EXHIBIT 10.39
$100,000,000
Floating Rate Variable Funding Note
---------------------------------
INDENTURE
Dated as of March 7, 2002
-----------------------------------
CPS WAREHOUSE TRUST,
Issuer
WESTDEUTSCHE LANDESBANK GIROZENTRALE
Agent
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].........................................3
SECTION 1.3 Other Definitional Provisions......................3
Article II The Note ..........................................................4
SECTION 2.1 Form...............................................4
SECTION 2.2 Execution, Authentication and Delivery.............5
SECTION 2.4 Registration; Registration of Transfer and
Exchange...........................................5
SECTION 2.5 Restrictions on Transfer and Exchange..............6
SECTION 2.6 Mutilated, Destroyed, Lost or Stolen Note.........10
SECTION 2.7 Persons Deemed Owner..............................11
SECTION 2.8 Payment of Principal and Interest; Defaulted
Interest..........................................11
SECTION 2.9 Cancellation12
SECTION 2.10 Release of Collateral.............................13
SECTION 2.11 Amount Limited; Advances..........................13
Article III Covenants...............................................14
SECTION 3.1.Payment of Principal and Interest .......................14
SECTION 3.2.Maintenance of Office or Agency .........................14
SECTION 3.3.Money for Payments to be Held in Trust ..................14
SECTION 3.4.........Existence .......................................16
SECTION 3.5.Protection of Trust Estate ..............................16
SECTION 3.6.Opinions as to Trust Estate .............................17
SECTION 3.7.Performance of Obligations; Servicing of Receivables ....17
SECTION 3.8.Negative Covenants ......................................18
SECTION 3.9.Annual Statement as to Compliance .......................19
SECTION 3.10.Issuer MayConsolidate, Etc. Only on Certain Terms ......19
SECTION 3.11.Successor or Transferee ................................21
SECTION 3.12.No Other Business ......................................21
SECTION 3.13.No Borrowing ...........................................21
SECTION 3.14.Servicer's Obligations .................................21
SECTION 3.15.Guarantees, Loans, Advances and Other Liabilities ......22
SECTION 3.16.Capital Expenditures ...................................22
SECTION 3.17.Compliance with Laws ...................................22
SECTION 3.18.Restricted Payments ....................................22
SECTION 3.19.Notice of Events of Default and Funding Termination
Events..................................................22
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TABLE OF CONTENTS
PAGE NO.
SECTION 3.20.Further Instruments and Acts ...........................22
SECTION 3.21.Amendments of Sale and Servicing Agreement .............23
SECTION 3.22.Income Tax Characterization ............................23
SECTION 3.23.Separate Existence of the Issuer .......................23
SECTION 3.24.Amendment of Issuer's Organizational Documents .........23
Article IV Satisfaction and Discharge........................................23
SECTION 4.1.Satisfaction and Discharge of Indenture .................23
SECTION 4.2.Application of Trust Money ..............................24
SECTION 4.3.Repayment of Moneys Held by Note Paying Agent ...........24
Article V Remedies...........................................................24
SECTION 5.1.Events of Default .......................................24
SECTION 5.2.Rights Upon Event of Default ............................26
SECTION 5.3.Collection of Indebtedness and Suits for Enforcement by
Trustee .................................................27
SECTION 5.4.Remedies ................................................29
SECTION 5.5.Optional Preservation of the Receivables ................30
SECTION 5.6.Priorities ..............................................30
SECTION 5.7.Limitation of Suits .....................................30
SECTION 5.8.Unconditional Rights of the Noteholder To Receive
Principal and Interest ..................................31
SECTION 5.9.Restoration of Rights and Remedies ......................31
SECTION 5.10.Rights and Remedies Cumulative .........................31
SECTION 5.11.Delay or Omission Not a Waiver .........................31
SECTION 5.12.Control by the Noteholder ..............................32
SECTION 5.13.Waiver of Past Defaults ................................32
SECTION 5.14.Undertaking for Costs ..................................32
SECTION 5.15.Waiver of Stay or Extension Laws .......................33
SECTION 5.16.Subrogation ............................................33
SECTION 5.17.Preference Claims ......................................33
Article VI The Trustee; The Agent............................................34
SECTION 6.1.Duties of Trustee .......................................34
SECTION 6.2.Rights of Trustee .......................................36
SECTION 6.3.Individual Rights of Trustee ............................37
SECTION 6.4.Trustee's Disclaimer ....................................37
SECTION 6.5.Notice of Defaults ......................................37
SECTION 6.6.Reports by Trustee to the Noteholder ....................37
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TABLE OF CONTENTS
PAGE NO.
SECTION 6.7.Compensation and Indemnity ..............................38
SECTION 6.8.Replacement of Trustee ..................................38
SECTION 6.9.Successor Trustee by Merger .............................39
SECTION 6.10.Appointment of Co-Trustee or Separate Trustee ..........39
SECTION 6.11.Eligibility: Disqualification ..........................41
SECTION 6.12.[RESERVED] .............................................41
SECTION 6.13.Appointment and Powers .................................41
SECTION 6.14.Performance of Duties ..................................41
SECTION 6.15.Limitation on Liability ................................41
SECTION 6.16.[Reserved] .............................................42
SECTION 6.17.Successor Trustee ......................................42
SECTION 6.18.[Reserved] .............................................43
SECTION 6.19.Representations and Warranties of the Trustee ..........43
SECTION 6.20.Waiver of Setoffs ......................................44
SECTION 6.21.Control by the Controlling Party .......................44
SECTION 6.22.Authorization and Action ...............................44
SECTION 6.23.Agent's Reliance, Etc ..................................44
Article VIII Collection of Money and Releases of Trust Estate.................45
SECTION 8.1.Collection of Money .....................................45
SECTION 8.2.Release of Trust Estate .................................45
(c) Opinion of Counsel......................................45
SECTION 9.1..........................................................46
SECTION 9.2.Supplemental Indentures with Consent of the Noteholder ..47
SECTION 9.3.Execution of Supplemental Indentures ....................48
SECTION 9.4.Effect of Supplemental Indenture ........................48
SECTION 9.5.[Reserved] ..............................................49
Article X REPAYMENT AND PREPAYMENT OF NOTE...................................49
SECTION 10.1.Repayment of the Note ..................................49
SECTION 10.2.Notice of Prepayment ...................................49
Article XI MISCELLANEOUS......................................................50
SECTION 11.1.Compliance Certificates and Opinions, etc ..............50
SECTION 11.2.Form of Documents Delivered to Trustee .................52
SECTION 11.3.Acts of the Noteholder .................................52
SECTION 11.4.Notices, etc., to Trustee, Issuer, Agent and Rating
Agencies................................................53
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SECTION 11.5.Waiver..................................................54
SECTION 11.6.Alternate Payment and Notice Provisions.................54
SECTION 11.8.Effect of Headings and Table of Contents................55
SECTION 11.9.Successors and Assigns..................................55
SECTION 11.10.Severability ..........................................55
SECTION 11.11.Benefits of Indenture..................................55
SECTION 11.12..Legal Holidays .......................................55
SECTION 11.13...Governing Law........................................55
SECTION 11.14....Counterparts .......................................56
SECTION 11.15.Recording of Indenture ................................56
SECTION 11.16.Issuer Obligation .....................................56
SECTION 11.17.No Petition ...........................................56
SECTION 11.18.Inspection ............................................56
EXHIBITS
Exhibit A-1 Form of Variable Funding Note
Exhibit A-2 Form of Transferee Certification
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INDENTURE dated as of March 7, 2002 among CPS Warehouse Trust,
a Delaware business trust (the "ISSUER"), Westdeutsche Landesbank Girozentrale
("WEST LB"), as administrator for the Noteholder (in such capacity, and together
with its successors and assigns in such capacity, the "AGENT") 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
parties and for the benefit of the Holder of the Issuer's Floating Rate Variable
Funding Note (the "NOTE"):
To secure the payment of principal of and interest on, and any
other amounts owing in respect of the Note, 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 Noteholder and the Insurer (as
defined below), as their respective interests may appear.
XL Capital 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 Note, 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 March 7, 2002 (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, 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.
