EXHIBIT 10.42
CPS FUNDING LLC
Floating Rate Variable Funding Notes
---------------------------------
INDENTURE
Dated as of January 9, 2003
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BANK ONE TRUST COMPANY, N.A.
Trustee
TABLE OF CONTENTS
PAGE NO.
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE...........................3
SECTION 1.1. DEFINITIONS.............................................3
SECTION 1.2. [RESERVED].............................................11
SECTION 1.3. OTHER DEFINITIONAL PROVISIONS..........................11
ARTICLE II THE NOTES..........................................................12
SECTION 2.1. FORM...................................................12
SECTION 2.2. EXECUTION, AUTHENTICATION AND DELIVERY.................12
SECTION 2.3. [RESERVED].............................................13
SECTION 2.4. REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE....13
SECTION 2.5. RESTRICTIONS ON TRANSFER AND EXCHANGE..................14
SECTION 2.6. MUTILATED, DESTROYED, LOST OR STOLEN NOTES.............16
SECTION 2.7. PERSONS DEEMED OWNER...................................17
SECTION 2.8. PAYMENT OF PRINCIPAL AND INTEREST; DEFAULTED INTEREST..17
SECTION 2.9. CANCELLATION...........................................18
SECTION 2.10. RELEASE OF COLLATERAL..................................18
SECTION 2.11. [RESERVED].............................................19
SECTION 2.12. [RESERVED].............................................19
SECTION 2.13. [RESERVED].............................................19
SECTION 2.14. [RESERVED].............................................19
SECTION 2.15. AMOUNT LIMITED; NOTE INCREASES.........................19
ARTICLE III COVENANTS ........................................................20
SECTION 3.1. PAYMENT OF PRINCIPAL AND INTEREST......................20
SECTION 3.2. MAINTENANCE OF OFFICE OR AGENCY........................20
SECTION 3.3. MONEY FOR PAYMENTS TO BE HELD IN TRUST.................20
SECTION 3.4. EXISTENCE..............................................22
SECTION 3.5. PROTECTION OF TRUST ESTATE.............................22
SECTION 3.6. OPINIONS AS TO TRUST ESTATE............................23
SECTION 3.7. PERFORMANCE OF OBLIGATIONS; SERVICING OF RECEIVABLES...24
SECTION 3.8. NEGATIVE COVENANTS.....................................24
SECTION 3.9. ANNUAL STATEMENT AS TO COMPLIANCE......................25
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PAGE NO.
SECTION 3.10. ISSUER MAY CONSOLIDATE, ETC. ONLY ON CERTAIN TERMS.....25
SECTION 3.11. SUCCESSOR OR TRANSFEREE................................28
SECTION 3.12. NO BORROWING...........................................28
SECTION 3.13. SERVICER'S OBLIGATIONS.................................28
SECTION 3.14. GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES......28
SECTION 3.15. CAPITAL EXPENDITURES...................................28
SECTION 3.16. COMPLIANCE WITH LAWS...................................29
SECTION 3.17. RESTRICTED PAYMENTS....................................29
SECTION 3.18. NOTICE OF EVENTS OF DEFAULT AND AMORTIZATION EVENTS....29
SECTION 3.19. FURTHER INSTRUMENTS AND ACTS...........................29
SECTION 3.20. AMENDMENTS OF SALE AND SERVICING AGREEMENT.............29
SECTION 3.21. INCOME TAX CHARACTERIZATION............................29
SECTION 3.22. SEPARATE EXISTENCE OF THE ISSUER.......................30
SECTION 3.23. AMENDMENT OF ISSUER'S ORGANIZATIONAL DOCUMENTS.........30
ARTICLE IV SATISFACTION AND DISCHARGE.........................................30
SECTION 4.1. SATISFACTION AND DISCHARGE OF INDENTURE................30
SECTION 4.2. APPLICATION OF TRUST MONEY.............................31
SECTION 4.3. REPAYMENT OF MONEYS HELD BY NOTE PAYING AGENT..........31
ARTICLE V REMEDIES............................................................31
SECTION 5.1. EVENTS OF DEFAULT......................................31
SECTION 5.2. RIGHTS UPON EVENT OF DEFAULT...........................33
SECTION 5.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE................................................34
SECTION 5.4. REMEDIES...............................................37
SECTION 5.5. OPTIONAL PRESERVATION OF THE RECEIVABLES...............38
SECTION 5.6. PRIORITIES.............................................38
SECTION 5.7. LIMITATION OF SUITS....................................38
SECTION 5.8. UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE PRINCIPAL
AND INTEREST...........................................39
SECTION 5.9. RESTORATION OF RIGHTS AND REMEDIES.....................39
SECTION 5.10. RIGHTS AND REMEDIES CUMULATIVE.........................39
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SECTION 5.11. DELAY OR OMISSION NOT A WAIVER.........................40
SECTION 5.12. CONTROL BY NOTEHOLDERS.................................40
SECTION 5.13. WAIVER OF PAST DEFAULTS................................40
SECTION 5.14. UNDERTAKING FOR COSTS..................................41
SECTION 5.15. WAIVER OF STAY OR EXTENSION LAWS.......................41
SECTION 5.16. SUBROGATION............................................41
SECTION 5.17. PREFERENCE CLAIMS......................................42
ARTICLE VI THE TRUSTEE........................................................43
SECTION 6.1. DUTIES OF TRUSTEE......................................43
SECTION 6.2. RIGHTS OF TRUSTEE......................................45
SECTION 6.3. INDIVIDUAL RIGHTS OF TRUSTEE...........................46
SECTION 6.4. TRUSTEE'S DISCLAIMER...................................46
SECTION 6.5. NOTICE OF DEFAULTS.....................................46
SECTION 6.6. REPORTS BY TRUSTEE TO HOLDERS..........................46
SECTION 6.7. COMPENSATION AND INDEMNITY.............................46
SECTION 6.8. REPLACEMENT OF TRUSTEE.................................47
SECTION 6.9. SUCCESSOR TRUSTEE BY MERGER............................49
SECTION 6.10. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE..........49
SECTION 6.11. ELIGIBILITY: DISQUALIFICATION..........................50
SECTION 6.12. [RESERVED].............................................51
SECTION 6.13. APPOINTMENT AND POWERS.................................51
SECTION 6.14. PERFORMANCE OF DUTIES..................................51
SECTION 6.15. LIMITATION ON LIABILITY................................51
SECTION 6.16. [RESERVED].............................................52
SECTION 6.17. SUCCESSOR TRUSTEE......................................52
SECTION 6.18. [RESERVED].............................................53
SECTION 6.19. REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE..........53
SECTION 6.20. WAIVER OF SETOFFS......................................54
SECTION 6.21. CONTROL BY THE CONTROLLING PARTY.......................54
ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS....................................54
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SECTION 7.1. ISSUER TO FURNISH TO TRUSTEE NAMES AND ADDRESSES OF
NOTEHOLDERS............................................54
SECTION 7.2. PRESERVATION OF INFORMATION; COMMUNICATIONS TO
NOTEHOLDERS............................................54
ARTICLE VIII COLLECTION OF MONEY AND RELEASES OF TRUST ESTATE.................55
SECTION 8.1. COLLECTION OF MONEY....................................55
SECTION 8.2. RELEASE OF TRUST ESTATE................................55
ARTICLE IX SUPPLEMENTAL INDENTURES............................................56
SECTION 9.1. SUPPLEMENTAL INDENTURES WITH THE CONSENT OF THE
INSURER................................................56
SECTION 9.2. SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS....57
SECTION 9.3. EXECUTION OF SUPPLEMENTAL INDENTURES...................59
SECTION 9.4. EFFECT OF SUPPLEMENTAL INDENTURE.......................59
SECTION 9.5. [RESERVED].............................................59
SECTION 9.6. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES..........59
ARTICLE X PREPAYMENT OF NOTES.................................................60
SECTION 10.1. PREPAYMENT OF NOTES....................................60
SECTION 10.2. NOTICE OF PREPAYMENT...................................60
SECTION 10.3. DEPOSIT OF PREPAYMENT PRICE; RELEASE OF LIEN OF
INDENTURE..............................................60
SECTION 10.4. PREPAYMENT UPON SECURITIZATION OF RECEIVABLES..........61
SECTION 10.5. NOTES PREPAYABLE ON ANY DATE...........................61
ARTICLE XI MISCELLANEOUS......................................................61
SECTION 11.1. COMPLIANCE CERTIFICATES AND OPINIONS, ETC.............61
SECTION 11.2. FORM OF DOCUMENTS DELIVERED TO TRUSTEE................63
SECTION 11.3. ACTS OF NOTEHOLDERS...................................64
SECTION 11.4. NOTICES, ETC., TO TRUSTEE, ISSUER AND RATING
AGENCIES..............................................65
SECTION 11.5. NOTICES TO NOTEHOLDERS; WAIVER........................66
SECTION 11.6. ALTERNATE PAYMENT AND NOTICE PROVISIONS...............67
SECTION 11.7. [RESERVED]............................................67
SECTION 11.8. EFFECT OF HEADINGS AND TABLE OF CONTENTS..............67
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SECTION 11.9. SUCCESSORS AND ASSIGNS................................67
SECTION 11.10. SEVERABILITY..........................................67
SECTION 11.11. BENEFITS OF INDENTURE.................................67
SECTION 11.12. LEGAL HOLIDAYS........................................68
SECTION 11.13. GOVERNING LAW.........................................68
SECTION 11.14. COUNTERPARTS..........................................68
SECTION 11.15. RECORDING OF INDENTURE................................68
SECTION 11.16. ISSUER OBLIGATION.....................................68
SECTION 11.17. NO PETITION...........................................69
SECTION 11.18. INSPECTION............................................69
Exhibits
Exhibit A Form of Note
Exhibit B-1 Form of Transferee Certificate
Exhibit B-2 Form of Transferor Certificate
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INDENTURE dated as of January 9, 2003 between CPS Funding LLC,
a Delaware limited liability company (the "ISSUER"), and BANK ONE TRUST COMPANY,
N.A., a national banking association, as trustee (the "TRUSTEE").
Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Issuer's
Floating Rate Variable Funding Notes (the "NOTES"):
To secure the payment of principal of and interest on, and any
other amounts owing in respect of the Notes, equally and ratably without
preference, priority or distinction of any kind, and to secure compliance with
this Indenture, the Issuer has agreed to pledge the Collateral (as defined
below) as collateral to the Trustee for the benefit of the Noteholders and the
Insurer (as defined below), as their respective interests may appear.
Financial Security Assurance Inc. (the "INSURER") has issued
and delivered a financial guaranty insurance policy, dated the Closing Date
(with endorsements, the "NOTE POLICY"), pursuant to which the Insurer guarantees
Scheduled Payments with respect to the Notes, as defined in the Note Policy.
As an inducement to the Insurer to issue and deliver the Note
Policy, the Issuer and the Insurer have executed and delivered the Insurance and
Indemnity Agreement, dated as of January 9, 2003 (as amended from time to time,
the "INSURANCE AGREEMENT") among the Insurer, the Issuer and Consumer Portfolio
Services, Inc.
As an additional inducement to the Insurer to issue the Note
Policy, and as security for the performance by the Issuer of the Insurer Secured
Obligations (as defined below) and as security for the performance by the Issuer
of the Trustee Secured Obligations (as defined below), the Issuer has agreed to
assign the Collateral (as defined below) as collateral to the Trustee for the
benefit of the Issuer Secured Parties, as their respective interests may appear.
GRANTING CLAUSE
The Issuer hereby Grants to the Trustee on each Transfer Date,
as Trustee for the benefit of the Holders of Notes and for the benefit of the
Issuer Secured Parties all right, title and interest of the Issuer, whether now
existing or hereafter arising, in and to the following;
(a) the Receivables listed in the Schedule of Receivables from
time to time;
(b) all monies received under the Receivables on and after the
related Cutoff Date and all Net Liquidation Proceeds received with respect to
the Receivables on and after the related Cutoff Date;
(c) the security interests in the Financed Vehicles granted by
Obligors pursuant to the related Contracts and any other interest of the Issuer
in such Financed Vehicles, including, without limitation, the certificates of
title or, with respect to such Financed Vehicles in the Non-Certificated States,
other evidence of title issued by the applicable Departments of Motor Vehicles
or similar authorities in such States with respect to such Financed Vehicles;
(d) any proceeds from claims on any physical damage, credit
life and credit accident and health insurance policies or certificates relating
to the Financed Vehicles securing the Receivables or the Obligors thereunder;
(e) all proceeds from recourse against Dealers with respect to
the Receivables;
(f) refunds for the costs of extended service contracts with
respect to Financed Vehicles securing Receivables, refunds of unearned premiums
with respect to credit life and credit accident and health insurance policies or
certificates covering an Obligor or Financed Vehicle under a Receivable or his
or her obligations with respect to a Financed Vehicle and any recourse to
Dealers for any of the foregoing;
(g) the Receivable File related to each Receivable and all
other documents that the Issuer keeps on file in accordance with its customary
procedures relating to the Receivables, for Obligors of the Financed Vehicles;
(h) all amounts and property from time to time held in or
credited to the Collection Account, the Note Distribution Account, the Principal
Funding Account, or the Lockbox Account;
(i) property (including the right to receive future Net
Liquidation Proceeds) that secures a Receivable that has been acquired by or on
behalf of the Issuer pursuant to a liquidation of such Receivable;
(j) the Sale and Servicing Agreement, including a direct right
to cause the Seller or the Servicer to purchase Receivables from the Issuer
pursuant to the Sale and Servicing Agreement under the circumstances specified
therein; and
(k) all present and future claims, demands, causes and choses
in action in respect of any or all of the foregoing and all payments on or under
and all proceeds of every kind and nature whatsoever in respect of any or all of
the foregoing, including all proceeds of the conversion, voluntary or
involuntary, into cash or other liquid property, all cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit
accounts, insurance proceeds, condemnation awards, rights to payment of any and
every kind and other forms of obligations and receivables, instruments and other
property which at any time constitute all or part of or are included in the
proceeds of any of the foregoing (collectively, the "COLLATERAL").
In addition, the Issuer shall cause the Note Policy to be
issued for the benefit of the Noteholders.
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The foregoing Grant is made in trust to the Trustee, for the
benefit of the Holders of the Notes and the Issuer Secured Parties, as their
interests may appear, to secure the payment of principal of and interest on, and
any other amounts owing in respect of the Notes, equally and ratably without
preference, priority or distinction of any kind, and to secure compliance with
this Indenture. The Trustee hereby acknowledges such Grant, accepts the trusts
under this Indenture in accordance with the provisions of this Indenture and
agrees to perform its duties as required in this Indenture.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
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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 and
the definitions of such terms are equally applicable to both the singular and
plural forms of such terms and to each gender.
Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to them in the Sale and Servicing Agreement or,
if not defined therein, in the Insurance Agreement.
"ACT" has the meaning specified in SECTION 11.3(A).
"ACCOUNTING DATE" means, with respect to any Determination
Date, any Payment Date or any Prepayment Date, the close of business on the day
immediately preceding such Determination Date, Payment Date or Prepayment Date.
"AFFILIATE" of any Person means any Person who directly or
indirectly controls, is controlled by, or is under direct or indirect common
control with such Person. For purposes of this definition of "AFFILIATE", the
term "CONTROL" (including the terms "CONTROLLING", "CONTROLLED BY" and "UNDER
COMMON CONTROL WITH") means the possession, directly or indirectly, of the power
to direct or cause a direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
"AMOUNT FINANCED" with respect to a Receivable shall have the
meaning specified in the Sale and Servicing Agreement.
"ANNUAL PERCENTAGE RATE" or "APR" shall have the meaning
specified in the Sale and Servicing Agreement.
"AUTHORIZED OFFICER" means, with respect to the Issuer and the
Servicer, any officer or agent who is authorized to act for the Issuer or the
Servicer, as applicable, in matters relating to the Issuer or the Servicer and
who is identified on the list of Authorized Officers delivered by each of the
Issuer and the Servicer to the Trustee and the Insurer on the Closing Date (as
such list may be modified or supplemented from time to time thereafter).
