the foregoing.
SECTION 2.15 LEGENDING OF NOTES.
Each Note shall bear a legend in substantially the following form:
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933) (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED
HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE
SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE
BENEFIT OF THE ISSUER THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (1) INSIDE THE UNITED STATES TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A
UNDER THE SECURITIES ACT, (2) TO THE SELLER OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY OTHER
APPLICABLE SECURITIES LAW OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY TO
THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
IN NO EVENT SHALL THIS SECURITY BE TRANSFERRED TO AN EMPLOYEE BENEFIT
PLAN, TRUST ANNUITY OR ACCOUNT SUBJECT TO ERISA OR A PLAN DESCRIBED IN SECTION
4975(E)(1) OF THE CODE, (ANY SUCH PLAN, TRUST OR ACCOUNT BEING REFERRED TO AS AN
"EMPLOYEE PLAN"), AN INDENTURE TRUSTEE OF ANY EMPLOYEE PLAN, OR AN ENTITY,
ACCOUNT OR OTHER POOLED INVESTMENT FUND THE UNDERLYING ASSETS OF WHICH INCLUDE
OR ARE DEEMED TO INCLUDE EMPLOYEE PLAN ASSETS BY REASON OF AN EMPLOYEE
23
PLAN'S INVESTMENT IN THE ENTITY, ACCOUNT OR OTHER POOLED INVESTMENT FUND, UNLESS
THE ACQUISITION OR TRANSFER AND CONTINUED HOLDING OF THE NOTES WILL NOT, AND BY
ITS ACCEPTANCE AND HOLDING OF ANY NOTES, THE TRANSFEREE WILL BE DEEMED TO
REPRESENT AND WARRANT THAT ITS ACQUISITION AND HOLDING OF THE NOTES WILL NOT,
RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406(a) OF ERISA OR
SECTION 4975 OF THE CODE. INCLUDED WITHIN THE DEFINITION OF "EMPLOYEE PLANS"
ARE, WITHOUT LIMITATION, KEOGH (HR-10) PLANS, IRA's (INDIVIDUAL RETIREMENT
ACCOUNTS OR ANNUITIES) AND OTHER EMPLOYEE BENEFIT PLANS, SUBJECT TO SECTION 406
OF ERISA OR SECTION 4975 OF THE CODE.
SECTION 2.16 PROVISION OF INFORMATION TO PROSPECTIVE PURCHASERS; RULE 144A
MATTERS.
For so long as any of the Notes remain outstanding and are "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities Act, the
Issuer shall provide the Indenture Trustee and the Indenture Trustee shall, upon
the request of any Holder of such Note, make available to such Holder and any
prospective purchaser of such Note designated by such Holder the information
specified in, and meeting the requirements of, Rule 144A(d)(4) under the
Securities Act.
ARTICLE III
COVENANTS
SECTION 3.1. DISTRIBUTIONS.
The Issuer will duly and punctually pay the principal of and interest on
the Notes in accordance with the terms of the Notes and this Indenture. Without
limiting the foregoing, the Issuer will cause the Paying Agent to distribute all
amounts on deposit in the Collection Account on each Distribution Date, in the
order of priority set forth within the following subsections:
(a) beginning with the Distribution Date in September 2000, to the extent
of the sum of (i) the Class A Collections received for the related Collection
Period, (ii) the Required Reserve Account Withdrawal (if any) and (iii) any
Investment Earnings from the Class A Sub-Account and the Reserve Account
received in the related Collection Period:
(A) to each Hedge Counterparty under any Class A Hedge Transaction,
any amounts owing to such Hedge Counterparty in respect of the related
Hedge Transaction;
(B) to the Servicer, the Servicing Fee accrued for the related
Collection Period (or, if the Back-Up Servicer has assumed servicing
duties, the Servicing Fee as calculated pursuant to Section 4.9(b) of the
Transfer and Servicing Agreement, all Transition Costs and its
out-of-pocket expenses not previously reimbursed pursuant to Section
6.7(a));
24
(C) to the Backup Servicer, the Backup Servicer Fee and its
out-of-pocket expenses not previously reimbursed pursuant to Section
6.7(a);
(D) to the Collateral Custodian, the Collateral Custodian Fee and
its out-of-pocket expenses not previously reimbursed pursuant to Section
6.7(a);
(E) to the Class A Note Investor, the related Note Interest accrued
during the related Interest Period and any past due interest;
(F) to the Deal Agent, amounts to cover Increased Costs related to
any Class A Note Investor;
(G) to the Class A Note Investor, the Class A Targeted Principal
Amount;
(H) prior to the Termination Date or the occurrence of a Trigger
Event, to the Reserve Account, until such time as the amount on deposit in
the Reserve Account is equal to the Reserve Account Required Amount;
(I) after (i) the Termination Date or (ii) the occurrence of a
Trigger Event (for so long as such Trigger Event occurs), to the Class A
Note Investor to reduce the balance of the Class A Note until the Class A
Note is paid in full;
(b) beginning with the Distribution Date in September 2000, to the extent
of the sum of (i) the Class B Collections received for the related Collection
Period, (ii) all amounts remaining after all payments to be made pursuant to
CLAUSE (A) above and (iii) any Investment Earnings from the Class B Sub-Account
received in the related Collection Period:
(A) to each Hedge Counterparty under a Class B Hedge Transaction,
any amounts owing to such Hedge Counterparty in respect of the related
Hedge Transaction;
(B) to the Backup Servicer, the Backup Servicer Fee and its
out-of-pocket expenses to the extent not paid pursuant to SECTION
3.1(A)(C);
(C) to the Collateral Custodian, the Collateral Custodian Fee and
its out-of-pocket expenses not paid pursuant to SECTION 3.1(A)(D);
(D) to the Class B Note Investor, the related Note Interest accrued
during the related Interest Period and any past due interest;
(E) to the Deal Agent, amounts to cover Increased Costs related to
any Class B Note Investor;
(F) all remaining amounts shall be used to reduce the principal
balance of the Class B Note until the Class B Note is paid in full;
25
(c) on the first Distribution Date after the occurrence of the Termination
Date, the Termination Date Reserve Account Withdrawal Amount shall be
distributed to the Class A Note Investor for application to the reduction to
zero of the Class A Outstanding Amount;
(d) on the Distribution Date in August 2000, to the Class A Investor, the
August 2000 Class A Distribution Amount, to be applied to the reduction of the
Class A Outstanding Amount and, to the Class B Investor, the August 2000 Class B
Distribution Amount, to be applied to the reduction of the Class B Outstanding
Amount; and
(e) any amounts remaining in the Collection Account on a Distribution Date
(other than the Distribution Date in August 2000) after distributions have been
made pursuant to CLAUSES (A), (B) and (C) above, shall be distributed to the
Issuer.
26
SECTION 3.2. MAINTENANCE OF OFFICE OR AGENCY.
The Issuer will maintain in Charlotte, North Carolina, an office or agency
where Notes may be surrendered for registration of transfer or exchange of the
Notes, 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
Note Registrar to serve as its agent for the foregoing purposes. The Issuer will
give prompt written notice to the Note Registrar 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
Note Registrar 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 Note Registrar as its agent to receive all such surrenders, notices
and demands.
SECTION 3.3. MONEY FOR PAYMENTS TO BE HELD IN TRUST.
(a) On or before each Distribution Date and Redemption Date, the Issuer
shall deposit or cause to be deposited in the Collection Account all
Collections, such amounts to be held in trust for the benefit of the Persons
entitled thereto and shall promptly notify the Indenture Trustee of its action
or failure so to act.
(b) First Union shall act as the initial Paying Agent hereunder and is
hereby authorized by the Issuer to make payments to and distributions from the
Collection Account.
(c) The Paying Agent hereby agrees with the Indenture Trustee, subject to
the provisions of this Section, to:
(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
of which it has actual knowledge (or any other obligor upon the Notes) in
the making of any payment required to be made with respect to the Notes;
(iii) at any time during the continuance of any such default, upon
the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of Notes if
at any time it ceases to meet the standards required to be met by a Paying
Agent at the time of its appointment; and
27
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith.
(d) [Reserved].
(e) Subject to applicable laws with respect to the escheat of funds, any
money held by the Paying Agent in trust for the payment of any amount due with
respect to any Note and remaining unclaimed for two years after such amount has
become due and payable shall be discharged from such trust and be paid to the
Issuer on Issuer Request and shall be deposited by the Paying Agent in the
Collection Account; and the Holder of such Note shall thereafter, as an
unsecured general creditor, look only to the Issuer for payment thereof (but
only to the extent of the amounts so paid to the Issuer), and all liability of
the Paying Agent with respect to such trust money shall thereupon cease;
PROVIDED, HOWEVER, that the Paying Agent, before being required to make any such
repayment to the Issuer, shall at the expense 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 30 days from the date of such publication,
any unclaimed balance of such money then remaining will be repaid to the Issuer.
The Paying Agent shall also adopt and employ, at the expense of the Issuer, any
other reasonable means of notification of such repayment (including, but not
limited to, mailing notice of such repayment to Holders whose Notes have been
called but have not been surrendered for redemption or whose right to or
interest in moneys due and payable but not claimed is determinable from the
records of the Indenture Trustee or of the Paying Agent, at the last address of
record for each such Holder).
SECTION 3.4. EXISTENCE.
(a) The Issuer will keep in full effect its existence, rights and
franchises as a limited partnership under the laws of the State of Delaware and
will 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 Collateral.
(b) The Issuer will do all things necessary to maintain its corporate
existence separate and apart from the Transferor and the Servicer and all other
Affiliates of the Transferor and the Servicer, including, without limitation,
(i) practicing and adhering to partnership formalities, such as maintaining
appropriate books and records; (ii) having a general partner which is a limited
purpose limited liability company with a member that is a corporation having a
board of directors at least one member of which is not an officer, director or
employee of any of its Affiliates; (iii) refraining from holding itself out as
responsible for debts of any of its Affiliates or for decisions or actions with
respect to the affairs of any of its Affiliates; (iv) maintaining all of its
deposit and other bank accounts and all of its assets separate from those of any
other Person; (v) maintaining all of its financial records separate and apart
from those of any other
28
Person and ensuring the Servicer's consolidated financial statements relating to
the Issuer and its Affiliates on a consolidated basis contain appropriate
disclosures concerning the Issuer's separate existence; (vi) accounting for and
managing all of its liabilities separately from those of any of its Affiliates;
(vii) refraining from filing or otherwise initiating or supporting the filing of
a motion in any bankruptcy or other insolvency proceeding involving the Issuer,
the Transferor, the Servicer or any other Affiliate of the Issuer to
substantively consolidate assets and liabilities of the Issuer with the assets
and liabilities of any such Person or any other Affiliate of the Issuer; (viii)
maintaining adequate capitalization in light of its business and purpose; and
(ix) conducting all of its business (whether written or oral) solely in its own
name.
SECTION 3.5. PROTECTION OF COLLATERAL.
The Issuer intends the security interests Granted pursuant to this
Indenture in favor of the Secured Parties to be prior to all other liens in
respect of the Collateral, and the Issuer shall take all actions necessary to
obtain and maintain, in favor of the Collateral Agent on behalf of the Indenture
Trustee, for the benefit of the Class A Secured Parties and the Class B Secured
Parties, respectively, a first lien on and a first priority, perfected security
interest in the Class A Collateral or the Class B Collateral, as the case may
be. The Issuer will from time to time prepare (or cause to be prepared), execute
and deliver all such supplements and amendments hereto and all such financing
statements, continuation statements, instruments of further assurance and other
instruments, and will take such other action necessary or advisable to:
(i) Grant more effectively all or any portion of the Collateral to
the related Secured Party;
(ii) maintain or preserve the liens and security interests (and the
priorities thereof) in favor of the Collateral Agent on behalf of the
Indenture Trustee for the benefit of the respective Secured Parties
created by this Indenture or carry out more effectively the purposes
hereof,
(iii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(iv) enforce any of the Collateral;
(v) preserve and defend title to the Collateral and the rights of
the Indenture Trustee in such Collateral against the claims of all persons
and parties; and
(vi) pay all taxes or assessments levied or assessed upon the
Collateral when due.
The Issuer hereby designates the Collateral Agent as its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required by this Section.
29
SECTION 3.6 OPINIONS AS TO COLLATERAL.
(a) On the Closing Date, the Issuer shall furnish to the Indenture Trustee
and the Deal Agent an Opinion of Counsel either stating that, in the opinion of
such counsel, such action has been taken with respect to the recording and
filing of this Indenture, any indentures supplemental hereto, and any other
requisite documents, and with respect to the execution and filing of any
financing statements and continuation statements, as are necessary to perfect
and make effective the first priority lien and security interest in favor of the
Collateral Agent on behalf of the Indenture Trustee, for the benefit of the
Secured Parties, created by this Indenture and reciting the details of such
action, or stating that, in the opinion of such counsel, no such action is
necessary to make such lien and security interest effective.
(b) Within 120 days after the beginning of each calendar year, beginning
with the first calendar year beginning more than six months after the Closing
Date, the Issuer shall furnish to the Indenture Trustee, Collateral Agent and
the Deal Agent either (i) an Opinion of Counsel 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, with respect to possession of the Contracts
by the Collateral Custodian and with respect to the execution and filing of any
financing statements and continuation statements as are necessary to maintain
the lien and security interest created by this Indenture and reciting the
details of such action or (ii) an Officer's Certificate stating that no such
action is necessary to maintain such lien and security interest and stating that
no event or occurrence that would necessitate or require any action to be taken
to maintain such lien and security interest has occurred. The Opinion of Counsel
set forth in clause (i) above shall also describe the recording, filing,
re-recording and refiling of this Indenture, any indentures supplemental hereto
and any other requisite documents and the execution and filing of any financing
statements and continuation statements that will, in the opinion of such
counsel, be required to maintain the lien and security interest of this
Indenture until January 30 in the following calendar year.
