EXHIBIT 4.12
INDENTURE dated as of December 1, 2005, between CPS AUTO RECEIVABLES
TRUST 2005-D, a Delaware statutory trust (the "Issuer"), and WELLS FARGO BANK,
NATIONAL ASSOCIATION, a national banking association, as trustee (the
"Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Issuer's Class A-1 4.93%
Asset-Backed Notes (the "Class A-1 Notes") and Class A-2 5.06% Asset-Backed
Notes (the "Class A-2 Notes" and, together with the Class A-1 Notes, the
"Notes"):
As security for the payment and performance by the Issuer of its
obligations under this Indenture and the Notes, the Issuer has agreed to assign
the Collateral (as defined below) as collateral to the Trustee for the benefit
of the Noteholders.
Financial Security Assurance Inc. (the "Note Insurer") has issued and
delivered a financial guaranty insurance policy, dated the Closing Date (with
endorsements, the "Note Policy"), pursuant to which the Note Insurer guarantees
Scheduled Payments, as defined in the Note Policy.
As an inducement to the Note Insurer to issue and deliver the Note
Policy, the Issuer and the Note Insurer have executed and delivered the
Insurance and Indemnity Agreement, dated as of December 22, 2005 (as amended
from time to time, in accordance with the terms thereof, the "Insurance
Agreement") among the Note Insurer, the Issuer, Consumer Portfolio Services,
Inc. and CPS Receivables Corp.
As an additional inducement to the Note 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.
GRANTING CLAUSE
The Issuer hereby Grants to the Trustee at the Closing Date, 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:
(i) the Initial Receivables listed in Schedule A to the Sale
and Servicing Agreement and all monies received thereunder (other than
the Additional Servicing Compensation) after the Initial Cutoff Date
and all Net Liquidation Proceeds and Recoveries received with respect
to such Initial Receivables after the Initial Cutoff Date;
(ii) the Subsequent Receivables listed in Schedule A to the
related Subsequent Transfer Agreement and all monies received
thereunder (other than the Additional Servicing Compensation) after the
related Subsequent Cutoff Date and all Net Liquidation Proceeds and
Recoveries received with respect to such Subsequent Receivables on or
after the related Subsequent Cutoff Date;
(iii) the security interests in the Financed Vehicles granted
by the related Obligors pursuant to the Receivables and any other
interest of the Issuer in such Financed Vehicles, including the
certificates of title or, with respect to such Financed Vehicles in the
Non-Certificated Title States, all other evidence of ownership with
respect to such Financed Vehicles issued by the applicable Department
of Motor Vehicles or similar authority;
(iv) any proceeds from claims on any physical damage, credit
life and credit accident and health insurance policies or certificates
relating to the Financed Vehicles securing the Receivables or the
Obligors thereunder;
(v) all proceeds from recourse against Dealers with respect to
the Receivables;
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(vi) the Purchase Agreements, including a direct right to
cause CPS to purchase Receivables from the Issuer and to indemnify the
Issuer pursuant to the Purchase Agreements under the circumstances
specified therein;
(vii) the Issuer's rights and benefits, but none of its
obligations or burdens, under the Sale and Servicing Agreement and each
Subsequent Transfer Agreement (including all rights of the Seller under
the Purchase Agreements);
(viii) 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 or his or her obligations with respect to a Financed
Vehicle and any recourse to Dealers for any of the foregoing;
(ix) the Receivable File related to each Receivable;
(x) all amounts and property from time to time held in or
credited to the Collection Account, the Pre-Funding Account, the
Capitalized Interest Account, the Note Distribution Account and the
Lockbox Account;
(xi) all property (including the right to receive future Net
Liquidation Proceeds) that secures a Receivable that has been acquired
by or on behalf of CPS, the Seller or the Issuer pursuant to a
liquidation of such Receivable; and
(xii) 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 Noteholders.
The foregoing Grant is made in trust to the Trustee, for the benefit of
the Holders of the Notes and the Issuer Secured Parties, as their interests may
appear, to secure the payment of 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 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
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SECTION 1.1 DEFINITIONS. Except as otherwise specified herein, the following
terms have the respective meanings set forth below for all purposes of this
Indenture and the definitions of such terms are equally applicable to both the
singular and plural forms of such terms and to each gender.
Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to them in the Sale and Servicing Agreement or, if
not defined therein, in the Trust Agreement.
"Act" has the meaning specified in Section 11.3(a).
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"Affiliate" of any Person means any Person who directly or indirectly
controls, is controlled by, or is under direct or indirect common control with
such Person. For purposes of this definition of "Affiliate", the term "control"
(including the terms "controlling", "controlled by" and "under common control
with") means the possession, directly or indirectly, of the power to direct or
cause a direction of the management and policies of a Person, whether through
the ownership of voting securities, by contract or otherwise.
"Amount Financed" with respect to a Receivable shall have the meaning
specified in the Sale and Servicing Agreement.
"Annual Percentage Rate" or "APR" of a Receivable means the annual rate
of finance charges stated in the Receivable.
"Authorized Officer" means, with respect to the Issuer and the
Servicer, any officer or agent acting pursuant to a power of attorney of the
Owner Trustee or the Servicer, as applicable, who is authorized to act for the
Owner Trustee or the Servicer, as applicable, in matters relating to the Issuer
and who is identified on the list of Authorized Officers delivered by each of
the Owner Trustee and the Servicer to the Trustee on the Closing Date (as such
list may be modified or supplemented from time to time thereafter).
"Basic Documents" means this Indenture, the Certificate of Trust, the
Trust Agreement, the Sale and Servicing Agreement, each Subsequent Transfer
Agreement, the Master Spread Account Agreement, the Spread Account Supplement,
the Insurance Agreement, the Indemnification Agreement, the Lockbox Agreement,
the Servicing Assumption Agreement, the Purchase Agreements, the Placement
Agency Agreement, the Notes, the Residual Pass-through Certificates, any trust
agreement, indenture or other agreement to which the Seller, CPS or the Trust or
any of their respective Affiliates is a party entered into in connection with a
transfer of any interest in the Residual Pass-through Certificates, any
securities representing direct or indirect interests in the Residual
Pass-through Certificates and other documents and certificates delivered in
connection with the foregoing.
"Book Entry Notes" means a beneficial interest in the Notes, ownership
and transfers of which shall be made through book entries by a Clearing Agency
as described in Section 2.10.
"Business Day" means any day other than a Saturday, a Sunday or a day
on which banking institutions in Wilmington, Delaware, New York, New York,
Minneapolis, Minnesota, the State in which the executive offices of the Servicer
are located and the State in which the principal place of business of the Note
Insurer is located shall be authorized or obligated by law, executive order, or
governmental decree to be closed.
"Certificate of Trust" means the certificate of trust of the Issuer
substantially in the form of Exhibit B to the Trust Agreement.
"Class A-1 Interest Rate" means 4.93% per annum.
"Class A-1 Notes" means the Class A-1 4.93% Asset-Backed Notes,
substantially in the form of Exhibit A-1.
"Class A-2 Interest Rate" means 5.06% per annum.
"Class A-2 Notes" means the Class A-2 5.06% Asset-Backed Notes,
substantially in the form of Exhibit A-2.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act, or any successor provision
thereto. The initial Clearing Agency shall be The Depository Trust Company.
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"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means December 22, 2005.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
"Collateral" has the meaning specified in the Granting Clause of this
Indenture.
"Commission" means the United State Securities and Exchange Commission.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered
which office at date of the execution of this Agreement is located at Sixth
Street and Marquette Avenue, MAC N9311-161, Minneapolis, Minnesota 55479,
Attention: Corporate Trust Services/Asset Backed Administration - CPS 2005-D, or
at such other address as the Trustee may designate from time to time by notice
to the Noteholders, the Note Insurer, the Servicer and the Issuer, or the
principal corporate trust office of any successor Trustee (the address of which
the successor Trustee will notify the Noteholders and the Issuer).
"Default" means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.
"Definitive Notes" has the meaning specified in Section 2.10.
"Depositor" means the Seller, in its capacity as such under the Trust
Agreement.
"Event of Default" has the meaning specified in Section 5.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Executive Officer" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, President,
Executive Vice President, any Vice President, the Secretary or the Treasurer of
such corporation; with respect to any limited liability company, the manager;
and with respect to any partnership, any general partner thereof.
"Grant" means to mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create, grant a lien upon and a
security interest in and right of set-off against, deposit, set over and confirm
pursuant to this Indenture. A Grant of the Collateral or of any other agreement
or instrument shall include all rights, powers and options (but none of the
obligations) of the granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of the Collateral and all other moneys payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
proceedings in the name of the granting party or otherwise and generally to do
and receive anything that the granting party is or may be entitled to do or
receive thereunder or with respect thereto.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Note Register.
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"Indebtedness" means, with respect to any Person at any time, (a)
indebtedness or liability of such Person for borrowed money whether or not
evidenced by bonds, debentures, notes or other instruments, or for the deferred
purchase price of property or services (including trade obligations); (b)
obligations of such Person as lessee under leases which should be, in accordance
with generally accepted accounting principles, recorded as capital leases; (c)
current liabilities of such Person in respect of unfunded vested benefits under
plans covered by Title IV of ERISA; (d) obligations issued for or liabilities
incurred on the account of such Person; (e) obligations or liabilities of such
Person arising under acceptance facilities; (f) obligations of such Person under
any guarantees, endorsements (other than for collection or deposit in the
ordinary course of business) and other contingent obligations to purchase, to
provide funds for payment, to supply funds to invest in any Person or otherwise
to assure a creditor against loss; (g) obligations of such Person secured by any
lien on property or assets of such Person, whether or not the obligations have
been assumed by such Person; or (h) obligations of such Person under any
interest rate or currency exchange agreement.
"Indenture" means this Indenture as amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Independent" means, when used with respect to any specified Person,
that the person (a) is in fact independent of the Issuer, any other obligor upon
the Notes, the Seller and any Affiliate of any of the foregoing persons, (b)
does not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Seller or any Affiliate of
any of the foregoing Persons and (c) is not connected with the Issuer, any such
other obligor, the Seller or any Affiliate of any of the foregoing Persons as an
officer, employee, promoter, underwriter, trustee, partner, director or Person
performing similar functions.
"Insolvency Event" means, with respect to a specified Person, (a) the
institution of a proceeding or the filing of a petition against such Person
seeking the entry of a decree or order for relief by a court having jurisdiction
in the premises in respect of such Person or any substantial part of its
property in an involuntary case under any applicable Federal or State
bankruptcy, insolvency or other similar law now or hereafter in effect, or the
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for such Person or for any substantial part of
its property, or ordering the winding-up or liquidation or such Person's
affairs, and such petition, decree or order shall remain unstayed and in effect
for a period of 60 consecutive days; or (b) the commencement by such Person of a
voluntary case under any applicable Federal or State bankruptcy, insolvency or
other similar law now or hereafter in effect, or the consent by such Person to
the entry of an order for relief in an involuntary case under any such law, or
the consent by such Person to the appointment of or taking possession by, a
receiver, liquidator, assignee, custodian, trustee, sequestrator, or similar
official for such Person or for any substantial part of its property, or the
making by such Person of any general assignment for the benefit of creditors, or
the failure by such Person generally to pay its debts as such debts become due,
or the taking of action by such Person in furtherance of any of the foregoing.
"Insurance Agreement Indenture Cross Default" has the meaning specified
therefor in the Insurance Agreement.
"Insurer Secured Obligations" means all amounts and obligations which
the Issuer may at any time owe to or on behalf of the Note Insurer under this
Indenture, the Insurance Agreement or any other Basic Document.
"Interest Rate" means, with respect to the (i) Class A-1 Notes, the
Class A-1 Interest Rate and (ii) Class A-2 Notes, the Class A-2 Interest Rate.
"Issuer" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained herein, each other obligor on the Notes.
"Issuer Order" and "Issuer Request" means a written order or request
signed in the name of the Issuer by any one of its Authorized Officers and
delivered to the Trustee.
"Issuer Secured Obligations" means the Insurer Secured Obligations and
the Trustee Secured Obligations.
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"Issuer Secured Parties" means each of the Trustee, in respect of the
Trustee Secured Obligations, and the Note Insurer, in respect of the Insurer
Secured Obligations.
"Mandatory Redemption Date" means the first Payment Date occurring on
or after the last day of the Funding Period.
"Note" means a Class A-1 Note or a Class A-2 Note.
"Note Insurer" has the meaning specified in the Preamble.