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"BANK ONE" means Bank One Trust Company, N.A., a national
banking association and its successors.
"BASIC DOCUMENTS" means this Indenture, the Sale and Servicing
Agreement, the Master Spread Account Agreement, the Spread Account Supplement,
the Insurance Agreement, the Premium Letter, the Lockbox Agreement, the Note
Purchase Agreement and other documents and certificates delivered in connection
therewith.
"BENEFIT PLAN" shall mean an "EMPLOYEE BENEFIT PLAN", as
defined in Section 3(3) of ERISA, which is subject to Title I of ERISA or any
"PLAN" as defined in Section 4975 of the Code.
"BUSINESS DAY" means (i) any day other than a Saturday, a
Sunday or a day on which banking institutions in the City of New York, Chicago,
Illinois, or the State in which the Corporate Trust Office is located, the State
in which the executive offices of the Servicer are located and the State in
which the principal place of business of the Insurer is located shall be
authorized or obligated by law, executive order, or governmental decree to be
closed, and (ii) if the applicable Business Day relates to the determination of
LIBOR, a day which is a day described in clause (i) above and which is also a
day for trading by and between banks in the London interbank eurodollar market.
"CLEARING AGENCY" means an organization registered as a
"CLEARING AGENCY" pursuant to Section 17A of the Exchange Act, or any successor
provision thereto. The initial Clearing Agency shall be The Depository Trust
Company.
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time a
Clearing Agency effects book-entry transfers and pledges of securities deposited
with the Clearing Agency.
"CLOSING DATE" means January 9, 2003.
"CODE" means the Internal Revenue Code of 1986, as amended
from time to time, and Treasury Regulations promulgated thereunder.
"CONTROLLING PARTY" has the meaning specified in the Sale and
Servicing Agreement.
"COLLATERAL" has the meaning specified in the Granting Clause
of this Indenture.
"COMMISSION" means the United States Securities and Exchange
Commission.
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"CORPORATE TRUST OFFICE" means the principal office of the
Trustee at which at any particular time its corporate trust business shall be
administered which office at date of the execution of this Agreement is located
at Bank One Plaza, IL1-0481, Chicago, Illinois 60670, Attention: Structured
Finance CPS Funding, or at such other address as the Trustee may designate from
time to time by notice to the Noteholders, the Insurer, the Servicer and the
Issuer, or the principal corporate trust office of any successor Trustee (the
address of which the successor Trustee will notify the Noteholders and the
Issuer).
"CPSRC" means CPS Receivables Corp., a California Corporation.
"DEFAULT" means any occurrence that is, or with notice or the
lapse of time or both would become, an Event of Default.
"DOLLAR" means lawful money of the United States.
"EVENT OF DEFAULT" has the meaning specified in SECTION 5.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXECUTIVE OFFICER" means, 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; with respect to any limited liability company,
the manager, and with respect to any partnership, any general partner thereof.
"FACILITY LIMIT" means $75,000,000.
"GRANT" means to 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.
"HOLDER" or "NOTEHOLDER" means, with respect to a Note, the
Person in whose name such Note is registered on the Note Register.
"INDEBTEDNESS" means, with respect to any Person at any time,
(a) indebtedness or liability of such Person for borrowed money whether or not
evidenced by bonds, debentures, notes or other instruments, or for the deferred
purchase price of property or services (including trade obligations); (b)
obligations of such Person as lessee under leases which should be, in accordance
with generally accepted accounting principles, recorded as capital leases; (c)
current liabilities of such Person in respect of unfunded vested benefits under
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plans covered by Title IV of ERISA; (d) obligations issued for or liabilities
incurred on the account of such Person; (e) obligations or liabilities of such
Person arising under acceptance facilities; (f) obligations of such Person under
any guarantees, endorsements (other than for collection or deposit in the
ordinary course of business) and other contingent obligations to purchase, to
provide funds for payment, to supply funds to invest in any Person or otherwise
to assure a creditor against loss; (g) obligations of such Person secured by any
lien on property or assets of such Person, whether or not the obligations have
been assumed by such Person; or (h) obligations of such Person under any
interest rate or currency exchange agreement.
"INDENTURE" means this Indenture as amended, supplemented or
otherwise modified from time to time in accordance with its terms.
"INDEPENDENT" means, when used with respect to any specified
Person, that the person (a) is in fact independent of the Issuer, any other
obligor upon the Notes, the Seller and any Affiliate of any of the foregoing
persons, (b) does not have any direct financial interest or any material
indirect financial interest in the Issuer, any such other obligor, the Seller or
any Affiliate of any of the foregoing Persons and (c) is not connected with the
Issuer, any such other obligor, the Seller or any Affiliate of any of the
foregoing Persons as an officer, employee, promoter, underwriter, trustee,
partner, director or Person performing similar functions.
"INDEPENDENT CERTIFICATE" means a certificate or opinion to be
delivered to the Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of SECTION 11.1, prepared by an
Independent appraiser or other expert appointed by an Issuer Order and approved
by the Trustee in the exercise of reasonable care, and such opinion or
certificate shall state that the signer has read the definition of "INDEPENDENT"
in this Indenture and that the signer is Independent within the meaning thereof.
"INITIAL NOTE INCREASE" means, the Note Increase (if any) that
is funded on the Closing Date.
"INSURANCE AGREEMENT INDENTURE CROSS DEFAULT" has the meaning
specified therefor in the Insurance Agreement.
"INSURED PAYMENT DATE" has the meaning specified in the Sale
and Servicing Agreement.
"INSURER PREMIUM PERCENT" means 0.75%.
"INSURER SECURED OBLIGATIONS" means all amounts and
obligations which the Issuer may at any time owe to or on behalf of the Insurer
under this Indenture, the Insurance Agreement or any other Basic Document.
"ISSUER" means the party named as such in this Indenture until
a successor replaces it and, thereafter, means the successor and, for purposes
of any provision contained herein, each other obligor on the Notes.
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"ISSUER ORDER" and "ISSUER REQUEST" means a written order or
request signed in the name of the Issuer by any one of its Authorized Officers
and delivered to the Trustee.
"ISSUER SECURED OBLIGATIONS" means the Insurer Secured
Obligations and the Trustee Secured Obligations.
"ISSUER SECURED PARTIES" means each of the Trustee, in respect
of the Trustee Secured Obligations, and the Insurer, in respect of the Insurer
Secured Obligations.
"LIBOR" has the meaning set forth in the Sale and Servicing
Agreement.
"LIBOR DETERMINATION DATE" has the meaning set forth in the
Sale and Servicing Agreement.
"MAXIMUM NOTE INTEREST RATE" means, for each Interest Period
7.00%.
"NOTEHOLDER" means with respect to a Note, the Person in whose
name such Note is registered on the Note Register.
"NOTE INCREASE" means each funding in respect of the
outstanding principal amount of the Notes on any Transfer Date, including the
funding, if any, on the Closing Date.
"NOTE INCREASE AMOUNT" means the principal amount of any Note
Increase.
"NOTE INCREASE DATE" means the date (which shall be a Transfer
Date) on which a Note Increase is funded.
"NOTE INTEREST RATE" means for any Interest Period (a) during
the Revolving Period, the lesser of (i) LIBOR plus 0.75% and (ii) the Maximum
Note Interest Rate and (b) during the Amortization Period, the lesser of (i) the
greater of (x) the Two-Year Swap Rate plus 1.50% and (y) LIBOR plus 1.50% and
(ii) the Maximum Note Interest Rate.
"NOTE MAJORITY" has the meaning set forth in the Sale and
Servicing Agreement.
"NOTE PAYING AGENT" means the Trustee or any other Person that
meets the eligibility standards for the Trustee specified in SECTION 6.11 and is
authorized by the Issuer to make the payments to and distributions from the
Collection Account and the Note Distribution Account, including payment of
principal of or interest on the Notes on behalf of the Issuer.
"NOTE POLICY" means the Financial Guaranty Insurance Policy
(No. 51382-N) issued by the Insurer with respect to the Notes, including any
endorsements thereto.
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"NOTE REGISTER" and "NOTE REGISTRAR" have the respective
meanings specified in SECTION 2.4.
"NOTES" means the Floating Rate Variable Funding Notes,
substantially in the forms of Note set forth in EXHIBIT A.
"OFFICER'S CERTIFICATE" means 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 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" means 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
Trustee and to the Insurer, and which shall comply with any applicable
requirements of SECTION 11.1, and shall be in form and substance satisfactory to
the Trustee and the Insurer.
"OUTSTANDING" means, as of the date of determination, all
Notes theretofore authenticated and delivered under this Indenture except:
(i) Notes theretofore canceled by the Note Registrar
or delivered to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which
money in the necessary amount has been theretofore deposited
with the Trustee or any Note Paying Agent in trust for the
Holders of such Notes (provided, however, that if such Notes
are to be prepaid, notice of such prepayment has been duly
given pursuant to this Indenture, satisfactory to the
Trustee); and
(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 Trustee is
presented that any such Notes are held by a bona fide
purchaser;
PROVIDED, HOWEVER, that Notes which have been paid with proceeds of the Note
Policy shall continue to remain Outstanding for purposes of this Indenture until
the Insurer has been paid as subrogee hereunder or reimbursed pursuant to the
Insurance Agreement as evidenced by a written notice from the Insurer delivered
to the Trustee, and the Insurer shall be deemed to be the Holder thereof to the
extent of any payments thereon made by the Insurer; provided, further, 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 Seller or any Affiliate of any of the
8
foregoing Persons shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the 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 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 Trustee the pledgee's right so to
act with respect to such Notes and that the pledgee is not the Issuer, any other
obligor upon the Notes, the Seller or any Affiliate of any of the foregoing
Persons.
"OUTSTANDING AMOUNT" means, with respect to any date of
determination, the aggregate principal amount (including all Note Increase
Amounts as of such date) of all Notes Outstanding at such date of determination.
"PAYMENT DATE" has the meaning specified in the Notes.
"PREDECESSOR NOTE" means, 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 2.6 in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
"PREPAYMENT DATE" has the meaning specified in SECTION 10.1.
"PREPAYMENT PRICE" has the meaning specified in SECTION 10.1.
"PROCEEDING" means any suit in equity, action at law or other
judicial or administrative proceeding.
"QUALIFIED INSTITUTIONAL BUYER" means a qualified
institutional buyer as specified in Rule 144A under the Securities Act.
"RATING AGENCY" means each of Moody's and Standard & Poor's,
so long as such Persons maintain a rating on the Notes; and if either Moody's or
Standard & Poor's no longer maintains a rating on the Notes, such other
nationally recognized statistical rating organization selected by the Seller and
(so long as an Insurer Default shall not have occurred and be continuing)
acceptable to the Insurer.
"RATING AGENCY CONDITION" means, with respect to any action,
that each Rating Agency shall have been given 10 days' (or such shorter period
as shall be acceptable to each Rating Agency) prior notice thereof and that each
of the Rating Agencies shall have notified the Seller, the Servicer, the
Insurer, the Trustee and the Issuer in writing that such action will not result
in a reduction or withdrawal of the then current rating of the Notes, without
giving effect to the existence of the Note Policy.
"RECORD DATE" means, with respect to a Payment Date, Insured
Payment Date or Prepayment Date, the last day of the calendar month preceding
the month in which such Payment Date, Insured Payment Date or Prepayment Date
occurs.
"REQUIRED COLLATERAL RATIO" has the meaning specified in the
Sale and Servicing Agreement.
9
"RESPONSIBLE OFFICER" means, in the case of the Trustee, the
chairman or vice-chairman of the board of directors, the chairman or
vice-chairman of the executive committee of the board of directors, the
president, vice-president, assistant vice-president or managing director, the
secretary, and assistant secretary or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject.
"SALE AND SERVICING AGREEMENT" means the Sale and Servicing
Agreement dated as of January 9, 2003, among the Issuer, the Seller, the
Servicer, the Backup Servicer and the Trustee as Standby Servicer and as
Trustee, as the same may be amended or supplemented from time to time.
"SCHEDULED PAYMENTS" has the meaning specified in the Note
Policy.
"SERVICING FEE PERCENTAGE" means 2.50%.
"STATE" means any one of the 50 states of the United States of
America or the District of Columbia.
"TERMINATION DATE" means the latest of (i) the expiration of
the Note Policy and the return of the Note Policy to the Insurer for
cancellation, (ii) the date on which the Insurer shall have received payment and
performance of all Insurer Secured Obligations and (iii) the date on which the
Trustee shall have received payment and performance of all Trustee Secured
Obligations.
"TOTAL EXPENSE PERCENT" has the meaning specified in the Sale
and Servicing Agreement.
"TRUST ESTATE" means (i) all money, instruments, rights and
other property that are subject or intended to be subject to the lien and
security interest of this Indenture for the benefit of the Noteholders and the
Insurer (including all property and interests Granted to the Trustee), including
all proceeds thereof and (ii) the right to receive payments pursuant to the Note
Policy.
"TRUSTEE" means Bank One Trust Company, N.A. not in its
individual capacity but as trustee under this Indenture, or any successor
trustee under this
Indenture.
"TRUSTEE SECURED OBLIGATIONS" means all amounts and
obligations which the Issuer may at any time owe to, or on behalf of, the
Trustee for the benefit of the Noteholders under this Indenture or the Notes.
"TWO-YEAR SWAP RATE" means the two-year swap rate which
appears on Telerate page 19901 determined by the Initial Note Purchaser at or
about 11:00 a.m. New York City time (i) with respect to any Interest Period, on
the Business Day immediately preceding such Interest Period and (ii) with
respect to any other date of determination, on such date (or, if such date is
not a Business Day, on the next succeeding Business Day); PROVIDED, HOWEVER, if
the Two-Year Swap Rate does not appear on the Telerate Page 19901 on any such
date of determination, the Two-Year Swap Rate shall be determined as follows:
10
With respect to a day on which the Two-Year Swap Rate does not
appear on Telerate Page 19901, Two-Year Swap Rate will be determined at
approximately 11:00 A.M., New York City time, on such day on the basis of (a)
the arithmetic mean of the rates at which two-year interest rate swaps are
offered by four (4) major banks in New York City that actively trade in such
products selected by the Initial Note Purchaser and in a principal amount of not
less than $75,000,000 that is representative for a single transaction in such
market at such time.
"UCC" means, unless the context otherwise requires, the
Uniform Commercial Code, as in effect in the relevant jurisdiction, as amended
from time to time.
SECTION 1.2. [RESERVED].
SECTION 1.3. OTHER DEFINITIONAL PROVISIONS. Unless the context
otherwise requires:
(i) All references in this instrument to designated
"ARTICLES," "SECTIONS," "SUBSECTIONS" and other subdivisions
are to the designated Articles, Sections, Subsections and
other subdivisions of this instrument as originally executed.
(ii) The words "HEREIN," "HEREOF," "HEREUNDER" and
other words of similar import refer to this Indenture as a
whole and not to any particular Article, Section, Subsection
or other subdivision.
(iii) Accounting terms used but not defined or partly
defined in this Indenture, in any instrument governed hereby
or in any certificate or other document made or delivered
pursuant hereto, to the extent not defined, shall have the
respective meanings given to them under U.S. generally
accepted accounting principles as in effect on the date of
this Indenture or any such instrument, certificate or other
document, as applicable. To the extent that the definitions of
accounting terms in this Indenture or in any such instrument,
certificate or other document are inconsistent with the
meanings of such terms under U.S. generally accepted
accounting principles, the definitions contained in this
Indenture or in any such instrument, certificate or other
document shall control.
(iv) "OR" is not exclusive; and
(v) "INCLUDING" means including without limitation.
11
(vi) The definitions contained in this Indenture are
applicable to the singular as well as the plural forms of such
terms and to the masculine as well as the feminine and neuter
genders of such terms.
(vii) Any agreement, instrument or statute defined or
referred to herein or in any instrument or certificate
delivered in connection herewith means such agreement,
instrument or statute as the same may from time to time be
amended, modified or supplemented in accordance with their
respective terms and include (in the case of agreements or
instruments) references to all attachments and instruments
associated therewith; all references to a Person include its
permitted successors and assigns.