SECTION 3.7 PERFORMANCE OF OBLIGATIONS; SERVICING OF CONTRACTS.
(a) The Issuer will not take any action and will 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 Collateral or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any such instrument or agreement, except as
ordered by any bankruptcy or other court or as expressly provided in this
Indenture, the other Basic Documents or such other instrument or agreement.
(b) The Issuer may contract with other Persons acceptable to the Deal
Agent 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 to assist the
Issuer in performing its duties under this Indenture.
30
(c) The Issuer will punctually perform and observe all of its obligations
and agreements contained in this Indenture, the Basic Documents and in the
instruments and agreements included in the Collateral, including but not limited
to preparing (or causing to be prepared) and filing (or causing to be filed) all
UCC financing statements and continuation statements required to be filed by the
terms of this Indenture and the Transfer 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 this Indenture or any provision hereof without the
consent of the Indenture Trustee, the Deal Agent and the Holders of at least a
majority of the Outstanding Amount of the Class A Notes and the Class B Notes.
(d) If a Responsible Officer of the Issuer shall have actual knowledge of
the occurrence of a Servicer Termination Event under the Transfer and Servicing
Agreement, the Issuer shall promptly notify the Indenture Trustee and the Rating
Agencies thereof in accordance with SECTION 11.4, and shall specify in such
notice the action, if any, the Issuer is taking in respect of such default. If a
Servicer Termination Event shall arise from the failure of the Servicer to
perform any of its duties or obligations under the Transfer and Servicing
Agreement with respect to the Contracts, the Issuer shall take all reasonable
steps available to it to remedy such failure.
(e) The Issuer agrees that it will not waive timely performance or
observance by the Servicer or the Transferor of their respective duties under
the Basic Documents (x) without the prior consent of the Deal Agent), or (y) if
the effect thereof would adversely affect the Holders of the Notes.
SECTION 3.8 HEDGE REQUIREMENTS.
The Issuer shall enter into one or more Hedge Transactions for the Class A
Note and the Class B Note, respectively, for the purpose of hedging its
obligations under this Indenture, provided that each such Hedge Transaction
shall be entered into with a Hedge Counterparty and governed by a Hedging
Agreement and all payments made by the Hedge Counterparty with respect to each
such Hedge Transaction shall be made to the Collection Account. As additional
security hereunder, Issuer hereby assigns to the Indenture Trustee on behalf of
the Holders of the Class A Note and the Class B Note, respectively, all right,
title and interest of Issuer in each related Hedging Agreement, each related
Hedge Transaction, and all present and future amounts payable by a related Hedge
Counterparty to the Issuer under or in connection with the respective Hedging
Agreement and Hedge Transaction(s) with that Hedge Counterparty ("HEDGE
COLLATERAL"), and grants a security interest to the Collateral Agent on behalf
of the Indenture Trustee for the benefit of the Class A Secured Parties and the
Class B Secured Parties in the Class A Collateral and the Class B Collateral,
respectively. Issuer acknowledges that, as a result of that assignment, Issuer
may not, without the prior written consent of the Class A Note Investor and the
Class B Note Investor, respectively, exercise any rights under any related
Hedging Agreement or Hedge Transaction, except for Issuer's right under any
Hedging Agreement to enter into Hedge Transactions in order to meet the Issuer's
obligations under this Section 3.8.
31
Nothing herein shall have the effect of releasing the Issuer from any of its
obligations under any Hedging Agreement or any Hedge Transaction, nor be
construed as requiring the consent of any Secured Party to the performance by
the Issuer of any such obligations. The Issuer shall enter into one or more ISDA
Master Agreements, together with related schedules thereto, each in form and
substance satisfactory to the Deal Agent, no later than August 22, 2000.
SECTION 3.9 NEGATIVE COVENANTS.
So long as any Notes are Outstanding, the Issuer shall not:
(i) except as expressly permitted by this Indenture or the other
Basic Documents, sell, transfer, exchange or otherwise dispose of any of
the properties or assets of the Issuer, including those included in the
Collateral, unless directed to do so by the Deal Agent;
(ii) claim any credit on, or make any deduction from the payment of
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 any part of the Collateral; or
(iii) (A) permit the validity or effectiveness of this Indenture to
be impaired, or permit the lien in favor of the Indenture Trustee created
by 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 Collateral or any part thereof or any interest therein or the
proceeds thereof (other than tax liens, mechanics liens and other liens
that arise subsequent to the Closing Date by operation of law, in each
case on a Financed Vehicle and arising solely as a result of an action or
omission of the related Obligor), (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 Collateral or
(D) amend, modify or fail to comply with the provisions of the Basic
Documents without the prior written consent of the Deal Agent.
32
SECTION 3.10 ANNUAL STATEMENT AS TO COMPLIANCE.
The Issuer will deliver to the Indenture Trustee and the Deal Agent,
within 120 days after the end of each fiscal year of the Issuer (commencing with
the fiscal year ended April 30, 2001) an Officer's Certificate stating that
(i) a review of the activities of the Issuer during such year and of
performance under this Indenture has been made under such Authorized
Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based on
such review, the Issuer has complied in all material respects with all
conditions and covenants under this Indenture throughout such year, or, if
there has been a default in the compliance of any such condition or
covenant, specifying each such default known to such Authorized Officer
and the nature and status thereof.
SECTION 3.11 ISSUER MAY NOT CONSOLIDATE.
The Issuer will not merge or consolidate with, or convey, transfer, lease
or otherwise dispose of any of its assets (whether now owned or hereafter
acquired) except as expressly permitted under the Basic Documents, or acquire
all or substantially all of the assets or capital stock or other ownership
interest of any Person, other than, with respect to asset dispositions, in
connection herewith.
SECTION 3.12 AMENDMENT TO PARTNERSHIP AGREEMENT
The Issuer will not amend, modify or otherwise make any change to its
partnership agreement or its certificate of formation to delete or otherwise
nullify or circumvent the provisions set forth on EXHIBIT D hereto.
SECTION 3.13 NO OTHER BUSINESS.
The Issuer shall not engage in any business other than the purchase of
Contracts and other Collateral from the Transferor, the financing and/or resale
of such Contracts and other Collateral and the other transactions permitted or
contemplated by this Indenture and the Basic Documents and activities incidental
thereto.
SECTION 3.14 NO BORROWING.
The Issuer shall not issue, incur, assume, guarantee or otherwise become
liable, directly or indirectly, for any Indebtedness except for (i) the Notes,
(ii) any Hedge Transaction or (iii) any other Indebtedness permitted by or
arising under the Basic Documents. The proceeds of the Notes shall be used
exclusively to fund the Issuer's purchase of the Contracts and other Collateral
and the other assets specified in the Transfer and Servicing Agreement, to fund
the Reserve Account and to pay the Issuer's organizational, transactional and
start-up expenses.
33
SECTION 3.15 SERVICER'S OBLIGATIONS.
The Issuer shall cause the Servicer to comply with Sections 4.9
(Servicer's Certificate), 4.10 (Annual Statement of Compliance, Notice of
Servicer Termination Event) and 4.11 (Annual Independent Accountants' Report).
SECTION 3.16 GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES.
Except as contemplated by the Transfer and Servicing Agreement or this
Indenture, the Issuer shall not make any loan or advance or credit to, or
guarantee (directly or indirectly or by an instrument having the effect of
assuring another's payment or performance on any obligation or capability of so
doing or otherwise), endorse or otherwise become contingently liable, directly
or indirectly, in connection with the obligations, stocks or dividends of, or
own, purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person.
SECTION 3.17 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 3.18 COMPLIANCE WITH LAWS.
The Issuer shall comply with the requirements of all Applicable Laws, the
non-compliance with which would, individually or in the aggregate, materially
and adversely affect the ability of the Issuer to perform its obligations under
the Notes, this Indenture or any Basic Document.
SECTION 3.19 RESTRICTED PAYMENTS.
The Issuer shall not, directly or indirectly, (i) except to the extent and
in such amount that funds have been distributed to the Issuer pursuant to
SECTION 3.1(C), pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof to any general partner or limited partner of the Issuer or otherwise
with respect to any partnership interest or security in or of the Issuer, or to
the Servicer, (ii) redeem, purchase, retire or otherwise acquire for value any
such ownership or equity interest or security or (iii) set aside or otherwise
segregate any amounts for any such purpose; PROVIDED, HOWEVER, that the Issuer
may make, or cause to be made distributions to the Servicer, the Deal Agent and
the Indenture Trustee as permitted by, and to the extent funds are available for
such purpose under, the Transfer and Servicing Agreement. The Issuer will not,
directly or indirectly, make payments to or distributions from the Collection
Account except in accordance with this Indenture and the Basic Documents.
34
SECTION 3.20 NOTICE OF EVENTS OF DEFAULT.
Upon a general partner (or a Responsible Officer thereof) of the Issuer
having actual knowledge thereof, the Issuer agrees to give the Transferor, the
Servicer, the Indenture Trustee, the Deal Agent prompt written notice of each
Event of Default hereunder and each default on the part of the Servicer or the
Transferor of its obligations under the Transfer and Servicing Agreement.
SECTION 3.21 FURTHER INSTRUMENTS AND ACTS.
Upon request of the Indenture Trustee or the Deal Agent, 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 purposes of
this Indenture.
SECTION 3.22 AMENDMENTS OF TRANSFER AND SERVICING AGREEMENT.
The Issuer shall not agree to any amendment to Section 13.1 of the
Transfer and Servicing Agreement to eliminate the requirements thereunder unless
the Indenture Trustee, the Deal Agent or the Holders of the Notes consent to
amendments thereto as provided therein.
SECTION 3.23 INCOME TAX CHARACTERIZATION.
For purposes of federal income, state and local income and franchise and
any other income taxes, the Issuer shall treat the Notes as indebtedness of the
Issuer and hereby instructs the Indenture Trustee to treat such Notes as
indebtedness of the Issuer for federal state tax reporting purposes.
SECTION 3.24 TRANSACTIONS WITH AFFILIATES.
The Issuer shall not enter into, or be a party to, any transaction with
any of its Affiliates, except the transactions permitted or contemplated by this
Indenture or any other Basic Document.
SECTION 3.25 LOCATION OF OFFICES; CORPORATE NAME.
The Issuer shall not, without providing 30 days prior written notice to
the Indenture Trustee and without filing such amendments to any previously filed
financing statements as the Secured Parties may require (a) change the location
of its principal executive office, or (b) change its name, identity or corporate
structure in any manner which would make any financing statement or continuation
statement filed by the Issuer in accordance with this Indenture misleading
within the meaning of Article 9-402(7) of any applicable enactment of the UCC.
The Issuer shall at all times maintain each office in which it holds or services
Contracts and its principal executive office within the United States of
America.
35
SECTION 3.26 [RESERVED].
SECTION 3.27 MAINTENANCE OF BOOKS AND RECORDS; INSPECTIONS.
The Issuer shall maintain its books and records separate from the books
and records of any other entity. The officers of the Deal Agent, or such
employees of the Deal Agent as the Deal Agent may designate, with reasonable
notice, may visit and inspect any of the properties of the Issuer, examine
(either by the Deal Agent or the Deal Agent's agents or employees) any of the
Collateral, or other assets of the Issuer, including the books of account of the
Issuer, and discuss the affairs, finances and accounts of the Issuer with its
officers and with its independent accountants, at such times as they may
reasonably desire.
The Deal Agent may conduct at any time, with reasonable notice, and from
time to time, and the Issuer will fully cooperate with, field examinations and
audits of the inventory, Contracts and business affairs of the Issuer. Such
examination will be conducted no more than twice per year, except upon the
occurrence of any material adverse change in the financial condition of a
Issuer. The Issuer shall reimburse the Deal Agent for all out-of-pocket costs
and expenses in connection with such examinations.
SECTION 3.28 NO COMMINGLING.
The Issuer shall maintain separate bank accounts and no funds of the
Issuer shall be commingled with funds of any other entity.
SECTION 3.29 YEAR 2000 COMPATIBILITY.
The Issuer shall take all necessary action to assure that, after January
1, 2000, the Issuer's computer system is able to operate and effectively process
data including dates on and after January 1, 2000. At the request of the Deal
Agent, the Issuer shall provide assurance acceptable to the Deal Agent of the
Issuer's Year 2000 compatibility.
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, 3.13, 3.20, 3.21 and 3.22, (v) the
rights, obligations and immunities of the Indenture Trustee hereunder (including
the rights of the Indenture Trustee under SECTION 6.7 and the obligations of the
Indenture Trustee under SECTION 4.2) and (vi) the rights of Noteholders as
beneficiaries hereof with respect to the property so deposited with the
Indenture Trustee payable to all or any of them, and the Indenture Trustee, on
36
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 2.5 and (ii) Notes for the payment
of which 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
(i) have become due and payable,
(ii) are to be called for redemption within one year under
arrangements satisfactory to the Indenture Trustee for the giving of
notice of redemption by the Indenture Trustee in the name, and at
the expense, of the Issuer,
and the Issuer, in the case of (i) or (ii) above, has irrevocably deposited or
caused to be irrevocably deposited with the Indenture Trustee cash or direct
obligations of or obligations guaranteed by the United States of America (which
will mature prior to the date such amounts are payable), in trust for such
purpose, in an amount sufficient to pay and discharge the entire indebtedness on
such Notes not theretofore called for redemption pursuant to SECTION 10.1
Redemption Date;
(B) the Issuer has delivered to the Indenture Trustee and the Deal Agent
an Officer's Certificate (and, if required, an Opinion of Counsel), meeting the
applicable requirements of SECTION 11.1(A) and stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
SECTION 4.2 APPLICATION OF MONEY HELD IN TRUST.
All moneys deposited with the Paying Agent 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 of all sums due and to become due
thereon for principal and interest to the Holders of the particular Notes for
the payment or redemption of which such moneys have been deposited with the
Paying Agent; but such moneys need not be segregated from other funds except to
the extent required herein or in the Transfer and Servicing Agreement or
required by law.