"Note Majority" means the Holders evidencing more than 50% of the Class
A-1 Note Balance and Holders evidencing more than 50% of the Class A-2 Note
Balance.
"Note Owner" means, with respect to a Book Entry Note, the person who
is the owner of such Book-Entry Note, as reflected on the books of the Clearing
Agency, or on the books of a Person maintaining an account with such Clearing
Agency (directly as a Clearing Agency Participant or as an indirect participant,
in each case in accordance with the rules of such Clearing Agency).
"Note Paying Agent" means the Trustee or any other Person that meets
the eligibility standards for the Trustee specified in Section 6.11 and is
authorized by the Issuer to make the payments to and distributions from the
Collection Account and the Note Distribution Account, including payment of
principal of or interest on the Notes on behalf of the Issuer.
"Note Policy" means the guaranty insurance policy (No. 51705-N) issued
by the Note Insurer with respect to the Notes, including any endorsements
thereto.
"Note Register" and "Note Registrar" have the respective meanings
specified in Section 2.4.
"Officer's Certificate" means a certificate signed by any Authorized
Officer of the Owner Trustee, under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.1, and
delivered to the Trustee. Unless otherwise specified, any reference in this
Indenture to an Officer's Certificate shall be to an Officer's Certificate of
any Authorized Officer of the Issuer.
"Opinion of Counsel" means one or more written opinions of counsel who
may, except as otherwise expressly provided in this Indenture, be employees of
or counsel to the Issuer and who shall be satisfactory to the Trustee and, if
addressed to the Note Insurer, satisfactory to the Note Insurer, and which shall
comply with any applicable requirements of Section 11.1, and shall be in form
and substance satisfactory to the Trustee, and if addressed to the Note Insurer,
satisfactory to the Note Insurer.
"Outstanding" means, as of the date of determination, all Notes
theretofore authenticated and delivered under this Indenture except:
(i) Notes theretofore canceled by the Note Registrar or
delivered to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in
the necessary amount has been theretofore deposited with the Trustee or
any Note Paying Agent in trust for the Holders of such Notes (provided,
however, that if such Notes are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture, satisfactory
to the Trustee); and
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(iii) Notes in exchange for or in lieu of other Notes which
have been authenticated and delivered pursuant to this Indenture unless
proof satisfactory to the Trustee is presented that any such Notes are
held by a bona fide purchaser; provided, however, that Notes which have
been paid with proceeds of the Note Policy shall continue to remain
Outstanding for purposes of this Indenture until the Note Insurer has
been paid as subrogee hereunder or reimbursed pursuant to the Insurance
Agreement as evidenced by a written notice from the Note Insurer
delivered to the Trustee, and the Note Insurer shall be deemed to be
the Holder thereof to the extent of any payments thereon made by the
Note Insurer; provided, further, that in determining whether the
Holders of the requisite Outstanding Amount of the Notes have given any
request, demand, authorization, direction, notice, consent or waiver
hereunder or under any Basic Document, Notes owned by the Issuer, any
other obligor upon the Notes, the Seller or any Affiliate of any of the
foregoing Persons shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes that a Responsible
Officer of the Trustee either actually knows to be so owned or has
received written notice thereof shall be so disregarded. Notes so owned
that have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Notes and that the
pledgee is not the Issuer, any other obligor upon the Notes, the Seller
or any Affiliate of any of the foregoing Persons.
"Outstanding Amount" means, with respect to any date of determination,
the aggregate principal amount of all Notes, or class of Notes, as applicable,
Outstanding at such date of determination.
"Ownership Interest" means, as to any Note, any ownership or security
interest in such Note, including any interest in such Note as the Holder thereof
and any other interest therein, whether direct or indirect, legal or beneficial,
as owner or as pledgee.
"Owner Trustee" means Wilmington Trust Company, and its successors.
"Payment Date" has the meaning specified in the Notes.
"Predecessor Note" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.5 in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
"Proceeding" means any suit in equity, action at law or other judicial
or administrative proceeding.
"Purchase Agreements" means the Receivables Purchase Agreement and each
Subsequent Receivables Purchase Agreement, collectively.
"Rating Agency" means each of Moody's and Standard & Poor's, so long as
such Persons maintain a rating on the Notes; and if either Moody's or Standard &
Poor's no longer maintains a rating on the Notes, such other nationally
recognized statistical rating organization selected by the Seller and (so long
as an Insurer Default shall not have occurred and be continuing) acceptable to
the Note Insurer.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days' (or such shorter period as shall be
acceptable to each Rating Agency) prior notice thereof and that each of the
Rating Agencies shall have notified the Seller, the Servicer, the Note Insurer,
the Trustee, the Owner Trustee and the Issuer in writing that such action will
not result in a reduction or withdrawal of the then current rating of the Notes.
"Record Date" means, with respect to the first Payment Date, the
Closing Date, and with respect to any subsequent Payment Date or Redemption
Date, the last calendar day of the month preceding the month in which such
Payment Date or Redemption Date occurs.
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"Redemption Date" means, in the case of a redemption of the Notes
pursuant to Section 10.1(a), the Payment Date specified by the Servicer or the
Issuer pursuant to Section 10.1(a).
"Redemption Price" means, in the case of a redemption of the Notes
pursuant to Section 10.1(a), an amount equal to the unpaid principal amount of
each class of Notes being redeemed plus accrued and unpaid interest thereon to
but excluding the Redemption Date.
"Responsible Officer" means, with respect to the Trustee, any officer
within the Corporate Trust Office of the Trustee, including any Vice President,
Assistant Vice President, Assistant Treasurer, Assistant Secretary, or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also, with respect to a
particular matter, any other officer to whom such matter is referred because of
such officer's knowledge of and familiarity with the particular subject.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement
dated as of December 1, 2005, among the Issuer, the Seller, the Servicer, and
the Trustee, as Backup Servicer and Trustee, as the same may be amended or
supplemented from time to time.
"Scheduled Payments" has the meaning specified in the Note Policy.
"State" means any one of the 50 states of the United States of America
or the District of Columbia.
"Termination Date" means the latest of (i) the expiration of the Note
Policy and the return of the Note Policy to the Note Insurer for cancellation,
(ii) the date on which the Note Insurer shall have received payment and
performance of all Insurer Secured Obligations and (iii) the date on which the
Trustee shall have received payment and performance of all Trustee Secured
Obligations and disbursed such payments in accordance with the Basic Documents.
"Trust Agreement" means the Trust Agreement dated as of November 23,
2005, between the Seller, as depositor, and the Owner Trustee, as amended and
restated by the Amended and Restated Trust Agreement dated as of December 22,
2005, by and among the Seller, as depositor, and the Owner Trustee, as the same
may be further amended or supplemented from time to time in accordance with the
terms thereof.
"Trust Estate" means all money, instruments, rights and other property
that are subject or intended to be subject to the lien and security interest of
this Indenture for the benefit of the Issuer Secured Parties (including the
Collateral Granted to the Trustee hereunder), including all proceeds thereof.
"Trustee" means Wells Fargo Bank, National Association, a national
banking association, not in its individual capacity but as trustee under this
Indenture, or any successor trustee under this Indenture.
"Trustee Secured Obligations" means all amounts and obligations which
the Issuer may at any time owe to the Trustee for the benefit of the Noteholders
under this Indenture or the Notes or any other Basic Document.
"UCC" means, unless the context otherwise requires, the Uniform
Commercial Code, as in effect in the relevant jurisdiction, as amended from time
to time.
SECTION 1.2 RESERVED.
SECTION 1.3 OTHER DEFINITIONAL PROVISIONS. Unless the context otherwise
requires:
(a) All references in this instrument to designated
"Articles," "Sections," "Subsections" and other subdivisions are to the
designated Articles, Sections, Subsections and other subdivisions of
this instrument as originally executed.
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(b) The words "herein," "hereof," "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any
particular Article, Section, Subsection or other subdivision.
(c) an accounting term not otherwise defined herein has the
meaning assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;
(d) "or" is not exclusive; and
(e) "including" means including without limitation.
ARTICLE II
THE NOTES
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SECTION 2.1 FORM.
(a) The Class A-1 Notes and the Class A-2 Notes, in each case together
with the Trustee's certificate of authentication, shall be in substantially the
form set forth in EXHIBITS A-1 AND A-2, respectively, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may,
consistently herewith, be determined by the officers executing such Notes, as
evidenced by their execution of the Notes. Any portion of the text of any Note
may be set forth on the reverse thereof, with an appropriate reference thereto
on the face of the Note.
(b) The Definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without steel
engraved borders), all as determined by the officers executing such Notes, as
evidenced by their execution of such Notes.
(c) Each Note shall be dated the date of its authentication. The terms
of the Notes set forth in EXHIBITS A-1 AND A-2 are part of the terms of this
Indenture.
SECTION 2.2 EXECUTION, AUTHENTICATION AND DELIVERY.
(a) The Notes shall be executed on behalf of the Issuer by any of its
Authorized Officers. The signature of any such Authorized Officer on the Notes
may be manual or facsimile.
(b) Notes bearing the manual or facsimile signature of individuals who
were at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
(c) The Trustee shall upon receipt of the Note Policy and Issuer Order
authenticate and deliver Class A-1 Notes for original issue in an aggregate
principal amount of $79,000,000 and Class A-2 Notes for original issue in an
aggregate principal amount of $48,600,000. Class A-1 Notes and Class A-2 Notes
outstanding at any time may not exceed such amounts except as provided in
Section 2.4.
(d) Each Note shall be dated the date of its authentication. The Notes
shall be issuable as registered Notes in the minimum denomination of $100,000
and in integral multiples of $1,000 in excess thereof (except for one Note of
each class which may be issued in a lesser denomination and other than an
integral multiple of $1,000).
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(e) No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein,
executed by the Trustee by the manual signature of one of its authorized
signatories, and such certificate upon any Note shall be conclusive evidence,
and the only evidence, that such Note has been duly authenticated and delivered
hereunder.
SECTION 2.3 TEMPORARY NOTES.
(a) Pending the preparation of Definitive Notes, the Issuer may
execute, and upon receipt of an Issuer Order the Trustee shall authenticate and
deliver, temporary Notes which are printed, lithographed, typewritten,
mimeographed or otherwise produced, of the tenor of the Definitive Notes in lieu
of which they are issued and with such variations not inconsistent with the
terms of this Indenture as the officers executing such Notes may determine, as
evidenced by their execution of such Notes.
(b) If temporary Notes are issued, the Issuer will cause Definitive
Notes to be prepared without unreasonable delay. After the preparation of
Definitive Notes, the temporary Notes shall be exchangeable without charge to
the Holder for Definitive Notes upon surrender of the temporary Notes at the
office or agency of the Issuer to be maintained as provided in Section 3.2. Upon
surrender for cancellation of any one or more temporary Notes, the Issuer shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
like principal amount of Definitive Notes of authorized denominations. Until so
exchanged, the temporary Notes shall in all respects be entitled to the same
benefits under this Indenture as Definitive Notes.
SECTION 2.4 REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE.
(a) The Issuer shall cause to be kept a register (the "Note Register")
in which, subject to such reasonable regulations as it may prescribe, the Issuer
shall provide for the registration of Notes and the registration of transfers of
Notes. The Trustee is hereby initially appointed "Note Registrar" for the
purpose of registering Notes and transfers of Notes as herein provided. Upon any
resignation or removal of any Note Registrar, the Issuer shall promptly appoint
a successor or, in the absence of such an appointment, assume the duties of Note
Registrar.
(b) If a Person other than the Trustee is appointed by the Issuer as
Note Registrar, the Issuer will give the Trustee 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 shall have the right to inspect
the Note Register at all reasonable times and to obtain copies thereof, and the
Trustee shall have the right to rely upon a certificate executed on behalf of
the Note Registrar by an Executive Officer thereof as to the names and addresses
of the Holders of the Notes and the principal amounts and number of such Notes.
(c) Subject to Sections 2.10 and 2.12 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 Issuer shall execute, and upon request by the Issuer the
Trustee shall authenticate, and the Noteholder shall obtain from the Trustee, in
the name of the designated transferee or transferees, one or more new Notes in
any authorized denominations of the same class and a like aggregate principal
amount.
(d) At the option of the Holder, Notes may be exchanged for other Notes
in any authorized denominations, of the same class and a like aggregate
principal amount, upon surrender of the Notes to be exchanged at such office or
agency. Whenever any Notes are so surrendered for exchange, subject to Sections
2.10 and 2.12 hereof, if the requirements of Section 8-401(a) of the UCC are met
the Issuer shall execute, and upon request by the Issuer the Trustee shall
authenticate, and the Noteholder shall obtain from the Trustee, the Notes which
the Noteholder making the exchange is entitled to receive.