West LB has been requested, and is willing, to act as the
Agent on behalf of the Noteholder.
GRANTING CLAUSE
The Issuer hereby Grants to the Trustee on each Funding Date,
as Trustee for the benefit of the Noteholder 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 States listed in ANNEX B
to the Sale and Servicing Agreement, other evidence of title issued by the
applicable Department of Motor Vehicles or similar authority in such States,
with respect to such Financed Vehicles;
(d) any proceeds from claims on any Receivables 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, the Reserve Account and the Lockbox Account;
(i) all 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 to purchase Receivables from the Issuer pursuant to the Sale
and Servicing Agreement under the circumstances specified therein;
(k) any Hedge Agreements;
(l) the Note Purchase Agreement; and
(m) 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 property described in this
Granting Clause, the "COLLATERAL").
In addition, the Issuer shall cause the Note Policy to be
issued for the benefit of the Noteholder.
The foregoing Grant is made in trust to the Trustee, for the
benefit of the Noteholder 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 Note, to secure the Issuer Secured Obligations
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 to the best of its ability to the end that the interests of such
parties, recognizing the priorities of their respective interests, may be
adequately and effectively protected.
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.2. 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 ANNEX A to the Sale and Servicing
Agreement dated as of March 7, 2002 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 (the "SALE AND SERVICING
AGREEMENT") or, if not defined therein, in the Insurance and Indemnity Agreement
dated as of March 7, 2002 among the Issuer, the Insurer, the Seller and the
Servicer, as the same may be amended or supplemented from time to time (the
"INSURANCE AGREEMENT").
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SECTION 1.3. [Reserved].
SECTION 1.4. OTHER DEFINITIONAL PROVISIONS.
(i) All terms defined in this Indenture shall have
the defined meanings when used in any instrument governed hereby and in
any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.
(ii) 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.
(iii) The words "HEREOF," "HEREIN," "HEREUNDER" and
words of similar import when used in this Indenture shall refer to this
Indenture as a whole and not to any particular provision of this
Indenture.
(iv) Section, Schedule and Exhibit references
contained in this Indenture are references to Sections, Schedules and
Exhibits in or to this Indenture unless otherwise specified; and the
term "INCLUDING" shall mean "INCLUDING WITHOUT LIMITATION."
(v) 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 to the feminine and neuter genders of
such terms.
(vi) 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 and
includes (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 NOTE
SECTION 1.1. FORM. i) The Note, together with the Trustee's
certificate of authentication, shall be in substantially the form set forth in
EXHIBIT A-1, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined by the
officers executing the Note, as evidenced by their execution of the Note. Any
portion of the text of the Note may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Note. Only one Note will be
issued on the Closing Date which Note shall be subject to Advances and
prepayments from time to time in accordance with SECTION 2.11 and ARTICLE X,
respectively.
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(a) The Note 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 the Note, as
evidenced by their execution of the Note.
(b) The terms of the Note set forth in EXHIBIT A-1 are part of
the terms of this Indenture.
SECTION 1.2. EXECUTION, AUTHENTICATION AND DELIVERY. ii) The
Note shall be executed on behalf of the Issuer by any of its Authorized
Officers. The signature of any such Authorized Officer on the Note may be manual
or facsimile.
(a) A Note 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 the Note or did
not hold such offices at the date of the Note.
(b) The Trustee shall upon receipt of the Note Policy and
Issuer Order for authentication and delivery, authenticate and deliver the Note
for original issue in an aggregate principal amount up to, but not in excess of,
the Maximum Invested Amount.
(c) The Note shall be dated the date of its authentication.
(d) The Note shall not be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose, unless there appears
attached to the 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 the Note shall be
conclusive evidence, and the only evidence, that the Note has been duly
authenticated and delivered hereunder.
SECTION 1.3. [Reserved]
SECTION 1.4. REGISTRATION; REGISTRATION OF TRANSFER AND
EXCHANGE. iii) 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 the Note, and the registration of transfers and exchanges of the
Note. The Trustee shall be "NOTE REGISTRAR" for the purpose of registering the
Note and transfers of the Note 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.
(a) 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 name and address of the Holder of the
Note and the principal amounts and number of the Note.
(b) 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, a new Note in any authorized denomination and a like aggregate
principal amount.
(c) At the option of the Holder, the Note may be exchanged for
another Note in any authorized denominations, of the same class and a like
aggregate principal amount, upon surrender of the Note to be exchanged at such
office or agency. Whenever the Note is so surrendered for exchange, subject to
SECTION 2.5 hereof, if the requirements of Section 8-401(a) of the UCC are met,
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the Issuer shall execute, and upon request by the Issuer the Trustee shall
authenticate, and the Noteholder shall obtain from the Trustee, the Note 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.
(d) The Note issued upon any registration of transfer or
exchange of the Note shall be the valid obligations of the Issuer, evidencing
the same debt, and entitled to the same benefits under this Indenture, as the
Note surrendered upon such registration of transfer or exchange.
(e) Every Note presented or surrendered for registration of
transfer or exchange shall be (i) duly endorsed by, or accompanied by a written
instrument of transfer in the form attached to EXHIBITS A-1 and A-2 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.
(f) No service charge shall be made to a Holder for any
registration of transfer or exchange of the Note, 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 the Note, other than exchanges pursuant to SECTION 9.6 not involving
any transfer.
(g) 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 the Note selected for redemption or
of any Note for a period of 15 days preceding the due date for any payment with
respect to the Note.
SECTION 1.5. RESTRICTIONS ON TRANSFER AND EXCHANGE.
(a) No transfer of the Note shall be made unless the
transferor therefor has provided a certification substantially in the form of
EXHIBIT A-2 that such transfer is (i) to the Issuer, or (ii) to any person the
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 under the Securities Act, or (iii) in compliance with Section 2.5(c)
hereof, (A) to 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 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 the Note or Advance made by the Noteholder), 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 the Note, acknowledges that the
Note will contain a legend substantially to the effect set forth in SECTION
2.5(D) (unless the Issuer determines otherwise in accordance with applicable
law).
Any transfer or exchange of a Note to a proposed transferee
taking such transfer in the form of a Note 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, if applicable, properly endorsed for assignment or
transfer or (B) written instructions from such Transferor directing the Note
Registrar to cause to be credited the beneficial interest in or amount of the
corresponding Note to the account designated by such Transferor in an amount
equal to the amount of such Note or beneficial interest to be transferred (but
not less than the minimum authorized denomination applicable to the Note) and
(C) 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.
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(b) Transfers to Qualified Institutional Buyers are subject to
the following:
(i) Each purchaser of the Note that is a qualified
institutional buyer will be deemed to have represented and agreed as
follows (terms used in this paragraph that are defined in Rule 144A
under the Securities Act are used herein as defined therein):
(A) The purchaser (1) is a qualified institutional
buyer, (2) is aware that the sale of the Note to it is being
made in reliance on the exemption from registration provided
by Rule 144A under the Securities Act and (3) is acquiring the
Note for its own account or for one or more accounts, each of
which is a qualified institutional buyer, and as to each of
which the purchaser exercises sole investment discretion, for
the purchaser and for each such account. The purchaser has
such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of
its investment in the Note, and the purchaser and any accounts
for which it is acting are each able to bear the economic risk
of the purchaser's or its investment.
(B) The purchaser understands that the Note is being
offered only in a transaction not involving any public
offering in the United States within the meaning of the
Securities Act, the Note have not been and will not be
registered under the Securities Act, and, if in the future the
purchaser decides to offer, resell, pledge or otherwise
transfer the Note, the Note may be offered, resold, pledged or
otherwise transferred only in accordance with the legend on
the Note set forth in Section 2.5(d). The purchaser
acknowledges that no representation is made by the Issuer as
to the availability of any exemption under the Securities Act
or any state securities laws for resale of the Note.
(C) The purchaser is not purchasing the Note with a
view to the resale, distribution or other disposition thereof
in violation of the Securities Act. The purchaser understands
that an investment in the Note involves certain risks,
including the risk of loss of a substantial part of its
investment under certain circumstances. The purchaser has had
access to such financial and other information concerning the
Issuer and the Note as it deemed necessary or appropriate in
order to make an informed investment decision with respect to
its purchase of the Note, including an opportunity to ask
questions of and request information from the Noteholder and
the Issuer.