SECTION 4.3 REPAYMENT OF MONIES HELD BY PAYING AGENT.
In connection with the satisfaction and discharge of this Indenture with
respect to the Notes, all moneys then held by the Paying Agent under the
provisions of this Indenture with
37
respect to such Notes shall be applied according to SECTION 3.3 and thereupon
such Paying Agent shall be released from all further liability with respect to
such moneys.
ARTICLE V
REMEDIES
SECTION 5.1 EVENTS OF DEFAULT.
"EVENT OF DEFAULT", wherever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) failure on the part of the Issuer to make any payment of
interest or principal which is or has become due under the terms of the
Basic Documents when the same becomes due and payable, and such default
shall continue for a period of two (2) Business Days; or
(b) failure on the part of the Issuer to duly observe or to perform
in any material respect any other covenants or agreements of the Issuer
set forth in any Basic Document, which failure shall continue unremedied
for a period of thirty (30) days (if such failure can be remedied) after
the earlier to occur of (i) the date on which written notice of such
failure is given to the Issuer by the Deal Agent or the Indenture Trustee
or (ii) the date on which an Authorized Officer of the Issuer or the
Transferor, as the case may be, has actual knowledge thereof; or
(c) Any representation or warranty of the Issuer in any of the Basic
Documents is discovered to be untrue in any material respect or any
statement or certificate furnished by the Issuer pursuant hereto is
discovered to be untrue in any material respect on the date as of which
the facts therein set forth or so certified were deemed to have been made;
or
(d) If the Issuer (i) shall generally not pay, or shall be unable to
pay, or shall admit in writing its inability to pay its debts as such
debts become due; or (ii) shall make an assignment for the benefit of
creditors, or petition or apply to any tribunal for the appointment of a
custodian, receiver, or trustee for it or for a substantial part of its
assets; or (iii) shall commence any proceeding under any bankruptcy,
reorganization, arrangements, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction whether now or hereafter in
effect; or (iv) shall have had any such action or application filed or any
such proceeding commenced against it in which an order for relief is
requested or entered or an adjudication or appointment is made (which
application or proceeding is not dismissed within sixty (60) days of
filing); or (v) shall indicate, by any act or omission, its consent to,
approval of, or acquiescence in any such petition, application,
proceeding, or order for relief or the appointment of a custodian,
receiver, or
38
trustee for all or any substantial part of its properties; or (vi) shall
suffer any such custodianship, receivership, or trusteeship or the
occurrence of any event or existence of any condition which could be the
ground, basis or cause for any action, application, proceeding or petition
described in this SECTION 5.1(D).
(e) The Issuer voluntarily or involuntarily is dissolved, terminates
or is terminated.
(f) The entry of a final judgment for the payment of money in excess
of $20,000 against the Issuer which, within thirty (30) days after such
entry, shall not have been vacated, discharged or stayed or bonded pending
appeal.
(g) The occurrence of a Servicer Termination Event.
(h) The assignment or attempted assignment by the Issuer of any of
its rights under any of the Basic Documents, or delegation or attempted
delegation by the Issuer of any of its obligations under any of the Basic
Documents, without first obtaining the specific written consent of the
Secured Parties, or the granting by the Issuer of any Lien on any
Collateral to a Person other than the Indenture Trustee on behalf of the
Secured Parties.
(i) On or after October 2, 1998, any Change in Control shall occur
as to the Transferor.
(j) A payment shortfall with respect to clause (a)(F) of SECTION 3.1
shall exist on two consecutive Distribution Dates.
(k) The Delinquency Ratio averaged over any three consecutive
Collection Periods shall equal or exceeds 16.0%.
(l) The Net Loss Ratio averaged over any three consecutive
Collection Periods shall equal or exceed 21.0%.
(m) The Secured Parties (through the Collateral Agent) shall fail
for any reason to have a valid and perfected first priority security
interest in the Collateral and the proceeds thereof.
(n) There shall be a material breach by the Transferor or Issuer of
their respective obligations under the Basic Documents.
(o) The active provider of any Hedging Agreement shall fail to
transfer its rights and obligations under each Hedge Transaction pursuant
to clause (ii)(B) of the definition of Hedge Counterparty.
39
(p) The Issuer shall be required to register as an investment
company under the Investment Company Act of 1940.
The Issuer shall deliver to the Transferor, the Servicer, the Indenture
Trustee and the Deal Agent, within five 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 (b), its status and what action the Issuer is taking or proposes to
take with respect thereto.
SECTION 5.2 REMEDIES UPON EVENT OF DEFAULT.
(a) Upon the occurrence of one or more Events of Default, the Deal Agent
shall have the right to obtain physical possession of all files of the Issuer
relating to the Collateral and all documents relating to the Collateral which
are then or may thereafter come into the possession of the Issuer or any third
party acting for the Issuer.
(b) Upon the occurrence of one or more Events of Default, the Deal Agent
on behalf of the Secured Parties shall have the right to dispose of the
Collateral or any portion thereof or rights therein at one or more public or
private sales conducted in any manner permitted by law or in any commercially
reasonable manner, or as provided by law. Without limiting the rights of the
Deal Agent hereunder, the Deal Agent as agent for the Secured Parties shall be
entitled, without limitation, to place the Contracts (together with all portions
of the Collateral related thereto) which it recovers after any default in a pool
for issuance of automobile loan receivable-backed securities at the then
prevailing price for such securities and to sell such securities for such
prevailing price in the open market, which the Issuer agrees shall constitute a
commercially reasonable disposition of collateral for all purposes. The Deal
Agent as agent for the Secured Parties shall also be entitled to sell any or all
of such Contracts (together with all portions of the Collateral related thereto)
individually for the prevailing price, which, the Issuer agrees shall constitute
a commercially reasonable disposition of such collateral for all purposes. The
specification in this SECTION 5.2(B) of manners of disposition of collateral as
being commercially reasonable shall not preclude the use of other commercially
reasonable methods (as contemplated by the UCC) at the option of the Deal Agent.
(c) After the occurrence of an Event of Default, all Class A Notes not
held by an Issuer Affiliate shall accrue interest at the Prime Rate plus 2.0%
(the "CLASS A DEFAULT RATE") and all Class B Notes not held by an Issuer
Affiliate shall accrue interest at 25% per annum (the "CLASS B DEFAULT RATE").
SECTION 5.3 TRIGGER EVENTS.
The occurrence and continuance of any one of the following events shall be
a "TRIGGER EVENT":
(a) On any date of determination, the Delinquency Ratio averaged
over any three consecutive Collection Periods shall equal or exceed 13.0%;
40
(b) On any date of determination, the Net Loss Ratio averaged over
any three consecutive Collection Periods shall equal or exceed 17.0%.
SECTION 5.4 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
INDENTURE TRUSTEE.
(a) The Issuer covenants that if (i) default is made in the payment of any
principal or interest on any Note when the same becomes due and payable and such
default continues for a period of two (2) Business Days, the Issuer will, upon
demand of the Indenture Trustee, pay to it, for the benefit of the Holders of
the Notes, the whole amount then due and payable on such Notes for principal and
interest, with interest upon the overdue principal, and, to the extent payment
at such rate of interest shall be legally enforceable, upon overdue installments
of interest, at the Note Interest Rate and in addition thereto such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Indenture Trustee and its agents and counsel.
(b) Each Secured Party hereby irrevocably and unconditionally appoints the
Deal Agent as its true and lawful attorney-in-fact, with full power of
substitution, to execute, acknowledge and deliver any notice, document,
certificate, paper, pleading or instrument and to do in the name of the Deal
Agent as well as in the name, place and stead of such Secured Party such acts,
things and deeds for or on behalf of and in the name of such Secured Party under
this Indenture (including specifically under this SECTION 5.4) and under the
Basic Documents which such Secured Party could or might do or which may be
necessary, desirable or convenient in such Deal Agent's sole discretion to
effect the purposes contemplated hereunder and under the Basic Documents and,
without limitation. following the occurrence of an Event of Default, exercise
full rights power and authority to take, or defer from taking, any and all acts
with respect to the administration, maintenance or disposition of the
Collateral.
(c) If an Event of Default occurs and is continuing, the Indenture Trustee
may in its discretion but with the consent of the Deal Agent and shall, at the
direction of the Deal Agent, proceed to protect and enforce its rights and the
rights of the Noteholders by such appropriate Proceedings as the Indenture
Trustee or the Deal Agent shall deem most effective to protect and enforce any
such rights, whether for the specific enforcement of any covenant or agreement
in this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy or legal or equitable right vested in the
Indenture Trustee by this Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Collateral, proceedings under 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 Indenture Trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or shall have 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,
41
irrespective of whether the principal of any Notes shall then be due and payable
as therein expressed or by declaration or otherwise and irrespective of whether
the Indenture Trustee shall have made any demand pursuant to the provisions of
this Section, shall be entitled and empowered, by intervention in such
proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes and to
file such other papers or documents as may be necessary or advisable in
order to have the claims of the Indenture Trustee (including any claim for
reasonable compensation to the Indenture Trustee and each predecessor
Indenture Trustee, and their respective agents, attorneys and counsel, and
for reimbursement of all expenses and liabilities incurred, and all
advances made, by the Indenture Trustee and each predecessor Indenture
Trustee, except as a result of negligence, bad faith or willful
misconduct) and of the Noteholders allowed in such proceedings;
(ii) unless prohibited by applicable law and regulations, to vote on
behalf of the Holders of Notes in any election of an Indenture Trustee,
standby Indenture Trustee or person performing similar functions in any
such proceedings;
(iii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute all amounts received with
respect to the claims of the Noteholders and of the 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 Holders of Notes allowed in any judicial proceedings
relative to the Issuer, its creditors and its property;
and any Indenture 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 made, by the Indenture
Trustee and each predecessor Indenture Trustee except as a result of negligence,
willful misconduct or bad faith.
(e) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of an Indenture Trustee in bankruptcy or similar person.
42
(f) All rights of action and of asserting claims under this Indenture or
under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
proceedings relative thereto, and any such action or proceedings instituted by
the Indenture Trustee shall be brought in its own name as Indenture Trustee of
an express trust, and any recovery of judgment, subject to the payment of the
expenses, disbursements and compensation of the Indenture Trustee, each
predecessor Indenture Trustee and their respective agents and attorneys, shall
be for the ratable benefit of the Holders of the Notes.
(g) In any proceedings brought by the Indenture Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture),
the Indenture Trustee shall be held to represent all the Holders of the Notes,
and it shall not be necessary to make any Noteholder a party to any such
proceedings.
SECTION 5.5 LIMITATION OF NOTEHOLDER RIGHTS.
(a) Each Holder of a Class A Note hereby agrees, solely in its capacity as
a Class A Note Investor, that it shall have no rights, title or interest in or
to any assets of the Issuer other than the Class A Collateral, including but not
limited to, any of the Class B Collateral. To the extent that such Holder shall
be deemed to have any interest in the Class B Collateral, such Holder hereby
agrees that its interest in such assets is subordinate to the claims or rights
of the Class B Note Investors. The provisions of this SECTION 5.5(A) shall
constitute a subordination agreement for purposes of Section 510(a) of the
Bankruptcy Code.
(b) Each Holder of a Class B Note hereby agrees, solely in its capacity as
a Class B Note Investor, that it shall have no right, title or interest in or to
any assets of the Issuer other than the Class B Collateral, including but not
limited to, any of the Class A Collateral (except to the extent that it is
entitled to receive amounts pursuant to SECTION 3.1(B)). To the extent that such
Holder shall be deemed to have any interest in the Class A Collateral (other
than to the extent that it is entitled to receive amounts pursuant to SECTION
3.1(B)), such Holder hereby agrees that its interest in such assets is
subordinate to the claims or rights of the Class A Note Investors. The
provisions of this SECTION 5.5(B) shall constitute a subordination agreement for
purposes of Section 510(a) of the Bankruptcy Code.
(c) Notwithstanding anything in this Indenture to the contrary, if either
or both the Class A Note Investor or the Class B Note Investor is an Issuer
Affiliate, all Notes held by such Issuer Affiliate shall be excluded from all
voting hereunder and the amount of such Notes shall be deemed to be not
Outstanding for determining the Outstanding Amount for purposes of voting,
consents and the exercise of rights and remedies hereunder and for the purpose
of SECTION 5.8(B).
(d) The provisions of this SECTION 5.5 shall survive the termination of
this Indenture.
SECTION 5.6 [RESERVED].
43
SECTION 5.7 [RESERVED].
SECTION 5.8 LIMITATION OF SUITS.
Subject to SECTION 11.18, no Holder of any Class A Note or Class B Note
(other than the Initial Class A Note Investor and the Initial Class B Note
Investor) shall have any right to institute, or encourage others 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 Holder has previously given written notice to the Indenture
Trustee of a continuing Event of Default;
(b) the Deal Agent and the Holders of not less than 51% of the
Outstanding Amount of the Notes have consented in writing to the
institution of such proceeding;
(c) such Holder or Holders requesting the institution of such
proceeding have offered to the Indenture Trustee indemnity reasonably
satisfactory to it against the costs, expenses and liabilities to be
incurred in complying with such request,
(d) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such
proceedings; and
(e) no direction inconsistent with such written request has been
given to the Indenture Trustee during such 60-day period by the Holders of
a majority of the Outstanding Amount of the Notes;
it being understood and intended that no Holders requesting the institution of
such proceeding shall have any right in any manner whatsoever by virtue of, or
by availing of, any provision of this Indenture to affect, disturb or prejudice
the rights of any other Holders of Notes or to obtain or to seek to obtain
priority or preference over any other Holders 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 Holders of Notes,
each representing less than a majority of the Outstanding Amount of the Notes,
the Indenture Trustee in its sole discretion may determine what action, if any,
shall be taken, notwithstanding and other provisions of this Indenture.
SECTION 5.9 UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE PRINCIPAL AND
INTEREST.