ARTICLE II
THE NOTES
---------
SECTION 2.1. FORM.
(a) The Notes, together with the Trustee's certificate of
authentication, shall be in substantially the form set forth in EXHIBIT A, with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture and may have such letters, numbers
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 such Note. It is anticipated that only one Note will be
issued on the Closing Date which Note shall be subject to Note Increases and
prepayments from time to time in accordance with Section 2.15 and Article X,
respectively.
(b) The Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without steel
engraved borders), all as determined by the officers executing such Notes, as
evidenced by their execution of such Notes.
(c) The terms of the Notes set forth in EXHIBIT A 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 manual or facsimile.
(b) Notes bearing the manual or facsimile signature of
individuals who were at any time Authorized Officers of the Issuer shall bind
the Issuer, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Notes or did
not hold such offices at the date of such Notes.
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(c) The Trustee shall upon receipt of the Note Policy and
Issuer Order for authentication and delivery, authenticate and deliver Notes for
original issue in an aggregate principal amount up to, but not in excess of, the
Facility Limit. Notes outstanding at any time may not exceed such amount except
as provided in SECTION 2.6.
(d) Each Note shall be dated the date of its authentication.
(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 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](a) .
SECTION 2.4. REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE.
(a) The Issuer shall cause to be kept a register (the "NOTE
REGISTER") in which, subject to such reasonable regulations as it may prescribe
and subject to the provisions of Section 2.5, the Issuer shall provide for the
registration of Notes, and the registration of transfers and exchanges of Notes.
The Trustee shall be "NOTE REGISTRAR" for the purpose of registering the Notes
and transfers of Notes as herein provided. Upon any resignation or removal 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 Trustee is appointed by the
Issuer as Note Registrar, the Issuer will give the Trustee and the Insurer
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 Trustee
and the Insurer shall have the right to inspect the Note Register at all
reasonable times and to obtain copies thereof. The Trustee shall have the right
to conclusively 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) Subject to SECTION 2.5 hereof, upon surrender for
registration of transfer of any Note at the office or agency of the Issuer to be
maintained as provided in SECTION 3.2, if the requirements of Section 8-401(a)
of the UCC are met, the Trustee shall have the Issuer execute and the Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes in any authorized denominations and a like
aggregate principal amount.
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(d) At the option of the Holder, Notes may be exchanged for
other Notes in any authorized denominations, of the same class 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, subject to
SECTION 2.5 hereof, if the requirements of Section 8-401(a) of the UCC are met,
the Issuer shall execute, and upon request by the Issuer the Trustee shall
authenticate, and the Noteholder shall obtain from the Trustee, the Notes which
the Noteholder making the exchange is entitled to receive. Every Note presented
or surrendered for registration of transfer or exchange shall be accompanied by
a written instrument of transfer in form satisfactory to the Issuer, the Trustee
and the Note Registrar duly executed by the Holder thereof or his attorney duly
authorized in writing.
(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 (i) duly endorsed by, or accompanied by a written
instrument of transfer in the form attached to EXHIBIT A 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 Trustee 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) The preceding provisions of this SECTION 2.4
notwithstanding, the Issuer shall not be required to make and the Note Registrar
shall not register transfers or exchanges of Notes selected for redemption or of
any Note for a period of 15 days preceding the due date for any payment with
respect to the Notes.
SECTION 2.5. RESTRICTIONS ON TRANSFER AND EXCHANGE.
(a) No transfer of a Note shall be made unless the transferor
therefor has provided a certification substantially in the form of EXHIBIT B-2
that such transfer is (i) to the Issuer, or (ii) to any person the transferor
reasonably believes is a Qualified Institutional Buyer in a transaction meeting
the requirements of Rule 144A under the Securities Act, or (iii) in compliance
with Section 2.5(c) hereof, (A) to an institutional investor that is an
14
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) of
Regulation D promulgated under the Securities Act in compliance with Section
2.5(d) hereof, or (B) in a transaction complying with or exempt from the
registration requirements of the Securities Act and in accordance with any
applicable securities laws of any state of the United States or any other
jurisdiction; PROVIDED, that (except with respect to the transfer of any Note or
Note Increase made by the Initial Note Purchaser), in the case of CLAUSES (A)
and (B) the Trustee or the Issuer may require an Opinion of Counsel to the
effect that such transfer may be effected without registration under the
Securities Act, which Opinion of Counsel, if so required, shall be addressed to
the Issuer and the Trustee and shall be secured at the expense of the Holder.
Each prospective purchaser by its acquisition of any Note, acknowledges that
each Note will contain a legend substantially to the effect set forth in SECTION
2.5(C) (unless the Issuer determines otherwise in accordance with applicable
law).
Any transfer or exchange of a Note to a proposed
transferee shall be conducted in accordance with the provisions of SECTION 2.4,
and shall be contingent
upon receipt by the Note Registrar of (A) such Note properly endorsed for
assignment or transfer and (B) such certificates or signatures as may be
required under the Note or this SECTION 2.5 , in each case, in form and
substance satisfactory to the Note Registrar. The Note Registrar shall cause any
such transfers and related cancellations or increases and related reductions, as
applicable, to be properly recorded in its books in accordance with the
requirements of SECTION 2.4.
(b) [Reserved]
(c) TRANSFERS TO INSTITUTIONAL ACCREDITED INVESTORS OR
QUALIFIED INSTITUTIONAL BUYERS.
(i) Any transfer to an institutional "ACCREDITED
INVESTOR" or to a Qualified Institutional Buyer, is expressly
conditioned upon the requirement that such transferee shall
deliver a Transferee's Certificate in the form of EXHIBIT B-1.
(d) LEGENDING OF NOTES. Unless the Issuer determines otherwise
in accordance with applicable law, each Note shall carry the following legend:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR "BLUE
SKY" LAWS. THE HOLDER HEREOF, BY PURCHASING ANY NOTE, AGREES FOR THE
BENEFIT OF THE ISSUER THAT IT IS AN INSTITUTIONAL INVESTOR THAT IS AN
"ACCREDITED INVESTOR" AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF
REGULATION D PROMULGATED UNDER THE SECURITIES ACT AND THAT SUCH NOTE IS
BEING ACQUIRED FOR ITS OWN ACCOUNT FOR INVESTMENT AND NOT WITH A VIEW
TO DISTRIBUTION AND MAY BE RESOLD, PLEDGED OR TRANSFERRED ONLY TO (1)
THE ISSUER (UPON REDEMPTION THEREOF OR OTHERWISE), (2) TO A PERSON THE
15
TRANSFEROR 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 OR (3) IN A TRANSACTION OTHERWISE EXEMPT
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
JURISDICTION, IN EACH SUCH CASE, IN COMPLIANCE WITH THE INDENTURE AND
ALL APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER JURISDICTION; PROVIDED, THAT THE TRUSTEE OR THE ISSUER MAY
REQUIRE AN OPINION OF COUNSEL TO THE EFFECT THAT SUCH TRANSFER MAY BE
EFFECTED WITHOUT REGISTRATION UNDER THE SECURITIES ACT, WHICH OPINION
OF COUNSEL, IF SO REQUIRED, SHALL BE ADDRESSED TO THE ISSUER AND THE
TRUSTEE AND SHALL BE SECURED AT THE EXPENSE OF THE HOLDER.
SECTION 2.6. MUTILATED, DESTROYED, LOST OR STOLEN NOTES.
(a) If (i) any mutilated Note is surrendered to the Trustee,
or the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, and (ii) there is delivered to the Trustee and the Insurer
(unless an Insurer Default shall have occurred and be continuing) such security
or indemnity as may be required by it to hold the Issuer, the Trustee and the
Insurer harmless, then, in the absence of notice to the Issuer, the Note
Registrar or the Trustee that such Note has been acquired by a bona fide
purchaser, and, provided that the requirements of Section 8-405 and 8-406 of the
UCC are met, the Issuer shall execute, and upon request by the Issuer, the
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, instead of issuing a replacement Note, the
Issuer may direct the Trustee, in writing, to pay such destroyed, lost or stolen
Note when so due or payable without surrender thereof. If, after the delivery of
such replacement Note or payment of a destroyed, lost or stolen Note pursuant to
the preceding sentence, a bona fide purchaser of the original Note in lieu of
which such replacement Note was issued, presents for payment such original Note,
the Issuer, the Trustee and the Insurer shall be entitled to recover such
replacement Note (or such payment) from the Person to whom it 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 Trustee in
connection therewith.
16
(b) Upon the issuance of any replacement Note under this
Section, the Issuer may require the payment by the Holder of such Note of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other reasonable expenses (including the fees and
expenses of the Trustee) 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 2.7. PERSONS DEEMED OWNER.
Prior to due presentment for registration of transfer of any
Note, the Issuer, the Trustee, the Insurer and any agent of the Issuer, the
Trustee or the Insurer may treat the Person in whose name any Note is registered
(as of the applicable Record Date) as the owner of such Note for the purpose of
receiving payments of principal of and interest, if any, on such Note, for all
other purposes whatsoever and whether or not such Note be overdue, and none of
the Issuer, the Insurer, the Trustee nor any agent of the Issuer, the Insurer or
the Trustee shall be affected by notice to the contrary.
SECTION 2.8. PAYMENT OF PRINCIPAL AND INTEREST; DEFAULTED INTEREST.
(a) The Notes shall accrue interest as provided in the forms
of Note set forth in EXHIBIT A, and such interest shall be due and payable on
each Payment Date and each Insured Payment Date, as specified therein. Any
installment of interest or principal, if any, payable on any Note which is
punctually paid or duly provided for by the Issuer on the applicable Payment
Date or Insured Payment Date shall be paid to the Person in whose name such Note
is registered on the related Record Date, either by wire transfer in immediately
available funds to such Person's account as it appears on the Note Register on
such Record Date if (i) such Noteholder has provided to the Note Registrar
appropriate written instructions at least five Business Days prior to such
Payment Date or Insured Payment Date and such Holder's Notes in the aggregate
evidence a denomination of not less than $1,000,000 or (ii) such Noteholder is
the Initial Note Purchaser, the Seller, or an Affiliate thereof, or if not by
check mailed to such Noteholder at the Address of such Noteholder appearing on
the Note Register.
(b) The principal of each Note shall be due and payable in
full on the Stated Maturity Date as provided in the forms of Note set forth in
EXHIBIT A. Notwithstanding the foregoing, the entire unpaid principal amount of
the Notes shall be due and payable, if not previously paid, on the date on which
an Event of Default shall have occurred and be continuing in the manner and
under the circumstances provided in SECTION 5.2. All principal payments on the
Notes shall be made pro rata to the Noteholders entitled thereto. Upon written
notice from the Issuer, the Trustee shall notify the Person in whose name a Note
17
is registered at the close of business on the Record Date preceding the Payment
Date on which the Issuer expects that the final installment of principal of and
interest on such Note will be paid. Such notice shall be mailed or transmitted
by facsimile prior to such final Payment Date and shall specify that such final
installment will be payable only upon presentation and surrender of such Note
and shall specify the place where such Note may be presented and surrendered for
payment of such installment.
(c) If the Issuer defaults in a payment of interest on the
Notes, the Issuer shall pay defaulted interest (plus interest on such defaulted
interest to the extent lawful) at the Note Interest Rate then in effect in any
lawful manner. The Issuer may pay such defaulted interest to the Persons who are
Noteholders on the immediately following Payment Date, and if such amount is not
paid on such following Payment Date, then on a subsequent special record date,
which date shall be at least five Business Days prior to the Payment Date. The
Issuer shall fix or cause to be fixed any such special record date and Payment
Date, and, at least 15 days before any such special record date, the Issuer
shall mail to each Noteholder and the Trustee a notice that states the special
record date, the payment date and the amount of defaulted interest to be paid.
(d) Promptly following the date on which all principal of and
interest on the Notes has been paid in full and the Notes have been surrendered
to the Trustee, the Trustee shall, if the Insurer has paid any amount in respect
of the Notes under the Note Policy or otherwise which has not been reimbursed to
it, deliver such surrendered Notes to the Insurer.
SECTION 2.9. CANCELLATION.
Subject to Section 2.8(c), all Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee and shall be promptly
canceled by the Trustee. Subject to Section 2.8(c), the Issuer may at any time
deliver to the 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 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.
Subject to Section 2.8(c), all canceled Notes may be held or disposed of by the
Trustee in accordance with its standard retention or disposal policy as in
effect at the time unless the Issuer shall direct by an Issuer Order that they
be destroyed or returned to it; provided that such Issuer Order is timely and
the Notes have not been previously disposed of by the Trustee.
SECTION 2.10. RELEASE OF COLLATERAL.
Subject to the terms of the other Basic Documents and Section
11.1, the Trustee shall, on or after the Termination Date, release any remaining
portion of the Trust Estate from the lien created by this Indenture and deposit
18
in the Collection Account any funds then on deposit in any other Trust Account.
In addition, the Trustee shall release Ineligible Receivables from the lien
created by this Indenture upon any dividend of such Ineligible Receivables
pursuant to Section 5.13 of the Sale and Servicing Agreement, provided that the
conditions in Section 10.4 are satisfied. The Trustee shall release property
from the lien created by this Indenture pursuant to this Section 2.10 only upon
receipt of an Issuer Request accompanied by an Officer's Certificate meeting the
applicable requirements of Section 11.1.
SECTION 2.11. [RESERVED].
SECTION 2.12. [RESERVED].
SECTION 2.13. [RESERVED]
SECTION 2.14. [RESERVED].
SECTION 2.15. AMOUNT LIMITED; NOTE INCREASES.
The maximum aggregate principal amount of Notes which may be
authenticated and delivered and Outstanding at any time under this Indenture is
limited to the Facility Limit.
On each Business Day during the Revolving Period that is a
Transfer Date under the Sale and Servicing Agreement, and upon the satisfaction
of all conditions precedent to (a) the funding of a Note Increase and (b) the
purchase of Receivables, in each case as set forth in SECTION 2.1(b) of the Sale
and Servicing Agreement, the Issuer shall be entitled to borrow additional funds
pursuant to a Note Increase on such Transfer Date in an aggregate principal
amount equal to the lesser of (i) the excess of (x) the Facility Limit over (y)
the outstanding principal amount of the Notes as of the close of business on the
day immediately preceding such Transfer Date and (ii) the product of (x) the
Aggregate Principal Balance of Receivables sold to the Purchaser pursuant to the
Sale and Servicing Agreement and related Assignment on each Transfer Date
relating to such Note Increase and (y) the Required Collateral Ratio. Each
request by the Issuer for a Note Increase shall be deemed to be a certification
by the Issuer as to the satisfaction of the conditions specified in the previous
sentence.
The aggregate outstanding principal amount of the Notes may be
increased through the funding of Note Increases. The Note Increase and
corresponding Note Increase Amount shall be recorded on the grid maintained by
the Trustee or in an electronic file substantially in the same form as such
grid. The grid (or such electronic file) shall show all Note Increase Amounts,
19
prepayments and additional Note issuances. The Trustee shall be responsible for
maintaining the grid with respect to each Note. Absent manifest error, all such
grid entries (whether manual or in electronic form) shall be dispositive with
respect to the determination of the outstanding principal amount of each Note.
On each Note Increase Date the Trustee shall promptly upon the funding of the
related Note Increase (including without limitation the Initial Note Increase),
provide to each Noteholder a copy of the revised grid reflecting such Note
Increase. The Notes (i) may be funded by Note Increases on any Transfer Date in
an amount of $1,000,000 and any higher amount (subject to the Facility Limit)
and (ii) subject to subsequent Note Increases pursuant to this Section 2.15, are
subject to prepayment, as provided in Article X herein.
ARTICLE III
COVENANTS
---------
SECTION 3.1. PAYMENT OF PRINCIPAL AND INTEREST.