(D) In connection with the transfer of the Note: (i)
none of the Issuer or the Noteholder is acting as a fiduciary
or financial or investment adviser for the purchaser; (ii) the
purchaser is not relying (for purposes of making any
investment decision or otherwise) upon any advice, counsel or
representations (whether written or oral) of the Issuer or the
Noteholder other than any representations expressly set forth
in a written agreement with such party; (iii) none of the
Issuer or the Noteholder has given to the purchaser (directly
or indirectly through any other person) any assurance,
guarantee, or representation whatsoever as to the expected or
projected success, profitability, return, performance, result,
effect, consequence, or benefit (including legal, regulatory,
tax, financial, accounting, or otherwise) of the Indenture or
documentation for the Note; (iv) the purchaser has consulted
with its own legal, regulatory, tax, business, investment,
financial, and accounting advisers to the extent it has deemed
6
necessary, and it has made its own investment decisions
(including decisions regarding the suitability of any
transaction pursuant to the Indenture) based upon its own
judgment and upon any advice from such advisers as it has
deemed necessary and not upon any view expressed by the
Issuer; (v) the purchaser has determined that the rates,
prices or amounts and other terms of the purchase and sale of
the Note reflect those in the relevant market for similar
transactions; (vi) the purchaser is acquiring the Note with a
full understanding of all of the terms, conditions and risks
thereof (economic and otherwise), and it is capable of
assuming and willing to assume (financially and otherwise)
those risks; and (vii) the purchaser is a sophisticated
investor.
(E) The purchaser understands that the Note will bear
the legend set forth in SECTION 2.5(D). The Note may not at
any time be held by or on behalf of U.S. persons that are not
qualified institutional buyers.
(F) The purchaser will not, at any time, offer to buy
or offer to sell the Note by any form of general solicitation
or advertising, including, but not limited to, any
advertisement, article, notice or other communication
published in any newspaper, magazine or similar medium or
broadcast over television or radio or seminar or meeting whose
attendees have been invited by general solicitations or
advertisings.
(G) The purchaser represents that either (1) it is
not a Benefit Plan and is not acting on behalf of or investing
plan assets of a Benefit Plan or (2) the purchaser's purchase
and holding of the Note is entitled to exemptive relief from
the prohibited transaction rules of Section 406 of ERISA and
Section 4975 of the Code pursuant to a U.S. Department of
Labor prohibited transaction class exemption.
(H) The purchaser acknowledges that the Issuer, the
Noteholder and others will rely upon the truth and accuracy of
the foregoing acknowledgments, representations and agreements
and agrees that, if any of the acknowledgments,
representations or warranties deemed to have been made by it
by or in connection with its purchase of the Note is no longer
accurate, it shall promptly notify the Issuer and the
Noteholder. If the purchaser is acquiring the Note as a
fiduciary or agent for one or more investor accounts, it shall
be deemed to have represented that it has sole investment
discretion with respect to each such account and that it has
full power to make the foregoing acknowledgments,
representations and agreements on behalf of each such account.
(I) In connection with a transfer of the Note, the
Issuer shall furnish upon request of a Noteholder to the
Noteholder and any prospective purchaser designated by the
Noteholder the information required to be delivered under
paragraph (d)(4) of Rule 144A of the Securities Act.
(J) Any information the purchaser desires concerning
the Issuer, the Note or any other matter relevant to its
decision to purchase the Note is or has been made available to
it.
(c) If the Note is sold in the United States to U.S. Persons
under Section 4(2) of the Securities Act to a limited number of institutional
"ACCREDITED INVESTORS" (as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act), it shall be issued in the form of certificated Note in
definitive, fully registered form without interest coupons with the applicable
legends set forth in the form of the Note registered in the name of the
beneficial owner or a nominee thereof, duly executed by the Issuer and
authenticated by the Trustee as hereinafter provided (a "Definitive Note"). Any
transfer to an institutional "ACCREDITED INVESTOR" is expressly conditioned upon
the requirement that such transferee shall deliver a Transferee's Certificate in
the form of EXHIBIT A-2.
(d) LEGENDING OF THE NOTE. Unless the Issuer determines
otherwise in accordance with applicable law, the Note shall have 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 TRANSFEROR REASONABLY BELIEVES IS A
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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 1.6. MUTILATED, DESTROYED, LOST OR STOLEN NOTE. iv) 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 Controlling Party such security
or indemnity as may be required by it to hold the Issuer, the Trustee and the
Controlling Party 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.
(a) 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.
(b) 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 the Note duly issued hereunder.
(c) 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 the mutilated, destroyed, lost or stolen Note.
SECTION 1.7. 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
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not such Note be overdue, and none of the Issuer, the Insurer, the Controlling
Party (if not the Insurer), the Trustee nor any agent of the Issuer, the
Insurer, the Controlling Party (if not the Insurer) or the Trustee shall be
affected by notice to the contrary.
SECTION 1.8. PAYMENT OF PRINCIPAL AND INTEREST; DEFAULTED
INTEREST. The Note shall accrue interest as provided in the form of the Note set
forth in EXHIBIT A-1, and such interest shall be due and payable on each
Settlement Date, as specified therein. Any installment of interest or principal,
if any, payable on the Note which is punctually paid or duly provided for by the
Issuer on the applicable Settlement Date shall be paid to the Person in whose
name such Note is registered on the 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 Settlement Date and such Holder's Note in the aggregate evidence a
denomination of not less than $1,000,000 or (ii) such Noteholder is 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, except that, unless a
Definitive Note has been issued pursuant to SECTION 2.5, with respect to the
Note registered on the Record Date in the name of the nominee of the Clearing
Agency (initially, such nominee to be Cede & Co.), payment will be made by wire
transfer in immediately available funds to the account designated by such
nominee, except for the final installment of principal payable with respect to
such Note on a Settlement Date or on the Final Scheduled Settlement Date, which
shall be payable as provided below.
(a) The principal of the Note shall be due and payable in full
on the last day of the third Interest Period after Facility Termination Date as
provided in the form of the Note set forth in EXHIBIT A-1. Notwithstanding the
foregoing, the entire unpaid principal amount of the Note 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 Note shall be made pro
rata to the Noteholder entitled thereto. Upon written notice from the Issuer,
the Trustee shall notify the Person in whose name a Note is registered at the
close of business on the Record Date preceding the Settlement 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 Settlement 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.
(b) If the Issuer defaults in a payment of interest on the
Note, 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 Noteholder on
the immediately following Settlement Date, and if such amount is not paid on
such following Settlement Date, then on a subsequent special record date, which
date shall be at least five Business Days prior to the Settlement Date. The
Issuer shall fix or cause to be fixed any such special record date and
Settlement Date, and, at least 15 days before any such special record date, the
Issuer shall mail to the Noteholder and the Trustee a notice that states the
special record date, the Settlement Date and the amount of defaulted interest to
be paid.
(c) Promptly following the date on which all principal of and
interest on the Note has been paid in full and the Note has been surrendered to
the Trustee, the Trustee shall, if the Insurer has paid any amount in respect of
the Note under the Note Policy or otherwise which has not been reimbursed to it,
deliver the surrendered Note to the Insurer.
SECTION 1.9. CANCELLATION. Subject to SECTION 2.8(c), the Note
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 Note
previously authenticated and delivered hereunder which the Issuer may have
acquired in any manner whatsoever, and the Note so delivered shall be promptly
9
canceled by the Trustee. No Note shall be authenticated in lieu of or in
exchange for any Note canceled as provided in this Section, except as expressly
permitted by this Indenture. Subject to SECTION 2.8(c), the canceled Note 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 Note has not been previously disposed of by the Trustee.
SECTION 1.10. RELEASE OF COLLATERAL. Subject to the terms of
the other Basic Documents and SECTIONS 10.1 AND 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 in the Collection Account
any funds then on deposit in any other Pledged Account. 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 1.11. AMOUNT LIMITED; ADVANCES.