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(e) All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
(f) Every Note presented or surrendered for registration of transfer or
exchange shall be (i) duly endorsed by, or accompanied by a written instrument
of transfer in the form attached to EXHIBITS A-1 AND A-2 and duly executed by,
the Holder thereof or such Holder's attorney, duly authorized in writing, with
such signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar which requirements include membership or
participation in Securities Transfer Agents Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Note Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Exchange Act and (ii) accompanied by such other documents as the Trustee may
require.
(g) Each Noteholder by its acquisition of any Notes (or a beneficial
interest therein) shall be deemed to have represented and warranted for the
benefit of the Issuer, the Owner Trustee, the Trustee and the Noteholders, that
either (i) it is not acquiring any Notes with the assets of any "employee
benefit plan" as defined in Section 3(3) of ERISA which is subject to Title I of
ERISA or any "plan" as defined in Section 4975 of the Internal Revenue Code or
(ii) the acquisition and holding of the Notes will be covered by Prohibited
Transaction Class Exemption ("PTCE") 84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60,
PTCE 96-23 or a similar U.S. Department of Labor class exemption.
(h) No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Note Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 2.3 or 9.6 not involving any transfer.
(i) The preceding provisions of this Section 2.4 notwithstanding, the
Issuer shall not be required to make and the Note Registrar shall not register
transfers or exchanges of Notes selected for redemption or of any Note for a
period of 15 days preceding the due date for any payment with respect to the
Notes.
(j) Notwithstanding anything to the contrary in this Indenture or any
other Basic Document, (i) the transfer of a Note, including the right to receive
principal and any stated interest thereon, may be effected only by surrender of
the old Note (or satisfactory evidence of the destruction, loss or theft of such
Note) to the Note Registrar, and the issuance by the Issuer (through the Note
Registrar) of a new Note to the new Holder, and (ii) each Note must be
registered in the name of the Holder thereof as to both principal and any stated
interest with the Note Registrar.
SECTION 2.5 MUTILATED, DESTROYED, LOST OR STOLEN NOTES.
(a) If (i) any mutilated Note is surrendered to the Trustee, or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, and (ii) there is delivered to the Trustee and the Note Insurer
(unless an Insurer Default shall have occurred and be continuing) such security
or indemnity as may be required by each of the Issuer, the Trustee and the Note
Insurer to hold it 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
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Issuer may direct the Trustee, in writing, to pay such destroyed, lost or stolen
Note when so due or payable or upon the Redemption Date without surrender
thereof. If, after the delivery of such replacement Note or payment of a
destroyed, lost or stolen Note pursuant to the proviso to the preceding
sentence, a bona fide purchaser of the original Note in lieu of which such
replacement Note was issued, presents for payment such original Note, the
Issuer, the Trustee and the Note Insurer shall be entitled to recover such
replacement Note (or such payment) from the Person to whom it was delivered or
any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer or the Trustee in connection therewith.
(b) Upon the issuance of any replacement Note under this Section, the
Issuer may require the payment by the Holder of such Note of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Trustee) connected therewith.
(c) Every replacement Note issued pursuant to this Section in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
(d) The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.6 PERSONS DEEMED OWNER. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Trustee, the Note Insurer
and any agent of the Issuer, the Trustee or the Note Insurer may treat the
Person in whose name any Note is registered (as of the applicable Record Date)
as the owner of such Note for the purpose of receiving payments of principal of
and interest, if any, on such Note, for all other purposes whatsoever and
whether or not such Note be overdue, and none of the Issuer, the Note Insurer,
the Trustee nor any agent of the Issuer, the Note Insurer or the Trustee shall
be affected by notice to the contrary.
SECTION 2.7 PAYMENT OF PRINCIPAL AND INTEREST; DEFAULTED INTEREST.
(a) The Notes shall accrue interest as provided in the forms
of the Class A-1 Note and the Class A-2 Note set forth in EXHIBITS A-1
AND A-2, respectively, and such interest shall be payable on each
Payment Date as specified therein. Any installment of interest or
principal, if any, payable on any Note which is punctually paid or duly
provided for by the Issuer on the applicable Payment Date shall be paid
to the Person in whose name such Note (or one or more Predecessor
Notes) is registered on the related Record Date, by check mailed
first-class, postage prepaid, to such Person's address as it appears on
the Note Register on such Record Date, or by wire transfer in
immediately available funds to the account designated in writing to the
Trustee by such Person at least five Business Days prior to the related
Record Date, except that, unless Definitive Notes have been issued
pursuant to Section 2.12, with respect to Notes registered on the
related 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 Payment Date or on the Final Scheduled
Payment Date (and except for the Redemption Price for any Note called
for redemption pursuant to Section 10.1), which shall be payable as
provided below. The funds represented by any such checks returned
undelivered shall be held in accordance with Section 3.3.
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(b) The principal of each Note shall be payable in
installments on each Payment Date as provided in the forms of the Class
A-1 Notes and the Class A-2 Notes set forth in EXHIBITS A-1 AND A-2,
respectively. Notwithstanding the foregoing, the entire unpaid
principal amount of the Notes shall be due and payable, if not
previously paid, on the date on which an Event of Default shall have
occurred and be continuing in the manner and under the circumstances
provided in Section 5.2. All principal payments on each class of Notes
shall be made pro rata to the Noteholders of such class 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 Payment Date on which the Issuer
expects that the final installment of principal of and interest on such
Note will be paid. Such notice shall be mailed or transmitted by
facsimile prior to such final Payment Date and shall specify that such
final installment will be payable only upon presentation and surrender
of such Note and shall specify the place where such Note may be
presented and surrendered for payment of such installment. Notices in
connection with redemptions of Notes shall be mailed to Noteholders as
provided in Section 10.2.
(c) If the Issuer defaults in a payment of interest on the
Notes, the Issuer shall pay defaulted interest (plus interest on such
defaulted interest to the extent lawful) at the applicable Interest
Rate in any lawful manner. The Issuer may pay such amounts to the
Persons who are Noteholders on a subsequent special record date, which
date shall be at least five Business Days prior to the Payment Date.
The Issuer shall fix or cause to be fixed any such special record date
and Payment Date, and, at least 15 days before any such special record
date, the Issuer shall mail to each Noteholder and the Trustee a notice
that states the special record date, the Payment Date and the amount of
defaulted interest to be paid.
(d) Promptly following the date on which all principal of and
interest on the Notes has been paid in full and the Notes have been
surrendered to the Trustee, the Trustee shall, if the Note Insurer has
paid any amount in respect of the Notes under the Note Policy or
otherwise which has not been reimbursed to it, deliver such surrendered
Notes to the Note Insurer.
SECTION 2.8 CANCELLATION. Subject to Section 2.7(d), all Notes
surrendered for payment, registration of transfer, exchange or redemption shall,
if surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by the Trustee. Subject to Section 2.7(d), the
Issuer may at any time deliver to the Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Issuer may have
acquired in any manner whatsoever, and all Notes so delivered shall be promptly
canceled by the Trustee. No Notes shall be authenticated in lieu of or in
exchange for any Notes canceled as provided in this Section, except as expressly
permitted by this Indenture. Subject to Section 2.7(d), all canceled Notes may
be held or disposed of by the Trustee in accordance with its standard retention
or disposal policy as in effect at the time unless the Issuer shall direct by an
Issuer Order that they be destroyed or returned to it; provided that such Issuer
Order is timely and the Notes have not been previously disposed of by the
Trustee.
SECTION 2.9 RELEASE OF COLLATERAL. 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 Trust Account. The Trustee shall release property
from the lien created by this Indenture pursuant to this Section 2.9 only upon
receipt of an Issuer Request accompanied by an Officer's Certificate and an
Opinion of Counsel meeting the applicable requirements of Section 11.1.
SECTION 2.10 BOOK-ENTRY NOTES. The Notes, upon original issuance, will
be issued in the form of typewritten Notes representing the Book-Entry Notes, to
be delivered to DTC or to the Trustee as custodian for the initial Clearing
Agency, by, or on behalf of, the Issuer. Such Notes shall initially be
registered on the Note Register in the name of Cede & Co., the nominee of the
initial Clearing Agency, and no Note Owner will receive a Definitive Note
representing such Note Owner's interest in such Note, except as provided in
Section 2.12. Unless and until definitive, fully registered Notes (the
"Definitive Notes") have been issued to Note Owners pursuant to Section 2.12:
(i) the provisions of this Section shall be in full force and
effect;
(ii) the Note Registrar and the Trustee shall be entitled to
deal with the Clearing Agency for all purposes of this Indenture
(including the payment of principal of and interest on the Notes and
the giving of instructions or directions hereunder) as the sole Holder
of the Notes, and shall have no obligation to the Note Owners;
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(iii) to the extent that the provisions of this Section
conflict with any other provisions of this Indenture, the provisions of
this Section shall control;
(iv) the rights of Note Owners shall be exercised only through
the Clearing Agency and shall be limited to those established by law
and agreements between such Note Owners and the Clearing Agency and/or
the Clearing Agency Participants. Unless and until Definitive Notes are
issued pursuant to Section 2.12, the Clearing Agency will make
book-entry transfers among the Clearing Agency Participants and receive
and transmit payments of principal of and interest on the Notes to such
Clearing Agency Participants;
(v) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Holders of Notes
evidencing a specified percentage of the Outstanding Amount of the
Notes, the Clearing Agency shall be deemed to represent such percentage
only to the extent that it has received instructions to such effect
from Note Owners and/or Clearing Agency Participants owning or
representing, respectively, such required percentage of the beneficial
interest in the Notes and has delivered such instructions to the
Trustee; and
(vi) Note Owners may receive copies of any reports sent to
Noteholders pursuant to this Indenture, upon written request, together
with a certification that they are Note Owners and payment of
reproduction and postage expenses associated with the distribution of
such reports, from the Trustee at the Corporate Trust Office.
SECTION 2.11 NOTICES TO CLEARING AGENCY. Whenever a notice or other
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Note Owners pursuant to Section
2.12, the Trustee shall give all such notices and communications specified
herein to be given to Holders of the Notes to the Clearing Agency and shall have
no obligation to deliver such notices or communications to the Note Owners.
SECTION 2.12 DEFINITIVE NOTES. If (i) the Servicer advises the Trustee
in writing that the Clearing Agency is no longer willing or able to properly
discharge its responsibilities with respect to the Notes, and the Servicer is
unable to locate a qualified successor, (ii) the Servicer at its option advises
the Trustee in writing that it elects to terminate the book-entry system through
the Clearing Agency or (iii) after the occurrence of an Event of Default, Note
Owners representing beneficial interests aggregating at least a majority of the
Outstanding Amount of the Notes advise the Trustee through the Clearing Agency
in writing that the continuation of a book entry system through the Clearing
Agency is no longer in the best interests of the Note Owners, then the Clearing
Agency shall notify all Note Owners and the Trustee of the occurrence of any
such event and of the availability of Definitive Notes to Note Owners requesting
the same. Upon surrender to the Trustee of the typewritten Note or Notes
representing the Book-Entry Notes by the Clearing Agency, accompanied by
registration instructions, the Issuer shall execute and the Trustee shall
authenticate the Definitive Notes in accordance with the instructions of the
Clearing Agency. None of the Issuer, the Note Registrar or the Trustee shall be
liable for any delay in delivery of such instructions and may conclusively rely
on, and shall be protected in relying on, such instructions. Upon the issuance
of Definitive Notes, the Trustee shall recognize the Holders of the Definitive
Notes as Noteholders.
SECTION 2.13 RESTRICTIONS ON TRANSFER OF NOTES
(a) The Notes have not been registered or qualified under the
Securities Act of 1933, as amended (the "1933 Act"), or any State
securities laws or "Blue Sky" laws, and the Notes are being offered and
sold in reliance upon exemptions from the registration requirements of
the 1933 Act and such Blue Sky or State securities laws. No transfer,
sale, pledge or other disposition of any Note shall be made unless such
14
disposition is made pursuant to an effective registration statement
under the 1933 Act and effective registration or qualification under
applicable State securities laws or "Blue Sky" laws, or is made in a
transaction which does not require such registration or qualification.