Notwithstanding any other provisions in this Indenture, the Holder of any
Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest, if any, on such Note on or after the
respective due dates thereof expressed in such Note or in this
44
Indenture (or, in the case of redemption, on or after the Redemption Date) and,
subject to SECTION 11.18, to institute suit for the enforcement of any such
payment, and such right shall not be impaired without the consent of such
Holder.
SECTION 5.10 RESTORATION OF RIGHTS AND REMEDIES.
If the Deal Agent 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, 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 5.11 RIGHTS AND REMEDIES CUMULATIVE.
No right or remedy herein conferred upon or reserved to the Deal Agent 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 5.12 DELAY OR OMISSION NOT A WAIVER.
No delay or omission of the Deal Agent or any Holder of any Note to
exercise any right or remedy accruing upon any Default or Event of Default shall
impair any such right or remedy or constitute a waiver of any such Default or
Event of Default or an acquiescence therein. Every right and remedy given by
this Article V or by law to the Indenture Trustee or to the Noteholders may be
exercised from time to time, and as often as may be deemed expedient, by the
Indenture Trustee or by the Noteholders, as the case may be.
SECTION 5.13 [RESERVED].
SECTION 5.14 WAIVER OF PAST DEFAULTS.
The Deal Agent and the Holders of Notes of not less than a majority of the
Outstanding Amount of the Class A Notes and the Class B Notes may waive any past
Default or Event of Default and its consequences except a Default (a) in payment
of principal of or interest on any of the Notes or (b) in respect of a covenant
or provision hereof which cannot be modified or amended without the consent of
the Holder of each Note. In the case of any such waiver, the Issuer, the
Indenture Trustee and the Holders of the Notes shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall extend to
any subsequent or other Default or 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
45
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereto.
SECTION 5.15 UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Note by such
Holder's acceptance thereof shall be deemed to have agreed, that any court may
in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Indenture Trustee for
any action taken, suffered or omitted by it as Indenture Trustee, the filing by
any party litigant in such suit of an undertaking to pay the costs of such suit,
and that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to (a) any suit
instituted by the Indenture Trustee, (b) any suit instituted by the Deal Agent
or any Noteholder, or group of Noteholders, in each case holding in the
aggregate more than 51% of the Outstanding Amount of the Class A Notes and the
Class B Notes or (c) any suit instituted by any Noteholder for the enforcement
of the payment of principal of or interest on any Note on or after the
respective due dates expressed in such Note and in this Indenture (or, in the
case of redemption, on or after the Redemption Date).
SECTION 5.16 WAIVER OF STAY OR EXTENSION LAWS.
The Issuer covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead or in any manner whatsoever, claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, that may affect the covenants or the
performance of this Indenture; and the Issuer (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Indenture Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
SECTION 5.17 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 Collateral or upon any of the assets of the
Issuer.
SECTION 5.18 PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS.
(a) Promptly following a request from the Indenture Trustee to do so and
at the Servicer's expense, the Issuer agrees to take all such lawful action as
the Indenture Trustee may request to compel or secure the performance and
observance by the Transferor and the Servicer,
46
as applicable, of each of their obligations to the Issuer under or in connection
with the Transfer and Servicing Agreement in accordance with the terms thereof,
and to exercise any and all rights, remedies, powers and privileges lawfully
available to the Issuer under or in connection with the Transfer and Servicing
Agreement to the extent and in the manner directed by the Indenture Trustee,
including the transmission of notices of default on the part of the Transferor
or the Servicer thereunder and the institution of legal or administrative
actions or proceedings to compel or secure performance or the Transferor or the
Servicer of each of their obligations under the Transfer and Servicing
Agreement.
(b) If an Event of Default has occurred and is continuing, the Indenture
Trustee may, and, at the written direction of the Deal Agent shall, exercise all
rights, remedies, powers, privileges and claims of the Issuer against the
Transferor or the Servicer under or in connection with the Transfer and
Servicing Agreement, including the right or power to take any action to compel
or secure performance or observance by the Transferor or the Servicer of each of
their obligations to the Issuer thereunder and to give any consent, request,
notice, direction, approval, extension or waiver under the Transfer 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
the Basic Documents and use the same degree of care and skill in their exercise
as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; however, the Indenture Trustee shall
examine the certificates and opinions to determine whether or not they
conform on their face 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:
47
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is proved
that the Indenture Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Indenture Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to SECTION 5.12.
(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 Transfer 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.
(g) Every provision of this Indenture in any way 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.
(h) The Indenture Trustee shall, upon no less than one Business Day's
prior written notice to the Indenture Trustee, permit any representative of the
Deal Agent, during the Indenture Trustee's normal business hours and at the
Issuer's expense, to examine all books of account, records, reports and other
papers of the Indenture Trustee relating to the Notes, to make copies and
extracts therefrom and to discuss the Indenture Trustee's actions, as such
actions relate to the Indenture Trustee's duties with respect to the Notes, with
the Indenture Trustee's officers and employees responsible for carrying out the
Indenture Trustee's duties with respect to the Notes.
(i) The Indenture Trustee shall, and hereby agrees that it will, perform
all of the obligations and duties required of it under the Transfer and
Servicing Agreement.
(j) [Reserved].
(k) [Reserved].
(l) In no event shall the Indenture Trustee be required to perform, or be
responsible for the manner of performance of, any of the obligations of the
Servicer, or any other party, under the Transfer and Servicing Agreement, except
during such time, if any, as the Backup Servicer
48
shall be the successor to, and be vested with the rights, powers, duties and
privileges of the Servicer in accordance with the terms of the Transfer and
Servicing Agreement.
(m) Without limiting the generality of this SECTION 6.1, the Indenture
Trustee shall have no duty (i) to see to any recording, filing or depositing of
this Indenture or any agreement referred to herein or any financing statement
evidencing a security interest in the Financed Vehicles, or to see to the
maintenance of any such recording or filing or depositing or to any
re-recording, refiling or redepositing of any thereof, (ii) to see to any
insurance of the Financed Vehicles or Obligors or to effect or maintain any such
insurance, (iii) to confirm or verify the contents of any reports or
certificates delivered to the Indenture Trustee pursuant to this Indenture or
the Transfer and Servicing Agreement believed by the Indenture Trustee to be
genuine and to have been signed or presented by the proper party or parties, or
(iv) to inspect the Financed Vehicles at any time or ascertain or inquire as to
the performance of observance of any of the Issuer's, the Transferor's or the
Servicer's representations, warranties under the Transfer and Servicing
Agreement.
(n) Except for actions expressly authorized by this Indenture, the
Indenture Trustee shall take no action reasonably likely to impair the security
interests created or existing under any Contract or Financed Vehicle or to
impair the value of any Contract or Financed Vehicle.
(o) All information obtained by the Indenture Trustee regarding the
Obligors and the Contracts, whether upon the exercise of its rights under this
Agreement or otherwise, shall be maintained by the Indenture Trustee in
confidence and shall not be disclosed to any other Person, unless such
disclosure is required by this Indenture or any applicable law or regulation.
SECTION 6.2 RIGHTS OF INDENTURE TRUSTEE.
(a) The Indenture Trustee may conclusively rely on any document believed
by it to be genuine and to have been signed or presented by the proper person.
The Indenture Trustee need not investigate any fact or matter stated in such
document, including, without limitation, the Servicer's or the Issuer's
compliance with any of its representations, warranties or covenants hereunder
(as to which the Indenture Trustee is entitled to rely exclusively on
certificates signed by a Responsible Officer of the Servicer or the Issuer, as
the case may be).
(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 such Officer's Certificate or Opinion of Counsel or as directed by
the requisite amount of Noteholders provided herein.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of, or for the
supervision of, such agent, attorney, custodian or nominee appointed with due
care by it hereunder.
49
(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 the Indenture Trustee's conduct does
not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture 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 institute,
conduct or defend any litigation under this Indenture or in relation to this
Indenture, at the request order or direction of any of the Holders of Notes or
the Deal Agent, pursuant to the provisions of this Indenture, unless such
Holders of Notes or the Deal Agent shall have offered to the Indenture Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that may be incurred therein or thereby; PROVIDED, HOWEVER, that the Indenture
Trustee shall, upon the occurrence of an Event of Default (that has not been
cured), exercise the rights and powers vested in it by this Indenture with
reasonable care and skill.
(g) The Indenture Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so by the Holders of
Notes evidencing not less than 51% of the Outstanding Amount thereof; PROVIDED,
HOWEVER, that if the payment within a reasonable time to the Indenture Trustee
of the costs, expenses or liabilities likely to be incurred by it in the making
of such investigation is, in the opinion of the Indenture Trustee, not
reasonably assured to the Indenture Trustee by the security afforded to it by
the terms of this Indenture or the Transfer and Servicing Agreement, the
Indenture Trustee may require reasonable indemnity against such cost, expense or
liability as a condition to so proceeding; the reasonable expense of every such
examination shall be paid by the Person making such request, or, if paid by the
Indenture Trustee, shall be reimbursed by the Person making such request upon
demand.
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.
The Paying Agent and any Note Registrar, co-registrar or co-paying agent may do
the same with like rights. However, the Indenture Trustee must comply with
SECTION 6.11.
SECTION 6.4 INDENTURE TRUSTEE'S DISCLAIMER.
The Indenture Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture, the Collateral
or the Notes, it shall not be accountable for
50
the Issuer's use of the proceeds from the Notes, and it shall not be responsible
for any statement of the Issuer in the Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Indenture
Trustee's certificate of authentication.
SECTION 6.5 NOTICE OF DEFAULTS.
If an Event of Default occurs and is continuing and if it is either
actually known by, or written notice of the existence thereof has been delivered
to, a Responsible Officer of the Indenture Trustee shall mail to each Noteholder
notice of the Event of Default within 30 days after such knowledge or notice
occurs. Except in the case of a default in payment of principal of or interest
on any Note (including payments pursuant to the mandatory redemption provisions
of such Note), the Indenture Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of Noteholders.
SECTION 6.6 REPORTS BY PAYING AGENT TO HOLDERS.
The Paying Agent shall on behalf of the Issuer deliver to each Noteholder,
at the request of any Noteholder, such information as may be reasonably required
to enable such Holder to prepare its Federal and state income tax returns.
SECTION 6.7 COMPENSATION AND INDEMNITY.
(a) Pursuant to SECTION 3.1, the Issuer shall, or shall cause the Servicer
to, pay to the Backup Servicer and the Collateral Custodian from time to time
compensation for its services. The Issuer shall or shall cause the Servicer to
reimburse the Backup Servicer and the Collateral Custodian for all reasonable
out-of-pocket expenses incurred or made by each such party, 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 Backup Servicer's and the Collateral Custodian's agents,
counsel, accountants and experts.
(b) The Issuer shall or shall cause the Servicer to indemnify the
Indenture Trustee and its officers, directors, employees and agents against any
and all loss, liability or reasonable expense (including attorneys' fees and
expenses) incurred by each of them in connection with the acceptance or the
administration of this trust and the performance of their respective duties
hereunder or under any of the Basic Documents. The Indenture Trustee shall
notify the Issuer and the Servicer promptly of any claim for which it may seek
indemnity. Failure by the Indenture Trustee to so notify the Issuer and the
Servicer shall not relieve the Issuer of its obligations hereunder or the
Servicer of its obligations under ARTICLE XII of the Transfer and Servicing
Agreement. The Issuer shall or shall cause the Servicer to defend the claim, the
Indenture Trustee may have separate counsel and the Issuer shall or shall cause
the Servicer to pay the reasonable fees and expenses of such counsel. Neither
the Issuer nor the Servicer need reimburse any expense or indemnify against any
loss, liability or expense to the extent that the same was incurred by the
Indenture Trustee through the Indenture Trustee's own willful misconduct,
negligence or bad faith.
51
(c) The Issuer's payment obligations to the Backup Servicer, Collateral
Custodian and Indenture Trustee pursuant to this Section shall survive the
discharge of this Indenture. When any such party incurs expenses after the
occurrence of a Default specified in SECTION 5.1(D) or (E) 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. Notwithstanding anything else set forth
in this Indenture or the Basic Documents, each of the Backup Servicer, the
Collateral Custodian and the Indenture Trustee agrees that the obligations of
the Issuer (but not the Servicer) to any such party hereunder and under the
Basic Documents shall be recourse to the Collateral only and specifically shall
not be recourse to the assets of the Issuer or any Noteholder. In addition, each
of the Backup Servicer, the Collateral Custodian and the Indenture Trustee
agrees that its recourse to the Issuer, the Collateral and the Transferor shall
be limited to the right to receive the distributions referred to in SECTION 3.1.
SECTION 6.8 REPLACEMENT OF INDENTURE TRUSTEE.
(a) RESIGNATION. The Indenture Trustee may at any time resign and be
discharged from the trusts hereby created by giving 30 days' prior written
notice thereof to the Servicer; PROVIDED that in the event that the Indenture
Trustee resigns for any reason not referred to in SECTION 6.8(B)(I) through (V)
below, the Indenture Trustee shall pay any reasonable acceptance fee of the
successor Indenture Trustee (not to exceed $6000) that shall be negotiated by
the outgoing Indenture Trustee, the successor Indenture Trustee and the
Servicer; PROVIDED further that the Indenture Trustee shall not be required to
pay any such acceptance fee for any resignation or discharge which is a result
of a conflict of interest.