The maximum aggregate principal amount of the Note which may be
authenticated and delivered and Outstanding at any time under this Indenture is
limited to the Maximum Invested Amount.
On each Business Day prior to the Facility Termination Date that is a
Funding Date, and upon the satisfaction of all conditions precedent to (a) the
funding of an Advance and (b) the purchase of Receivables, in each case as set
forth in SECTION 2.1(b) of the Sale and Servicing Agreement, SECTION 7.02 and
SECTION 7.03 of the Note Purchase Agreement, the Issuer shall be entitled to
borrow additional funds pursuant to an Advance on such Funding Date in an
aggregate principal amount equal to the Advance Amount with respect to such
Funding Date. Each request by the Issuer for an Advance 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 Note may be increased
through the funding of the Advances. Each Advance and corresponding Advance
Amount shall be recorded on the grid attached to the Note or in an electronic
file substantially in the same form as such grid. The grid (or such electronic
file) shall show all Advance Amounts and prepayments. The Agent shall be
responsible for maintaining the grid with respect to the 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 the Note. The Note (i) can be funded by Advances on any Funding Date
in a minimum amount of $1,000,000 and any higher amount (subject to the Maximum
Invested Amount), and (ii) subject to subsequent Advances pursuant to this
SECTION 2.11, are subject to prepayment in whole or in part, at the option of
the Issuer as provided in Article X herein.
ARTICLE II
COVENANTS
SECTION 1.1. PAYMENT OF PRINCIPAL AND INTEREST. The Issuer
will duly and punctually pay the principal of and interest on the Note in
accordance with the terms of the Note and this Indenture. Without limiting the
foregoing, the Issuer will cause to be distributed on each Settlement Date all
amounts deposited in the Note Distribution Account pursuant to the Sale and
Servicing Agreement to the Noteholder. Amounts properly withheld under the Code
by any Person from a payment to the Noteholder of interest and/or principal
shall be considered as having been paid by the Issuer to the Noteholder for all
purposes of this Indenture.
SECTION 1.2. MAINTENANCE OF OFFICE OR AGENCY. The Issuer will
maintain in Phoenix, Arizona, an office or agency where the Note may be
surrendered for registration of transfer or exchange, and where notices and
demands to or upon the Issuer in respect of the Note 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.
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SECTION 1.3. MONEY FOR PAYMENTS TO BE HELD IN TRUST. v) On or
before each Settlement Date, 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 Note, such sum to be
held in trust for the benefit of the Persons entitled thereto and (unless the
Note Paying Agent is the Trustee) shall promptly notify the Trustee of its
action or failure so to act.
(a) The Issuer shall cause each Note Paying Agent other than
the Trustee to execute and deliver to the Trustee and the Controlling Party 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 Note 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 Note) of which it has actual
knowledge in the making of any payment required to be made with respect
to the Note;
(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 the Note 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 the Note of
any applicable withholding taxes imposed thereon and with respect to
any applicable reporting requirements in connection therewith.
(b) 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.
(c) 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 the 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
Controlling Party and shall be deposited by the Trustee in the Collection
Account; and the Holder of the Note shall thereafter, as an unsecured general
creditor, look only to the Issuer for payment thereof (but only to the extent of
the amounts so paid to the Issuer), and all liability of the 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 Note, 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
11
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 the Holder whose Note 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 1.4. 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 business trust under the laws of the State of
Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other state or of the United States of America,
in which case the Issuer 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 Note, the Collateral and each other
instrument or agreement included in the Trust Estate.
SECTION 1.5. 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;
(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 Noteholder 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 1.6. OPINIONS AS TO TRUST ESTATE. vi) On the Closing
Date, the Issuer shall furnish to the Trustee, the Agent and the Controlling
Party 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.
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(a) 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 Agent and the Controlling Party 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.
SECTION 1.7. PERFORMANCE OF OBLIGATIONS; SERVICING OF
RECEIVABLES. vii) 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.
(a) 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.
(b) 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 Controlling Party.
(c) If a responsible officer of the Issuer shall have written
notice or actual knowledge of the occurrence of a Servicer Termination Event or
Funding Termination Event under the Sale and Servicing Agreement, the Issuer
shall promptly notify the Trustee, the Agent, 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 a
Servicer Termination Event or Funding Termination 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.
(d) 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 without the prior consent of the Controlling
Party.
SECTION 1.8. NEGATIVE COVENANTS. So long as the Note is
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 or the Controlling Party has approved such
disposition;
13
(ii) claim any credit on, or make any deduction from
the principal or interest payable in respect of, the Note (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 in favor of the
Trustee created by this Indenture to be amended, hypothecated,
subordinated, terminated or discharged, or permit any Person to be
released from any covenants or obligations with respect to the Note
under this Indenture except as may be expressly permitted hereby, (B)
permit any lien, charge, excise, claim, security interest, mortgage or
other encumbrance (other than the lien of this Indenture) to be created
on or extend to or otherwise arise upon or burden the Trust Estate or
any part thereof or any interest therein or the proceeds thereof (other
than tax liens, mechanics' liens and other liens that arise by
operation of law, in each case on a Financed Vehicle and arising solely
as a result of an action or omission of the related Obligor), (C)
permit the lien of this Indenture not to constitute a valid first
priority (other than with respect to any such tax, mechanics' or other
lien) 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 1.9. ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer
will deliver to the Trustee, the Agent and the Insurer, on or before February 28
of each year, beginning February 28, 2003 an Officer's Certificate, dated as of
December 31 of the preceding 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 (or portion of such year from the initial Funding
Date through December 31, 2002) 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 1.10. ISSUER MAY CONSOLIDATE, ETC. ONLY ON CERTAIN
TERMS. viii) 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 business
trust and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the
Trustee, the Agent and, unless an Insurer Default is continuing, the
Insurer, the due and punctual payment of the principal of and interest
on the Note 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, Insurance Agreement Event of
Default or Funding Termination Event shall have occurred and be
continuing;
(iii) the Rating Agency Condition shall have been
satisfied with respect to such transaction;
14
(iv) the Issuer shall have received an Opinion of
Counsel (and shall have delivered copies thereof to the Trustee, the
Agent, and the Insurer) to the effect that such transaction will not
have any material adverse tax consequence to the Insurer, or the
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,
the Agent 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) the Issuer shall have given the Controlling
Party 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 Controlling Party 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
(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 business
trust, (B) expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the
Trustee, the Agent and the Controlling Party, the due and punctual
payment of the principal of and interest on the Note 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 the Noteholder, 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
Note;
(ii) immediately after giving effect to such
transaction, no Default, Event of Default, Insurance Agreement Event of
Default or Funding Termination 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
Agent, and the Insurer) to the effect that such transaction will not
have any material adverse tax consequence to the Insurer, or the
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 Agent 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
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(vii) the Issuer shall have given the Controlling
Party 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 Controlling Party 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.
SECTION 1.11. SUCCESSOR OR TRANSFEREE. ix) 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.
(a) Upon a conveyance or transfer of all the assets and
properties of the Issuer pursuant to SECTION 3.10(B), the Issuer 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 Note immediately upon
the delivery of written notice to the Trustee stating that the Issuer is to be
so released.
SECTION 1.12. NO OTHER BUSINESS. The Issuer shall not engage
in any business other than financing, purchasing, owning, selling and managing
the Related Receivables in the manner contemplated by this Indenture and the
other Basic Documents and activities incidental thereto. After the Facility
Termination Date, the Issuer shall not purchase any additional Receivables.
SECTION 1.13. NO BORROWING. The Issuer shall not issue, incur,
assume, guarantee or otherwise become liable, directly or indirectly, for any
Indebtedness except for (i) the Note, (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 Note
shall be used to fund the Issuer's purchase of the Related Receivables and the
other assets specified in the Sale and Servicing Agreement, to fund the Reserve
Account up to the Required Reserve Account Amount and to pay the Issuer's
organizational, transactional and start-up expenses.
SECTION 1.14. SERVICER'S OBLIGATIONS. The Issuer shall cause
the Servicer to comply with Sections 4.9, 4.10, 4.11 and 5.9 of the Sale and
Servicing Agreement.