In the event that a transfer of an Ownership Interest in a Book-Entry
Note is to be made in reliance upon an exemption from the 1933 Act, the
transferee will be deemed to have made the same representations and
warranties as required of an initial purchaser of such Ownership
Interest, as set forth in Section 2.13(b) below. In the event that a
transfer of an Ownership Interest in a Note which is not a Book-Entry
Note is to be made in reliance upon an exemption from the 1933 Act, the
Trustee or the Note Registrar shall require, in order to assure
compliance with the 1933 Act, that the Noteholder desiring to effect
such disposition and such Noteholder's prospective transferee each (A)
certify to the Trustee or the Note Registrar in writing the facts
surrounding such disposition pursuant to a letter, substantially in the
form of EXHIBIT B hereto, or (B) provide to the Trustee or the Note
Registrar such other evidence satisfactory to the Transferor, the
Trustee and the Note Registrar that the transfer is in compliance with
the 1933 Act. The Trustee may also, unless such transfer occurs more
than three years after the Closing Date or is made pursuant to Rule
144A promulgated under the 1933 Act, require an opinion of counsel
satisfactory to it that such transfer may be made pursuant to an
exemption from the 1933 Act, which opinion of counsel shall not be an
expense of the Trustee. None of the Seller, the Servicer, the Issuer,
the Owner Trustee or the Trustee is obligated under this Indenture to
register the Notes under the 1933 Act or any other securities law or to
take any action not otherwise required under this Indenture to permit
the transfer of such Notes without such registration or qualification.
Notwithstanding the foregoing, any transfer of a Note from a
Noteholder to the Seller or an Affiliate of the Seller shall be deemed
to have been made pursuant to an exemption from the registration
requirements of the 1933 Act, applicable State securities laws and
"Blue Sky" laws, and none of the conditions precedent set forth in this
Section 2.13(a) to the transfer of the Notes shall be applicable to
such transfer and such transferee shall not be deemed to have made the
representations and warranties in Section 2.13(b).
(b) Each Person (other than the Seller or an Affiliate of the
Seller) who has or who acquires an Ownership Interest in a Book-Entry
Note in reliance upon an exemption from the 1933 Act shall be deemed by
the acceptance or acquisition of such Ownership Interest to have
represented and agreed, as follows:
(i) Such Person is a qualified institutional buyer as
defined in Rule 144A under the 1933 Act, is aware that the
seller of the Note may be relying on the exemption from the
registration requirements of the 1933 Act provided by Rule
144A and is acquiring such Note for its own account, for the
account of one or more qualified institutional buyers for whom
it is authorized to act.
(ii) Such Person understands that the Notes have not
been and will not be registered under the 1933 Act and may be
offered, sold, pledged or otherwise transferred only to a
person whom the seller reasonably believes is a qualified
institutional buyer in a transaction meeting the requirements
of Rule 144A under the 1933 Act and in accordance with any
applicable securities laws of any State.
(iii) Such Person understands that a single
certificate in respect of each Class of Notes has been
registered in the name of the nominee of DTC, or in the case
of Definitive Notes, such Definitive Notes have been
registered in the name of such Person or its nominee, and
bears a legend to the following effect:
15
"THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES ("BLUE SKY
LAWS"), AND THIS NOTE MAY NOT BE OFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT (A) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A UNDER THE 1933 ACT IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (B) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, (C)
PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED UNDER THE
1933 ACT (IF AVAILABLE), OR (D) TO THE SELLER OR AN AFFILIATE
OF THE SELLER, IN EACH CASE IN ACCORDANCE WITH THE INDENTURE
AND ALL APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION. NO REPRESENTATION
IS MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY
RULE 144A FOR RESALES OF THIS NOTE."
ARTICLE III
COVENANTS
---------
SECTION 3.1 PAYMENT OF PRINCIPAL AND INTEREST. The Issuer will duly and
punctually pay the principal of and interest on the Notes in accordance with the
terms of the Notes and this Indenture. Without limiting the foregoing, the
Issuer will cause to be distributed on each Payment Date all amounts deposited
in the Note Distribution Account pursuant to the Sale and Servicing Agreement
(i) for the benefit of the Class A-1 Notes, to the Class A-1 Noteholders and
(ii) for the benefit of the Class A-2 Notes, to the Class A-2 Noteholders.
Amounts properly withheld under the Code or any applicable State law by any
Person from a payment to any Noteholder of interest and/or principal shall be
considered as having been paid by the Issuer to such Noteholder for all purposes
of this Indenture.
SECTION 3.2 MAINTENANCE OF OFFICE OR AGENCY. The Issuer will maintain
in Minneapolis, Minnesota, an office or agency where Notes may be surrendered
for registration of transfer or exchange, and where notices and demands to or
upon the Issuer in respect of the Notes and this Indenture may be served. The
Issuer hereby initially appoints the Trustee to serve as its agent for the
foregoing purposes. The Issuer will give prompt written notice to the Trustee of
the location, and of any change in the location, of any such office or agency.
If at any time the Issuer shall fail to maintain any such office or agency or
shall fail to furnish the Trustee with the address thereof, such surrenders,
notices and demands may be made or served at the Corporate Trust Office, and the
Issuer hereby appoints the Trustee as its agent to receive all such surrenders,
notices and demands.
SECTION 3.3 MONEY FOR PAYMENTS TO BE HELD IN TRUST.
(a) On or before each Payment Date and Redemption 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 Notes, 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.
(b) The Issuer shall cause each Note Paying Agent other than
the Trustee to execute and deliver to the Trustee and the Note Insurer
an instrument in which such Note Paying Agent shall agree with the
Trustee (and if the Trustee acts as Note Paying Agent, it hereby so
agrees), subject to the provisions of this Section, that such Note
Paying Agent shall:
(i) hold all sums held by it for the payment of
amounts due with respect to the Notes in trust for the benefit
of the Persons entitled thereto until such sums shall be paid
to such Persons or otherwise disposed of as herein provided
and pay such sums to such Persons as herein provided;
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(ii) give the Trustee notice of any default by the
Issuer (or any other obligor upon the Notes) of which it has
actual knowledge in the making of any payment required to be
made with respect to the Notes;
(iii) at any time during the continuance of any such
default, upon the written request of the Trustee, forthwith
pay to the Trustee all sums so held in trust by such Note
Paying Agent;
(iv) immediately resign as a Note Paying Agent and
forthwith pay to the Trustee all sums held by it in trust for
the payment of Notes if at any time it ceases to meet the
standards required to be met by a Note Paying Agent at the
time of its appointment; and
(v) comply with all requirements of the Code with
respect to the withholding from any payments made by it on any
Notes of any applicable withholding taxes imposed thereon and
with respect to any applicable reporting requirements in
connection therewith.
(c) The Issuer may at any time, for the purpose of obtaining
the satisfaction and discharge of this Indenture or for any other
purpose, by Issuer Order direct any Note Paying Agent to pay to the
Trustee all sums held in trust by such Note Paying Agent, such sums to
be held by the Trustee upon the same trusts as those upon which the
sums were held by such Note Paying Agent; and upon such a payment by
any Note Paying Agent to the Trustee, such Note Paying Agent shall be
released from all further liability with respect to such money.
(d) Subject to applicable laws with respect to the escheat of
funds, any money held by the Trustee or any Note Paying Agent in trust
for the payment of any amount due with respect to any Note and
remaining unclaimed for two years after such amount has become due and
payable shall be discharged from such trust and be paid to the Issuer
on Issuer Request with the consent of the Note Insurer (unless an
Insurer Default shall have occurred and be continuing) and shall be
deposited by the Trustee in the Collection Account; and the Holder of
such Note shall thereafter, as an unsecured general creditor, look only
to the Issuer for payment thereof (but only to the extent of the
amounts so paid to the 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 Note Insurer with the Trustee for the
payment of principal or interest on the Notes, to the extent any
amounts are owing to the Note Insurer, such amounts shall be paid
promptly to the Note Insurer upon receipt of a written request by the
Note Insurer to such effect, and provided, further, that the Trustee or
such Note Paying Agent, before being required to make any such
repayment, shall at the expense of the Issuer cause to be published
once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the City
of New York, notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the
date of such publication, any unclaimed balance of such money then
remaining will be repaid to the Issuer. The Trustee shall also adopt
and employ, at the expense of the Issuer, any other reasonable means of
notification of such repayment (including mailing notice of such
repayment to Holders whose Notes have been called but have not been
surrendered for redemption or whose right to or interest in moneys due
and payable but not claimed is determinable from the records of the
Trustee or of any Note Paying Agent, at the last address of record for
each such Holder).
SECTION 3.4 EXISTENCE. Except as otherwise permitted by the provisions
of Section 3.10, the Issuer will keep in full effect its existence, rights and
franchises as a statutory trust under the laws of the State of Delaware (unless
it becomes, or any successor Issuer hereunder is or becomes, organized under the
laws of any other State or of the United States of America, in which case the
Issuer will keep in full effect its existence, rights and franchises under the
laws of such other jurisdiction) and will obtain and preserve its qualification
to do business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Indenture, the
Notes, the Collateral and each other instrument or agreement included in the
Trust Estate.
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SECTION 3.5 PROTECTION OF TRUST ESTATE. The Issuer intends the security
interest Granted pursuant to this Indenture in favor of the Issuer Secured
Parties to be prior to all other liens in respect of the Trust Estate, and the
Issuer shall take all actions necessary to obtain and maintain, in favor of the
Trustee, for the benefit of the Issuer Secured Parties, a first lien on and a
first priority, perfected security interest in the Trust Estate. The Issuer will
from time to time prepare (or shall cause to be prepared), execute and deliver
all such supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance and other instruments,
and will take such other action necessary or advisable to:
(i) Grant more effectively all or any portion of the
Trust Estate;
(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 in such Trust Estate against the
claims of all persons and parties; and
(vi) pay all taxes or assessments levied or assessed
upon the Trust Estate when due.
The Issuer hereby designates the Trustee its agent and attorney-in-fact
to execute any financing statement, continuation statement or other instrument
required by the Trustee pursuant to this Section.
SECTION 3.6 OPINIONS AS TO TRUST ESTATE.
(a) On the Closing Date, and on the date of execution of each
indenture supplemental hereto, the Issuer shall furnish to the Trustee
and the Note Insurer an Opinion of Counsel either stating that, in the
opinion of such counsel, such action has been taken with respect to the
recording and filing of this Indenture, any indentures supplemental
hereto, and any other requisite documents, and with respect to the
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 in the Receivables, for the
benefit of the Issuer Secured Parties, created by this Indenture and
reciting the details of such action, or stating that, in the opinion of
such counsel, no such action is necessary to make such lien and
security interest effective.
(b) Within 90 days after the beginning of each calendar year,
commencing in 2006, the Issuer shall furnish to the Trustee and the
Note Insurer an Opinion of Counsel either stating that, in the opinion
of such counsel, such action has been taken with respect to the
recording, filing, re-recording and re-filing of this Indenture, any
indentures supplemental hereto and any other requisite documents and
with respect to the filing of any financing statements and continuation
statements as are necessary to maintain the first priority lien and
security interest created by this Indenture in the Receivables 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 3.7 PERFORMANCE OF OBLIGATIONS; SERVICING OF
RECEIVABLES.
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(a) The Issuer will not take any action and will use its best efforts
not to permit any action to be taken by others that would release any Person
from any of such Person's material covenants or obligations under any instrument
or agreement included in the Trust Estate or that would result in the amendment,
hypothecation, subordination, termination or discharge of or impair the validity
or effectiveness of, any such instrument or agreement, except as ordered by any
bankruptcy or other court or as expressly provided in this Indenture, the Basic
Documents or such other instrument or agreement.
(b) The Issuer may contract with other Persons acceptable to the Note
Insurer (so long as no Insurer Default shall have occurred and be continuing) 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 Note 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 to assist the
Issuer in performing its duties under this Indenture.
(c) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Basic Documents and
in the instruments and agreements included in the Trust Estate, including
preparing (or causing to be prepared) and filing (or causing to be filed) all
UCC financing statements and continuation statements required to be filed by the
terms of this Indenture and the Sale and Servicing Agreement in accordance with
and within the time periods provided for herein and therein. Except as otherwise
expressly provided therein, the Issuer shall not waive, amend, modify,
supplement or terminate any Basic Document or any provision thereof without the
consent of the Trustee, the Note Insurer or a Note Majority.
(d) If a responsible officer of the Owner Trustee shall have written
notice or actual knowledge of the occurrence of a Servicer Termination Event
under the Sale and Servicing Agreement, the Issuer shall promptly notify the
Trustee, the Note 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 shall arise
from the failure of the Servicer to perform any of its duties or obligations
under the Sale and Servicing Agreement with respect to the Receivables, the
Issuer shall take all reasonable steps available to it to remedy such failure.