(b) The Issuer may, with prior written consent of the Deal Agent, remove
the Indenture Trustee, if:
(i) the Indenture Trustee fails to comply with SECTION 6.11;
(ii) a court having jurisdiction in the premises in respect of the
Indenture Trustee in an involuntary case or proceeding under federal or
state banking or bankruptcy laws, as now or hereafter constituted, or any
other applicable federal or state bankruptcy, insolvency or other similar
law, shall have entered a decree or order granting relief or appointing a
receiver, liquidator, assignee, custodian, Indenture Trustee, conservator,
sequestrator (or similar official) for the Indenture Trustee or for any
substantial part of the Indenture Trustee's property, or ordering the
winding-up or liquidation of the Indenture Trustee's affairs;
(iii) an involuntary case under the federal bankruptcy laws, as now
or hereafter in effect, or another present or future federal or state
bankruptcy, insolvency or similar law, is commenced with respect to the
Indenture Trustee and such case is not dismissed within 60 days;
52
(iv) the Indenture Trustee commences a voluntary case under any
federal or state banking or bankruptcy laws, as now or hereafter
constituted, or any other applicable federal or state bankruptcy,
insolvency or other similar law, or consents to the appointment of or
taking possession by a receiver, liquidator, assignee, custodian,
Indenture Trustee, conservator, sequestrator (or other similar official)
for the Indenture Trustee or for any substantial part of the Indenture
Trustee's property, or makes any assignment for the benefit of creditors
or fails generally to pay its debts as such debts become due or takes any
corporate action in furtherance of any of the foregoing; or
(v) the Indenture Trustee otherwise becomes incapable of acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists in
the office of Indenture Trustee for any reason (the Indenture Trustee in such
event being referred to herein as the retiring Indenture Trustee), the Indenture
Trustee shall promptly deliver a notice of such resignation, removal or vacancy
to the Noteholders and the Deal Agent shall appoint a successor Indenture
Trustee acceptable to the Deal Agent and Holders of Notes evidencing at least a
majority of the Outstanding Amount of the Notes. If the Deal Agent fails to
appoint such a successor Indenture Trustee, the Issuer may appoint a successor
Indenture Trustee and shall deliver a notice of such appointment to the
Noteholders.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee, the Noteholders and the Issuer.
Thereupon the resignation or removal of the retiring Indenture Trustee, shall
become effective, and the successor Indenture Trustee shall have all the rights,
powers and duties of the retiring Indenture Trustee under this Indenture. The
retiring Indenture Trustee shall promptly transfer all property held by it as
Indenture Trustee to the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days after
the retiring Indenture Trustee is removed, the retiring Indenture Trustee, the
Issuer or the Deal Agent may petition any court of competent for the appointment
of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with SECTION 6.11, any Noteholder
may petition any court of competent jurisdiction for the removal of the
Indenture Trustee and the appointment of a successor Indenture Trustee.
Any resignation or removal of the Indenture Trustee and appointment of a
successor Indenture Trustee pursuant to any of the provisions of this Section
shall not become effective until acceptance of appointment by the successor
Indenture Trustee pursuant to this Section 6.8 and payment of all fees and
expenses owed to the outgoing Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to this
Section, the Issuer's and the Servicer's obligations under SECTION 6.7 shall
continue for the benefit of the retiring Indenture Trustee.
53
SECTION 6.9 SUCCESSOR INDENTURE TRUSTEE BY MERGER.
If the Indenture Trustee consolidates with, merges or converts into, or
transfers all or substantially all its corporate trust business or assets to,
another corporation or banking association, the resulting, surviving or
transferee corporation, without any further act, shall be the successor
Indenture Trustee.
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 Indenture 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; and in all such cases such certificates
shall have the full force which it is anywhere in the Notes or in this Indenture
provided 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,
the Indenture Trustee with the prior written consent of the Deal Agent shall
have the power and may execute and deliver all instruments to appoint one or
more Persons to act as a co-Indenture Trustee or co-Indenture Trustees, or
separate Indenture Trustee or separate Indenture Trustees, of all or any part of
the Collateral, and to vest in such Person or Persons, in such capacity and for
the benefit of the Noteholders, such title to the Collateral, or any part
thereof, and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and trusts as the Indenture Trustee may consider
necessary or desirable. No co-Indenture Trustee or separate Indenture Trustee
hereunder shall be required to meet the terms of eligibility as a successor
Indenture Trustee under SECTION 6.11 and no notice to Noteholders of the
appointment of any co-Indenture Trustee or separate Indenture Trustee shall be
required under SECTION 6.8.
(b) Every separate Indenture Trustee and co-Indenture 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
Indenture Trustee or co-Indenture Trustee jointly (it being understood
that such separate Indenture Trustee or co-Indenture Trustee is not
authorized to act separately without the Indenture Trustee joining in such
act), except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed the Indenture Trustee shall
be incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of
title to the Collateral or any portion thereof in any such jurisdiction)
shall be exercised and performed singly by such separate Indenture Trustee
or co-Indenture Trustee, but solely at the direction of the Indenture
Trustee;
54
(ii) no Indenture Trustee hereunder shall be personally liable by
reason of any act or omission of any other Indenture Trustee hereunder,
including acts or omissions of predecessor or successor Indenture
Trustees; and
(iii) the Indenture Trustee may at any time accept the resignation
of or remove any separate Indenture Trustee or co-Indenture 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 Indenture
Trustees and co-Indenture Trustees, as effectively as if given to each of them.
Every instrument appointing any separate Indenture Trustee or co-Indenture
Trustee shall refer to this Agreement and the conditions of this Article VI.
Each separate Indenture Trustee and co-Indenture 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 Indenture Trustee or co-Indenture Trustee may at any time
constitute the Indenture Trustee, its agent or attorney-in-fact with full power
and authority, to the extent not prohibited by law, to do any lawful act under
or in respect of this Agreement on its behalf and in its name. If any separate
Indenture Trustee or co-Indenture Trustee shall die, dissolve, become insolvent.
become incapable of acting. resign or be removed. all of its estates,
properties, rights, remedies and trusts shall invest in and be exercised by the
Indenture Trustee, to the extent permitted by law, without the appointment of a
new or successor Indenture Trustee.
SECTION 6.11 ELIGIBILITY; DISQUALIFICATION.
The Indenture Trustee 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 subject to supervision or examination by federal or state
authorities; and shall have a rating, both with respect to long-term and
short-term unsecured obligations, of not less than investment grade by the
Rating Agencies. The Indenture Trustee shall provide copies of such reports to
the Deal Agent upon request.
SECTION 6.12 [RESERVED].
SECTION 6.13 APPOINTMENT AND POWERS.
Subject to the terms and conditions hereof, each of the Secured Parties
hereby appoints Wells Fargo Bank Minnesota, National Association as the
Indenture Trustee with respect to the Collateral, and Wells Fargo Bank
Minnesota, National Association hereby accepts such appointment and agrees to
act as Indenture Trustee with respect to the Collateral for the Secured Parties
and to perform the duties of the Indenture Trustee in accordance with the
provisions of this Indenture and the other Basic Documents. Each Secured Party
hereby authorizes the
55
Indenture Trustee to take such action on its behalf, and to exercise such
rights, remedies, powers and privileges hereunder, as the Deal Agent may direct
and as are specifically authorized to be exercised by the Indenture Trustee by
the terms hereof, together with such actions, rights, remedies, powers and
privileges as are reasonably incidental thereto. The Indenture Trustee shall act
upon and in compliance with the written instructions of the Deal Agent delivered
pursuant to this Indenture promptly following receipt of such written
instructions; provided that the Indenture Trustee shall not act in accordance
with any instructions (i) which are not authorized by, or in violation of the
provisions of, this Indenture, (ii) which are in violation of any applicable
law, rule or regulation or (iii) for which the Indenture Trustee has not
received reasonable indemnity. Receipt of such instructions shall not be a
condition to the exercise by the Indenture Trustee of its express duties
hereunder, except where this Indenture provides that the Indenture Trustee is
permitted to act only following and in accordance with such instructions.
SECTION 6.14 PERFORMANCE OF DUTIES.
The Indenture Trustee shall have no duties or responsibilities except
those expressly set forth in this Indenture and the other Basic Documents to
which the Indenture Trustee is a party or as directed in writing by the Deal
Agent in accordance with and subject to this Indenture. The Indenture Trustee
shall not be required to take any discretionary actions hereunder except at the
written direction and with the indemnification of the Deal Agent. The Indenture
Trustee shall, and hereby agrees that it will, perform all of the duties and
obligations required of it under the Transfer and Servicing Agreement.
SECTION 6.15 LIMITATION ON LIABILITY.
Neither the Indenture Trustee nor any of its directors, officers or
employees shall be liable for any action taken or omitted to be taken by it or
them in good faith hereunder, or in connection herewith, except that the
Indenture Trustee shall be liable for its negligence, bad faith or willful
misconduct; nor shall the Indenture Trustee be responsible for the validity,
effectiveness, value, sufficiency or enforceability against the Issuer of this
Indenture or any of the Collateral (or any part thereof). Notwithstanding any
term or provision of this Indenture, the Indenture Trustee shall incur no
liability to the Issuer or the Secured Parties for any action taken or omitted
by the Indenture Trustee in connection with the Collateral, except for
negligence, bad faith or willful misconduct on the part of the Indenture
Trustee, and, further, shall incur no liability to the Secured Parties except
for negligence, bad faith or willful misconduct in carrying out its duties to
the Secured Parties. Subject to Section 6.16, the Indenture Trustee shall be
protected and shall incur no liability to any such party in relying upon the
accuracy, acting in reliance upon the contents, and assuming the genuineness of
any notice, demand, certificate, signature, instrument or other document
reasonably believed by the Indenture Trustee to be genuine and to have been duly
executed by the appropriate signatory, and (absent actual knowledge to the
contrary) the Indenture Trustee shall not be required to make any independent
investigation with respect thereto. The Indenture Trustee shall at all times be
free independently to establish to its reasonable satisfaction, but shall have
no duty to independently verify, the existence or nonexistence of facts that are
a condition to the exercise or enforcement of any right or remedy hereunder or
under any of the Basic Documents. The Indenture Trustee may consult with
56
counsel, and shall not be liable for any action taken or omitted to be taken by
it hereunder in good faith and in accordance with the advice of such counsel.
The Indenture Trustee shall not be under any obligation to exercise any of the
remedial rights or powers vested in it by this Indenture or to follow any
direction from the Deal Agent unless it shall have received reasonable security
or indemnity reasonably satisfactory to the Indenture Trustee against the costs,
expenses and liabilities which might be incurred by it.
SECTION 6.16 RELIANCE UPON DOCUMENTS.
In the absence of negligence, bad faith or willful misconduct on its part,
the Indenture Trustee shall be entitled to rely on any communication,
instrument, paper or other document reasonably believed by it to be genuine and
correct and to have been signed or sent by the proper Person or Persons and
shall have no liability in acting, or omitting to act, where such action or
omission to act is in reasonable reliance upon any statement or opinion
contained in any such document or instrument.
SECTION 6.17 SUCCESSOR INDENTURE TRUSTEE.
(a) MERGER. Any Person into which the Indenture Trustee may be converted
or merged, or with which it may be consolidated, or to which it may sell or
transfer its trust business and assets as a whole or substantially as a whole,
or any Person resulting from any such conversion, merger, consolidation, sale or
transfer to which the Indenture Trustee is a party. shall (provided it is
otherwise qualified to serve as the Indenture Trustee hereunder) be and become a
successor Indenture Trustee hereunder and be vested with all of the title to and
interest in the Collateral and all of the trusts, powers, discretions,
immunities, privileges and other matters as was its predecessor without the
execution or filing of any instrument or any further act, deed or conveyance on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding, except to the extent, if any, that any such action is necessary
to perfect, or continue the perfection of the security interest of the Secured
Parties in the Collateral; PROVIDED that any such successor shall also be the
successor Indenture Trustee under SECTION 6.9.
(b) REMOVAL. The Indenture Trustee may at any time resign and be
discharged from its obligations under this Agreement by giving 30 days' prior
written notice thereof to the Servicer; PROVIDED that the Indenture Trustee
shall pay all reasonable expenses of transferring custody of the Contract Files
to a successor Indenture Trustee (and the Indenture Trustee shall have the
opportunity to participate in negotiations of such expenses with such
successor). The Indenture Trustee may be removed by the Deal Agent at any time
(and shall be removed at any time that the Indenture Trustee has been removed),
with or without cause, by an instrument or concurrent instruments in writing
delivered to the Indenture Trustee, the other Secured Party and the Issuer. A
temporary successor may be removed at any time to allow a successor Indenture
Trustee to be appointed pursuant to subsection (c) below. Any resignation or
removal pursuant to the provisions of this subsection (b) shall take effect only
upon the date which is the latest of (i) the effective date of the appointment
of a successor Indenture Trustee and the acceptance in writing by such successor
Indenture Trustee of such appointment and of its obligation to perform
57
its duties hereunder in accordance with the provisions hereof, and (ii) receipt
by the Deal Agent of an Opinion of Counsel to the effect described in SECTION
3.6.
(c) ACCEPTANCE BY SUCCESSOR. The Deal Agent shall have the sole right to
appoint each successor Indenture Trustee. Every temporary or permanent successor
Indenture Trustee appointed hereunder shall execute, acknowledge and deliver to
its predecessor and to the Indenture Trustee, each Secured Party, the Collateral
Custodian and the Issuer an instrument in writing accepting such appointment
hereunder whereupon such successor, without any further act, deed or conveyance,
shall become fully vested with all the estates, properties, rights, powers,
duties and obligations of its predecessor. Such predecessor shall, nevertheless,
on the written request of either Secured Party, execute and deliver an
instrument transferring to such successor all the estates, properties, rights
and powers of such predecessor hereunder. In the event that any instrument in
writing from the Issuer or an Secured Party is reasonably required by a
successor Indenture Trustee to more fully and certainly vest in such successor
the estates, properties, rights, powers, duties and obligations vested or
intended to be vested hereunder in the Indenture Trustee, any and all such
written instruments shall, at the request of the temporary or permanent
successor Indenture Trustee, be forthwith executed, acknowledged and delivered
by the Indenture Trustee or the Issuer, as the case may be. The designation of
any successor Indenture Trustee and the instrument or instruments removing any
Indenture Trustee and appointing a successor hereunder, together with all other
instruments provided for herein, shall be maintained with the records relating
to the Collateral and, to the extent required by applicable law, filed or
recorded by the successor Indenture Trustee in each place where such filing or
recording is necessary to effect the transfer of the Collateral to the successor
Indenture Trustee or to protect or continue the perfection of the security
interests granted hereunder.