SECTION 1.15. 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 1.16. CAPITAL EXPENDITURES. The Issuer shall not make
any expenditure (by long-term or operating lease or otherwise) for capital
assets (either realty or personalty).
SECTION 1.17. 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 Note, this Indenture
or any Basic Document.
SECTION 1.18. 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
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the Issuer, (ii) redeem, purchase, retire or otherwise acquire for value any
such ownership or equity interest or security or (iii) set aside or otherwise
segregate any amounts for any such purpose; provided, however, that the Issuer
may make, or cause to be made, distributions to the Trustee and to any owner of
a beneficial interest in the Issuer as permitted by, and to the extent funds are
available for such purpose from distributions 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 1.19. NOTICE OF EVENTS OF DEFAULT AND FUNDING
TERMINATION EVENTS. Upon a responsible officer of the Issuer having notice or
actual knowledge thereof, the Issuer agrees to give the Trustee, the Insurer
(unless an Insurer Default is continuing), the Noteholder, the Agent and the
Rating Agencies prompt written notice of each Event of Default hereunder and
each Funding Termination Event, Servicer Termination Event or other Default on
the part of the Servicer or the Seller of its obligations under the Sale and
Servicing Agreement.
SECTION 1.20. FURTHER INSTRUMENTS AND ACTS. Upon request of
the Trustee or the Controlling Party, 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 1.21. AMENDMENTS OF SALE AND SERVICING AGREEMENT. The
Issuer shall not agree to any amendment to Section 11.1 of the Sale and
Servicing Agreement to eliminate the requirements thereunder that the Trustee,
the Agent, the Controlling Party or the Noteholder consent to amendments thereto
as provided therein.
SECTION 1.22. INCOME TAX CHARACTERIZATION. For purposes of
federal income tax, state and local income tax, franchise tax and any other
income taxes, the Issuer and the Noteholder will treat the Note as indebtedness
and hereby instructs the Trustee to treat the Note as indebtedness for all such
tax reporting purposes.
SECTION 1.23. 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, including as follows:
(i) the Issuer shall maintain business records and
books of account separate from those of its Affiliates;
(ii) except as otherwise provided in the Basic
Documents, the Issuer shall not commingle its assets and funds with
those of its Affiliates;
(iii) the Issuer shall at all times hold itself out
to the public under the Issuer's own name as a legal entity separate
and distinct from its Affiliates;
(iv) all transactions and dealings between the Issuer
and its Affiliates will be conducted on an arm's-length basis; and
(v) the requirements set forth in the legal opinion
delivered by Andrews & Kurth dated March 7, 2002 with respect to
nonconsolidation of the Issuer and its Affiliates.
SECTION 1.24. AMENDMENT OF ISSUER'S ORGANIZATIONAL DOCUMENTS.
The Issuer shall not amend its organizational documents except in accordance
with the provisions thereof.
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ARTICLE II
SATISFACTION AND DISCHARGE
--------------------------
SECTION 1.1. SATISFACTION AND DISCHARGE OF INDENTURE. This
Indenture shall cease to be of further effect with respect to the Note except as
to (i) rights of registration of transfer and exchange, (ii) substitution of
mutilated, destroyed, lost or stolen Note, (iii) rights of the Noteholder to
receive payments of principal thereof and interest thereon, (iv) SECTIONS 3.3,
3.4, 3.5, 3.6, 3.8, 3.10, 3.11, 3.18, 3.19, 3.20, 3.21, 3.23, 3.24 and 11.17,
(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 the Noteholder 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 Note, when
(a) the Note theretofore authenticated and delivered (other
than (i) a Note that have been destroyed, lost or stolen and that have been
replaced or paid as provided in SECTION 2.6 and (ii) a Note 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.
SECTION 1.2. APPLICATION OF TRUST MONEY. All moneys deposited
with the Trustee pursuant to SECTION 4.1 or SECTION 4.3 hereof shall be held in
trust and applied by it, in accordance with the provisions of the Note and this
Indenture, to the payment, either directly or through the Note Paying Agent, as
the Trustee may determine, to the Noteholder 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. Any
funds remaining with the Trustee or on deposit in the Pledged Accounts shall be
remitted to the Issuer upon satisfaction by the Issuer of its obligations
hereunder and under the Basic Documents, including without limitation, those
under SECTION 4.1(c).
SECTION 1.3. REPAYMENT OF MONEYS HELD BY NOTE PAYING AGENT. In
connection with the satisfaction and discharge of this Indenture with respect to
the Note, all moneys then held by the Note Paying Agent other than the Trustee
under the provisions of this Indenture with respect to the Note shall, upon
demand of the Issuer, be remitted to the Trustee to be held and applied
according to SECTION 4.2 and thereupon the Note Paying Agent shall be released
from all further liability with respect to such moneys.
ARTICLE II
REMEDIES
SECTION 1.1. EVENTS OF DEFAULT. x) "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):
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(i) default in the payment of any interest on the
Note when the same becomes due and payable (solely for purposes of this
clause, a payment on the Note funded by the Insurer or from amounts on
deposit in the Reserve Account 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 the Note when the same becomes due
and payable (solely for purposes of this clause, a payment on the Note
funded from amounts on deposit in the Reserve Account shall be deemed
to be a payment made by the Issuer); or
(iii) an Insurance Agreement Indenture Cross Default
shall have occurred; 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 10 days (or for such longer period, not in excess of 30 days,
as may be reasonably necessary to remedy such default; provided that
such default is capable of remedy within 30 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 Agent, 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) an Insolvency Event with respect to the Issuer
shall have occurred; or
(vi) the failure of the Invested Amount to be reduced
to zero on or prior to the last day of the third Interest Period after
the Facility Termination Date;
(b) The Issuer shall deliver to the Trustee, the Agent and the
Insurer, within two 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 1.2. RIGHTS UPON EVENT OF DEFAULT. xi) If an Event of
Default shall have occurred and be continuing, the Note shall become immediately
due and payable at par, together with accrued interest thereon, upon written
notice by the Controlling Party. 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 the Note 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 Note. Payments under the Note Policy following acceleration of
the Note shall be applied by the Trustee:
FIRST: on any Settlement Date, to the Noteholder for amounts
due and unpaid on the Note for interest; and
SECOND: on the Final Scheduled Settlement Date, for amounts
due and unpaid on the Note, to the Noteholder, the Noteholder's
Principal Distributable Amount together with the Noteholder's Principal
Carryover Shortfall, to pay principal of the Note until the outstanding
principal amount of the Note has been reduced to zero.
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(a) In the event the Note is accelerated due to an Event of
Default, the Insurer shall have the right (in addition to its obligation to pay
Scheduled Payments on the Note 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 the Note, in whole or in part, on any date or dates following
such acceleration as the Insurer, in its sole discretion, shall elect.
(b) 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, a Note
Majority, by written notice to the Issuer and the Trustee, may rescind and annul
such declaration and its consequences if the Issuer has paid or deposited with
the Trustee a sum sufficient to pay:
(i) all payments of principal of and interest on the
Note and all other amounts that would then be due hereunder or upon the
Note if the Event of Default giving rise to such acceleration had not
occurred; and
(ii) 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
(iii) all Events of Default, other than the
nonpayment of the principal of the Note 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 1.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR
ENFORCEMENT BY TRUSTEE. xii) The Issuer covenants that if (i) default is made in
the payment of any interest on, or principal of, the Note when the same becomes
due and payable, the Issuer will, upon demand of the Trustee, pay to it, for the
benefit of the Noteholder, the whole amount then due and payable on the Note 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.
(a) 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.
(b) 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, proceed to protect and
enforce its rights and the rights of the Noteholder 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
20
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.
(c) [RESERVED].
(d) In case there shall be pending, relative to the Issuer or
any other obligor upon the Note 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 Note, or to the creditors or
property of the Issuer or such other obligor, the Trustee, irrespective of
whether the principal of the Note 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
Note 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
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
Noteholder allowed in such proceedings;
(ii) unless prohibited by applicable law and
regulations, to vote on behalf of the Noteholder 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 Noteholder and
of the Trustee on their behalf; and
(e) 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 Noteholder 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 the Noteholder to make payments to
the Trustee, and, in the event that the Trustee shall consent to the making of
payments directly to the Noteholder, 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.