The Issuer will duly and punctually pay the principal of and
interest on the Notes in accordance with the terms of the Notes and this
Indenture. Without limiting the foregoing, the Issuer will cause to be
distributed on each Payment Date or each Insured Payment Date, if applicable,
all amounts deposited in the Note Distribution Account pursuant to the Sale and
Servicing Agreement to the Noteholders. Amounts properly withheld under the Code
by any Person from a payment to any Noteholder of interest and/or principal
shall be considered as having been paid by the Issuer to such Noteholder for all
purposes of this Indenture.
SECTION 3.2. MAINTENANCE OF OFFICE OR AGENCY.
The Issuer will maintain in Phoenix, Arizona, an office or
agency where Notes may be surrendered for registration of transfer or exchange,
and where notices and demands to or upon the Issuer in respect of the Notes and
this Indenture may be served. The Issuer hereby initially appoints the Trustee
to serve as its agent for the foregoing purposes. The Issuer will give prompt
written notice to the Trustee of the location, and of any change in the
location, of any such office or agency. If at any time the Issuer shall fail to
maintain any such office or agency or shall fail to furnish the Trustee with the
address thereof, such surrenders, notices and demands may be made or served at
the Corporate Trust Office, and the Issuer hereby appoints the Trustee 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 Payment Date or each Insured Payment
Date, if applicable, the Issuer shall deposit or cause to be deposited in the
Note Distribution Account from the Collection Account an aggregate sum
sufficient to pay the amounts then becoming due under the Notes, such sum to be
held in trust for the benefit of the Persons entitled thereto and (unless the
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Note Paying Agent is the Trustee) shall promptly notify the Trustee of its
action or failure so to act.
(b) The Issuer shall cause each Note Paying Agent other than
the Trustee to execute and deliver to the Trustee and the Insurer an instrument
in which such Note Paying Agent shall agree with the Trustee (and if the Trustee
acts as Note Paying Agent, it hereby so agrees), subject to the provisions of
this Section, that such Note Paying Agent shall:
(i) hold all sums held by it for the payment of amounts due
with respect to the Notes in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided;
(ii) give the Trustee notice of any default by the Issuer (or
any other obligor upon the Notes) of which it has actual knowledge in
the making of any payment required to be made with respect to the
Notes;
(iii) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Note Paying Agent;
(iv) immediately resign as a Note Paying Agent and forthwith
pay to the Trustee all sums held by it in trust for the payment of
Notes if at any time it ceases to meet the standards required to be met
by a Note Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code 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.
(c) The Issuer may at any time, for the purpose of obtaining
the satisfaction and discharge of this Indenture or for any other purpose, by
Issuer Order direct any Note Paying Agent to pay to the Trustee all sums held in
trust by such Note Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which the sums were held by such Note Paying Agent;
and upon such a payment by any Note Paying Agent to the Trustee, such Note
Paying Agent shall be released from all further liability with respect to such
money.
(d) Subject to applicable laws with respect to the escheat of
funds, any money held by the Trustee or any Note Paying Agent in trust for the
payment of any amount due with respect to any Note and remaining unclaimed for
two years after such amount has become due and payable shall be discharged from
such trust and be paid to the Issuer on Issuer Request with the consent of the
Insurer (unless an Insurer Default shall have occurred and be continuing) and
shall be deposited by the Trustee 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
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Issuer), and all liability of the Trustee or such Note Paying Agent with respect
to such trust money shall thereupon cease; provided, however, that if such money
or any portion thereof had been previously deposited by the Insurer with the
Trustee for the payment of principal or interest on the Notes, to the extent any
amounts are owing to the Insurer, such amounts shall be paid promptly to the
Insurer upon receipt of a written request from the Insurer to such effect, and
provided, further, that the Trustee or such Note Paying Agent, before being
required to make any such repayment, 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 Trustee 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 Trustee
or of any Note Paying Agent, at the last address of record for each such
Holder).
SECTION 3.4. EXISTENCE.
Except as otherwise permitted by the provisions of Section
3.10, the Issuer will keep in full effect its existence, rights and franchises
as a limited liability Company under the laws of the State of Delaware (unless
it becomes, or any successor Issuer hereunder is or becomes, organized under the
laws of any other state or of the United States of America, in which case the
Issuer will keep in full effect its existence, rights and franchises under the
laws of such other jurisdiction) 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
Trust Estate.
SECTION 3.5. PROTECTION OF TRUST ESTATE.
The Issuer intends the security interest Granted pursuant to
this Indenture in favor of the Issuer Secured Parties to be prior to all other
liens in respect of the Trust Estate, and the Issuer shall take all actions
necessary to obtain and maintain, in favor of the Trustee, for the benefit of
the Issuer Secured Parties, a first lien on and a first priority, perfected
security interest in the Trust Estate. The Issuer will from time to time prepare
(or shall 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 Trust
Estate;
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(ii) maintain or preserve the lien and security interest (and
the priority thereof) in favor of the Trustee for the benefit of the
Issuer 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 Trust Estate and the
rights of the Trustee and the Noteholders in such Trust Estate against
the claims of all persons and parties; and
(vi) pay all taxes or assessments levied or assessed upon the
Trust Estate when due.
The Issuer hereby designates the Trustee its agent and attorney-in-fact to
execute any financing statement, continuation statement or other instrument
required by the Trustee pursuant to this Section.
SECTION 3.6. OPINIONS AS TO TRUST ESTATE.
(a) On the Closing Date, the Issuer shall furnish to the
Trustee, the Initial Note Purchaser and the Insurer 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 Trustee, for the benefit of the Issuer 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 90 days after the beginning of each calendar year,
beginning with the first calendar year beginning more than three months after
the first day of the Amortization Period, the Issuer shall furnish to the
Trustee, the Initial Note Purchaser (for so long as the Initial Note Purchaser
is a Noteholder) and the Insurer an Opinion of Counsel either stating that, in
the opinion of such counsel, such action has been taken with respect to the
recording, filing, re-recording and refiling of this Indenture, any indentures
supplemental hereto and any other requisite documents and with respect to the
execution and filing of any financing statements and continuation statements as
are necessary to maintain the lien and security interest created by this
Indenture and reciting the details of such action or stating that in the opinion
of such counsel no such action is necessary to maintain such lien and security
interest. Such Opinion of Counsel shall also describe any action necessary (as
of the date of such opinion) to be taken in the following year to maintain the
lien and security interest of this Indenture.
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SECTION 3.7. PERFORMANCE OF OBLIGATIONS; SERVICING OF RECEIVABLES.
(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 Trust Estate or that would result in the
amendment, hypothecation, subordination, termination or discharge of or impair
the validity or effectiveness of, any such instrument or agreement, except as
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 Controlling Party to assist it in performing its duties under this
Indenture, and any performance of such duties by a Person identified to the
Trustee and the Insurer in an Officer's Certificate of the Issuer shall be
deemed to be action taken by the Issuer. Initially, the Issuer has contracted
with the Servicer and the Backup Servicer to assist the Issuer in performing its
duties under this Indenture.
(c) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the other Basic
Documents and in the instruments and agreements included in the Trust Estate,
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 Sale and
Servicing Agreement in accordance with and within the time periods provided for
herein and therein. Except as otherwise expressly provided therein, the Issuer
shall not waive, amend, modify, supplement or terminate any Basic Document or
any provision thereof without the consent of the Trustee or the Controlling
Party.
(d) If a responsible officer of the Issuer shall have written
notice or actual knowledge of the occurrence of a Servicer Termination Event or
Amortization Event under the Sale and Servicing Agreement, the Issuer shall
promptly notify the Trustee, the Insurer 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 an Amortization Event
shall arise from the failure of the Servicer to perform any of its duties or
obligations under the Sale and Servicing Agreement with respect to the
Receivables, the Issuer shall take all reasonable steps available to it to
remedy such failure.
(e) The Issuer agrees that it will not waive timely
performance or observance by the Servicer or the Seller of their respective
duties under the Basic Documents (x) without the prior consent of the
Controlling Party.
SECTION 3.8. NEGATIVE COVENANTS.
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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 Trust Estate, unless directed to do so by the Controlling Party;
(ii) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Notes (other than
amounts properly withheld from such payments under the Code) or assert
any claim against any present or former Noteholder by reason of the
payment of the taxes levied or assessed upon any part of the Trust
Estate; or
(iii) (A) permit the validity or effectiveness of this
Indenture to be impaired, or permit the lien 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 created by
this Indenture) to be created on or extend to or otherwise arise upon
or burden the Trust Estate or any part thereof or any interest therein
or the proceeds thereof (other than tax liens, mechanics' liens and
other liens that arise by operation of law, in each case on a Financed
Vehicle and arising solely as a result of an action or omission of the
related Obligor), (C) permit the lien created by this Indenture not to
constitute a valid first priority (other than with respect to any such
tax, mechanics' or other lien) perfected security interest in the Trust
Estate or (D) amend, modify or fail to comply with the provisions of
the Basic Documents without the prior written consent of the
Controlling Party.
SECTION 3.9. ANNUAL STATEMENT AS TO COMPLIANCE.
The Issuer will deliver to the Trustee, the Initial Note
Purchaser (for so long as the Initial Note Purchaser is a Noteholder) and the
Insurer, on or before July 31 of each year, beginning July 31, 2004 an Officer's
Certificate, dated as of March 31 of such year, stating, as to the Authorized
Officer signing such Officer's Certificate, that
(i) a review of the activities of the Issuer during the
preceding 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 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 3.10. ISSUER MAY CONSOLIDATE, ETC. ONLY ON CERTAIN TERMS.
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(a) The Issuer shall not consolidate or merge with or into any
other Person, unless
(i) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger shall be a Delaware limited
liability company and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee and the Insurer, the due and punctual
payment of the principal of and interest on all Notes and the
performance or observance of every agreement and covenant of this
Indenture on the part of the Issuer to be performed or observed, all as
provided herein;
(ii) immediately after giving effect to such transaction, no
Default, Event of Default, or Amortization Event shall have occurred
and be continuing;
(iii) the Rating Agency Condition shall have been satisfied
with respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Trustee the Initial Note
Purchaser (for so long as the Initial Note Purchaser is a Noteholder)
and the Insurer) to the effect that such transaction will not have any
material adverse tax consequence to the Insurer or any Noteholder;
(v) any action as is necessary to maintain the lien and first
priority, perfected security interest created by this Indenture shall
have been taken;
(vi) the Issuer shall have delivered to the Trustee and the
Initial Note Purchaser (for so long as the Initial Note Purchaser is a
Noteholder) and the Insurer an Officer's Certificate and an Opinion of
Counsel each stating that such consolidation or merger and such
supplemental indenture comply with this SECTION 3.10 and that all
conditions precedent herein provided for relating to such transaction
have been complied with; and
(vii) so long as no Insurer Default shall have occurred and be
continuing, the Issuer shall have given the Insurer written notice of
such conveyance or transfer at least 20 Business Days prior to the
consummation of such action and shall have received the prior written
approval of the Insurer of such conveyance or transfer and the Issuer
or the Person (if other than the Issuer) formed by or surviving such
conveyance or transfer has a net worth, immediately after such
conveyance or transfer, that is (a) greater than zero and (b) not less
than the net worth of the Issuer immediately prior to giving effect to
such conveyance or transfer.
(b) The Issuer shall not convey or transfer all or
substantially all of its properties or assets, including those included in the
Trust Estate, to any Person, unless
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(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of which
is hereby restricted shall (A) be a Delaware limited liability company,
(B) expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, and the
Insurer, the due and punctual payment of the principal of and interest
on all Notes and the performance or observance of every agreement and
covenant of this Indenture and each of the other Basic Documents on the
part of the Issuer to be performed or observed, all as provided herein,
(C) expressly agree by means of such supplemental indenture that all
right, title and interest so conveyed or transferred shall be subject
and subordinate to the rights of Holders of the Notes, and (D) unless
otherwise provided in such supplemental indenture, expressly agree to
indemnify, defend and hold harmless the Issuer against and from any
loss, liability or expense arising under or related to this Indenture
and the Notes;
(ii) immediately after giving effect to such transaction, no
Default, Event of Default or Amortization Event shall have occurred and
be continuing;
(iii) the Rating Agency Condition shall have been satisfied
with respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Trustee, the Initial Note
Purchaser (for so long as the Initial Note Purchaser is a Noteholder)
and the Insurer) to the effect that such transaction will not have any
material adverse tax consequence to the Insurer or any Noteholder;
(v) any action as is necessary to maintain the lien and
security interest created by this Indenture shall have been taken;
(vi) the Issuer shall have delivered to the Trustee, the
Initial Note Purchaser (for so long as the Initial Note Purchaser is a
Noteholder) and the Insurer an Officers' Certificate and an Opinion of
Counsel each stating that such conveyance or transfer and such
supplemental indenture comply with this SECTION 3.10 and that all
conditions precedent herein provided for relating to such transaction
have been complied with; and
(vii) so long as no Insurer Default shall have occurred and be
continuing, the Issuer shall have given the Insurer written notice of
such conveyance or transfer at least 20 Business Days prior to the
consummation of such action and shall have received the prior written
approval of the Insurer of such conveyance or transfer and the Issuer
or the Person (if other than the Issuer) formed by or surviving such
conveyance or transfer has a net worth, immediately after such
conveyance or transfer, that is (a) greater than zero and (b) not less
than the net worth of the Issuer immediately prior to giving effect to
such consolidation or merger.
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SECTION 3.11. SUCCESSOR OR TRANSFEREE.
(a) Upon any consolidation or merger of the Issuer in
accordance with Section 3.10(a), the Person formed by or surviving such
consolidation or merger (if other than the Issuer) shall succeed to, and be
substituted for, and may exercise every right and power of, the Issuer under
this Indenture with the same effect as if such Person had been named as the
Issuer herein.
(b) Upon a conveyance or transfer of all the assets and
properties of the Issuer pursuant to SECTION 3.10(B), CPS Funding LLC will be
released from every covenant and agreement of this Indenture to be observed or
performed on the part of the Issuer with respect to the Notes immediately upon
the delivery of written notice to the Trustee stating that CPS Funding LLC is to
be so released.
No Other Business. The Issuer shall not engage in any business other than
financing, purchasing, owning, selling and managing the Receivables in the
manner contemplated by this Indenture and the other Basic Documents and
activities incidental thereto. After the Revolving Period, the Issuer shall not
purchase any additional Receivables.
SECTION 3.12. 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) obligations owing from time to time to the Insurer under the
Insurance Agreement and (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 Receivables and the other assets specified
in the Sale and Servicing Agreement, to fund the Liquidity Amount and to pay the
Issuer's organizational, transactional and start-up expenses.
SECTION 3.13. SERVICER'S OBLIGATIONS.
The Issuer shall cause the Servicer to comply with Sections
4.9, 4.10, 4.11 and 5.11 of the Sale and Servicing Agreement.
SECTION 3.14. GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES.
Except as contemplated by the Sale and Servicing Agreement,
this Indenture or the other Basic Documents, the Issuer shall not make any loan
or advance or credit to, or guarantee (directly or indirectly or by an
instrument having the effect of assuring another's payment or performance on any
obligation or capability of so doing or otherwise), endorse or otherwise become
contingently liable, directly or indirectly, in connection with the obligations,
stocks or dividends of, or own, purchase, repurchase or acquire (or agree
contingently to do so) any stock, obligations, assets or securities of, or any
other interest in, or make any capital contribution to, any other Person.
SECTION 3.15. CAPITAL EXPENDITURES.
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The Issuer shall not make any expenditure (by long-term or
operating lease or otherwise) for capital assets (either realty or personalty).
SECTION 3.16. 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 3.17. RESTRICTED PAYMENTS.
The Issuer shall not, directly or indirectly, (i) pay any
dividend or make any distribution (by reduction of capital or otherwise),
whether in cash, property, securities or a combination thereof, to any owner of
a beneficial interest in the Issuer or otherwise with respect to any ownership
or equity interest or security in or of the Issuer or to CPSRC, (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 CPSRC, the Trustee and any owner of a beneficial interest
in the Issuer as permitted by, and to the extent funds are available for such
purpose under, the Sale and Servicing Agreement. The Issuer will not, directly
or indirectly, make payments to or distributions from the Collection Account and
the other Pledged Accounts except in accordance with this Indenture and the
Basic Documents.