SECTION 6.18 COMPENSATION.
The Indenture Trustee shall not be entitled to any compensation for the
performance of its duties hereunder other than the compensation it is entitled
to receive in its capacity as Indenture Trustee.
SECTION 6.19 REPRESENTATIONS AND WARRANTIES OF THE INDENTURE TRUSTEE.
The Indenture Trustee represents and warrants to the Issuer and to each
Secured Party as follows:
(a) DUE ORGANIZATION. The Indenture Trustee is a national banking
association, duly organized, validly existing and in good standing under the
laws of the United States and is duly authorized and licensed under applicable
law to conduct its business as presently conducted.
(b) CORPORATE POWER. The Indenture Trustee has all requisite right, power
and authority to execute and deliver this Indenture and to perform all of its
duties as Indenture Trustee hereunder.
58
(c) DUE AUTHORIZATION. The execution and delivery by the Indenture Trustee
of this Indenture and the other Basic Documents to which it is a party, and the
performance by the Indenture Trustee of its duties hereunder and thereunder,
have been duly authorized by all necessary corporate proceedings and no further
approvals or filings, including any governmental approvals, are required for the
valid execution and delivery by the Indenture Trustee, or the performance by the
Indenture Trustee, of this Indenture and such other Basic Documents.
(d) VALID AND BINDING INDENTURE. The Indenture Trustee has duly executed
and delivered this Indenture and each other Basic Document to which it is a
party, and each of this Indenture and each such other Basic Document constitutes
the legal, valid and binding obligation of the Indenture Trustee, enforceable
against the Indenture Trustee in accordance with its terms, except as (i) such
enforceability may be limited by bankruptcy, insolvency, reorganization and
similar laws relating to or affecting the enforcement of creditors' rights
generally and (ii) the availability of equitable remedies may be limited by
equitable principles of general applicability.
SECTION 6.20 WAIVER OF SETOFFS.
The Indenture Trustee hereby expressly waives any and all rights of setoff
that the Indenture Trustee may otherwise at any time have under applicable law
with respect to any Note Investor or its assets, the Collection Account or the
Reserve Account and agrees that amounts in the Collection Account and the
Reserve Account shall at all times be held and applied solely in accordance with
the provisions hereof
SECTION 6.21 CONTROL BY THE DEAL AGENT.
The Indenture Trustee shall not comply with written notices and
instructions given by the Issuer unless accompanied by the written consent of
the Deal Agent, and the Indenture Trustee shall act upon and comply with written
notices and instructions given by the Deal Agent alone in the place and stead of
the Issuer.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.1 ISSUER TO FURNISH TO NOTE REGISTRAR NAMES AND ADDRESSES OF
NOTEHOLDERS.
The Issuer will furnish or cause to be furnished to the Note Registrar in
writing on each Record Date and at such other times as the Note Registrar may
request, a list, in such form as the Note Registrar may reasonably require, of
the names and addresses of the Holders as of such Record Date. The Issuer will
furnish or cause to be furnished such list to the Indenture Trustee upon
request.
SECTION 7.2 PRESERVATION OF INFORMATION: COMMUNICATIONS TO NOTEHOLDERS.
59
The Note Registrar shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders contained in the most recent
list furnished to the Note Registrar as provided in SECTION 7.1 and the names
and addresses of Holders otherwise received by the Note Registrar in its
capacity as Note Registrar. The Note Registrar may destroy any list furnished to
it as provided in such SECTION 7.1 upon receipt of a new list so furnished.
ARTICLE VIII
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 Transfer and Servicing Agreement. The
Indenture Trustee shall apply all such money received by it, or cause the Paying
Agent to apply all money received by it as provided in this Indenture and the
Transfer and Servicing Agreement. Except as otherwise expressly provided in this
Indenture or in the Transfer and Servicing Agreement, if any default occurs in
the making of any payment or performance under any agreement or instrument that
is part of the Collateral, the Indenture Trustee may take such action as may be
appropriate to enforce such payment or performance, including the institution
and prosecution of appropriate proceedings. Any such action shall be without
prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in ARTICLE V.
SECTION 8.2 RELEASE OF COLLATERAL.
(a) Subject to the payment of its fees and expenses pursuant to SECTION
6.7 and the provisions of SECTION 11.1(B), the Indenture Trustee may, and when
required by the provisions of this Indenture shall, execute instruments provided
to it to release property from the lien of this Indenture, 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 moneys.
(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, (i) release any remaining portion of the Collateral that secured the
Notes from the lien of this Indenture (ii) provide written instruction to the
Collateral Custodian to release all Contract Files to the Issuer pursuant to
Section 3.6(b) of the Transfer and Servicing Agreement and (iii) release to the
Issuer or any other Person entitled thereto any funds then on deposit in the
Collection Account or the Reserve Account, as the case may be. The Indenture
Trustee shall release property from the lien of this Indenture pursuant to this
SECTION 8.2(B) only upon receipt of an Issuer Request accompanied by an
Officer's Certificate, meeting the applicable requirements of SECTION 11.1.
60
SECTION 8.3 OPINION OF COUNSEL.
The Indenture Trustee shall receive at least seven days' prior written
notice when requested by the Issuer to take any action pursuant to SECTION
8.2(A), accompanied by copies of any instruments involved, and the Indenture
Trustee shall also require as a condition to such action, an Opinion of Counsel
in form and substance satisfactory to the Indenture Trustee and the Deal Agent,
stating the legal effect of any such action by the Indenture Trustee, 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 Collateral and PROVIDED, FURTHER, that an
Opinion of Counsel need not be given to take any action pursuant to SECTION
8.2(B). 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 Holders of any Notes but with the prior
written consent of the Deal Agent, as evidenced to the Indenture Trustee and the
Issuer, at any time and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Deal Agent, 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 any 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
Holders of the Notes, 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;
61
(v) to cure any ambiguity, to correct or supplement any provision
herein or in any supplemental indenture which may be inconsistent with any
other provision herein or in any supplemental indenture or to make any
other provisions with respect to matters or questions arising under this
Indenture or in any supplemental indenture; PROVIDED that such action
shall not adversely affect the interests of the Holders of the Notes;
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor Indenture 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 Indenture 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 comply with any
provision of Applicable Law.
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, with the prior written consent
of the Deal Agent, may, also without the consent of any of the Holders of the
Notes enter into an indenture or indentures supplemental hereto for the purpose
of adding any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or of modifying in any manner the rights of the
Holders of the Notes under this Indenture; PROVIDED, HOWEVER, that such action
(as evidenced, at the request of the Indenture Trustee, by an Opinion of
Counsel) shall not adversely affect in any material respect the interests of any
Noteholder.
SECTION 9.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS.
The Issuer and the Indenture Trustee, also may with the prior written
consent of the Deal Agent and with the consent of the Holders of not less than a
majority of the Outstanding Amount of the Notes, by Act of such Holders
delivered to the Issuer and the Indenture Trustee, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to, or
changing in any manner or eliminating any of the provisions of, this Indenture
or of modifying in any manner the rights of the Holders of the Notes under this
Indenture; PROVIDED, HOWEVER, that, no such supplemental indenture shall,
without the consent of the Holder of each Outstanding Note affected thereby:
(i) change the date of payment of any installment of principal of or
interest on any Note, or reduce the principal amount thereof, the interest
rate thereon or the Redemption Price with respect thereto, change the
provision of this Indenture relating to the application of collections on,
or the proceeds of the sale of, the Collateral to payment of principal of
or interest on the Notes, or chance any place of payment where, or the
coin or currency in which, any Note or the interest thereon is payable;
62
(ii) impair the right to institute suit for the enforcement of the
provisions of this Indenture requiring the application of funds available
therefor, as provided in Article V, to the payment of any such amount due
on the Notes on or after the respective due dates thereof (or, in the case
of redemption, on or after the Redemption Date);
(iii) reduce the percentage of the Outstanding Amount of the Notes,
the consent of the Holders of which is required for any such supplemental
indenture, or the consent of the Holders of which is required for any
waiver of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences provided for in this Indenture;
(iv) modify or alter the provisions of the second proviso to the
definition of the term "Outstanding";
(v) reduce the percentage of the Outstanding Amount of the Notes
required to direct the Indenture Trustee to direct the Indenture Trustee
to sell or liquidate the Collateral pursuant to SECTION 5.4(B);
(vi) modify any provision of this Section except to increase any
percentage specified herein or to provide that certain additional
provisions of this Indenture or the 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 Distribution Date (including the
calculation of any of the individual components of such calculation) or to
affect the rights of the Holders of Notes to the benefit of any provisions
for the mandatory redemption of the Notes contained herein; or
(viii) permit the creation of any lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the
Collateral or, except as otherwise permitted or contemplated herein or in
any of the Basic Documents, terminate the lien of this Indenture on any
property at any time subject hereto or deprive the Holder of any Note of
the security provided by the lien of this Indenture.
The Indenture Trustee may determine whether or not any Notes would be
affected by any supplemental indenture and any such determination shall be
conclusive upon the Holders of all Notes, whether theretofore or thereafter
authenticated and delivered hereunder. The Indenture Trustee shall not be liable
for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
63
Promptly after the execution by the Issuer and the Indenture Trustee of
any supplemental indenture pursuant to this Section, the Indenture Trustee shall
mail to each Rating Agency and the Holders of the Notes to which such amendment
or supplemental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Indenture Trustee
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
SECTION 9.3 EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or permitting the additional trusts created by, any
supplemental indenture permitted by this ARTICLE IX or the modifications thereby
of the trusts created by this Indenture, the Indenture Trustee shall be entitled
to receive, and subject to SECTIONS 6.1 and 6.2, shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture. The
Indenture Trustee may, but shall not be obligated to, enter into any such
supplemental indenture that affects the Indenture Trustee's own rights, duties,
liabilities or immunities under this Indenture or otherwise.
SECTION 9.4 EFFECT OF SUPPLEMENTAL INDENTURE.
Upon the execution of any supplemental indenture pursuant to the
provisions hereof, this Indenture shall be and be deemed to be modified and
amended in accordance therewith with respect to the Notes affected thereby, and
the respective rights, limitations of rights, obligations, duties, liabilities
and immunities under this Indenture of the Indenture Trustee, the Issuer and the
Holders of the Notes shall thereafter be determined. exercised and enforced
hereunder subject in all respects to such modifications and amendments, and all
the terms and conditions of any such supplemental indenture shall be and be
deemed to be part of the terms and conditions of this Indenture for any and all
purposes.
SECTION 9.5 [RESERVED].
SECTION 9.6 REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES.
Notes authenticated and delivered after the execution of any supplemental
indenture pursuant to this ARTICLE IX may, and if required by the Indenture
Trustee shall, bear a notation in form approved by the Indenture Trustee as to
any matter provided for in such supplemental indenture. If the Issuer or the
Indenture Trustee shall so determine, new Notes so modified as to conform, in
the opinion of the Indenture Trustee and the Issuer, to any such supplemental
indenture may be prepared and executed by the Issuer and authenticated and
delivered by the Indenture Trustee in exchange for Outstanding Notes.
64
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.1 REDEMPTION.
The Class A Note and the Class B Note are subject to redemption in whole,
but not in part, on any Distribution Date. If the Notes are to be redeemed
pursuant to this SECTION 10.1, the Servicer, the Transferor or the Issuer shall
furnish written notice of such election (which notice shall contain the
information required by SECTION 10.2(A)) to the Indenture Trustee and the Paying
Agent not later than 60 days prior to the Redemption Date and the Issuer shall
deposit the Redemption Price in the Collection Account. All such Notes shall be
due and payable on the Redemption Date upon the furnishing of a notice complying
with SECTION 10.2.
SECTION 10.2 FORM OF REDEMPTION NOTICE.
Notice of redemption under SECTION 10.1 shall be given by the Indenture
Trustee by facsimile or by first-class mail, postage prepaid, transmitted or
mailed prior to the applicable Redemption Date to each Holder of Notes, as of
the close of business on the Record Date preceding the applicable Redemption
Date, at such Holder's address appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) that the Record Date otherwise applicable to such Redemption
Date is not applicable and that payments shall be made only upon
presentation and surrender of such Notes and the place where such Notes
are to be surrendered for payment of the Redemption Price (which shall be
the office or agency of the Issuer to be maintained as provided in SECTION
3.2) and
(iv) that interest on the Notes shall cease to accrue on the
Redemption Date.
Notice of redemption 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
redemption, or any defect therein, to any Holder of any Note shall not impair or
affect the validity of the redemption of any other Note. Any notice of
redemption given pursuant to this SECTION 10.2 shall be irrevocable.
SECTION 10.3 NOTES PAYABLE ON REDEMPTION DATE.
The Notes to be redeemed shall, following notice of redemption as required
by SECTION 10.2 on the Redemption Date become due and payable at the Redemption
Price and (unless the
65
Issuer shall default in the payment of the Redemption Price) no interest shall
accrue on the Redemption Price for any period after the date to which accrued
interest is calculated for purposes of calculating the Redemption Price.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 COMPLIANCE CERTIFICATES AND OPINIONS, ETC.
(a) Upon any application or request by the Issuer to the Indenture Trustee
or the Indenture Trustee to take any action under any provision of this
Indenture, the Issuer shall furnish to the Indenture Trustee and to the Deal
Agent (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 and (ii) if required pursuant to the terms of this Indenture, an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that, in the case
of any such application or request as to which the furnishing of such documents
is specifically required by 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:
(i) a statement that each signatory of such certificate or opinion
has read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
signatory such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture, the
Issuer shall, in addition to any obligation imposed in SECTION 11.1(A) or
elsewhere in this Indenture, furnish to the Indenture Trustee and the Deal Agent
an Officer's Certificate certifying or stating the opinion of each person
signing such certificate as to
66
the fair value (within 90 days of such deposit) to the Issuer of the Collateral
or other property or securities to be so deposited.