(f) 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
the Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Note or the rights of the Noteholder or to authorize
the Trustee to vote in respect of the claim of the Noteholder in any such
proceeding except, as aforesaid, to vote for the election of a trustee in
bankruptcy or similar person.
(g) All rights of action and of asserting claims under this
Indenture or under the Note, may be enforced by the Trustee without the
possession of the Note 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
21
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 benefit of the Noteholder.
(h) In any proceedings brought by the Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture),
the Trustee shall be held to represent the Noteholder, and it shall not be
necessary to make the Noteholder a party to any such proceedings.
SECTION 1.4. 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 Note or under this
Indenture with respect thereto, whether by declaration or otherwise,
enforce any judgment obtained, and collect from the Issuer and any
other obligor upon the Note 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 Issuer Secured Parties; 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(a)(i) or (a)(ii), or
(B) either
(x) the Holder of 100% of the
Invested Amount of the Note consents
thereto, or
(y) the proceeds of such sale or
liquidation distributable to the Noteholder
are sufficient to discharge in full all
amounts then due and unpaid upon the Note
for principal and interest.
In determining such sufficiency or insufficiency with respect
to CLAUSE (Y), 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 1.5. OPTIONAL PRESERVATION OF THE RECEIVABLES. If the
Trustee is the Controlling Party and if the Note has 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 Noteholder that there be at all times sufficient funds
for the payment of principal of and interest on the Note, 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.
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SECTION 1.6. PRIORITIES.
(a) Following the acceleration of the Note pursuant to SECTION
5.2, the Available Funds, together with any other amounts on deposit in the
Pledged Accounts, including any money or property collected pursuant to SECTION
5.4 of this Indenture shall be applied by the Trustee on the related Settlement
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 Settlement Date for
any payment to Noteholder pursuant to this Section. At least 15 days before such
record date the Issuer shall mail to the Noteholder and the Trustee a notice
that states such record date, the Settlement Date and the amount to be paid.
SECTION 1.7. LIMITATION OF SUITS. No Holder of the 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) the Holder has previously given written notice to
the Trustee of a continuing Event of Default;
(ii) the Holder of the Note has made a written
request to the Trustee to institute such proceeding in respect of such
Event of Default in its own name as Trustee hereunder;
(iii) the Holder has 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 a
Note Majority; and
(vi) an Insurer Default shall have occurred and be
continuing;
it being understood and intended that no Holder of the Note 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 Holder of the Note
or to obtain or to seek to obtain priority or preference over any Holder or to
enforce any right under this Indenture, except in the manner herein provided.
SECTION 1.8. UNCONDITIONAL RIGHTS OF THE NOTEHOLDER TO RECEIVE
PRINCIPAL AND INTEREST. Notwithstanding any other provisions of this Indenture,
the Noteholder shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest, if any, on the Note on or
after the respective due dates thereof expressed in the Note or in this
Indenture and to institute suit for the enforcement of any such payment, and
such right shall not be impaired without the consent of the Noteholder.
SECTION 1.9. RESTORATION OF RIGHTS AND REMEDIES. If the
Controlling Party or the 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 the Noteholder, then and in every such case the Issuer, the Trustee and the
Noteholder 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 Noteholder shall continue as
though no such proceeding had been instituted.
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SECTION 1.10. RIGHTS AND REMEDIES CUMULATIVE. No right or
remedy herein conferred upon or reserved to the Controlling Party or to the
Noteholder 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 1.11. DELAY OR OMISSION NOT A WAIVER. No delay or
omission of the Controlling Party or the Noteholder to exercise any right or
remedy accruing upon any Default or Event of Default shall impair any such right
or remedy or constitute a waiver of any such 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 Noteholder may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Noteholder, as the
case may be.
SECTION 1.12. CONTROL BY THE NOTEHOLDER. If the Trustee is the
Controlling Party, the Note Majority 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 Note 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 Holder of the Note representing not less than 100% of the
Invested Amount of the Note;
(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 the
Holder of the Note representing less than 100% of the Invested Amount
of the Note 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 Noteholder not consenting to such action.
SECTION 1.13. 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 Note as provided in SECTION 5.2, a Note
Majority 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 the Note or (ii) in respect of a covenant or provision hereof which cannot be
modified or amended without the consent of the Noteholder. In the case of any
such waiver, the Issuer, the Trustee and the Noteholder 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.
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SECTION 1.14. UNDERTAKING FOR COSTS. All parties to this
Indenture agree, and the Noteholder by its 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 the Noteholder
holding in the aggregate more than 10% of the Invested Amount of the Note or (c)
any suit instituted by the Noteholder for the enforcement of the payment of
principal of or interest on the Note on or after the respective due dates
expressed in the Note and in this Indenture.
SECTION 1.15. 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 1.16. SUBROGATION. The Trustee shall receive as
attorney-in-fact of the 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 the Note, 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 Note, 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 Note 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 Note 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 Note 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 the
Noteholder upon receipt from the Insurer of proof of payment by the Insurer of
the Noteholder's Interest Distributable Amount or Noteholder's Principal
Distributable Amount. The foregoing subrogation shall in all cases be subject to
the rights of the Noteholder to receive all Scheduled Payments in respect of the
Note.
SECTION 1.17. PREFERENCE CLAIMS. In the event that the Trustee
has received a certified copy of a final, non-appealable order of the
appropriate court that the Noteholder's Interest Distributable Amount or
Noteholder's 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 the Agent by mail that, in
the event that the Noteholder's payment is so recoverable, the 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
the Note, if any, which have been made by the Trustee and subsequently recovered
25
from the Noteholder, 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 the 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 the 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 Note. Each Holder,
by its purchase of the Note, 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,
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 the Noteholder and the Trustee hereby
delegate and assign, to the fullest extent permitted by law, the rights of the
Trustee and the 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 II
THE TRUSTEE; THE AGENT
----------------------
SECTION 1.1. DUTIES OF TRUSTEE. xiii) 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.
(a) 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.
(b) 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;
(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.
(c) 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.
(d) 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.
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(e) 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.
(f) 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.
(g) The Trustee shall permit any representative of the
Controlling Party or the Noteholder, during the Trustee's normal business hours,
to examine all books of account, records, reports and other papers of the
Trustee relating to the Note, 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 Note, with the Trustee's officers and
employees responsible for carrying out the Trustee's duties with respect to the
Note.
(h) 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.
(i) 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 Noteholder.
(j) 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.
(k) 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.
SECTION 1.2. 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 the Servicer, the Backup Servicer 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 or
opinion of counsel with respect to legal matters relating to this Indenture and
the Note 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.
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(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 Holder of the Note
or the Controlling Party, pursuant to the provisions of this Indenture, unless
the Holder of the Note 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 Controlling
Party; 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 1.3. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its
individual or any other capacity may become the owner or pledgee of the Note 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 1.4. 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 Note, it shall not be
accountable for the Issuer's use of the proceeds from the Note, 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 Note or in the Note other
than the Trustee's certificate of authentication.
SECTION 1.5. 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 the Agent 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 the Note (including payments pursuant to the
mandatory redemption provisions of the 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 the
Noteholder.
SECTION 1.6. REPORTS BY TRUSTEE TO THE NOTEHOLDER. The Trustee
shall on behalf of the Issuer deliver to the Noteholder such information as may
be reasonably required to enable such Holder to prepare its Federal and state
income tax returns.
SECTION 1.7. COMPENSATION AND INDEMNITY. xiv) Pursuant to
Section 5.7 of the Sale and Servicing Agreement, the Issuer shall pay to the
Trustee from time to time compensation for its services. 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
28
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 reasonable fees and expenses of such
counsel. Neither the Issuer nor the Servicer need reimburse any expense or
indemnify against any loss, liability or expense incurred by the Trustee through
the Trustee's own willful misconduct, negligence or bad faith.
(a) 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)
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 the Noteholder.