SECTION 3.18. NOTICE OF EVENTS OF DEFAULT AND AMORTIZATION EVENTS.
Upon a responsible officer of the Issuer having notice or
actual knowledge thereof, the Issuer agrees to give the Trustee, the Insurer,
the Initial Note Purchaser and the Rating Agencies prompt written notice of each
Event of Default hereunder and each Amortization Event or other Default on the
part of the Servicer or the Seller of its obligations under the Sale and
Servicing Agreement.
SECTION 3.19. FURTHER INSTRUMENTS AND ACTS.
Upon request of the Trustee or the Insurer, the Issuer will
execute and deliver such further instruments and do such further acts as may be
reasonably necessary or proper to carry out more effectively the purpose of this
Indenture.
SECTION 3.20. AMENDMENTS OF SALE AND SERVICING AGREEMENT.
The Issuer shall not agree to any amendment to Section 13.1 of
the Sale and Servicing Agreement to eliminate the requirements thereunder that
the Trustee, the Insurer or the Holders of the Notes consent to amendments
thereto as provided therein.
SECTION 3.21. INCOME TAX CHARACTERIZATION.
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For purposes of federal income tax, state and local income
tax, franchise tax and any other income taxes, the Issuer and the Noteholders
will treat the Notes as indebtedness and hereby instructs the Trustee to treat
the Notes as indebtedness for federal and state income tax reporting purposes.
SECTION 3.22. SEPARATE EXISTENCE OF THE ISSUER.
During the term of the Indenture, the Issuer shall observe the
applicable legal requirements for the recognition of the Issuer as a legal
entity separate and apart from its Affiliates, as set out in Section 9(j) of the
Amended and Restated Limited Liability Company Agreement of the Issuer dated
January 9, 2003.
SECTION 3.23. AMENDMENT OF ISSUER'S ORGANIZATIONAL DOCUMENTS.
The Issuer shall not amend its organizational documents except
in accordance with the provisions thereof.
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 Trustee hereunder
(including the rights of the Trustee under Section 6.7 and the obligations of
the Trustee under SECTION 4.2) and (vi) the rights of Noteholders as
beneficiaries hereof with respect to the property so deposited with the Trustee
payable to all or any of them, and the Trustee, on demand of and at the expense
of the Issuer, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture with respect to the Notes, when
(a) all Notes theretofore authenticated and delivered (other
than (i) Notes that have been destroyed, lost or stolen and that have been
replaced or paid as provided in SECTION 2.6 and (ii) Notes for whose payment
money has theretofore been deposited in trust or segregated and held in trust by
the Issuer and thereafter repaid to the Issuer or discharged from such trust, as
provided in SECTION 3.3) have been delivered to the Trustee for cancellation and
the Note Policy has expired and been returned to the Insurer for cancellation;
(b) the Issuer has paid or caused to be paid all Insurer
Secured Obligations and all Trustee Secured Obligations; and
(c) the Issuer has delivered to the Trustee and the Insurer an
Officer's Certificate 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.
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SECTION 4.2. APPLICATION OF TRUST MONEY.
All moneys deposited with the Trustee pursuant to Section 4.1
hereof shall be held in trust and applied by it, in accordance with the
provisions of the Notes and this Indenture, to the payment, either directly or
through any Note Paying Agent, as the Trustee may determine, to the Holders of
the particular Notes for the payment or redemption of which such moneys have
been deposited with the Trustee, of all sums due and to become due thereon for
principal and interest; but such moneys need not be segregated from other funds
except to the extent required herein, in the Sale and Servicing Agreement or in
the other Basic Documents or required by law.
SECTION 4.3. REPAYMENT OF MONEYS HELD BY NOTE PAYING AGENT.
In connection with the satisfaction and discharge of this
Indenture with respect to the Notes, all moneys then held by any Note Paying
Agent other than the Trustee under the provisions of this Indenture with respect
to such Notes shall, upon demand of the Issuer, be paid to the Trustee to be
held and applied according to Section 3.3 and thereupon such Note Paying Agent
shall be released from all further liability with respect to such moneys.
ARTICLE V
REMEDIES
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SECTION 5.1. EVENTS OF DEFAULT
(a) "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):
(i) default in the payment of any interest on any Note when
the same becomes due and payable and such default shall continue for a
period of 2 Business Days (solely for purposes of this clause, (x) so
long as no Insurer Default has occurred and is continuing, payment due
on a Payment Date shall not be considered "due" until the immediately
following Insured Payment Date and (y) a payment on the Notes funded by
the Insurer or the Collateral Agent pursuant to the Spread Account
Supplement shall be deemed to be a payment made by the Issuer); or
(ii) default in the payment of the principal of or any
installment of the principal of any Note when the same becomes due and
payable and such default shall continue for a period of 2 Business Days
(solely for purposes of this clause, (x) so long as no Insurer Default
has occurred and is continuing, a payment due on a Payment Date shall
not be considered "due" until the immediately following Insured Payment
Date and (y) a payment on the Notes funded by the Insurer or the
Collateral Agent pursuant to the Spread Account Supplement, shall be
deemed to be a payment made by the Issuer); or
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(iii) so long as an Insurer Default shall not have occurred
and be continuing, an Insurance Agreement Indenture Cross Default shall
have occurred; provided, however, that the occurrence of an Insurance
Agreement Indenture Cross Default may not form the basis of an Event of
Default unless the Insurer shall, upon prior written notice to the
Rating Agencies, have delivered to the Issuer and the Trustee and not
rescinded a written notice specifying that such Insurance Agreement
Indenture Cross Default constitutes an Event of Default under the
Indenture; or
(iv) so long as an Insurer Default shall have occurred and be
continuing, default in the observance or performance of any covenant or
agreement of the Issuer made in this Indenture (other than a covenant
or agreement, a default in the observance or performance of which is
elsewhere in this Section specifically dealt with), or any
representation or warranty of the Issuer made in this Indenture or in
any certificate or other writing delivered pursuant hereto or in
connection herewith proving to have been incorrect in any material
respect as of the time when the same shall have been made, and such
default shall continue or not be cured, or the circumstance or
condition in respect of which such misrepresentation or warranty was
incorrect shall not have been eliminated or otherwise cured, for a
period of 30 days (or for such longer period, not in excess of 90 days,
as may be reasonably necessary to remedy such default; provided that
such default is capable of remedy within 90 days or less and the
Servicer on behalf of the Issuer delivers an Officer's Certificate to
the Trustee to the effect that the Issuer has commenced, or will
promptly commence and diligently pursue, all reasonable efforts to
remedy such default) after there shall have been given, by registered
or certified mail, to the Issuer by the Trustee or to the Issuer and
the Trustee by the Holders of at least 25% of the Outstanding Amount of
the Notes, a written notice specifying such default or incorrect
representation or warranty and requiring it to be remedied and stating
that such notice is a "NOTICE OF DEFAULT" hereunder; or
(v) so long as an Insurer Default shall have occurred and be
continuing, the filing of a decree or order for relief by a court
having jurisdiction in the premises in respect of the Issuer or any
substantial part of the Trust Estate in an involuntary case under any
applicable Federal or state bankruptcy, insolvency or other similar law
now or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the
Issuer or for any substantial part of the Trust Estate, or ordering the
winding-up or liquidation of the Issuer's affairs, which decree or
order shall remain unstayed and in effect for a period of 60
consecutive days; or
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(vi) so long as an Insurer Default shall have occurred and be
continuing, the commencement by the Issuer of a voluntary case under
any applicable Federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, or the consent by the Issuer to the
entry of an order for relief in an involuntary case under any such law,
or the consent by the Issuer to the appointment or taking possession by
a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Issuer or for any substantial part of the Trust
Estate, or the making by the Issuer of any general assignment for the
benefit of creditors, or the failure by the Issuer generally to pay its
debts as such debts become due, or the taking of action by the Issuer
in furtherance of any of the foregoing.
(b) The Issuer shall deliver to the Trustee and the Insurer,
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 (III), its status and what
action the Issuer is taking or proposes to take with respect thereto.
SECTION 5.2. RIGHTS UPON EVENT OF DEFAULT.
(a) If an Insurer Default shall not have occurred and be
continuing and an Event of Default shall have occurred and be continuing, the
Notes shall become immediately due and payable at par, together with accrued
interest thereon. If an Event of Default shall have occurred and be continuing,
the Controlling Party may exercise any of the remedies specified in Section 5.4.
In the event of any acceleration of any Notes by operation of this Section 5.2,
the Trustee shall continue to be entitled to make claims under the Note Policy
pursuant to the Sale and Servicing Agreement for Scheduled Payments on the
Notes. Payments under the Note Policy following acceleration of any Notes shall
be applied by the Trustee:
FIRST: on any Insured Payment Date, to Noteholders for amounts
due and unpaid on the Notes for interest, ratably, without preference
or priority of any kind, according to the amounts due and payable on
the Notes for interest; and
SECOND: on the Final Scheduled Payment Date, for amounts due
and unpaid on the Notes, to the Noteholders, the Noteholders' Principal
Distributable Amount together with any Noteholders' Principal Carryover
Shortfall, to pay principal of the Notes until the outstanding
principal amount of the Notes has been reduced to zero.
(b) In the event any Notes are accelerated due to an Event of
Default, the Insurer shall have the right (in addition to its obligation to pay
Scheduled Payments on the Notes in accordance with the Note Policy), but not the
obligation, to make payments under the Note Policy or otherwise of interest and
principal due on such Notes, in whole or in part, on any date or dates following
such acceleration as the Insurer, in its sole discretion, shall elect.
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(c) If an Insurer Default shall have occurred and be
continuing and an Event of Default shall have occurred and be continuing, the
Trustee in its discretion may, or if so requested in writing by Holders holding
Notes representing not less than a majority of the Outstanding Amount of the
Notes, the Trustee shall, declare by written notice to the Issuer that the Notes
become, whereupon they shall become, immediately due and payable at par,
together with accrued interest thereon.
(d) If an Insurer Default shall have occurred and be
continuing, then at any time after such declaration of acceleration of maturity
has been made and before a judgment or decree for payment of the money due has
been obtained by the Trustee as hereinafter in this Article V provided, the
Holders of Notes representing a majority of the Outstanding Amount of the Notes,
by written notice to the Issuer and the Trustee, may rescind and annul such
declaration and its consequences if:
(i) the Issuer has paid or deposited with the Trustee a sum
sufficient to pay
(ii) all payments of principal of and interest on all Notes
and all other amounts that would then be due hereunder or upon such
Notes if the Event of Default giving rise to such acceleration had not
occurred; and
(iii) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances of
the Trustee and its agents and counsel; and
(iv) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such acceleration,
have been cured or waived as provided in Section 5.13.
No such rescission shall affect any subsequent default or
impair any right consequent thereto.
SECTION 5.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
(a) The Issuer covenants that if (i) default is made in the
payment of any interest on, or principal of, any Note when the same becomes due
and payable, the Issuer will, upon demand of the 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 Trustee and its agents and counsel.
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(b) Each Issuer Secured Party hereby irrevocably and
unconditionally appoints the Controlling Party as the true and lawful
attorney-in-fact of such Issuer Secured Party for so long as such Issuer Secured
Party is not the Controlling Party, 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 Controlling Party as well as in the
name, place and stead of such Issuer Secured Party such acts, things and deeds
for or on behalf of and in the name of such Issuer Secured Party under this
Indenture (including specifically under SECTION 5.4) and under the other Basic
Documents which such Issuer Secured Party could or might do or which may be
necessary, desirable or convenient in such Controlling Party's sole discretion
to effect the purposes contemplated hereunder and under the other Basic
Documents and, without limitation, following the occurrence of an Event of
Default, exercise full right, power and authority to take, or defer from taking,
any and all acts with respect to the administration, maintenance or disposition
of the Trust Estate.
(c) If an Event of Default occurs and is continuing, the
Trustee may in its discretion subject to the consent of the Controlling Party
and shall, at the direction of the Controlling Party (except as provided in
SECTION 5.3(D) below), proceed to protect and enforce its rights and the rights
of the Noteholders by such appropriate Proceedings as the Trustee or the
Controlling Party 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
Trustee by this Indenture or by law.
(d) [RESERVED].
(e) 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 Trust Estate, proceedings under Title 11 of the United States
Code or any other applicable Federal or state bankruptcy, insolvency or other
similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor or Person, or in case of any other comparable judicial proceedings
relative to the Issuer or other obligor upon the Notes, or to the creditors or
property of the Issuer or such other obligor, the Trustee, irrespective of
whether the principal of any Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the 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 Trustee (including any claim for
reasonable compensation to the Trustee and each predecessor Trustee,
and their respective agents, attorneys and counsel, and for
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reimbursement of all expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee, except as a
result of negligence, bad faith or willful misconduct) and of the
Noteholders allowed in such proceedings;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Holders of Notes in any election of a trustee, a
standby trustee or person performing similar functions in any such
proceedings;
(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
Trustee on their behalf; and
(f) 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 Trustee or
the Holders of Notes allowed in any judicial proceedings relative to the Issuer,
its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such proceeding is hereby authorized by each of such Noteholders to make
payments to the Trustee, and, in the event that the Trustee shall consent to the
making of payments directly to such Noteholders, to pay to the Trustee such
amounts as shall be sufficient to cover reasonable compensation to the Trustee,
each predecessor Trustee and their respective agents, attorneys and counsel, and
all other expenses and liabilities incurred, and all advances made, by the
Trustee and each predecessor Trustee except as a result of negligence or bad
faith.
(g) Nothing herein contained shall be deemed to authorize the
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 Trustee to vote in respect of the claim of any Noteholder in any
such proceeding except, as aforesaid, to vote for the election of a trustee in
bankruptcy or similar person.
(h) All rights of action and of asserting claims under this
Indenture, the Master Spread Account Agreement or under any of the Notes, may be
enforced by the 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 Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment, subject to
the payment of the expenses, disbursements and compensation of the Trustee, each
predecessor Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the Notes.
(i) In any proceedings brought by the Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture or
the Master Spread Account Agreement), the 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.
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SECTION 5.4. REMEDIES.
If an Event of Default shall have occurred and be continuing,
the Controlling Party may do one or more of the following (subject to Section
5.5):
(i) institute or direct the Trustee to institute Proceedings
in its own name and as trustee of an express trust for the collection
of all amounts then payable on the Notes or under this Indenture with
respect thereto, whether by declaration or otherwise, enforce any
judgment obtained, and collect from the Issuer and any other obligor
upon such Notes moneys adjudged due;
(ii) institute or direct the Trustee to institute Proceedings
from time to time for the complete or partial foreclosure of this
Indenture with respect to the Trust Estate;
(iii) exercise or direct the Trustee to exercise any remedies
of a secured party under the UCC and take any other appropriate action
to protect and enforce the rights and remedies of the Trustee and the
Holders of the Notes; and
(iv) sell or direct the Trustee to sell the Trust Estate or
any portion thereof or rights or interest therein, at one or more
public or private sales (including, without limitation, the sale of the
Collateral in connection with a securitization thereof) called and
conducted in any manner permitted by law; provided, however, that if
the Trustee is the Controlling Party, the Trustee may not sell or
otherwise liquidate the Trust Estate following an Event of Default
unless
(A) such Event of Default is of the type described in
Section 5.1(i) or (ii), or
(B) either
(x) the Holders of a Note Majority consent
thereto, or
(y) the proceeds of such sale or liquidation
distributable to the Noteholders are sufficient to
discharge in full all amounts then due and unpaid
upon such Notes for principal and interest.
Solely with respect to clause (y), in determining such sufficiency or
insufficiency the Trustee may, but need not, obtain and rely upon an opinion of
an Independent investment banking or accounting firm of national reputation as
to the feasibility of such proposed action and as to the sufficiency of the
Trust Estate for such purpose.
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SECTION 5.5. OPTIONAL PRESERVATION OF THE RECEIVABLES.