(e) The Issuer agrees that it will not waive timely performance or
observance by the Servicer or the Seller of their respective duties under the
Basic Documents (x) without the prior consent of the Note Insurer (unless an
Insurer Default shall have occurred and be continuing) or (y) if the effect
thereof would adversely affect the Holders of the Notes.
SECTION 3.8 NEGATIVE COVENANTS. So long as any Notes are Outstanding, the Issuer
shall not:
(i) except as expressly permitted by this Indenture or the
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, without the satisfaction of the Rating Agency
Condition and unless directed to do so by the Controlling Party or
unless the Controlling Party has approved such disposition;
(ii) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Notes (other than
amounts properly withheld from such payments under the Code) or assert
any claim against any present or former Noteholder by reason of the
payment of the taxes levied or assessed upon any part of the Trust
Estate; or
(iii) (A) permit the validity or effectiveness of this
Indenture to be impaired, or permit the lien 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 Notes under this Indenture
except as may be expressly permitted hereby, (B) permit any lien,
charge, excise, claim, security interest, mortgage or other encumbrance
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(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) 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, and if such amendments or modifications would
adversely affect the interests of any Noteholder in any material
respect, the satisfaction of the Rating Agency Condition; or
(iv) engage in any business or activity other than as
permitted by the Trust Agreement; or
(v) incur or assume any indebtedness or guarantee any
indebtedness of any Person, except for such indebtedness incurred
pursuant to Section 3.15; or
(vi) dissolve or liquidate in whole or in part or merge or
consolidate with any other Person, other than in compliance with
Section 3.10; or
(vii) take any action that would result in the Issuer becoming
taxable as a corporation for federal income tax purposes or for the
purposes of any applicable State tax.
SECTION 3.9 ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer will deliver
to the Trustee and the Note Insurer, on or before March 31 of each year,
beginning March 31, 2006, an Officer's Certificate, dated as of December 31 of
the preceding calendar year, stating, as to the Authorized Officer signing such
Officer's Certificate, that
(i) a review of the activities of the Issuer during
such preceding year (or such shorter period, in the case of
the first such Officer's Certificate) and of its performance
under this Indenture has been made under such Authorized
Officer's supervision; and
(ii) to the best of such Authorized Officer's
knowledge, based on such review, the Issuer has complied with
all conditions and covenants under this Indenture throughout
such year (or such shorter period, in the case of the first
such Officer's Certificate), or, if there has been a default
in the compliance of any such condition or covenant,
specifying each such default known to such Authorized Officer
and the nature and status thereof.
SECTION 3.10 ISSUER MAY CONSOLIDATE, ETC. ONLY ON CERTAIN TERMS.
(a) The Issuer shall not consolidate or merge with or into any
other Person, unless
(i) the Person (if other than the Issuer) formed by
or surviving such consolidation or merger shall be a Delaware
Statutory Trust or a similar trust organized and existing
under the laws of any other State and shall expressly assume,
by an indenture supplemental hereto, executed and delivered to
the Trustee, in form satisfactory to the Trustee and the Note
Insurer (so long as no Insurer Default shall have occurred and
be continuing), the due and punctual payment of the principal
of and interest on all Notes and the performance or observance
of every agreement and covenant of this Indenture on the part
of the Issuer to be performed or observed, all as provided
herein;
(ii) immediately after giving effect to such
transaction, no Default or Event of Default shall have
occurred and be continuing;
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(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 and the Note Insurer (so long as no Insurer Default
shall have occurred and be continuing)) to the effect that
such transaction will not have any material adverse tax
consequence to the Trust, the Note Insurer, any Noteholder or
any Certificateholder;
(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
and the Note Insurer an Officer's Certificate and an Opinion
of Counsel each stating that such consolidation or merger and
such supplemental indenture comply with this Article III and
that all conditions precedent herein provided for relating to
such transaction have been complied with; and
(vii) so long as no Insurer Default shall have
occurred and be continuing, the Issuer shall have given the
Note Insurer written notice of such consolidation or merger at
least 20 Business Days prior to the consummation of such
action and shall have received the prior written approval of
the Note Insurer of such consolidation or merger and the
Issuer or the Person (if other than the Issuer) formed by or
surviving such consolidation or merger has a net worth,
immediately after such consolidation or merger, 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.
(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 Statutory Trust or a similar trust organized and
existing under the laws of any other State, (B) expressly
assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee,
and the Note Insurer (so long as no Insurer Default shall have
occurred and be continuing), the due and punctual payment of
the principal of and interest on all Notes and the performance
or observance of every agreement and covenant of this
Indenture and each of the Basic Documents on the part of the
Issuer to be performed or observed, all as provided herein,
(C) expressly agree by means of such supplemental indenture
that all right, title and interest so conveyed or transferred
shall be subject and subordinate to the rights of Holders of
the Notes, (D) unless otherwise provided in such supplemental
indenture, expressly agree to indemnify, defend and hold
harmless the Issuer against and from any loss, liability or
expense arising under or related to this Indenture and the
Notes and (E) expressly agree by means of such supplemental
indenture that such Person (or if a group of persons, then one
specified Person) shall prepare (or cause to be prepared) and
make all filings with the Commission (and any other
appropriate Person) required by the Exchange Act in connection
with the Notes;
(ii) immediately after giving effect to such
transaction, no Default or Event of Default shall have
occurred and be continuing;
(iii) the Rating Agency Condition shall have been
satisfied with respect to such transaction;
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(iv) the Issuer shall have received an Opinion of
Counsel (and shall have delivered copies thereof to the
Trustee and the Note Insurer (so long as no Insurer Default
shall have occurred and be continuing)) to the effect that
such transaction will not have any material adverse tax
consequence to the Trust, the Note Insurer, any Noteholder or
any Certificateholder;
(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
and the Note Insurer an Officers' Certificate and an Opinion
of Counsel each stating that such conveyance or transfer and
such supplemental indenture comply with this Article III and
that all conditions precedent herein provided for relating to
such transaction have been complied with; and
(vii) so long as no Insurer Default shall have
occurred and be continuing, the Issuer shall have given the
Note Insurer written notice of such conveyance or transfer at
least 20 Business Days prior to the consummation of such
action and shall have received the prior written approval of
the Note Insurer of such conveyance or transfer and the Issuer
or the Person (if other than the Issuer) formed by or
surviving such conveyance or transfer has a net worth,
immediately after such conveyance or transfer, that is (a)
greater than zero and (b) not less than the net worth of the
Issuer immediately prior to giving effect to such conveyance
or transfer.
SECTION 3.11 SUCCESSOR OR TRANSFEREE.
(a) Upon any consolidation or merger of the Issuer in
accordance with Section 3.10(a), the Person formed by or surviving such
consolidation or merger (if other than the Issuer) shall succeed to,
and be substituted for, and may exercise every right and power of, the
Issuer under this Indenture with the same effect as if such Person had
been named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and
properties of the Issuer pursuant to Section 3.10(b), CPS Auto
Receivables Trust 2005-D will be released from every covenant and
agreement of this Indenture to be observed or performed on the part of
the Issuer with respect to the Notes immediately upon the delivery of
written notice to the Trustee stating that CPS Auto Receivables Trust
2005-D is to be so released.
SECTION 3.12 NO OTHER BUSINESS. The Issuer shall not engage in any
business other than financing, purchasing, owning, selling and managing the
Receivables in the manner contemplated by this Indenture and the Basic Documents
and activities incidental thereto. After the end of the Funding Period, the
Issuer will not purchase any additional Receivables.
SECTION 3.13 NO BORROWING. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
Indebtedness except for (i) the Notes (ii) obligations owing from time to time
to the Note Insurer under the Insurance Agreement and (iii) any other
Indebtedness permitted by or arising under the Basic Documents. The proceeds of
the Notes shall be used exclusively to fund the Issuer's purchase of the
Receivables and the other assets specified in the Sale and Servicing Agreement,
to fund the Pre-Funding Account, the Capitalized Interest Account and (on behalf
of the Seller) the Spread Account and to pay the Issuer's organizational,
transactional and start-up expenses.
SECTION 3.14 SERVICER'S OBLIGATIONS. The Issuer shall cause the
Servicer to comply with Sections 4.9, 4.10, 4.11 and 5.11 of the Sale and
Servicing Agreement.
SECTION 3.15 GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES. Except
as contemplated by the 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.
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SECTION 3.16 CAPITAL EXPENDITURES. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
SECTION 3.17 COMPLIANCE WITH LAWS. The Issuer shall comply with the
requirements of all applicable laws, the non-compliance with which would,
individually or in the aggregate, materially and adversely affect the ability of
the Issuer to perform its obligations under the Notes, this Indenture or any
other Basic Document.
SECTION 3.18 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 the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the Issuer or to the Servicer, (ii) redeem, purchase, retire or
otherwise acquire for value any such ownership or equity interest or security or
(iii) set aside or otherwise segregate any amounts for any such purpose;
provided, however, that the Issuer may make, or cause to be made, distributions
to the Servicer, the Owner Trustee, the Trustee, the Collateral Agent, the
Backup Servicer, the Note Insurer, the Noteholders and the Certificateholders as
permitted by, and to the extent funds are available for such purpose under, the
Sale and Servicing Agreement, the Master Spread Account Agreement, the Trust
Agreement or any other Basic Document. The Issuer will not, directly or
indirectly, make payments to or distributions from the Collection Account except
in accordance with this Indenture and the Basic Documents.
SECTION 3.19 NOTICE OF EVENTS OF DEFAULT. Upon a responsible officer of
the Owner Trustee having notice or actual knowledge thereof, the Issuer agrees
to give the Trustee, the Note Insurer and the Rating Agencies prompt written
notice of each Event of Default hereunder and each default on the part of the
Servicer or the Seller of its obligations under any of the Basic Documents.
SECTION 3.20 FURTHER INSTRUMENTS AND ACTS. Upon request of the Trustee
or the Note Insurer, the Issuer will execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper to
carry out more effectively the purpose of this Indenture.
SECTION 3.21 AMENDMENTS OF SALE AND SERVICING AGREEMENT AND TRUST
AGREEMENT. The Issuer shall not agree to any amendment to Section 13.1 of the
Sale and Servicing Agreement or Section 11.1 of the Trust Agreement to eliminate
the requirements thereunder that the Trustee or the Holders of the Notes consent
to amendments thereto as provided therein.
SECTION 3.22 INCOME TAX CHARACTERIZATION. For purposes of federal
income tax, State and local income tax franchise tax and any other income taxes,
the Issuer and each Noteholder, by its acceptance of its Note or in the case of
a Note Owner, by its acceptance of a beneficial interest in a Note, will treat
the Notes as indebtedness of the Issuer and hereby instructs the Trustee to
treat the Notes as indebtedness of the Issuer for federal and State tax
reporting purposes.
SECTION 3.23 SEPARATE EXISTENCE OF THE ISSUER. During the term of this
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:
(a) The Issuer shall maintain business records and books of
account separate from those of its Affiliates;
(b) Except as otherwise provided in the Basic Documents, the
Issuer shall not commingle its assets and funds with those of its
Affiliates;
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(c) 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; and
(d) All transactions and dealings between the Issuer and its
Affiliates will be conducted on an arm's-length basis.
SECTION 3.24 REPRESENTATIONS AND WARRANTIES OF THE ISSUER.
The Issuer hereby makes the following representations and warranties as
to the Trust Estate to the Note Insurer and the Trustee for the benefit of the
Noteholders:
(i) CREATION OF SECURITY INTEREST. This Indenture creates a
valid and continuing security interest (as defined in the UCC) in the
Trust Estate in favor of the Trustee for the benefit of the Noteholders
and the Note Insurer, which security interest is prior to all other
Liens (except, as to priority, for any tax liens or mechanics' lien
which may arise after the Closing Date or as a result of an Obligor's
failure to pay its obligations, as applicable) and is enforceable as
such as against creditors of and purchasers from the Issuer.
(ii) PERFECTION OF SECURITY INTEREST IN TRUST PROPERTY. The
Issuer has caused, on or prior to the Closing Date, the filing of all
appropriate financing statements in the proper filing office in the
appropriate jurisdictions under applicable law in order to perfect the
security interest in the Trust Estate Granted to the Trustee for the
benefit of the Noteholders and the Note Insurer hereunder.