SECTION 1.8. REPLACEMENT OF TRUSTEE. The Issuer may, with the
consent of the Controlling Party, and at the request of the Controlling Party,
shall remove the Trustee if:
(i) the Trustee fails to comply with Section 6.11 or
the Trustee fails to perform any other material covenant or agreement
of the Trustee set forth in the Basic Documents TO WHICH THE TRUSTEE IS
A PARTY AND SUCH FAILURE CONTINUES FOR 45 DAYS AFTER WRITTEN NOTICE OF
SUCH FAILURE FROM THE CONTROLLING PARTY;
(ii) an Insolvency Event with respect to the Trustee
occurs; or
(iii) 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 Controlling Party and the Agent. 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 Agent, Insurer (provided that no
Insurer Default shall have occurred and be continuing) 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 the Agent. 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 a Note Majority may petition any court of competent jurisdiction for
the appointment of a successor Trustee.
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.
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SECTION 1.9. SUCCESSOR TRUSTEE BY MERGER. xv) 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.
(a) 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 the Note 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 the Note so
authenticated; and in case at that time the Note shall not have been
authenticated, any successor to the Trustee may authenticate the Note 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 Note or in this Indenture provided that the certificate of
the Trustee shall have.
SECTION 1.10. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
xvi) 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 Controlling Party 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 Noteholder, 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 the Agent of the appointment of any co-trustee or separate trustee shall be
required under Section 6.8 hereof.
(a) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations
conferred or imposed upon the 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.
(b) 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 Indenture and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
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.
30
(c) 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 Indenture 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 1.11. 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 and the Agent upon request.
SECTION 1.12. [RESERVED].
SECTION 1.13. 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 with respect to the Collateral, and Bank One
Trust Company, N.A. hereby accepts such appointment and agrees to act as Trustee
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 1.14. 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 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 1.15. 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, 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.
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SECTION 1.16. [RESERVED].
SECTION 1.17. 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 Controlling
Party 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 Controlling Party
of an Opinion of Counsel to the effect described in Section 3.4.
(c) ACCEPTANCE BY SUCCESSOR. The Controlling Party 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 1.18. [RESERVED].
SECTION 1.19. REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE.
The Trustee represents and warrants to the Issuer and to each Issuer Secured
Party as follows:
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(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.
(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 1.20. 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 1.21. CONTROL BY THE CONTROLLING PARTY. The Trustee
shall comply with notices and instructions given by the Issuer 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.
SECTION 1.22. AUTHORIZATION AND ACTION. For so long as
Paradigm Funding LLC is the Noteholder, the Agent (or its designees) has been
appointed and authorized to take such action as agent on the Noteholder's behalf
and to exercise such powers under this Indenture as are delegated to the
Noteholder by the terms hereof, together with such powers as are reasonably
incidental thereto. The Agent shall also act on behalf of the Majority Program
Support Providers.
SECTION 1.23. AGENT'S RELIANCE, ETC. The Agent and its
directors, officers, agents or employees shall not be liable for any action
taken or omitted to be taken by it or them under or in connection with the Basic
Documents except for its or their own negligence, bad faith or willful
misconduct. Without limiting the generality of the foregoing, the Agent: (a) may
consult with legal counsel (including counsel for the Trustee), independent
certified public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (b) makes no
warranty or representation to the Noteholder or any other holder of any interest
in the Collateral and shall not be responsible to the Noteholder or any such
other holder for any statements, warranties or representations made in or in
connection with any Basic Document; (c) shall not have any duty to ascertain or
to inquire as to the performance or observance of any of the terms, covenants or
conditions of any Basic Document on the part of the Issuer, the Seller or the
Servicer or to inspect the property (including the books and records) of the
Issuer, the Seller or the Servicer; (d) shall not be responsible to the
Noteholder or any other holder of any interest in the Collateral for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of any Basic Document; and (e) shall incur no liability under or in respect of
this Indenture by acting upon any notice (including notice by telephone if
confirmed in writing within two (2) Business Days), consent, certificate or
other instrument or writing (which may be by facsimile or telex) believed by it
to be genuine and signed or sent by the proper party or parties.
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ARTICLE II
[Reserved]
ARTICLE III
COLLECTION OF MONEY AND RELEASES OF TRUST ESTATE
SECTION 1.1. 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 1.2. RELEASE OF TRUST ESTATE. xvii) 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 of this Indenture, in a manner and under
circumstances that are not inconsistent with the provisions of this Indenture.
No party relying upon an instrument executed by the 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.
(a) The Trustee shall, at such time as there is no Note
outstanding and all sums due the Insurer under any of the Basic Documents are
satisfied as evidenced by a certificate of the Insurer 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 Note from the lien of 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 of this Indenture pursuant to this Section 8.2(b) only upon receipt of an
Issuer Request accompanied by an Officer's Certificate and a certificate by the
Insurer.
(b) 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 Note or the rights of the Noteholder and the other Issuer
Secured Parties 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 II
SUPPLEMENTAL INDENTURES
SECTION 1.1. xviii) With the prior written consent of the
Controlling Party 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:
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(i) to correct or amplify the description of any
property at any time subject to the lien of this Indenture, or better
to assure, convey and confirm unto the Trustee any property subject or
required to be subjected to the lien of this Indenture, or to subject
to the lien of this Indenture additional property;
(ii) to evidence the succession, in compliance with
the applicable provisions hereof, of another person to the Issuer, and
the assumption by any such successor of the covenants of the Issuer
herein and in the Note contained;
(iii) to add to the covenants of the Issuer, for the
benefit of the Holder of the Note, 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 shall not adversely affect the
interests of the Noteholder or the Insurer; or
(vi) to evidence and provide for the acceptance of
the appointment hereunder by a successor trustee with respect to the
Note 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 with the consent of the Controlling Party, 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
Holder of the Note 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 the Noteholder.
SECTION 1.2. SUPPLEMENTAL INDENTURES WITH CONSENT OF THE
NOTEHOLDER. xix) 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 Controlling Party, 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:
(i) change the date of payment of any installment of
principal of or interest on the Note, or reduce the principal amount
thereof, the interest rate thereon, 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 Note, or change any place of payment where, or the coin
or currency in which, the Note or the interest thereon is payable;
(ii) impair the right to institute suit for the
enforcement of the provisions of this Indenture requiring the
application of funds available therefor, as provided in Article V, to
the payment of any such amount due on the Note on or after the
respective due dates thereof;
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(iii) reduce the percentage of the Invested Amount of
the Note, the consent of the Holder of which is required for any such
supplemental indenture, or the consent of the Holder 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 Invested Amount of
the Note 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 the Note on any Settlement Date
(including the calculation of any of the individual components of such
calculation) or to affect the rights of the Noteholder to the benefit
of any provisions for the mandatory redemption of the Note contained
herein; or
(viii) permit the creation of any lien ranking prior
to or on a parity with the lien of this Indenture with respect to any
part of the Trust Estate or, except as otherwise permitted or
contemplated herein or in any of the Basic Documents, terminate the
lien of this Indenture on any property at any time subject hereto or
deprive the Holder of the Note of the security provided by the lien of
this Indenture.
(b) The Trustee may determine whether or not the Note would be
affected by any supplemental indenture and any such determination shall be
conclusive upon the Holder of the Note, whether theretofore or thereafter
authenticated and delivered hereunder. The Trustee shall not be liable for any
such determination made in good faith.
(c) It shall not be necessary for any Act of the Noteholder
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 Controlling Party and the Holder of the Note 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 1.3. 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 1.4. 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 Note affected thereby, and the respective rights,
limitations of rights, obligations, duties, liabilities and immunities under
this Indenture of the Trustee, the Issuer and the Holder of the Note shall
36
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 1.5. [RESERVED].
ARTICLE II
REPAYMENT AND PREPAYMENT OF NOTE
SECTION 1.1. REPAYMENT OF THE NOTE. The Issuer shall repay the
Invested Amount of the Note (i) following the Facility Termination Date, in full
on or prior to the last day of the third Interest Period after such Facility
Termination Date or (ii) in full or in part upon the direction of the Noteholder
with the consent of the Controlling Party in accordance with Section 10.4
herein.