(ii) Other than with respect to the release of any Purchased
Contracts or Liquidated Contracts, whenever any property or securities are
to be released from the lien of this Indenture, the Issuer shall also
furnish to the Indenture Trustee and the Deal Agent an Officer's
Certificate certifying or stating the opinion of each person signing such
certificate as to the fair value (within 90 days of such release) of the
property or securities proposed to be released and stating that in the
opinion of such person the proposed release will not impair the security
under this Indenture in contravention of the provisions hereof.
(iii) Notwithstanding SECTION 2.9 or any other provision of this
Section, the Issuer may (A) collect, liquidate, sell or otherwise dispose
of the Collateral as and to the extent permitted or required by the Basic
Documents and (B) make cash payments out of the Collection Accounts and
the Reserve Account as and to the extent permitted or required by the
Basic Documents.
SECTION 11.2 FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE.
(a) In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
(b) Any certificate or opinion of an Authorized Officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his or her certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Servicer, the Transferor or the Issuer, stating that the information with
respect to such factual matters is in the possession of the Servicer, the
Transferor or the Issuer, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
(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
67
condition of the granting of such application, or as evidence of the Issuer's
compliance with an term hereof, it is intended that the truth and accuracy, at
the time of the granting of such application or at the effective date of such
certificate or report (as the case may be), of the facts and opinions stated in
such document shall in such case be conditions precedent to the right of the
Issuer to have such application granted or to the sufficiency of such
certificate or report. The foregoing shall not, however, be construed to affect
the Indenture Trustee's right to rely upon the truth and accuracy of any
statement or opinion contained in any such document as provided in Article VI.
SECTION 11.3 ACTS OF NOTEHOLDERS.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Noteholders
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Noteholders in person or by agents duly appointed
in writing; and except as herein otherwise expressly provided such action shall
become effective when such instrument or instruments are delivered to the
Indenture Trustee, and, where it is hereby expressly required, to the Issuer.
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "ACT" of the Noteholders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to SECTION 6.1) conclusive in favor of
the Indenture Trustee and the Issuer, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any customary manner of the Indenture
Trustee.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Notes shall bind the Holder of every Note
issued upon the registration thereof or in exchange therefor or in lieu thereof,
in respect of anything done, omitted or suffered to be done by the Indenture
Trustee or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Note.
SECTION 11.4 NOTICES, ETC. TO INDENTURE TRUSTEE AND ISSUER.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Noteholders or other documents provided or permitted by this Indenture to
be made upon, given or furnished to or filed with:
(a) The Indenture Trustee by any Noteholder or by the Issuer shall be
sufficient for every purpose hereunder if personally delivered, delivered by
overnight courier or mailed certified mail, return receipt requested and shall
be deemed to have been duly given upon receipt to the Indenture Trustee at its
Corporate Trust Office or at any other address previously furnished in writing
to each Noteholder and the Issuer, or
68
(b) The Issuer or the Transferor by the Indenture Trustee or by any
Noteholder shall be sufficient for every purpose hereunder if personally
delivered, delivered by overnight courier or mailed certified mail or sent by
confirmed facsimile transmission and shall deemed to have been duly given upon
receipt to the Issuer addressed to: Project Brave Limited Partnership, in care
of First Investors Financial Services, Inc., 675 Bering Drive, Suite 710,
Houston, TX 77057 or at any other address previously furnished in writing to the
Indenture Trustee by the Issuer. The Issuer shall promptly transmit any notice
received by it from the Noteholders to the Indenture Trustee.
SECTION 11.5 NOTICES TO NOTEHOLDERS; WAIVER.
(a) Where this Indenture provides for notice to Noteholders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class, postage prepaid to each
Noteholder affected by such event, at his address as it appears on the Note
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where notice to
Noteholders is given by mail, neither the failure to mail such notice nor any
defect in any notice so mailed to any particular Noteholder shall affect the
sufficiency of such notice with respect to other Noteholders, and any notice
that is mailed in the manner herein provided shall conclusively be presumed to
have been duly given.
(b) Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
(c) In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.
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 Holder of a Note
providing for a method of payment, or notice by the Indenture Trustee or the
Paying Agent to such Holder, that is different from the methods provided for in
this Indenture for such payments or notices, provided that such methods are
reasonable and consented to by the Indenture Trustee and the Paying Agent (which
consent shall not be unreasonably withheld). The Issuer will furnish to the
Indenture Trustee and the Paying Agent a copy of each such agreement and the
Indenture Trustee and the Paying Agent will cause payments to be made and
notices to be given in accordance with such agreements.
69
SECTION 11.7 [RESERVED].
SECTION 11.8 EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 11.9 SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture and the Notes by the Issuer
shall bind its successors and assigns, whether so expressed or not. All
agreements of the Indenture Trustee in this Indenture shall bind its successors.
SECTION 11.10 [RESERVED].
SECTION 11.11 BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Notes, express or implied, shall give
to any Person, other than the parties hereto and their successors hereunder, and
the Noteholders and any other party secured hereunder, and any other person with
an ownership interest in any part of the Collateral, 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 an
which nominally due, and no interest shall accrue for the period from and after
any such nominal date.
SECTION 11.13 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF OBJECTION
TO VENUE.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO AND EACH HEDGE
COUNTERPARTY HEREBY AGREES TO THE NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL
COURT LOCATED WITHIN THE STATE OF NEW YORK, NEW YORK COUNTY. EACH OF THE PARTIES
HERETO AND EACH SECURED PARTY HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON
CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY
OF THE AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.
70
SECTION 11.14 WAIVER OF JURY TRIAL.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO AND
EACH HEDGE COUNTERPARTY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING
ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE
PARTIES HERETO ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP BETWEEN ANY OF THEM IN CONNECTION WITH THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY. INSTEAD, ANY SUCH DISPUTE RESOLVED IN COURT
WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
SECTION 11.15 EXECUTION IN COUNTERPARTS; SEVERABILITY; INTEGRATION.
This Indenture may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same Indenture. Delivery of an executed counterpart
of a signature page to this Indenture by facsimile shall be effective as
delivery of a manually executed counterpart of this Indenture. In case any
provision in or obligation under this Indenture shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.
This Indenture contains the final and complete integration of all prior
expressions by the parties hereto with respect to the subject matter hereof and
shall constitute the entire Indenture among the parties hereto with respect to
the subject matter hereof, superseding all prior oral or written understandings
other than any fee letter delivered by the Issuer to the Deal Agent and the Note
Investors.
SECTION 11.16 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 may be counsel to the
Indenture Trustee or any other counsel reasonably acceptable to the Indenture
Trustee and the Deal Agent) 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 or the Indenture Trustee under this Indenture.
SECTION 11.17 NO RECOURSE.
(a) No recourse under or with respect to any obligation, covenant or
agreement (including, without limitation, the payment of any fees or any other
obligations) of any Secured Party as contained in this Indenture or any other
agreement, instrument or document entered into by it pursuant hereto or in
connection herewith shall be had against any administrator of such Secured Party
or any incorporator, affiliate, stockholder, officer, employee or director of
such Secured Party or of any such administrator, as such, by the enforcement of
any assessment or by
71
any legal or equitable proceeding, by virtue of any statute or otherwise; IT
BEING EXPRESSLY AGREED AND UNDERSTOOD that the agreements of such Secured Party
contained in this Indenture and all of the other agreements, instruments and
documents entered into by it pursuant hereto or in connection herewith are, in
each case, solely the corporate obligations of such Secured Party, PROVIDED
THAT, in the case of any Note Investor, such liabilities shall be paid only
after the repayment in full of all Commercial Paper Notes and all other
liabilities contemplated in the program documents with respect to such Note
Investor, and that no personal liability whatsoever shall attach to or be
incurred by any administrator of such Secured Party or any incorporator,
stockholder, affiliate, officer, employee or director of such Secured Party or
of any such administrator, as such, or any of them, under or by reason of any of
the obligations, covenants or agreements of such Secured Party contained in this
Indenture or in any other such instrument, document or agreement, or which are
implied therefrom, and that any and all personal liability of every such
administrator of such Secured Party and each incorporator, stockholder,
affiliate, officer, employee or director of such Secured Party or of any such
administrator, or any of them, for breaches by such Secured Party of any such
obligations, covenants or agreements, which liability may arise either at common
law or in equity, by statute or constitution, or otherwise, is hereby expressly
waived as a condition of, and in consideration for, the execution of this
Indenture.
(b) Notwithstanding anything contained in this Indenture, no Note Investor
shall have an obligation to pay any amount required to be paid by it hereunder
to any of the Liquidity Agent, the Deal Agent, the Indenture Trustee or the
Backup Servicer in excess of any amount available to such Note Investor after
paying or making provision for the payment of its Commercial Paper Notes. All
payment obligations of each Note Investor hereunder are contingent upon the
availability of funds in excess of the amounts necessary to pay Commercial Paper
Notes; and each of the Liquidity Agent, the Deal Agent, the Indenture Trustee
and the Backup Servicer agrees that they shall not have a claim under Section
101(5) of the Bankruptcy Code if and to the extent that any such payment
obligation exceeds the amount available to Note Investor to pay such amounts
after paying or making provision for the payment of its Commercial Paper Notes.
(c) The provisions of this SECTION 11.18 shall survive the termination of
this Agreement.
SECTION 11.18 NO PETITION.
The Indenture Trustee, by entering into this Indenture, and each
Noteholder (other than the Initial Class A Noteholder and the Initial Class B
Noteholder), by accepting a Note, hereby covenant and agree that they will not
at any time institute against the Issuer, encourage others to or join in any
institution against the Issuer of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any United
States Federal or state bankruptcy or similar law in connection with any
obligations relating to the Notes, this Indenture or any of the Basic Documents.
SECTION 11.19 INSPECTION.
72
The Issuer agrees that, on reasonable prior notice, it will permit any
representative of the Indenture Trustee or of the Deal Agent, 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 except to
the extent that the Indenture Trustee may reasonably determine that such
disclosure is consistent with its obligations hereunder.
73
IN WITNESS WHEREOF, the Issuer, the Paying Agent and the Indenture Trustee
have caused this Indenture to be duly executed by their respective officers,
hereunto duly authorized, all as of the day and year first above written.
PROJECT BRAVE LIMITED PARTNERSHIP,
as Issuer
By: FIFS ACQUISITION FUNDING
COMPANY, L.L.C.,
as General Partner
By: FIALAC Holdings, Inc.,
as Manager
By: ______________________________________
Name:
Title:
WELLS FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Indenture Trustee
By: ______________________________________
Name:
Title:
FIRST UNION NATIONAL BANK,
not in its individual capacity,
but solely as Paying Agent
By: ______________________________________
Name:
Title:
[Form of Class A Note] EXHIBIT A
REGISTERED $19,204,362.00
No. R-1
SEE REVERSE FOR CERTAIN DEFINITIONS
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE
SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE
BENEFIT OF THE ISSUER THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (1) INSIDE THE UNITED STATES TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A
UNDER THE SECURITIES ACT, (2) TO THE SELLER OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY OTHER
APPLICABLE SECURITIES LAW OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY TO
THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
IN NO EVENT SHALL THIS SECURITY BE TRANSFERRED TO AN EMPLOYEE BENEFIT
PLAN, TRUST ANNUITY OR ACCOUNT SUBJECT TO ERISA OR A PLAN DESCRIBED IN SECTION
4975(E)(1) OF THE CODE (ANY SUCH PLAN, TRUST OR ACCOUNT BEING REFERRED TO AS AN
"EMPLOYEE PLAN"), A TRUSTEE OF ANY EMPLOYEE PLAN, OR AN ENTITY, ACCOUNT OR OTHER
POOLED INVESTMENT FUND THE UNDERLYING ASSETS OF WHICH INCLUDE OR ARE DEEMED TO
INCLUDE EMPLOYEE PLAN ASSETS BY REASON OF AN EMPLOYEE PLAN'S INVESTMENT IN THE
ENTITY, ACCOUNT OR OTHER POOLED INVESTMENT FUND, UNLESS THE ACQUISITION OR
TRANSFER AND CONTINUED HOLDING OF THE NOTES WILL NOT, AND BY ITS ACCEPTANCE AND
HOLDING OF ANY NOTES, THE TRANSFEREE WILL BE DEEMED TO REPRESENT AND WARRANT
THAT ITS ACQUISITION AND HOLDING OF THE NOTES WILL NOT, RESULT IN A NONEXEMPT
2
PROHIBITED TRANSACTION UNDER SECTION 406(a) OF ERISA OR SECTION 4975 OF THE
CODE. INCLUDED WITHIN THE DEFINITION OF "EMPLOYEE PLANS" ARE, WITHOUT
LIMITATION, KEOGH (HR-10) PLANS. IRA's (INDIVIDUAL RETIREMENT ACCOUNTS OR
ANNUITIES) AND OTHER EMPLOYEE BENEFIT PLANS, SUBJECT TO SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE.
THE PRINCIPAL OF THIS NOTE IS PAYABLE 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.
3
PROJECT BRAVE LIMITED PARTNERSHIP
CLASS A NOTE
PROJECT BRAVE LIMITED PARTNERSHIP, a limited partnership 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 VARIABLE FUNDING CAPITAL
CORPORATION, or registered assigns, the principal sum of $19,204,362.00 DOLLARS
payable on each Distribution Date in an amount equal to the aggregate amount, if
any, payable from the Class A Sub-Account in respect of principal on the Notes
pursuant to Section 3.1 of the Indenture. The Issuer will pay interest on this
Note pursuant to Section 3.1 of the Indenture until the principal of this Note
is paid or made available for payment. Interest on this Note will accrue daily
and be paid on each Distribution Date for the related Interest Period. Interest
will be computed on the basis of a 360-day year for the actual days elapsed.
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.
4
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.