(iii) NO OTHER SECURITY INTERESTS. Other than the security
interest Granted to the Trustee for the benefit of the Noteholders and
the Note Insurer hereunder, the Issuer has not pledged, assigned, sold,
granted a security interest in, or otherwise conveyed any of the Trust
Estate. The Issuer has not authorized the filing of and is not aware of
any financing statements filed against the Issuer that include a
description of collateral covering the Trust Estate other than any
financing statement relating to the security interest Granted to the
Trustee for the benefit of the Noteholders and the Note Insurer
hereunder or that has been terminated. The Issuer is not aware of any
judgment or tax lien filings against the Issuer.
(iv) NOTATIONS ON CONTRACTS; FINANCING STATEMENT DISCLOSURE.
The Servicer has in its possession copies of all the original Contracts
that constitute or evidence the Initial Receivables and, from and after
each Subsequent Transfer Date, will have in its possession copies of
all the original Contracts that constitute or evidence the related
Subsequent Receivables. The Contracts that constitute or evidence the
Receivables do not and will not have any marks or notations indicating
that they have been pledged, assigned or otherwise conveyed to any
Person other than the Issuer and/or the Trustee for the benefit of the
Noteholders and the Note Insurer. All financing statements filed or to
be filed against the Issuer in favor of the Trustee in connection
herewith describing the Trust Estate contain a statement to the
following effect: "A purchase of or security interest in any collateral
described in this financing statement will violate the rights of Wells
Fargo Bank, National Association, as Trustee and secured party."
(v) TITLE. Immediately prior to the Grant herein contemplated,
the Issuer had good and marketable title to each Receivable and the
other property Granted hereunder and was the sole owner thereof, free
and clear of all liens, claims, encumbrances, security interests, and
rights of others, and, immediately upon the transfer thereof, the
Trustee for the benefit of the Noteholders and the Note Insurer shall
have good and marketable title to each such Receivable and other
property and will be the sole owner thereof, free and clear of all
liens, encumbrances, security interests, and rights of others, and the
transfer has been perfected under the UCC.
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The representations and warranties of the Issuer in this Section 3.24
may not be waived, modified or amended in any material respect without the prior
written consent of the Trustee, the Note Insurer and the Rating Agencies, and
shall survive the satisfaction and discharge of this Indenture.
ARTICLE IV
SATISFACTION AND DISCHARGE
--------------------------
SECTION 4.1 SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture
shall cease to be of further effect with respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.3, 3.4, 3.5, 3.8,
3.10, 3.12, 3.13, 3.20, 3.21, 3.22 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 Noteholders as beneficiaries hereof with respect to the property so
deposited with the Trustee payable to all or any of them, and the Trustee, on
demand of and at the expense of the Issuer, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture with respect to the
Notes, when
(a) all Notes theretofore authenticated and delivered (other
than (i) Notes that have been destroyed, lost or stolen and that have
been replaced or paid as provided in Section 2.5 and (ii) Notes for
whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Issuer and thereafter repaid to the
Issuer or discharged from such trust, as provided in Section 3.3) have
been delivered to the Trustee for cancellation and the Note Policy has
expired and been returned to the Note 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 Note
Insurer an Officer's Certificate and an Opinion of Counsel, each
meeting the applicable requirements of Section 11.1(a) and each stating
that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with.
SECTION 4.2 APPLICATION OF TRUST MONEY. All moneys deposited with the
Trustee pursuant to Section 4.1 hereof shall be held in trust and applied by it,
in accordance with the provisions of the Notes and this Indenture, to the
payment, either directly or through any Note Paying Agent, as the Trustee may
determine, to the Holders of the particular Notes for the payment or redemption
of which such moneys have been deposited with the Trustee, of all sums due and
to become due thereon for principal and interest; but such moneys need not be
segregated from other funds except to the extent required herein or in the Sale
and Servicing Agreement or required by law.
SECTION 4.3 REPAYMENT OF MONEYS HELD BY NOTE PAYING AGENT. In
connection with the satisfaction and discharge of this Indenture with respect to
the Notes, all moneys then held by any Note Paying Agent other than the Trustee
under the provisions of this Indenture with respect to such Notes shall, upon
demand of the Issuer, be paid to the Trustee to be held and applied according to
Section 3.3 and thereupon such Note Paying Agent shall be released from all
further liability with respect to such moneys.
ARTICLE V
REMEDIES
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SECTION 5.1 EVENTS OF DEFAULT.
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(a) "Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(i) default in the payment of any interest on any Note when
the same becomes due and payable, and such default shall continue for a
period of five days (solely for purposes of this clause, a payment on
the Notes funded by the Note Insurer or the Collateral Agent pursuant
to the Master Spread Account Agreement shall be deemed to be a payment
made by the Issuer); or
(ii) default in the payment of the principal of or any
installment of the principal of any Note when the same becomes due and
payable and such default shall continue for a period of five days
(solely for purposes of this clause, a payment on the Notes funded by
the Note Insurer or the Collateral Agent pursuant to the Master Spread
Account Agreement shall be deemed to be a payment made by the Issuer);
or
(iii) so long as no Insurer Default shall have occurred and be
continuing, an Insurance Agreement Indenture Cross Default shall have
occurred; provided, however, that the occurrence of an Insurance
Agreement Indenture Cross Default may not form the basis of an Event of
Default unless the Note Insurer shall, upon prior written notice to the
Rating Agencies, have delivered to the Issuer and the Trustee and not
rescinded a written notice specifying that such Insurance Agreement
Indenture Cross Default constitutes an Event of Default under this
Indenture; or
(iv) so long as an Insurer Default shall have occurred and be
continuing, a default in the observance or performance of any covenant
or agreement of the Issuer made in this Indenture (other than a
covenant or agreement, a default in the observance or performance of
which is elsewhere in this Section specifically dealt with), or any
representation or warranty of the Issuer made in this Indenture or in
any certificate or other writing delivered pursuant hereto or in
connection herewith proving to have been incorrect in any material
respect as of the time when the same shall have been made, and such
default shall continue or not be cured, or the circumstance or
condition in respect of which such misrepresentation or warranty was
incorrect shall not have been eliminated or otherwise cured, for a
period of 30 days (or for such longer period, not in excess of 90 days,
as may be reasonably necessary to remedy such default; provided that
such default is capable of remedy within 90 days or less and the
Servicer on behalf of the Owner Trustee delivers an Officer's
Certificate to the Trustee to the effect that the Issuer has commenced,
or will promptly commence and diligently pursue, all reasonable efforts
to remedy such default) after there shall have been given, by
registered or certified mail, to the Issuer by the Trustee or to the
Issuer and the Trustee by the Holders of at least 25% of the
Outstanding Amount of each class of Notes, a written notice specifying
such default or incorrect representation or warranty and requiring it
to be remedied and stating that such notice is a "Notice of Default"
hereunder; or
(v) so long as an Insurer Default shall have occurred and be
continuing, the occurrence of an Insolvency Event with respect to the
Issuer, the Servicer or the Seller (or, so long as CPS is Servicer, any
of the Servicer's Specified Affiliates).
(b) The Issuer shall deliver to the Trustee and the Note Insurer,
within five days after the occurrence thereof, written notice in the form of an
Officer's Certificate of any event which with the giving of notice and the lapse
of time would become an Event of Default under clause (iii), its status and what
action the Issuer is taking or proposes to take with respect thereto.
SECTION 5.2 RIGHTS UPON EVENT OF DEFAULT.
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(a) So long as no Insurer Default has occurred and is continuing, if an
Event of Default shall have occurred and be continuing, then the Controlling
Party shall have the right, but not the obligation, upon prior written notice to
each Rating Agency, to declare by written notice to the Issuer and the Trustee
that the Notes become immediately due and payable, and upon any such declaration
the unpaid principal amount of the Notes, together with accrued and unpaid
interest thereon, shall become immediately due and payable. The Trustee will
have no discretion with respect to the acceleration of the Notes under the
foregoing circumstances. 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 Notes, the Trustee shall
continue to make claims under the Note Policy pursuant to the Sale and Servicing
Agreement for Scheduled Payments on the Notes. Subject to the terms of the Note
Policy, payments under the Note Policy following acceleration of any Notes shall
be applied by the Trustee:
FIRST: to Noteholders for amounts due and unpaid on
the Notes for interest, ratably, without preference or
priority of any kind, according to the amounts due and payable
on the Notes for interest;
SECOND: to the Noteholders for amounts due and unpaid
on the Notes for principal, ratably and without preference or
priority of any kind, according to the amounts then due and
payable on the Notes for principal.
(b) In the event any Notes are accelerated due to an Event of Default,
the Note Insurer shall have the right (in addition to its obligation to pay
Scheduled Payments on the Notes in accordance with the Note Policy), but not the
obligation, to make payments under the Note Policy or otherwise of interest and
principal due on such Notes, in whole or in part, on any date or dates following
such acceleration as the Note Insurer, in its sole discretion, shall elect.
(c) If an Insurer Default shall have occurred and be continuing and an
Event of Default shall have occurred and be continuing, the Trustee in its
discretion may, or if so requested in writing by a Note Majority, shall declare
by written notice to the Issuer that the Notes become, whereupon they shall
become, immediately due and payable at par, together with accrued interest
thereon.
(d) If an Insurer Default shall have occurred and be continuing, then
at any time after such declaration of acceleration of maturity has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter provided in this Article V, a Note Majority, by
written notice to the Issuer and the Trustee, may rescind and annul such
declaration and its consequences if:
(i) the Issuer has paid or deposited with the Trustee a sum
sufficient to pay
(A) all payments of principal of and interest on all
Notes and all other amounts that would then be due hereunder
or upon such Notes if the Event of Default giving rise to such
acceleration had not occurred; and
(B) 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
(ii) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such acceleration,
have been cured or waived as provided in Section 5.13.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
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SECTION 5.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.
(a) The Issuer covenants that if (i) default is made in the payment of
any interest on any Note when the same becomes due and payable, and such default
continues for a period of five days, or (ii) default is made in the payment of
the principal of or any installment of the principal of any Note when the same
becomes due and payable and such default continues for a period of five days,
the Issuer will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of the Notes, the whole amount then due and payable on such Notes for
principal and interest, with interest upon the overdue principal, and, to the
extent payment at such rate of interest shall be legally enforceable, upon
overdue installments of interest, at the applicable 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.
(b) Each Issuer Secured Party hereby irrevocably and unconditionally
appoints the Controlling Party as the true and lawful attorney-in-fact of such
Issuer Secured Party for so long as such Issuer Secured Party is not the
Controlling Party, with full power of substitution, to execute, acknowledge and
deliver any notice, document, certificate, paper, pleading or instrument and to
do in the name of the Controlling Party as well as in the name, place and stead
of such Issuer Secured Party such acts, things and deeds for or on behalf of and
in the name of such Issuer Secured Party under this Indenture (including
specifically under Section 5.4) and under the 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 Basic Documents and, without limitation,
following the occurrence of an Event of Default, exercise full right, power and
authority to take, or defer from taking, any and all acts with respect to the
administration, maintenance or disposition of the Trust Estate.
(c) If an Event of Default occurs and is continuing, the Trustee may in
its discretion subject to the consent of the Controlling Party and shall, at the
direction of the Controlling Party (except as provided in Section 5.3(d) below),
proceed to protect and enforce its rights and the rights of the Noteholders by
such appropriate Proceedings as the Trustee or the Controlling Party shall deem
most effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy or
legal or equitable right vested in the Trustee by this Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Trust Estate, proceedings under Title 11 of the United States Code or any
other applicable Federal or State bankruptcy, insolvency or other similar law,
or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial proceedings relative to the Issuer
or other obligor upon the Notes, or to the creditors or property of the Issuer
or such other obligor, the Trustee, irrespective of whether the principal of any
Notes shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand
pursuant to the provisions of this Section, shall be entitled and empowered, by
intervention in such proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount
of principal and interest owing and unpaid in respect of the Notes and
to file such other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any claim for
reasonable compensation to the Trustee and each predecessor Trustee,
and their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee, except as a
result of negligence, bad faith or willful misconduct) and of the
Noteholders allowed in such proceedings;
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(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Holders of Notes in any election of a trustee, a
standby trustee or person performing similar functions in any such
proceedings;
(iii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute all amounts
received with respect to the claims of the Noteholders and of the
Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims
of the Trustee or the Holders of Notes allowed in any judicial
proceedings relative to the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar
official in any such proceeding is hereby authorized by each of such Noteholders
to make payments to the Trustee, and, in the event that the Trustee shall
consent to the making of payments directly to such Noteholders, to pay to the
Trustee such amounts as shall be sufficient to cover reasonable compensation to
the Trustee, each predecessor Trustee and their respective agents, attorneys and
counsel, and all other expenses and liabilities incurred, and all advances made,
by the Trustee and each predecessor Trustee except as a result of negligence or
bad faith.