SECTION 1.2. NOTICE OF PREPAYMENT. Notice of the prepayment of
the Note pursuant to Section 10.4 shall be given upon the direction of the
Noteholder, by the Trustee by facsimile transmission, courier or first-class
mail, postage prepaid, mailed, faxed or couriered not less than 15 days prior to
the related date of prepayment, to the Agent and to the Insurer.
All notices of prepayment shall state:
(a) the date of prepayment;
(b) the Invested Amount to be prepaid, including an
itemization of each Advance to be so 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. Any prepayment pursuant to Section 10.4 shall be subject to the
payment of any amounts required by the Agent resulting from a prepayment or
repayment of the Invested Amount of the Note on a date other than a Settlement
Date.
SECTION 1.3. GENERAL PROCEDURES. The Invested Amount of the
Note shall not be considered reduced by any allocation, setting aside or
distribution of any portion of the Available Funds unless such Available Funds
shall have been actually delivered to the Agent for the purpose of paying such
principal. The Invested Amount of the Note shall not be considered repaid by any
distribution of any portion of the Available Funds if at any time such
distribution is rescinded or must otherwise be returned for any reason, in which
event, if such amount has been returned by the Noteholder or the Agent, such
principal and/or interest shall be reinstated in an amount equal to the amount
returned by the Agent or Noteholder, as the case may be. No provision of this
Indenture shall require the payment or permit the collection of interest in
excess of the maximum permitted by applicable law.
SECTION 1.4. PREPAYMENT UPON SECURITIZATION OF RECEIVABLES.
The Noteholder may, with the prior written consent of the Controlling Party, not
to be unreasonably withheld, direct the Issuer to sell all or a portion of the
Receivables into a term securitization transaction approved by the Noteholder,
the Agent and the Controlling Party in which equity and/or any residual interest
therein is retained by the Issuer. Upon such direction, the Noteholder shall
deliver a notice of prepayment of the Note in accordance with Section 10.2 and
the Note shall be repaid in accordance with this Article X.
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ARTICLE II
MISCELLANEOUS
SECTION 1.1. COMPLIANCE CERTIFICATES AND OPINIONS, ETC. xx)
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 an Advance), the Issuer shall furnish to the
Trustee, the Agent and to the Insurer (i) an Officer's Certificate stating that
all conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, and (ii) 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
of this Indenture, the Issuer shall, in addition to any obligation imposed in
Section 11.1(a) or elsewhere in this Indenture, furnish to the Trustee, the
Agent and the Insurer (unless an Insurer Default is continuing) 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,
the Agent or 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, the Agent or the Insurer, as
applicable, 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 Invested Amount of the Note, 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% of the Invested Amount of the Note.
(d) Other than with respect to the release of any Purchased
Receivables or Liquidated Receivables or the release of any Receivables upon a
mandatory or partial prepayment of the Note pursuant to Section 10.1, whenever
any property or securities are to be released from the lien of this Indenture,
the Issuer shall also furnish to the Trustee, the Agent 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
38
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,
the Agent or 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, securities or Receivables released from the lien of this
Indenture since the commencement of the then current calendar year, as set forth
in the certificates required by clause (d) above and this clause (e), equals 10%
or more of the Invested Amount of the Note, 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 % of the then Invested Amount of the Note.
(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 Pledged Accounts as and to the extent
permitted or required by the Basic Documents.
SECTION 1.2. FORM OF DOCUMENTS DELIVERED TO TRUSTEE. xxi) 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.
(a) Any certificate or opinion of an Authorized Officer of the
Issuer may be based, insofar as it relates to legal matters, upon a certificate
or opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his or her certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Servicer, the Seller 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.
(b) 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.
(c) 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 1.3. ACTS OF THE NOTEHOLDER. Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholder may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
the Noteholder in person or by agents duly appointed in writing; and except as
herein otherwise expressly provided such action shall become effective when such
39
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 Noteholder 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.
(a) 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.
(b) The ownership of the Note shall be proved by the Note
Register.
(c) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of the Note shall bind the Holder
of the 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 the Note.
SECTION 1.4. NOTICES, ETC., TO TRUSTEE, ISSUER, AGENT AND
RATING AGENCIES. xxii) Any request, demand, authorization, direction, notice,
consent, waiver or Act of the Noteholder or other documents provided or
permitted by this Indenture to be made upon, given or furnished to or filed
with:
(i) the Trustee by the 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 the 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 at the Corporate Trust Office of the Owner
Trustee, with a copy to :Consumer Portfolio Services, Inc. 16355 Laguna
Canyon Road, Irvine, California 92618 Attention: Mark Creatura, Esq.
Confirmation: (888) 785-6691, Telecopy No. (949) 753-6897 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 Noteholder 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:
250 Park Avenue
New York, New York 10177
Attention: Surveillance
Confirmation: (646) 658-5900
Telecopy No.: (646) 658-5955
(iv) the Agent 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:
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To the Agent:
1211 Avenue of the Americas
New York, New York 10036
Attention: Rahel Avigdor
Telephone: (212) 597-8347
Telecopy: (212) 852-5971
(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 1.5. WAIVER. xxiii) 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 Noteholder
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.
(a) 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 Noteholder 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.
(b) 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 1.6. ALTERNATE PAYMENT AND NOTICE PROVISIONS.
Notwithstanding any provision of this Indenture or the Note to the contrary, the
Issuer may enter into any agreement with the Holder of the Note providing for a
method of payment, or notice by the Trustee or the 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 1.7. [RESERVED]
SECTION 1.8. 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 1.9. SUCCESSORS AND ASSIGNS. All covenants and
agreements in this Indenture and the Note 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 1.10. SEVERABILITY. In case any provision in this
Indenture or in the Note 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.
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SECTION 1.11. 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, to the extent such provisions are for the benefit
of the Insurer and so long as any amounts remain due and owing to the Insurer
pursuant to the Insurance Agreement. Nothing in this Indenture or in the Note,
express or implied, shall give to any Person, other than the parties hereto and
their successors hereunder, and the Noteholder, 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.
SECTION 1.12. 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 Note 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 1.13. GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS
LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 1.14. 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 1.15. 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 Controlling Party) to the effect that such
recording is necessary either for the protection of the Noteholder or any other
person secured hereunder or for the enforcement of any right or remedy granted
to the Trustee under this Indenture.
SECTION 1.16. ISSUER OBLIGATION. No recourse may be taken,
directly or indirectly, with respect to the obligations of the Issuer, the
Seller, the Servicer, the Owner Trustee or the Trustee on the Note or under this
Indenture or any certificate or other writing delivered in connection herewith
or therewith, against (i) the Seller, the Servicer, the Owner Trustee 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, the Owner Trustee or the Trustee
in its individual capacity, any holder of a beneficial interest in the Issuer,
the Seller, the Servicer, the Owner Trustee or the Trustee or of any successor
or assign of the Seller, the Servicer, the Owner Trustee or the Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that neither the Trustee nor the Owner Trustee have 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. For all purposes of this
Indenture, in the performance of its duties or obligations hereunder or in the
performance of any duties or obligations of the Issuer hereunder, the Owner
Trustee shall be subject to, and entitled to the benefits of, the terms and
provisions of Articles VI, VII and VIII of the Trust Agreement.
SECTION 1.17. NO PETITION. The Trustee, the Owner Trustee, the
Noteholder and the Agent, by entering into this Indenture hereby covenant and
agree 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 Note, this Indenture or any of the Basic
Documents.
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SECTION 1.18. INSPECTION. The Issuer agrees that, on
reasonable prior notice, it will permit any representative of the Agent, the
Noteholder, the Trustee or of the Controlling Party, 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, the Agent, and the
Noteholder 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, the Agent 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 WAREHOUSE TRUST
By: Wilmington Trust Company, not in its
individual capacity but solely as Owner Trustee
By:
--------------------------------------------
Name:
Title:
BANK ONE TRUST COMPANY, N.A.
By:
--------------------------------------------
Name:
Title:
WESTDEUTSCHE LANDESBANK GIROZENTRALE, as Agent
By:
--------------------------------------------
Name:
Title:
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