If the Trustee is the Controlling Party and if the Notes have
been declared to be due and payable under Section 5.2 following an Event of
Default and such declaration and its consequences have not been rescinded and
annulled, the Trustee may, but need not, elect to maintain possession of the
Trust Estate. It is the desire of the parties hereto and the Noteholders that
there be at all times sufficient funds for the payment of principal of and
interest on the Notes, and the Trustee shall take such desire into account when
determining whether or not to maintain possession of the Trust Estate. In
determining whether to maintain possession of the Trust Estate, the Trustee may,
but need not, obtain and rely upon an opinion of an Independent investment
banking or accounting firm of national reputation as to the feasibility of such
proposed action and as to the sufficiency of the Trust Estate for such purpose.
SECTION 5.6. PRIORITIES.
(a) Following (1) the acceleration of the Notes pursuant to
SECTION 5.2 or (2) if an Insurer Default shall have occurred and be continuing,
the occurrence of an Event of Default pursuant to SECTION 5.1(i), 5.1(ii),
5.1(iv), 5.1(v) or 5.1(VI) of this Indenture, the Total Distribution Amount,
together with any other amounts on deposit in the Collection Account and the
Principal Funding Account, including any money or property collected pursuant to
SECTION 5.4 of this Indenture shall be applied by the Trustee on the related
Payment Date in the order of priority specified in Section 5.7 of the Sale and
Servicing Agreement.
(b) The Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section. At least 15 days before such
record date the Issuer shall mail to each Noteholder and the Trustee a notice
that states such record date, the payment date and the amount to be paid.
SECTION 5.7. LIMITATION OF SUITS.
No Holder of any Note shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless:
(i) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Outstanding
Amount of the Notes have made written request to the Trustee to
institute such proceeding in respect of such Event of Default in its
own name as Trustee hereunder;
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(iii) such Holder or Holders have offered to the Trustee
indemnity reasonably satisfactory to it against the costs, expenses and
liabilities to be incurred in complying with such request;
(iv) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute such
proceedings;
(v) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority of the Outstanding Amount of the Notes; and
(vi) an Insurer Default shall have occurred and be continuing;
it being understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
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 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 Trustee in its sole
discretion may determine what action, if any, shall be taken, notwithstanding
any other provisions of this Indenture.
SECTION 5.8. UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE PRINCIPAL
AND INTEREST.
Notwithstanding any other provisions of this Indenture, the
Holder of any Note shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest, if any, on such Note on or
after the respective due dates thereof expressed in such Note or in this
Indenture (or, in the case of prepayment, on or after the Prepayment Date) and
to institute suit for the enforcement of any such payment, and such right shall
not be impaired without the consent of such Holder.
SECTION 5.9. RESTORATION OF RIGHTS AND REMEDIES.
If the Controlling Party or any Noteholder has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason or has been
determined adversely to the Trustee or to such Noteholder, then and in every
such case the Issuer, the 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
Trustee and the Noteholders shall continue as though no such proceeding had been
instituted.
SECTION 5.10. RIGHTS AND REMEDIES CUMULATIVE.
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No right or remedy herein conferred upon or reserved to the
Controlling Party 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 5.11. DELAY OR OMISSION NOT A WAIVER.
No delay or omission of the Controlling Party 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 Trustee or to the Noteholders may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Noteholders, as the case may be.
SECTION 5.12. CONTROL BY NOTEHOLDERS.
If the Trustee is the Controlling Party, the Holders of a
majority of the Outstanding Amount of the Notes shall have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Trustee with respect to the Notes or exercising any trust or power
conferred on the Trustee; provided that
(i) such direction shall not be in conflict with any rule of
law or with this Indenture;
(ii) subject to the express terms of SECTION 5.4, any
direction to the Trustee to sell or liquidate the Trust Estate shall be
by the Holders of Notes representing not less than a Note Majority;
(iii) if the conditions set forth in SECTION 5.5 have been
satisfied and the Trustee elects to retain the Trust Estate pursuant to
such Section, then any direction to the Trustee by Holders of Notes
representing less than a Note Majority to sell or liquidate the Trust
Estate shall be of no force and effect; and
(iv) the Trustee may take any other action deemed proper by
the Trustee that is not inconsistent with such direction;
PROVIDED, HOWEVER, that, subject to SECTION 6.1, the Trustee need not take any
action that it determines might involve it in liability or might materially
adversely affect the rights of any Noteholders not consenting to such action.
SECTION 5.13. WAIVER OF PAST DEFAULTS.
If an Insurer Default shall have occurred and be continuing,
prior to the declaration of the acceleration of the maturity of the Notes as
provided in Section 5.2, the Holders of Notes of not less than a majority of the
Outstanding Amount of the Notes may waive any past Default or Event of Default
and its consequences except a Default or Event of Default (i) in payment of
principal of or interest on any of the Notes or (ii) in respect of a covenant or
40
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 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 Event of Default or impair any right consequent thereto.
Upon any such waiver, such Default or Event of Default shall
cease to exist and be deemed to have been cured and not to have occurred, and
any Event of Default arising therefrom shall be deemed to have been cured and
not to have occurred, for every purpose of this Indenture; but no such waiver
shall extend to any subsequent or other Default or Event of Default or impair
any right consequent thereto.
SECTION 5.14. 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 Trustee for any
action taken, suffered or omitted by it as 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 Trustee, (b) any suit instituted by any Noteholder, or group of Noteholders,
in each case holding in the aggregate more than 10% of the Outstanding Amount of
the 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
prepayment, on or after the Prepayment Date).
SECTION 5.15. 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 and any right of the Issuer to take such action shall be
suspended.
SECTION 5.16. SUBROGATION.
The Trustee shall receive as attorney-in-fact of each
Noteholder any Note Policy Claim Amount from the Insurer. Any and all Note
Policy Claim Amounts disbursed by the Trustee from claims made under the Note
Policy shall not be considered payment by the Issuer with respect to such Notes,
and shall not discharge the obligations of the Issuer with respect thereto. The
Insurer shall, to the extent it makes any payment with respect to the Notes,
41
become subrogated to the rights of the recipient of such payments to the extent
of such payments. Subject to and conditioned upon any payment with respect to
the Notes by or on behalf of the Insurer, the Trustee shall assign to the
Insurer all rights to the payment of interest or principal with respect to the
Notes which are then due for payment to the extent of all payments made by the
Insurer, and the Insurer may exercise any option, vote, right, power or the like
with respect to the Notes to the extent that it has made payment pursuant to the
Note Policy. To evidence such subrogation, the Note Registrar shall note the
Insurer's rights as subrogee upon the register of Noteholders upon receipt from
the Insurer of proof of payment by the Insurer of any Noteholders' Interest
Distributable Amount or Noteholders' Principal Distributable Amount. The
foregoing subrogation shall in all cases be subject to the rights of the
Noteholders to receive all Scheduled Payments in respect of the Notes.
SECTION 5.17. PREFERENCE CLAIMS.
(a) In the event that the Trustee has received a certified
copy of a final, non-appealable order of the appropriate court that any
Noteholders' Interest Distributable Amount or Noteholders' Principal
Distributable Amount paid on a Note has been avoided in whole or in part as a
preference payment under applicable bankruptcy law, the Trustee shall so notify
the Insurer, shall comply with the provisions of the Note Policy to obtain
payment by the Insurer of such avoided payment, and shall, at the time it
provides notice to the Insurer, notify Holders of the Notes by mail that, in the
event that any Noteholder's payment is so recoverable, such Noteholder will be
entitled to payment pursuant to the terms of the Note Policy. The Trustee shall
furnish to the Insurer at its written request, the requested records it holds in
its possession evidencing the payments of principal of and interest on Notes, if
any, which have been made by the Trustee and subsequently recovered from
Noteholders, and the dates on which such payments were made. Pursuant to the
terms of the Note Policy, the Insurer will make such payment on behalf of the
Noteholder to the receiver, conservator, debtor-in-possession or trustee in
bankruptcy named in the Order (as defined in the Note Policy) and not to the
Trustee or any Noteholder directly (unless a Noteholder has previously paid such
payment to the receiver, conservator, debtor-in-possession or trustee in
bankruptcy, in which case the Insurer will make such payment to the Trustee for
distribution to such Noteholder upon proof of such payment reasonably
satisfactory to the Insurer).
(b) The Trustee shall promptly notify the Insurer of any
proceeding or the institution of any action (of which the Trustee has actual
knowledge) seeking the avoidance as a preferential transfer under applicable
bankruptcy, insolvency, receivership, rehabilitation or similar law (a
"PREFERENCE CLAIM") of any payment made with respect to the Notes. Each Holder,
by its purchase of Notes, and the Trustee hereby agree that so long as (i) an
Insurer Default shall not have occurred and be continuing, (ii) any amounts due
to the Insurer under the Insurance Agreement or the other Basic Documents remain
unpaid or (iii) the Note Policy has not expired in accordance with its terms,
42
the Insurer may at any time during the continuation of any proceeding relating
to a Preference Claim direct all matters relating to such Preference Claim
including, without limitation, (1) the direction of any appeal of any order
relating to any Preference Claim and (2) the posting of any surety, supersedeas
or performance bond pending any such appeal at the expense of the Insurer, but
subject to reimbursement as provided in the Insurance Agreement. In addition,
and without limitation of the foregoing, as set forth in Section 5.16, the
Insurer shall be subrogated to, and each Noteholder and the Trustee hereby
delegate and assign, to the fullest extent permitted by law, the rights of the
Trustee and each Noteholder in the conduct of any proceeding with respect to a
Preference Claim, including, without limitation, all rights of any party to an
adversary proceeding action with respect to any court order issued in connection
with any such Preference Claim.
ARTICLE VI
THE TRUSTEE
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SECTION 6.1. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise the rights and powers vested in it by this Indenture and
the other 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 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 Trustee; and
(ii) in the absence of bad faith on its part, the
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
Trustee and conforming to the requirements of this Indenture;
however, the 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 Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of
paragraph (b) of this Section;
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(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it
is proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the 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 Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Issuer.
(e) Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law or the terms of this
Indenture or the Sale and Servicing Agreement.
(f) No provision of this Indenture shall require the 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 relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
(h) The Trustee shall permit any representative of the Insurer
or the Initial Note Purchaser, during the Trustee's normal business hours, to
examine all books of account, records, reports and other papers of the Trustee
relating to the Notes, to make copies and extracts therefrom and to discuss the
Trustee's affairs and actions, as such affairs and actions relate to the
Trustee's duties with respect to the Notes, with the Trustee's officers and
employees responsible for carrying out the Trustee's duties with respect to the
Notes.
(i) The Trustee shall, and hereby agrees that it will, perform
all of the obligations and duties required of it under the Sale and Servicing
Agreement.
(j) The Trustee shall, and hereby agrees that it will, hold
the Note Policy in trust, and will hold any proceeds of any claim on the Note
Policy in trust solely for the use and benefit of the Noteholders.
(k) Except for actions expressly authorized by this Indenture,
the Trustee shall take no action reasonably likely to impair the security
interests created or existing under any Receivable or Financed Vehicle or to
impair the value of any Receivable or Financed Vehicle.
(l) All information obtained by the Trustee regarding the
Obligors and the Receivables, whether upon the exercise of its rights under this
Indenture or otherwise, shall be maintained by the Trustee in confidence and
shall not be disclosed to any other Person, other than the Trustee's attorneys,
accountants and agents unless such disclosure is required by this Indenture or
any applicable law or regulation.
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SECTION 6.2. RIGHTS OF TRUSTEE.
Subject to Sections 6.1 and this Section 6.2, the Trustee
shall be protected and shall incur no liability to the Issuer or any Issuer
Secured 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 Trustee to be
genuine and to have been duly executed by the appropriate signatory, and, except
to the extent the Trustee has actual knowledge to the contrary or as required
pursuant to Section 6.1 the Trustee shall not be required to make any
independent investigation with respect thereto.
(a) Before the Trustee acts or refrains from acting, it may
require an Officer's Certificate. Subject to Section 6.1(c), the Trustee shall
not be liable for any action it takes or omits to take in good faith in reliance
on the Officer's Certificate.
(b) The 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 Trustee shall not be
responsible for any misconduct or negligence on the part of, or for the
supervision of Consumer Portfolio Services, Inc., or any other such agent,
attorney, custodian or nominee appointed with due care by it hereunder.
(c) The 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 Trustee's conduct does not
constitute willful misconduct, negligence or bad faith.
(d) The Trustee may consult with counsel, and the advice of
such counsel or any 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 or Opinion of counsel.
(e) The 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 Controlling Party, pursuant to the provisions of this Indenture, unless such
Holders of Notes or the Controlling Party shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that may be incurred therein or thereby; PROVIDED, HOWEVER, that the 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 in accordance with
SECTION 6.1.
(f) The 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 Insurer (so
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long as no Insurer Default shall have occurred and be continuing) or (if an
Insurer Default shall have occurred and be continuing) by the Holders of Notes
evidencing not less than 25% of the Outstanding Amount thereof; provided,
however, that if the payment within a reasonable time to the 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 Trustee, not reasonably assured to the
Trustee by the security afforded to it by the terms of this Indenture or the
Sale and Servicing Agreement, the 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 Trustee, shall be reimbursed by the Person
making such request upon demand.
SECTION 6.3. INDIVIDUAL RIGHTS OF TRUSTEE.
The 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 the Trustee. Any
Note Paying Agent, Note Registrar, co-registrar or co-paying agent may do the
same with like rights. However, the Trustee must comply with SECTION 6.11.
SECTION 6.4. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and
makes no representation as to the validity or adequacy of this Indenture, the
Trust Estate, the Collateral or the Notes, it shall not be accountable for 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 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 known by, or written notice of the existence thereof has been delivered
to, a Responsible Officer of the Trustee, the Trustee shall mail to each
Noteholder notice of the 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, if any), the 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 TRUSTEE TO HOLDERS.
The Trustee shall on behalf of the Issuer deliver to each
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.
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(a) The Issuer shall pay to the Trustee from time to time
compensation for its services pursuant to Section 5.7 of the Sale and Servicing
Agreement or as otherwise agreed pursuant to the Fee Schedule or other writing
in accordance with the Sale and Servicing Agreement. The Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Issuer shall reimburse the Trustee, pursuant to Section 5.7 of the
Sale and Servicing Agreement, for all reasonable out-of-pocket expenses incurred
or made by it, including costs of collection, in addition to the compensation
for its services. Such expenses shall include the reasonable compensation and
expenses, disbursements and advances of the Trustee's agents, counsel,
accountants and experts. The Issuer shall or shall cause the Servicer to
indemnify the Trustee against any and all loss, liability or expense incurred by
the Trustee without willful misfeasance, negligence or bad faith on its part
arising out of or in connection with the acceptance or the administration of
this trust and the performance of its duties hereunder, including the costs and
expenses of defending itself against any claim or liability in connection
therewith. The Trustee shall notify the Issuer and the Servicer promptly of any
claim for which it may seek indemnity. Failure by the 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 Sale and
Servicing Agreement. The Trustee may have separate counsel and the Issuer shall
or shall cause the Servicer to pay the fees and expenses of such counsel.
Neither the Issuer nor the Servicer need reimburse any expense or indemnify
against any loss, liability or expense incurred by the Trustee through the
Trustee's own willful misconduct, negligence or bad faith.
(b) The Issuer's payment obligations to the Trustee pursuant
to this Section shall survive the discharge of this Indenture. When the Trustee
incurs expenses after the occurrence of a Default specified in SECTION 5.1(A)(V)
or (VI) 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 other Basic
Documents, the recourse of the Trustee hereunder and under the other Basic
Documents shall be to the Trust Estate only and specifically shall not be
recourse to the other assets of the Issuer or the assets of any Noteholder. In
addition, the Trustee agrees that its recourse to the Issuer, the Trust Estate,
the Seller and amounts held pursuant to the Master Spread Account Agreement
shall be limited to the right to receive the distributions referred to in
Section 5.7 of the Sale and Servicing Agreement.
SECTION 6.8. REPLACEMENT OF TRUSTEE.