(e) Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or vote for or accept or adopt on behalf of any
Noteholder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof or to authorize the
Trustee to vote in respect of the claim of any Noteholder in any such proceeding
except, as aforesaid, to vote for the election of a trustee in bankruptcy or
similar person.
(f) All rights of action and of asserting claims under this Indenture
or the Master Spread Account Agreement or under any of the Notes, may be
enforced by the Trustee without the possession of any of the Notes or the
production thereof in any trial or other proceedings relative thereto, and any
such action or proceedings instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment, subject to
the payment of the expenses, disbursements and compensation of the Trustee, each
predecessor Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the Notes.
(g) In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture or the Master
Spread Account Agreement), the Trustee shall be held to represent all the
Holders of the Notes, and it shall not be necessary to make any Noteholder a
party to any such proceedings.
SECTION 5.4 REMEDIES. If an Event of Default shall have occurred and be
continuing, the Controlling Party may do one or more of the following (subject
to Section 5.5):
(i) institute or direct the Trustee to institute Proceedings
in its own name and as trustee of an express trust for the collection
of all amounts then payable on the Notes or under this Indenture with
respect thereto, whether by declaration or otherwise, enforce any
judgment obtained, and collect from the Issuer and any other obligor
upon such Notes moneys adjudged due;
(ii) institute or direct the Trustee to institute Proceedings
from time to time for the complete or partial foreclosure of this
Indenture with respect to the Trust Estate;
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(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 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 either (x) the Holders of 100% of
the Outstanding Amount of the Notes consent thereto, or (y) the
proceeds of such sale or liquidation distributable to the Noteholders
are sufficient to discharge in full all amounts then due and unpaid
upon such Notes for principal and interest.
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 5.5 OPTIONAL PRESERVATION OF THE RECEIVABLES. If the Trustee is
the Controlling Party and if the Notes have been declared to be due and payable
under Section 5.2 following an Event of Default and such declaration and its
consequences have not been rescinded and annulled, the Trustee may, but need
not, elect to maintain possession of the Trust Estate. It is the desire of the
parties hereto and the Noteholders that there be at all times sufficient funds
for the payment of principal of and interest on the Notes, and the Trustee shall
take such desire into account when determining whether or not to maintain
possession of the Trust Estate. In determining whether to maintain possession of
the Trust Estate, the Trustee may, but need not, obtain and rely upon an opinion
of an Independent investment banking or accounting firm of national reputation
as to the feasibility of such proposed action and as to the sufficiency of the
Trust Estate for such purpose.
SECTION 5.6 PRIORITIES.
(a) Following (1) the acceleration of the Notes pursuant to
Section 5.2 or (2) if an Insurer Default shall have occurred and be
continuing, the occurrence of an Event of Default pursuant to Section
5.1(a)(i), 5.1(a)(ii) or 5.1(a)(v) of this Indenture, the Total
Distribution Amount, including any money or property collected pursuant
to Section 5.4 of this Indenture shall be applied by the Trustee on the
related Payment Date in the following order of priority:
FIRST: amounts due and owing and required to be
distributed pursuant to priorities (i) through (iv) of Section
5.7(a) of the Sale and Servicing Agreement and not previously
distributed to the Persons set forth therein, in the order of
such priorities and without preference or priority of any kind
within such priorities, and, if applicable, subject to the
monetary limitations set forth therein;
SECOND: to Noteholders for amounts due and unpaid on
the Notes for interest, ratably, without preference or
priority of any kind, according to the amounts due and payable
on the Notes for interest;
THIRD: to the Noteholders for amounts due and unpaid
on the Notes for principal, ratably and without preference of
priority of any kind, to the Class A-1 Noteholders and the
Class A-2 Noteholders, according to the amounts due and
payable on the Notes, until the outstanding principal amount
of the Notes has been reduced to zero;
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FOURTH: amounts due and owing and required to be
distributed to the Note Insurer pursuant to priority (viii) of
Section 5.7(a) of the Sale and Servicing Agreement and not
previously distributed;
FIFTH: amounts due and owing and required to be
distributed to the Residual Certificateholders, pro rata,
pursuant to priorities (vi) and (xiii) of Section 5.7(a) of
the Sale and Servicing Agreement and not previously
distributed;
SIXTH: in the event any Person other than the Backup
Servicer becomes the successor Servicer, to such successor
Servicer, to the extent not previously paid by the predecessor
Servicer pursuant to the Sale and Servicing Agreement, or
pursuant to priority FIRST hereof, reasonable transition
expenses (up to a maximum of $50,000 for all such expenses
during the term of this Indenture) incurred in becoming the
successor Servicer and all other amounts due and owing to the
Backup Servicer pursuant to Section 5.7(a)(xii) of the Sale
and Servicing Agreement;
SEVENTH: to the Residual Certificateholders, pro
rata, in reduction of the Residual Certificate Notional
Balance until the Residual Certificate Notional Balance equals
zero; and
EIGHTH: to the Residual Certificateholders, pro rata,
any remaining amount;
provided that any amounts collected from the Pre-Funding Account or the
Capitalized Interest Account shall be applied solely to the payment of
amounts due and unpaid on the Notes FIRST, in accordance with Section
10.1(b) and SECOND, in accordance with Section 5.8(a)(ii) of the Sale
and Servicing Agreement and THIRD, in accordance with priorities FIRST
through EIGHTH above.
(b) The Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section. At least 15 days
before such record date the Issuer shall mail to each Noteholder and
the Trustee a notice that states such record date, the payment date and
the amount to be paid.
SECTION 5.7 LIMITATION OF SUITS. No Holder of any Note shall have any
right to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(i) such Holder has previously given written notice
to the Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the
Outstanding Amount of each class of Notes have made written
request to the Trustee to institute such proceeding in respect
of such Event of Default in its own name as Trustee hereunder;
(iii) such Holder or Holders have offered to the
Trustee indemnity reasonably satisfactory to it against the
costs, expenses and liabilities to be incurred in complying
with such request;
(iv) the Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has failed to
institute such proceedings;
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(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 one or more Holders of Notes
shall have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Notes or to obtain or to seek to obtain priority or preference
over any other Holders or to enforce any right under this Indenture, except in
the manner herein provided.
In the event the Trustee shall receive conflicting or inconsistent
requests and indemnity from two or more groups of Holders of Notes, each
representing less than a majority of the Outstanding Amount of each class of
Notes, the Trustee in its sole discretion may determine what action, if any,
shall be taken, notwithstanding any other provisions of this Indenture.
SECTION 5.8 UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE PRINCIPAL
AND INTEREST. Notwithstanding any other provisions of this Indenture, the Holder
of any Note shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest, if any, on such Note on or
after the respective due dates thereof expressed in such Note or in this
Indenture (or, in the case of redemption, on or after the Redemption Date) and
to institute suit for the enforcement of any such payment, and such right shall
not be impaired without the consent of such Holder.
SECTION 5.9 RESTORATION OF RIGHTS AND REMEDIES. If the Controlling
Party or any Noteholder has instituted any proceeding to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Trustee or to
such Noteholder, then and in every such case the Issuer, the Trustee and the
Noteholders shall, subject to any determination in such Proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Trustee and the Noteholders shall continue as
though no such proceeding had been instituted.
SECTION 5.10 RIGHTS AND REMEDIES CUMULATIVE. No right or remedy herein
conferred upon or reserved to the Controlling Party or to the Noteholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.11 DELAY OR OMISSION NOT A WAIVER. No delay or omission of
the Controlling Party or any Holder of any Note to exercise any right or remedy
accruing upon any Default or Event of Default shall impair any such right or
remedy or constitute a waiver of any such Default or Event of Default or an
acquiescence therein. Every right and remedy given by this Article V or by law
to the Trustee or to the Noteholders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Noteholders, as the
case may be.
SECTION 5.12 CONTROL BY NOTEHOLDERS. If the Trustee is the Controlling
Party, a 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 Notes or exercising any trust or power conferred on the Trustee;
provided that
(i) such direction shall not be in conflict with any
rule of law or with this Indenture;
(ii) subject to the express terms of Section 5.4, any
direction to the Trustee to sell or liquidate the Trust Estate
shall be by the Holders of Notes representing not less than
100% of the Outstanding Amount of the Notes;
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(iii) if the conditions set forth in Section 5.5 have
been satisfied and the Trustee elects to retain the Trust
Estate pursuant to such Section, then any direction to the
Trustee by Holders of Notes representing less than 100% of the
Outstanding Amount of each class of Notes to sell or liquidate
the Trust Estate shall be of no force and effect; and
(iv) the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such
direction;
provided, however, that, subject to Section 6.1, the Trustee need not
take any action that it determines might involve it in liability or might
materially adversely affect the rights of any Noteholders not consenting to such
action.
SECTION 5.13 WAIVER OF PAST DEFAULTS. If an Insurer Default shall have
occurred and be continuing, prior to the declaration of the acceleration of the
maturity of the Notes as provided in Section 5.4, 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 any of the Notes or
(ii) in respect of a covenant or provision hereof which cannot be modified or
amended without the consent of the Holder of each Note. In the case of any such
waiver, the Issuer, the Trustee and the Holders of the Notes shall be restored
to their former positions and rights hereunder, respectively; but no such waiver
shall extend to any subsequent or other Default or Event of Default or impair
any right consequent thereto.
Upon any such waiver, such Default or Event of Default shall cease to
exist and be deemed to have been cured and not to have occurred, and any Event
of Default arising therefrom shall be deemed to have been cured and not to have
occurred, for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other Default or Event of Default or impair any right
consequent thereto.
SECTION 5.14 UNDERTAKING FOR COSTS. All parties to this Indenture
agree, and each Holder of any Note by such Holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken, suffered or omitted by it as Trustee,
the filing by any party litigant in such suit of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to (a)
any suit instituted by the Trustee, (b) any suit instituted by any Noteholder,
or group of Noteholders, in each case holding in the aggregate more than 10% of
the Outstanding Amount of each class of Notes or (c) any suit instituted by any
Noteholder for the enforcement of the payment of principal of or interest on any
Note on or after the respective due dates expressed in such Note and in this
Indenture (or, in the case of redemption, on or after the Redemption Date).
SECTION 5.15 WAIVER OF STAY OR EXTENSION LAWS. The Issuer covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead or in any manner whatsoever, claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture; and
the Issuer (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power and any right of the Issuer to take
such action shall be suspended.
SECTION 5.16 SUBROGATION. The Note Insurer shall, to the extent it
makes any payment with respect to the Notes, become subrogated to the rights of
the recipients of such payments to the extent of such payments. Subject to and
conditioned upon any payment with respect to the Notes by or on behalf of the
Note Insurer, each Noteholder shall be deemed, without further action to have
directed the Trustee to assign to the Note Insurer all rights to the payment of
interest or principal with respect to the Notes which are then due for payment
to the extent of all payments made by the Note Insurer and the Note Insurer may
exercise any option, vote, right, power or the like with respect to the Notes to
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the extent that it has made payment pursuant to the Note Policy. Notwithstanding
the foregoing, the order of priority of payments to be made pursuant to Section
5.7(a) of the Sale and Servicing Agreement shall not be modified by this clause.
To evidence such subrogation, the Note Registrar shall note the Note Insurer's
rights as subrogee upon the register of Noteholders upon receipt from the Note
Insurer of proof of payment by the Note Insurer of any Class A Noteholders'
Interest Distributable Amount or Class A Noteholders' Principal Distributable
Amount.
SECTION 5.17 PREFERENCE CLAIMS; DIRECTION OF PROCEEDINGS. (a) In the
event that the Trustee has received a certified copy of an order of the
appropriate court that any Scheduled Payment 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 Note Insurer, shall comply with the provisions of
the Note Policy to obtain payment by the Note Insurer of such avoided payment,
and shall, at the time it provides notice to the Note Insurer, notify Holders of
the Notes by mail that, in the event that any Noteholder's payment is so
recoverable, such Noteholder will be entitled to payment pursuant to the terms
of the Note Policy. Pursuant to the terms of the Note Policy, the Note Insurer
will make such payment on behalf of the Noteholder to the receiver, conservator,
debtor-in-possession or trustee in bankruptcy named in the Final Order (as
defined in the Note Policy) and not to the Trustee or any Noteholder directly
(unless a Noteholder has previously paid such payment to the receiver,
conservator, debtor-in-possession or trustee in bankruptcy, in which case the
Note Insurer will make such payment to the Trustee for payment, in accordance
with the instructions to be provided by the Note Insurer, to such Noteholder
upon proof of such payment reasonably satisfactory to the Note Insurer).