PROJECT BRAVE LIMITED PARTNERSHIP
By: FIFS ACQUISITION FUNDING
COMPANY, L.L.C., General Partner
By: FIALAC Holdings, Inc., as Manager
By: ______________________________________
Name:
Title:
5
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: August 8, 2000 Wells Fargo Bank Minnesota, National
Association, not in its individual
capacity but solely as Indenture Trustee,
By: ______________________________________
Name:
Title:
6
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A Notes (herein called the "NOTES"), all issued under an
Indenture dated as of August 8, 2000 (such indenture, as supplemented or
amended, is herein called the "INDENTURE"), between the Issuer, First Union
National Bank, as Paying Agent and Wells Fargo Bank Minnesota, National
Association, as Indenture Trustee (the "INDENTURE TRUSTEE", which term includes
any successor Indenture Trustee under the Indenture) to which the Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the Holders of the Notes. The Notes are subject to all terms of the
Indenture. All terms used in this Note that are defined in the Indenture, as
supplemented or amended, shall have the meanings assigned to them in or pursuant
to the Indenture, as so supplemented or amended.
The Notes (together, the "NOTES") are and will be equally and ratably
secured by the collateral pledged as security therefor, subject to the
priorities and other conditions as provided in the Indenture.
Principal of and interest on the Notes will be payable on each
Distribution Date pursuant to Section 3.1 of the Indenture, "DISTRIBUTION Date"
means the twentieth day of each month, or, if any such date is not a Business
Day, the next succeeding Business Day, commencing August 20,
2000.
All principal payments on the Notes shall be made pro rata to the
Noteholders entitled thereto. Payments of interest on this Note due and payable
on each Distribution Date, together with any principal payments to the extent
not in full payment of this Note, shall be made by wire transfer in immediately
available funds to the account designated by the Holder of this Note. Any
reduction in the principal amount of this Note effected by any payments made on
any Distribution Date shall be binding upon all future Holders of this Note and
of any Note issued upon the registration of transfer hereof or in exchange
hereof or in lieu hereof, whether or not rated 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 Distribution Date, then the
Note Registrar, in the name of and on behalf of the Issuer, will notify the
Person who was the Holder hereof as of the Record Date preceding such
Distribution Date by notice mailed prior to such Distribution Date and the
amount then due and payable shall be payable only upon presentation and
surrender of this Note to the Note Registrar.
The Issuer shall pay interest on overdue installments of interest at the
Class A Default Rate to the extent lawful. Notwithstanding all other provisions
of this Note, in no event shall the interest payable hereon, whether before or
after maturity, exceed the maximum interest which, under Applicable Law, may be
contracted for, charged, or received on this Note, and this Note is expressly
made subject to the provisions of the Indenture which more fully set out the
limitations on how interest accrues hereon.
7
As provided in the Indenture, the Notes may be redeemed pursuant to
Section 10.1 of the Indenture, in whole, but not in part, at the option of the
Transferor on any Business Day. The Purchaser (as defined in the Note Purchase
Agreement) shall be permitted to purchase the Notes from the Holder hereof
pursuant to Section 2.4 of the Note Purchase 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, (i) duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar which requirements
include membership or participation in Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, Stamp,
all in accordance with the Exchange Act, and (ii) accompanied by such other
documents as the Indenture Trustee may require, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder, by acceptance of a Note covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer or the Indenture Trustee on the Notes or under the Indenture or
any certificate or other writing delivered in connection therewith, against (i)
the Transferor, the Servicer or the Indenture Trustee in its individual
capacity, (ii) any general partner or limited partner of the Issuer or (iii) any
partner, owner, beneficiary, agent, officer, director or employee of the
Transferor, the Servicer or the Indenture Trustee in its individual capacity,
any general partner or limited partner of the Issuer, the Transferor, the
Servicer or the Indenture Trustee in its individual capacity, except as any such
Person may have expressly agreed (it being understood that the Indenture Trustee
has no such obligations in their individual capacity), except that any such
owner, partner 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.
Prior to the due presentment for registration of transfer of this Note,
the Issuer and 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 neither the Issuer, the Indenture Trustee nor any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Insurer
8
and of the Holders of Notes representing a majority of the Outstanding Amount of
all Notes at the time Outstanding. The Indenture also contains provisions
permitting the Holders of Notes representing specified percentages of the
Outstanding Amount of the Notes, on behalf of the Holders of all the Notes, 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 Holder of this Note shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of Holders of the
Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The 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 construed in accordance with the laws
of the State of New York and the obligations, rights and remedies of the parties
hereunder and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Indenture or the Basic Documents, none of Wells Fargo Bank
Minnesota, National Association in its individual capacity, any general partner
or limited partner of the Issuer, nor 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 of or interest on, or performance of, or omission to
perform, any of the covenants, obligations or indemnifications contained in this
Note or the Indenture, it being expressly understood that said covenants,
obligations and indemnifications have been made by the Issuer for the sole
purposes of binding the interests of the Issuer in the assets of the Issuer. The
Holder of this Note by the acceptance hereof agrees that except as expressly
provided in the Indenture or the Basic Documents, in the case of an Event of
Default under the Indenture, the Holder shall have no claim against any of the
foregoing for any deficiency, loss or claim therefrom; PROVIDED, HOWEVER, that
nothing contained herein shall be taken to prevent recourse to, and enforcement
against, the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
9
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:__________________ ____________________________________ (1)
Signature Guaranteed:
________________________ ____________________________________
___________________________________
(1) NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
[Form of Class B Note] EXHIBIT B
REGISTERED $979,453.00
No. R-1
SEE REVERSE FOR CERTAIN DEFINITIONS
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE
SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE
BENEFIT OF THE ISSUER THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (1) INSIDE THE UNITED STATES TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A
UNDER THE SECURITIES ACT, (2) TO THE SELLER OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY OTHER
APPLICABLE SECURITIES LAW OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY TO
THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
IN NO EVENT SHALL THIS SECURITY BE TRANSFERRED TO AN EMPLOYEE BENEFIT
PLAN, TRUST ANNUITY OR ACCOUNT SUBJECT TO ERISA OR A PLAN DESCRIBED IN SECTION
4975(E)(1) OF THE CODE (ANY SUCH PLAN, TRUST OR ACCOUNT BEING REFERRED TO AS AN
"EMPLOYEE PLAN"), A TRUSTEE OF ANY EMPLOYEE PLAN, OR AN ENTITY, ACCOUNT OR OTHER
POOLED INVESTMENT FUND THE UNDERLYING ASSETS OF WHICH INCLUDE OR ARE DEEMED TO
INCLUDE EMPLOYEE PLAN ASSETS BY REASON OF AN EMPLOYEE PLAN'S INVESTMENT IN THE
ENTITY, ACCOUNT OR OTHER POOLED INVESTMENT FUND, UNLESS THE ACQUISITION OR
TRANSFER AND CONTINUED HOLDING OF THE NOTES WILL NOT, AND BY ITS ACCEPTANCE AND
HOLDING OF ANY NOTES, THE TRANSFEREE WILL BE DEEMED TO REPRESENT AND WARRANT
THAT ITS ACQUISITION AND HOLDING OF THE NOTES WILL NOT, RESULT IN A NONEXEMPT
PROHIBITED TRANSACTION UNDER SECTION 406(a) OF ERISA OR SECTION 4975 OF THE
CODE. INCLUDED WITHIN THE DEFINITION OF "EMPLOYEE PLANS" ARE, WITHOUT
LIMITATION, KEOGH (HR-10) PLANS. IRA's (INDIVIDUAL RETIREMENT
ACCOUNTS OR ANNUITIES) AND OTHER EMPLOYEE BENEFIT PLANS, SUBJECT TO SECTION 406
OF ERISA OR SECTION 4975 OF THE CODE.
THE PRINCIPAL OF THIS NOTE IS PAYABLE 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.
PROJECT BRAVE LIMITED PARTNERSHIP
CLASS B NOTE
Project Brave Limited Partnership, a limited partnership 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 VARIABLE FUNDING CAPITAL
CORPORATION, or registered assigns, the principal sum of $979,453.00 DOLLARS
payable on each Distribution Date in an amount equal to the aggregate amount, if
any, payable from the Class B Sub-Account in respect of principal on the Notes
pursuant to Section 3.1 of the Indenture. The Issuer will pay interest on this
Note pursuant to Section 3.1 of the Indenture until the principal of this Note
is paid or made available for payment. Interest on this Note will accrue daily
and be paid on each Distribution Date for the related Interest Period. Interest
will be computed on the basis of a 360-day year for the actual days elapsed.
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.
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.
PROJECT BRAVE LIMITED PARTNERSHIP
By: FIFS ACQUISITION FUNDING
COMPANY, L.L.C., General Partner
By: FIALAC Holdings, Inc., as Manager
By: ______________________________________
Name:
Title:
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: August 8, 2000 Wells Fargo Bank Minnesota, National
Association, not in its individual
capacity but solely as Indenture Trustee,
By: ______________________________________
Name:
Title:
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class B Notes (herein called the "NOTES"), all issued under an
Indenture dated as of August 8, 2000 (such indenture, as supplemented or
amended, is herein called the "INDENTURE"), between the Issuer, First Union
National Bank, as Paying Agent and Wells Fargo Bank Minnesota, National
Association, as Indenture Trustee (the "INDENTURE TRUSTEE", which term includes
any successor Indenture Trustee under the Indenture) to which the Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the Holders of the Notes. The Notes are subject to all terms of the
Indenture. All terms used in this Note that are defined in the Indenture, as
supplemented or amended, shall have the meanings assigned to them in or pursuant
to the Indenture, as so supplemented or amended.
The Notes (together, the "NOTES") are and will be equally and ratably
secured by the collateral pledged as security therefor, subject to the
priorities and other conditions as provided in the Indenture.
Principal of and interest on the Notes will be payable on each
Distribution Date pursuant to Section 3.1 of the Indenture, "DISTRIBUTION DATE"
means the twentieth day of each month, or, if any such date is not a Business
Day, the next succeeding Business Day, commencing August 20, 2000.
All principal payments on the Notes shall be made pro rata to the
Noteholders entitled thereto. Payments of interest on this Note due and payable
on each Distribution Date, together with any principal payments to the extent
not in full payment of this Note, shall be made by wire transfer in immediately
available funds to the account designated by the Holder of this Note. Any
reduction in the principal amount of this Note effected by any payments made on
any Distribution Date shall be binding upon all future Holders of this Note and
of any Note issued upon the registration of transfer hereof or in exchange
hereof or in lieu hereof, whether or not rated 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 Distribution Date, then the
Note Registrar, in the name of and on behalf of the Issuer, will notify the
Person who was the Holder hereof as of the Record Date preceding such
Distribution Date by notice mailed prior to
such Distribution Date and the amount then due and payable shall be payable only
upon presentation and surrender of this Note to the Note Registrar.
The Issuer shall pay interest on overdue installments of interest at
the Class B Default Rate to the extent lawful. Notwithstanding all other
provisions of this Note, in no event shall the interest payable hereon, whether
before or after maturity, exceed the maximum interest which, under Applicable
Law, may be contracted for, charged, or received on this Note, and this Note is
expressly made subject to the provisions of the Indenture which more fully set
out the limitations on how interest accrues hereon.
As provided in the Indenture, the Notes may be redeemed pursuant to
Section 10.1 of the Indenture, in whole, but not in part, at the option of the
Transferor on any Business Day. The Purchaser (as defined in the Note Purchase
Agreement) shall be permitted to purchase the Notes from the Holder hereof
pursuant to Section 2.4 of the Note Purchase 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, (i) duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar which requirements
include membership or participation in Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, Stamp,
all in accordance with the Exchange Act, and (ii) accompanied by such other
documents as the Indenture Trustee may require, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder, by acceptance of a Note covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer or the Indenture Trustee on the Notes or under the Indenture or
any certificate or other writing delivered in connection
therewith, against (i) the Transferor, the Servicer or the Indenture Trustee in
its individual capacity, (ii) any general partner or limited partner of the
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or
employee of the Transferor, the Servicer or the Indenture Trustee in its
individual capacity, any general partner or limited partner of the Issuer, the
Transferor, the Servicer or the Indenture Trustee in its individual capacity,
except as any such Person may have expressly agreed (it being understood that
the Indenture Trustee has no such obligations in their individual capacity),
except that any such owner, partner 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.
Prior to the due presentment for registration of transfer of this Note,
the Issuer and 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 neither the Issuer, the Indenture Trustee nor any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Insurer and of the Holders of Notes
representing a majority of the Outstanding Amount of all Notes at the time
Outstanding. The Indenture also contains provisions permitting the Holders of
Notes representing specified percentages of the Outstanding Amount of the Notes,
on behalf of the Holders of all the Notes, 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 Holder of
this Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Note. The Indenture also permits the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The 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 construed in accordance with the laws
of the State of New York and the obligations, rights and remedies of the parties
hereunder and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Indenture or the Basic Documents, none of Wells Fargo Bank
Minnesota, National Association in its individual capacity, any general partner
or limited partner of the Issuer, nor 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 of or interest on, or performance of, or omission to
perform, any of the covenants, obligations or indemnifications contained in this
Note or the Indenture, it being expressly understood that said covenants,
obligations and indemnifications have been made by the Issuer for the sole
purposes of binding the interests of the Issuer in the assets of the Issuer. The
Holder of this Note by the acceptance hereof agrees that except as expressly
provided in the Indenture or the Basic Documents, in the case of an Event of
Default under the Indenture, the Holder shall have no claim against any of the
foregoing for any deficiency, loss or claim therefrom; PROVIDED, HOWEVER, that
nothing contained herein shall be taken to prevent recourse to, and enforcement
against, the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
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: _________________ ____________________________________(2)
Signature Guaranteed:
________________________ ____________________________________
______________________________
(2) NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
EXHIBIT C
HEDGING AGREEMENT
[to be provided by the Deal Agent]
EXHIBIT D
PARTNERSHIP AGREEMENT
[to come]