The Trustee may resign at any time by providing 60 days' prior
written notice to the Issuer, the Noteholders, the Insurer and the Rating
Agencies; provided however that no such resignation shall be effective unless
and until a successor Trustee has been appointed and has accepted such
appointment in accordance with this Section 6.8. The Issuer may, with the
consent of the Controlling Party, and at the request of the Controlling Party,
shall remove the Trustee if:
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(i) the Trustee fails to comply with SECTION 6.11;
(ii) a court having jurisdiction in the premises in
respect of the 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, trustee,
conservator, sequestrator (or similar official) for the
Trustee or for any substantial part of the Trustee's property,
or ordering the winding-up or liquidation of the 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 Trustee and such
case is not dismissed within 60 days;
(iv) the 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 received,
liquidator, assignee, custodian, trustee, conservator or
sequestrator (or other similar official) for the Trustee or
for any substantial part of the 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 furtherances of any of the foregoing; or
(v) the Trustee otherwise becomes incapable of
acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Issuer shall promptly appoint a
successor Trustee acceptable to the Insurer (so long as an Insurer Default shall
not have occurred and be continuing). If the Issuer fails to appoint such a
successor Trustee, the Controlling Party may appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee, the Controlling Party and the Issuer,
whereupon, the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have all the rights, powers and
duties of the retiring Trustee under this Indenture, subject to satisfaction of
the Rating Agency Condition. The successor Trustee shall mail a notice of its
succession to each Noteholder. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Issuer or the Holders of a majority in outstanding Amount of the Notes may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
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Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor Trustee
pursuant to SECTION 6.8.
Notwithstanding the replacement of the 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 Trustee.
SECTION 6.9. SUCCESSOR TRUSTEE BY MERGER.
(a) If the 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 Trustee.
The Trustee shall provide the Rating Agencies prior written notice of any such
transaction.
(b) In case at the time such successor or successors to the
Trustee by merger, conversion or consolidation 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 Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Trustee may authenticate such Notes either
in the name of any predecessor hereunder or in the name of the successor to the
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 Trustee shall have.
SECTION 6.10. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
(a) Notwithstanding any other provisions of this Indenture, at
any time, for the purpose of meeting any legal requirement of any jurisdiction
in which any part of the Trust Estate may at the time be located, the Trustee
with the consent of the Insurer (so long as an Insurer Default shall not have
occurred and be continuing) shall have the power and may execute and deliver all
instruments to appoint one or more Persons to act as a co-trustee or
co-trustees, or separate trustee or separate trustees, of all or any part of the
Trust Estate, and to vest in such Person or Persons, in such capacity and for
the benefit of the Noteholders, such title to the Trust Estate, or any part
thereof, and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and trusts as the Trustee may consider necessary or
desirable. No co-trustee or separate trustee hereunder shall be required to meet
the terms of eligibility as a successor trustee under Section 6.11 and no notice
to Noteholders of the appointment of any co-trustee or separate trustee shall be
required under Section 6.8 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
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(i) all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or
imposed upon and exercised or performed by the Trustee and
such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not
authorized to act separately without the 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 Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the
Trust or any portion thereof in any such jurisdiction) shall
be exercised and performed singly by such separate trustee or
co-trustee, but solely at the direction of the Trustee;
(ii) no trustee hereunder shall be personally liable
by reason of any act or omission of any other trustee
hereunder, including acts or omissions of predecessor or
successor trustees; and
(iii) the Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this ARTICLE VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
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 Trustee. Every such instrument shall be filed with the Trustee.
(d) Any separate trustee or co-trustee may at any time
constitute the Trustee, its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, 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 Trustee, to the extent permitted
by law, without the appointment of a new or successor trustee.
SECTION 6.11. ELIGIBILITY: DISQUALIFICATION.
The 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 having a rating, both with respect to long-term and short-term
unsecured obligations, of not less than investment grade by the Rating Agencies.
The Trustee shall provide copies of such reports to the Insurer upon request.
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SECTION 6.12. [RESERVED].
SECTION 6.13. APPOINTMENT AND POWERS.
Subject to the terms and conditions hereof, each of the Issuer
Secured Parties hereby appoints Bank One Trust Company, N.A. as the Trustee,
custodian, agent and bailee with respect to the Collateral, and Bank One Trust
Company, N.A. hereby accepts such appointment and agrees to act as Trustee,
custodian, agent and bailee with respect to the Collateral for the Issuer
Secured Parties, to maintain custody and possession of such Collateral (except
as otherwise provided hereunder) and to perform the other duties of the Trustee
in accordance with the provisions of this Indenture and the other Basic
Documents. Each Issuer Secured Party hereby authorizes the Trustee to take such
action on its behalf, and to exercise such rights, remedies, powers and
privileges hereunder, as the Controlling Party may direct and as are
specifically authorized to be exercised by the Trustee by the terms hereof,
together with such actions, rights, remedies, powers and privileges as are
reasonably incidental thereto. The Trustee shall act upon and in compliance with
the written instructions of the Controlling Party delivered pursuant to this
Indenture promptly following receipt of such written instructions; provided that
the 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 Trustee has not received reasonable indemnity. Receipt of such instructions
shall not be a condition to the exercise by the Trustee of its express duties
hereunder, except where this Indenture provides that the Trustee is permitted to
act only following and in accordance with such instructions.
SECTION 6.14. PERFORMANCE OF DUTIES.
The Trustee shall have no duties or responsibilities except
those expressly set forth in this Indenture and the other Basic Documents to
which the Trustee is a party or as directed by the Controlling Party in
accordance with this Indenture. The Trustee shall not be required to take any
discretionary actions hereunder except at the written direction and with the
indemnification of the Controlling Party and as provided in Section 5.12. The
Trustee shall, and hereby agrees that it will, perform all of the duties and
obligations required of it under the Sale and Servicing Agreement.
SECTION 6.15. LIMITATION ON LIABILITY.
Neither the 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 Trustee
shall be liable for its negligence, bad faith or willful misconduct.
Notwithstanding any term or provision of this Indenture, the Trustee shall incur
no liability to the Issuer or the Issuer Secured Parties for any action taken or
omitted by the Trustee in connection with the Collateral, except for the
negligence, bad faith or willful misconduct on the part of the Trustee, and,
51
further, shall incur no liability to the Issuer Secured Parties except for
negligence, bad faith or willful misconduct in carrying out its duties to the
Issuer Secured Parties. The 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 Trustee may consult with 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 written advice of such counsel. The
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
Controlling Party unless it shall have received reasonable security or indemnity
satisfactory to the Trustee against the costs, expenses and liabilities which
might be incurred by it.
SECTION 6.16. [RESERVED].
SECTION 6.17. SUCCESSOR TRUSTEE.
(a) MERGER. Any Person into which the 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 Trustee is a party, shall (provided it is otherwise
qualified to serve as the Trustee hereunder) be and become a successor Trustee
hereunder and be vested with all of the title to and interest in the Collateral
and all of the trusts, powers, descriptions, 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 Issuer Secured Parties in the Collateral; provided that
any such successor shall also be the successor Trustee under SECTION 6.9.
(b) REMOVAL. The Trustee may be removed by the Insurer (or, if
an Insurer Default has occurred and is continuing, by a Note Majority) at any
time, with or without cause, by an instrument or concurrent instruments in
writing delivered to the Trustee, the other Issuer Secured Party and the Issuer.
A temporary successor may be removed at any time to allow a successor Trustee to
be appointed pursuant to SUBSECTION (c) below. Any 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 Trustee
and the acceptance in writing by such successor Trustee of such appointment and
of its obligation to perform its duties hereunder in accordance with the
provisions hereof, and (ii) receipt by the Insurer (or, if an Insurer Default
has occurred and is continuing, all the Holders of the Notes) of an Opinion of
Counsel to the effect described in SECTION 3.6.
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(c) ACCEPTANCE BY SUCCESSOR. The Insurer (or, if an Insurer
Default has occurred and is continuing, a Note Majority) shall have the sole
right to appoint each successor Trustee. Every temporary or permanent successor
Trustee appointed hereunder shall execute, acknowledge and deliver to its
predecessor and to the Trustee, each Issuer Secured Party and the Issuer an
instrument in writing accepting such appointment hereunder and the relevant
predecessor shall execute, acknowledge and deliver such other documents and
instruments as will effectuate the delivery of all Collateral to the successor
Trustee, 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 Issuer Secured Party or the Issuer, 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 Issuer Secured Party is
reasonably required by a successor 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 Trustee, any and all such
written instruments shall at the request of the temporary or permanent successor
Trustee, be forthwith executed, acknowledged and delivered by the Trustee or the
Issuer, as the case may be. The designation of any successor Trustee and the
instrument or instruments removing any 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 Trustee in each
place where such filing or recording is necessary to effect the transfer of the
Collateral to the successor Trustee or to protect or continue the perfection of
the security interests granted hereunder.
SECTION 6.18. [RESERVED].
SECTION 6.19. REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE.
The Trustee represents and warrants to the Issuer and to each
Issuer Secured Party as follows:
(a) DUE ORGANIZATION. The 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 Trustee has all requisite right,
power and authority to execute and deliver this Indenture and to perform all of
its duties as Trustee hereunder.
(c) DUE AUTHORIZATION. The execution and delivery by the
Trustee of this Indenture and the other Basic Documents to which it is a party,
and the performance by the 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 Trustee, or the performance by the Trustee,
of this Indenture and such other Basic Documents.
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(d) VALID AND BINDING INDENTURE. The 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 Trustee, enforceable against the
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 Trustee hereby expressly waives any and all rights of
setoff that the Trustee may otherwise at any time have under applicable law with
respect to any Pledged Account and agrees that amounts in the Pledged Accounts
shall at all times be held and applied solely in accordance with the provisions
hereof.
SECTION 6.21. CONTROL BY THE CONTROLLING PARTY.
The Trustee shall comply with notices and instructions given
by the Issuer pursuant to the Basic Documents only if accompanied by the written
consent of the Controlling Party, except that if any Event of Default shall have
occurred and be continuing, the Trustee shall act upon and comply with notices
and instructions given by the Controlling Party alone in the place and stead of
the Issuer.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
------------------------------
SECTION 7.1. ISSUER TO FURNISH TO TRUSTEE NAMES AND ADDRESSES OF
NOTEHOLDERS.
The Issuer will furnish or cause to be furnished to the
Trustee (a) not more than five days after the earlier of (i) each Record Date
and (ii) three months after the last Record Date, a list, in such form as the
Trustee may reasonably require, of the names and addresses of the Holders as of
such Record Date, (b) at such other times as the Trustee may request in writing,
within 30 days after receipt by the Issuer of any such request, a list of
similar form and content as of a date not more than 10 days prior to the time
such list is furnished; provided, however, that so long as the Trustee is the
Note Registrar, no such list shall be required to be furnished. The Trustee or,
if the Trustee is not the Note Registrar, the Issuer shall furnish to the
Insurer in writing on an annual basis on each March 31 and at such other times
as the Insurer may request a copy of the list.
SECTION 7.2. PRESERVATION OF INFORMATION; COMMUNICATIONS TO
NOTEHOLDERS.
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The Trustee 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 Trustee as provided in Section 7.1 and the
names and addresses of Holders received by the Trustee in its capacity as Note
Registrar. The Trustee may destroy any list furnished to it as provided in such
Section 7.1 upon receipt of a new list so furnished.
ARTICLE VIII
COLLECTION OF MONEY AND RELEASES OF TRUST ESTATE
------------------------------------------------
SECTION 8.1. COLLECTION OF MONEY.
Except as otherwise expressly provided herein, the 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 Trustee pursuant to
this Indenture and the Sale and Servicing Agreement. The Trustee shall apply all
such money received by it as provided in this Indenture and the Sale and
Servicing Agreement. Except as otherwise expressly provided in this Indenture or
in the Sale 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
Trust Estate, the 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 TRUST ESTATE.
(a) Subject to the payment of its fees and expenses pursuant
to Section 6.7, the Trustee may, and when required by the provisions of this
Indenture shall, execute instruments to release property from the lien created
by 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 Trustee as provided in this Article VIII shall be bound to
ascertain the Trustee's authority, inquire into the satisfaction of any
conditions precedent or see to the application of any moneys.
(b) The Trustee shall, at such time as there are no Notes
outstanding and all sums due the Insurer under any of the Basic Documents and
all sums due the Trustee pursuant to SECTION 6.7 have been paid, release any
remaining portion of the Trust Estate that secured the Notes from the lien
created by this Indenture and release to the Issuer or any other Person entitled
thereto any funds then on deposit in the Pledged Accounts. The Trustee shall
release property from the lien created by this Indenture pursuant to this
SECTION 8.2(b) only upon receipt of an Issuer Request accompanied by an
Officer's Certificate.
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(c) OPINION OF COUNSEL. The Trustee shall receive at least
seven days' 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
Trustee shall also require as a condition to such action, an Opinion of Counsel
in form and substance satisfactory to the Trustee, stating the legal effect of
any such action, outlining the steps required to complete the same, and
concluding that all conditions precedent to the taking of such action have been
complied with and such action will not materially and adversely affect 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 Trust
Estate. Counsel rendering any such opinion may rely, without independent
investigation, on the accuracy and validity of any certificate or other
instrument delivered to the Trustee in connection with any such action.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1. SUPPLEMENTAL INDENTURES WITH THE CONSENT OF THE INSURER.
(a) Without the consent of the Holders of any Notes but with
the prior written consent of the Insurer (unless an Insurer Default shall have
occurred and be continuing) and with prior notice to the Rating Agencies by the
Issuer, as evidenced to the Trustee, the Issuer and the Trustee, when authorized
by an Issuer Order, at any time and from time to time, may enter into one or
more indentures supplemental hereto, in form satisfactory to the Trustee, for
any of the following purposes:
(i) to correct or amplify the description of any
property at any time subject to the lien created by this
Indenture, or better to assure, convey and confirm unto the
Trustee any property subject or required to be subjected to
the lien created by this Indenture, or to subject additional
property to the lien created by this Indenture;
(ii) to evidence the succession, in compliance with
the applicable provisions hereof, of another person to the
Issuer, and the assumption by any such successor of the
covenants of the Issuer 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 Trustee;
(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
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shall not materially and adversely affect the interests of the
Noteholders or the Insurer as evidenced by satisfaction of the
Rating Agency Condition; or
(vi) to evidence and provide for the acceptance of
the appointment hereunder by a successor trustee with respect
to the Notes and to add to or change any of the provisions of
this Indenture as shall be necessary to facilitate the
administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Article VI.
The 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 Trustee, when authorized by an Issuer
Order, may, also without the consent of any of the Holders of the Notes but with
the consent of the Insurer, if no Insurer Default has occurred and is
continuing, and with prior notice to the Rating Agencies by the Issuer, as
evidenced to the 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 such action shall not, as evidenced by an Opinion of Counsel,
adversely affect in any material respect the interests of any Noteholder.
SECTION 9.2. SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS.
(a) The Issuer and the Trustee, when authorized by an Issuer
Order, also may, with prior written notice to the Rating Agencies, with the
consent of the Insurer (unless an Insurer Default shall have occurred and be
continuing) and if the Insurer is no longer the Controlling Party, with the
consent of the Holders of not less than a majority of the Outstanding Amount of
the Notes, enter into an indenture or indentures supplemental hereto for any
purpose; 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 Prepayment
Price with respect thereto, change the provision of this
Indenture relating to the application of collections on, or
the proceeds of the sale of, the Trust Estate to payment of
principal of or interest on the Notes, or change any place of
payment where, or the coin or currency in which, any Note or
the interest thereon is payable; PROVIDED, HOWEVER, that any
change necessitated by the assumption by the Backup Servicer
or Standby Servicer or other successor Servicer to the duties
of CPS, as Servicer, which results in the Payment Date
becoming the same date as the Insured Payment Date shall not
be considered an event which requires the consent of the
Trustee, the Insurer or any Noteholder;
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(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 Prepayment 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 proviso to
the definition of the term "Outstanding";
(v) reduce the percentage of the Outstanding Amount
of the Notes required to direct the Trustee to direct the
Issuer to sell or liquidate the Trust Estate pursuant to
Section 5.4;
(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 other
Basic Documents cannot be modified or waived without the
consent of the Holder of each Outstanding Note;
(vii) modify any of the provisions of this Indenture
in such manner as to affect the calculation of the amount of
any payment of interest or principal due on any Note on any
Payment Date or any Insured Payment 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 created by this Indenture with
respect to any part of the Trust Estate or, except as
otherwise permitted or contemplated herein or in any of the
Basic Documents, terminate the lien created by this Indenture
on any property at any time subject hereto or deprive the
Holder of any Note of the security provided by the lien
created by this Indenture.
(b) The 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 Trustee shall not be liable for any
such determination made in good faith.
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(c) 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.
(d) Promptly after the execution by the Issuer and the Trustee
of any supplemental indenture pursuant to this Section, the Trustee shall mail
to the Insurer 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 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 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 Trustee
may, but shall not be obligated to, enter into any such supplemental indenture
that affects the 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 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
Issuer shall, bear a notation in form approved by the Issuer as to any matter
provided for in such supplemental indenture. If the Issuer shall so determine,
new Notes so modified as to conform, in the opinion of the Issuer, to any such
supplemental indenture may be prepared and executed by the Issuer and
authenticated and delivered by the Trustee in exchange for Outstanding Notes.
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ARTICLE X
PREPAYMENT OF NOTES
-------------------
SECTION 10.1. PREPAYMENT OF NOTES.
Subject to the provisions of Section 2.15 following any
prepayment in accordance herewith, the Notes shall be prepayable in whole, but
not in part, on any Business Day (each such day, a "Prepayment Date") at a price
(the "Prepayment Price") equal to the sum of (a) the outstanding principal
amount of the Notes as of the Accounting Date related to such Prepayment Date
and (b) all interest accrued on the Notes and unpaid as of such Prepayment Date
in accordance with the terms hereof. In addition, subject to the provisions of
Section 2.15, the Notes may be prepaid in whole upon the direction of the
Majority Noteholders without the consent of the Controlling Party, or in part
upon the discretion of the Majority Noteholders with the consent of the
Controlling Party, in each case in accordance with Section 10.4 herein. To the
extent there is more than one Note Outstanding, principal prepayments with
respect thereto shall be applied pro rata among all such Notes, without priority
or preference of any kind.
SECTION 10.2. NOTICE OF PREPAYMENT.
Notice of the prepayment of the Notes shall be given (a) at
any time prior to the occurrence of an Amortization Event, at the direction of
the Majority Noteholders in accordance with Section 10.4, and (b) after the
occurrence of an Amortization Event, upon the direction of the Controlling
Party, in each case by the Trustee by facsimile transmission, courier or first
class mail, postage prepaid, mailed, faxed or couriered not less than 30 days
prior to the related Prepayment Date, to each Holder of Notes, at such Holder's
address appearing in the Note Register, to the Initial Note Purchaser and to the
Insurer.
All notices of prepayment shall state:
(a) the Prepayment Date;
(b) the aggregate outstanding principal balance of the Notes
to be prepaid; and
(c) the Prepayment Price.
Failure to give notice of prepayment, or any defect therein,
to any Holder of any Note shall not impair or affect the validity of such
prepayment.
SECTION 10.3. DEPOSIT OF PREPAYMENT PRICE; RELEASE OF LIEN OF
INDENTURE.
(a) On or prior to any Prepayment Date, as a condition to the
release of the lien created by this Indenture with respect to the Collateral
related to the prepayment to occur on such Prepayment Date, an amount equal to
the sum of (a) the Prepayment Price and (b) all amounts due and owing (as of the
next succeeding Payment Date) pursuant to Section 5.7(a)(i)-(vi) and (ix) of the
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Sale and Servicing Agreement shall be on deposit in the Collection Account, the
Principal Funding Account and/or the Note Distribution Account for payment in
accordance with Section 5.7(a) of the Sale and Servicing Agreement on such
Prepayment Date.
SECTION 10.4. PREPAYMENT UPON SECURITIZATION OF RECEIVABLES.
Subject to Section 10.2, the Majority Noteholders may direct
the Issuer to sell all or portions of the Receivables into a term securitization
transaction approved by the Majority Noteholders (a "Take-Out Securitization")
(a) the proceeds of which are sufficient to pay (i) all amounts due in
connection with a full or partial prepayment of the Notes in accordance with
this ARTICLE X and (ii) all amounts then due and owing the Insurer and (b) in
which equity and any residual interest therein is retained by the Issuer or an
Affiliate thereof. Upon such direction, the Majority Noteholders shall direct
the Trustee to deliver a notice of prepayment of the Notes in accordance with
Section 10.2 and the Notes shall be repaid in accordance with this ARTICLE X. In
the event that the requirements for a Take-Out Securitization set forth above
are not satisfied, the sale of receivables and Take-Out Securitization shall not
be consummated and the Notes shall remain outstanding and payable in accordance
with their terms. No Noteholder shall have any claim against the Issuer or the
Insurer resulting solely from the Issuer's failure to consummate such Take-Out
Securitization, unless such failure results from the Issuer's or any Affiliate's
(i) refusal to consummate a Take-Out Securitization that would, absent such
refusal, result in the Notes being paid in full or (ii) negligence, bad faith or
willful misconduct.
SECTION 10.5. NOTES PREPAYABLE ON ANY DATE.
Notice of prepayment having been given as aforesaid, the Notes
so to be prepaid shall, on the date on which such prepayment shall occur, become
due and payable at the Prepayment Price therein specified, and from and after
such date (unless the Issuer shall default in the payment of the Prepayment
Price and subject to the provisions of Section 2.15) such Notes shall cease to
bear interest.
If any Note called for prepayment shall not be so paid upon presentment thereof
for prepayment in whole, the principal shall, until paid, bear interest from the
date on which such prepayment in whole shall occur at the Note Interest Rate.
ARTICLE XI
MISCELLANEOUS
-------------
SECTION 11.1. COMPLIANCE CERTIFICATES AND OPINIONS, ETC.
(a) Except as set forth herein, upon any application or
request by the Issuer to the Trustee to take any action under any provision of
this Indenture (other than any request hereunder by the Issuer for a Note
Increase), the Issuer shall furnish to the Trustee and to the Insurer (i) an
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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) 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) Other than with respect to Dollars prior to the deposit of
any Collateral or other property or securities with the Trustee that is to be
made the basis for the release of any property or securities subject to the lien
created by this Indenture, the Issuer shall, in addition to any obligation
imposed in SECTION 11.1(a) or elsewhere in this Indenture, furnish to the
Trustee and the Insurer an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the fair value (on the
date of such deposit) to the Issuer of the Collateral or other property or
securities to be so deposited.
(c) Whenever the Issuer is required to furnish to the Trustee
and the Insurer an Officer's Certificate certifying or stating the opinion of
any signer thereof as to the matters described in CLAUSE (b) above, the Issuer
shall also deliver to the Trustee and the Insurer an Independent Certificate as
to the same matters, if the fair value to the Issuer of the securities to be so
deposited and of all other such securities made the basis of any such withdrawal
or release since the commencement of the then-current fiscal year of the Issuer,
as set forth in the certificates delivered pursuant to CLAUSE (b) above and this
CLAUSE (c) is 10% or more of the Outstanding Amount of the Notes, but such a
certificate need not be furnished with respect to any securities so deposited,
if the fair value thereof to the Issuer as set forth in the related Officer's
Certificate is less than $25,000 or less than 1% percent of the Outstanding
Amount of the Notes.
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(d) Other than with respect to the release of any Purchased
Receivables or Liquidated Receivables, whenever any property or securities are
to be released from the lien created by this Indenture, the Issuer shall also
furnish to the Trustee and the Insurer 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.
(e) Whenever the Issuer is required to furnish to the Trustee
and the Insurer an Officer's Certificate certifying or stating the opinion of
any signer thereof as to the matters described in CLAUSE (d) above, the Issuer
shall also furnish to the Trustee and the Insurer an Independent Certificate as
to the same matters if the fair value of the property or securities and of all
other property other than Purchased Receivables and Liquidated Receivables, or
securities released from the lien created by this Indenture since the
commencement of the then current calendar year, as set forth in the certificates
required by CLAUSE (d) above and this CLAUSE (e), equals 10% or more of the
Outstanding Amount of the Notes, but such certificate need not be furnished in
the case of any release of property or securities if the fair value thereof as
set forth in the related Officer's Certificate is less than $25,000 or less than
1 percent of the then Outstanding Amount of the Notes.
(f) Notwithstanding SECTION 2.10 or any provision of this
Section, the Issuer may (A) collect, liquidate, sell or otherwise dispose of
Receivables as and to the extent permitted or required by the Basic Documents
and (B) make cash payments out of the Trust Accounts as and to the extent
permitted or required by the Basic Documents.
SECTION 11.2. FORM OF DOCUMENTS DELIVERED TO 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
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Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Servicer, the Seller or the Issuer, stating that the information with
respect to such factual matters is in the possession of the Servicer, the Seller
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 Trustee, it is provided that the
Issuer shall deliver any document as a condition of the granting of such
application, or as evidence of the Issuer's compliance with any term hereof, it
is intended that the truth and accuracy, at the time of the granting of such
application or at the effective date of such certificate or report (as the case
may be), of the facts and opinions stated in such document shall in such case be
conditions precedent to the right of the Issuer to have such application granted
or to the sufficiency of such certificate or report. The foregoing shall not,
however, be construed to affect the 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 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 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 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
Trustee or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Note.
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SECTION 11.4. NOTICES, ETC., TO TRUSTEE, ISSUER AND RATING AGENCIES.
(a) 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:
(i) the 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 Trustee at its Corporate
Trust Office;
(ii) the Issuer by the Trustee or by any Noteholder
shall be sufficient for every purpose hereunder if personally
delivered, delivered by overnight courier or mailed certified
mail, return receipt requested and shall deemed to have been
duly given upon receipt to the Issuer addressed to: CPS
Funding LLC, in care of the Chief Financial Officer or at such
other address previously furnished in writing to the Trustee
by the Issuer. The Issuer shall promptly transmit any notice
received by it from the Noteholders to the Trustee; or
(iii) the Insurer by the Issuer or the Trustee shall
be sufficient for any purpose hereunder if in writing and
mailed by registered mail or personally delivered or telexed
or telecopied to the recipient as follows:
To the Insurer:
Financial Security Assurance Inc.
350 Park Avenue
New York, NY 10022
Attention: Surveillance Department
Telex No.: (212) 688-3101
Confirmation: (212) 826-0100
Telecopy Nos.: (212) 339-3518 or
(212) 339-3529
(In each case in which notice or other communication to the Insurer refers to an
Event of Default, a claim on the Note Policy or with respect to which failure on
the part of the Insurer to respond shall be deemed to constitute consent or
acceptance, then a copy of such notice or other communication should also be
sent to the attention of the General Counsel and the Head--Financial Guaranty
Group "URGENT MATERIAL ENCLOSED.")
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(iv) the Initial Purchaser shall be sufficient for
any purpose hereunder if in writing and mailed by registered
mail or personally delivered or telexed or telecopied to the
recipient as follows:
To the Initial Purchaser:
Greenwich Capital Markets, Inc.
600 Steamboat Road
Greenwich, Connecticut 06830
Telex No.: (203) 618-2153
Confirmation No.:(203) 625-2757
Telecopy No.: (203) 618-2154
(b) Notices required to be given to the Rating Agencies by the
Issuer or the Trustee shall be in writing, personally delivered, delivered by
overnight courier or mailed certified mail, return receipt requested to (i) in
the case of Moody's, at the following address: Moody's Investors Service, Inc.,
99 Church Street, New York New York 10004 and (ii) in the case of S&P, at the
following address: Standard & Poor's Ratings Group, a Division of The McGraw
Hill Companies, 55 Water Street, New York, New York 10041, Attention:
Asset-Backed Surveillance Department; or as to each of the foregoing, at such
other address as shall be designated by written notice to the other parties.
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 expressly
provided herein) 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 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 Trustee shall be
deemed to be a sufficient giving of such notice.
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(d) Where this Indenture provides for notice to the Rating
Agencies, failure to give such notice shall not affect any other rights or
obligations created hereunder, and shall not under any circumstance constitute a
Default or Event of Default.
SECTION 11.6. ALTERNATE PAYMENT AND NOTICE PROVISIONS.
Notwithstanding any provision of this Indenture or any of the
Notes to the contrary, the Issuer may enter into any agreement with any Holder
of a Note providing for a method of payment, or notice by the Trustee or any
Note 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 Trustee (which consent shall not be
unreasonably withheld). The Issuer will furnish to the Trustee a copy of each
such agreement and the Trustee will cause payments to be made and notices to be
given in accordance with such agreements.
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 Trustee in this Indenture shall bind its successors.
All agreements of the Trustee in this Indenture shall bind its successors.
SECTION 11.10. SEVERABILITY.
In case any provision in this Indenture or in the Notes shall
be invalid, illegal or unenforceable, the validity, legality, and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 11.11. BENEFITS OF INDENTURE.
The Insurer and its successors and assigns shall be a
third-party beneficiary to the provisions of this Indenture, and shall be
entitled to rely upon and directly to enforce such provisions of this Indenture
so long as no Insurer Default shall have occurred and be continuing. 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 Trust Estate, any benefit or any legal or
equitable right, remedy or claim under this Indenture. The Insurer may disclaim
any of its rights and powers under this Indenture (in which case the Trustee may
exercise such right or power hereunder), but not its duties and obligations
under the Note Policy, upon delivery of a written notice to the Trustee.
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SECTION 11.12. LEGAL HOLIDAYS.
In any case where the date on which any payment is due shall
not be a Business Day, then (notwithstanding any other provision of the Notes or
this Indenture) payment need not be made on such date, but may be made on the
next succeeding Business Day with the same force and effect as if made on the
date on which nominally due, and no interest shall accrue for the period from
and after any such nominal date.
SECTION 11.13. GOVERNING LAW.
THIS INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS,
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.14. COUNTERPARTS.
This Indenture may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
SECTION 11.15. RECORDING OF INDENTURE.
If this Indenture is subject to recording in any appropriate
public recording offices, such recording is to be effected by the Issuer and at
its expense accompanied by an Opinion of Counsel (which may be counsel to the
Trustee or any other counsel reasonably acceptable to the Trustee and the
Insurer) 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 Trustee under this Indenture
or to the Collateral Agent under the Master Spread Account Agreement.
SECTION 11.16. ISSUER OBLIGATION.
No recourse may be taken, directly or indirectly, with respect
to the obligations of the Issuer, the Seller, the Servicer or the Trustee on the
Notes or under this Indenture or any certificate or other writing delivered in
connection herewith or therewith, against (i) the Seller, the Servicer, or the
Trustee in its individual capacity (ii) any owner of a beneficial interest in
the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director,
employee or agent of the Seller, the Servicer or the Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Seller, the
Servicer or the Trustee or of any successor or assign of the Seller, the
Servicer, or the Trustee in its individual capacity, except as any such Person
may have expressly agreed (it being understood that the Trustee has no such
obligations in its individual capacity) and except that any such partner, owner
or beneficiary shall be fully liable, to the extent provided by applicable law,
for any unpaid consideration for stock, unpaid capital contribution or failure
to pay any installment or call owing to such entity.
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SECTION 11.17. NO PETITION.
The Trustee, by entering into this Indenture, and each
Noteholder, by purchasing a Note, hereby covenants and agrees that they will not
at any time institute against the Issuer, or join in any institution against the
Issuer of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, 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 11.18. INSPECTION.
The Issuer agrees that, on reasonable prior notice, it will
permit any representative of the Trustee, the Initial Note Purchaser or of the
Insurer, 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 Trustee shall and shall cause its representatives to hold in
confidence all such information except to the extent disclosure may be required
by law (and all reasonable applications for confidential treatment are
unavailing) and except to the extent that the Trustee may reasonably determine
that such disclosure is consistent with its Obligations hereunder.
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IN WITNESS WHEREOF, the Issuer and the 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.
CPS FUNDING LLC
By:
---------------------------------
Name:
Title:
BANK ONE TRUST COMPANY N.A.
By:
---------------------------------
Name:
Title:
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