(b) Each Notice of Claim (as defined in the Note Policy) shall provide
that the Trustee, on its behalf and on behalf of the Noteholders, thereby
appoints the Note Insurer as agent and attorney-in-fact for the Trustee and each
Noteholder in any legal proceeding with respect to the Notes. The Trustee shall
promptly notify the Note Insurer of any proceeding or the institution of any
action (of which a Responsible Officer of the Trustee has actual knowledge)
seeking the avoidance as a preferential transfer under applicable bankruptcy,
insolvency, receivership, rehabilitation or similar law (a "Preference Claim")
of any payment made with respect to the Notes. Each Holder of the Notes, by its
purchase of Notes, and the Trustee hereby agree that so long as a Note Insurer
Default shall not have occurred and be continuing, the Note 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 (i) the direction
of any appeal of any order relating to any Preference Claim and (ii) the posting
of any surety, supersedeas or performance bond pending any such appeal at the
expense of the Note Insurer, but subject to the reimbursement as provided in the
Insurance Agreement. In addition, and without limitation of the foregoing, the
Note Insurer shall be subrogated to, and each Noteholder and the Trustee hereby
delegate and assign, to the fullest extent permitted by law, the rights of the
Trustee and each Noteholder in the conduct of any proceeding with respect to a
Preference Claim, including all rights of any party to an adversary proceeding
action with respect to any court order issued in connection with any such
Preference Claim.
ARTICLE VI
THE TRUSTEE
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SECTION 6.1 DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise the rights and powers vested in it by this
Indenture and the Basic Documents and use the same degree of care and
skill in their exercise as a prudent person would exercise or use under
the circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this
Indenture and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
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(ii) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture;
however, the Trustee shall examine the certificates and
opinions to determine whether or not they conform on their
face to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of
paragraph (b) of this Section;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it
is proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section
5.12.
(d) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the
Issuer.
(e) Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law or the terms of
the Basic Documents.
(f) No provision of this Indenture shall require the Trustee
in any of its capacities to expend or risk its own funds or otherwise
incur financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers, if it
shall have reasonable grounds to believe that repayment of such funds
or adequate indemnity against such risk or liability is not reasonably
assured to it.
(g) Every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee
shall be subject to the provisions of this Section.
(h) The Trustee shall permit any representative of the Note
Insurer, during the Trustee's normal business hours, to examine all
books of account, records, reports and other papers of the Trustee
relating to the Notes, to make copies and extracts therefrom and to
discuss the Trustee's affairs and actions, as such affairs and actions
relate to the Trustee's duties with respect to the Notes, with the
Trustee's officers and employees responsible for carrying out the
Trustee's duties with respect to the Notes.
(i) The Trustee shall, and hereby agrees that it will, perform
all of the obligations and duties required of it under the Basic
Documents.
(j) The Trustee shall, and hereby agrees that it will, hold
the Note Policy in trust, and will hold any proceeds of any claim on
the Note Policy in trust solely for the use and benefit of the
Noteholders.
(k) In no event shall Wells Fargo Bank, National Association,
in any of its capacities hereunder, be deemed to have assumed any
duties of the Owner Trustee under the Delaware Statutory Trust Statute,
common law, or the Trust Agreement.
(l) 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.
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(m) 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 6.2 RIGHTS OF TRUSTEE.
(a) Subject to Sections 6.1 and 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
or Section 6.2(g) the Trustee shall not be required to make any
independent investigation with respect thereto.
(b) 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.
(c) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian or nominee, and the Trustee
shall not be responsible for any misconduct or negligence on the part
of, or for the supervision of Consumer Portfolio Services, Inc., or any
other such agent, attorney, custodian or nominee appointed with due
care by it hereunder.
(d) 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.
(e) The Trustee may consult with counsel, and the advice of
such counsel or any opinion of counsel with respect to legal matters
relating to the Basic Documents and the Notes shall be full and
complete authorization and protection from liability in respect to any
action taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.
(f) The Trustee shall be under no obligation to institute,
conduct or defend any litigation under this Indenture or in relation to
this Indenture or any of the Basic Documents, at the request, order or
direction of any of the Holders of Notes or the Controlling Party,
pursuant to the provisions of this Indenture, unless such Holders of
Notes or the Controlling Party shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities that may be incurred therein or thereby; provided, however,
that the Trustee shall, upon the occurrence of an Event of Default
(that has not been cured or waived), exercise the rights and powers
vested in it by this Indenture in accordance with Section 6.1.
(g) 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 Note Insurer (so long as no Insurer Default
shall have occurred and be continuing) or (if an Insurer Default shall
have occurred and be continuing) by the Holders of Notes evidencing not
less than 25% of the Outstanding Amount of each class thereof;
provided, however, that if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by
it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded
to it by the terms of this Indenture or the Sale and Servicing
Agreement, the Trustee may require reasonable indemnity against such
cost, expense or liability as a condition to so proceeding; the
reasonable expense of every such examination shall be paid by the
Person making such request, or, if paid by the Trustee, shall be
reimbursed by the Person making such request upon demand.
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SECTION 6.3 INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its individual
or any other capacity may become the owner or pledgee of Notes and may otherwise
deal with the Issuer or its Affiliates with the same rights it would have if it
were not the Trustee. Any Note Paying Agent, Note Registrar, co-registrar or
co-paying agent may do the same with like rights. However, the Trustee must
comply with Section 6.11.
SECTION 6.4 TRUSTEE'S DISCLAIMER. The Trustee shall not be responsible
for and makes no representation as to the validity or adequacy of this
Indenture, any Basic Documents, the Trust Estate, the Collateral or the Notes,
it shall not be accountable for the Issuer's use of the proceeds from the Notes,
and it shall not be responsible for any statement of the Issuer in this
Indenture or in any document issued in connection with the sale of the Notes or
in the Notes other than the Trustee's certificate of authentication.
SECTION 6.5 NOTICE OF DEFAULTS. If an Event of Default occurs and is
continuing and if it is either known by, or written notice of the existence
thereof has been delivered to, a Responsible Officer of the Trustee, the Trustee
shall mail to each Noteholder notice of the Default within 30 days after such
knowledge or notice occurs. Except in the case of a Default in payment of
principal of or interest on any Note (including payments pursuant to the
mandatory redemption provisions of such Note, if any), the Trustee may withhold
the notice if and so long as a committee of its Responsible Officers in good
faith determines that withholding the notice is in the interests of Noteholders.
SECTION 6.6 REPORTS BY TRUSTEE TO HOLDERS. The Trustee shall on behalf
of the Issuer deliver to each Noteholder such information as may be reasonably
required to enable such Holder to prepare its Federal and State income tax
returns.
SECTION 6.7 COMPENSATION AND INDEMNITY.
(a) Pursuant to Section 5.7(a) of the Sale and Servicing
Agreement, the Issuer shall pay to the Trustee from time to time
compensation for its services, as separately agreed. 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(a) 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 the Trustee's part arising out of or in connection with the
acceptance or the administration of this trust and the performance of
its duties hereunder, including the costs and expenses of defending
itself against any claim or liability in connection therewith and
including any loss, liability or expense directly or indirectly
incurred (regardless of negligence on the part of the Trustee or the
Issuer) by the Trustee as a result of any penalty or other cost imposed
by the Internal Revenue Service or other taxing authority (except any
penalties arising out of fees paid to the Trustee or as a result of any
action taken contrary to the Indenture) related to the tax status of
the Issuer or the Notes. The Trustee shall notify the Issuer and the
Servicer promptly of any claim for which it may seek indemnity. Failure
by the Trustee to so notify the Issuer and the Servicer shall not
relieve the Issuer of its obligations hereunder or the Servicer of its
obligations under Article XII of the Sale and Servicing Agreement. The
Trustee may have separate counsel and the Issuer shall or shall cause
the Servicer to pay the fees and expenses of such counsel. Neither the
Issuer nor the Servicer need reimburse any expense or indemnify against
any loss, liability or expense incurred by the Trustee through the
Trustee's own willful misconduct, negligence or bad faith.
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(b) The Issuer's payment obligations to the Trustee pursuant
to this Section shall survive the discharge of this Indenture. When the
Trustee incurs expenses after the occurrence of a Default specified in
Section 5.1(a)(v) with respect to the Issuer, the expenses are intended
to constitute expenses of administration under Title 11 of the United
States Code or any other applicable Federal or State bankruptcy,
insolvency or similar law. Notwithstanding anything else set forth in
this Indenture or the Basic Documents, the recourse of the Trustee
hereunder and under the Basic Documents shall be to the Trust Estate
only and specifically shall not be recourse to the assets of the
Seller, the Depositor, any Noteholder or any Residual
Certificateholder. In addition, the Trustee agrees that its recourse to
the Trust Estate and amounts held pursuant to the Master Spread Account
Agreement shall be limited to the right to receive the distributions
referred to in Section 5.7(a) of the Sale and Servicing Agreement.
SECTION 6.8 REPLACEMENT OF TRUSTEE. The Issuer may, with the consent of
the Note Insurer, and at the request of the Note Insurer (unless an Insurer
Default shall have occurred and be continuing), shall, remove the Trustee if:
(i) the Trustee fails to comply with Section 6.11;
(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 the 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 Note Insurer (so long as an Insurer Default
shall not have occurred and be continuing). If the Issuer fails to appoint such
a successor Trustee, the Note Insurer may appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee, the Note 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 each
Noteholder. The retiring Trustee shall promptly transfer all property held by it
as Trustee to the successor Trustee.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuer, the
Note Insurer 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.
SECTION 6.9 SUCCESSOR TRUSTEE BY MERGER.
(a) If the Trustee consolidates with, merges or converts into,
or transfers all or substantially all its corporate trust business or
assets to, another corporation or banking association, the resulting,
surviving or transferee corporation without any further act shall be
the successor Trustee. The Trustee shall provide the Rating Agencies
and the Note Insurer with written notice of any such transaction.
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(b) In case at the time such successor or successors to the
Trustee by merger, conversion or consolidation shall succeed to the
trusts created by this Indenture any of the Notes shall have been
authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor trustee, and
deliver such Notes so authenticated; and in case at that time any of
the Notes shall not have been authenticated, any successor to the
Trustee may authenticate such Notes either in the name of any
predecessor hereunder or in the name of the successor to the Trustee;
and in all such cases such certificates shall have the full force which
it is anywhere in the Notes or in this Indenture provided that the
certificate of the Trustee shall have.
SECTION 6.10 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
(a) Notwithstanding any other provisions of this Indenture, at
any time, for the purpose of meeting any legal requirement of any
jurisdiction in which any part of the Trust may at the time be located,
the Trustee with the consent of the Note Insurer (so long as an Insurer
Default shall not have occurred and be continuing) shall have the power
and may execute and deliver all instruments to appoint one or more
Persons to act as a co-trustee or co-trustees, or separate trustee or
separate trustees, of all or any part of the Trust, and to vest in such
Person or Persons, in such capacity and for the benefit of the
Noteholders, such title to the Trust, or any part hereof, and, subject
to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Trustee may consider necessary or
desirable. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under
Section 6.11 and no notice to Noteholders of the appointment of any
co-trustee or separate trustee shall be required under Section 6.8
hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following
provisions and conditions:
(i) all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or
imposed upon and exercised or performed by the Trustee and
such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in
such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be
performed the Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the
Trust or any portion thereof in any such jurisdiction) shall
be exercised and performed singly by such separate trustee or
co-trustee, but solely at the direction of the Trustee;
(ii) no trustee hereunder shall be personally liable
by reason of any act or omission of any other trustee
hereunder, including acts or omissions of predecessor or
successor trustees; and
(iii) the Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate
trustees and co-trustees, as effectively as if given to each of them.
Every instrument appointing any separate trustee or co-trustee shall
refer to this Agreement and the conditions of this Article VI. Each
separate trustee and co-trustee, upon its acceptance of the trusts
conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or
separately, as may be provided therein, subject to all the provisions
of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be
filed with the Trustee.
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(d) Any separate trustee or co-trustee may at any time
constitute the Trustee, its agent or attorney-in-fact with full power
and authority, to the extent not prohibited by law, to do any lawful
act under or in respect of this Agreement on its behalf and in its
name. If any separate trustee or co-trustee shall die, dissolve, become
insolvent, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 6.11 ELIGIBILITY: DISQUALIFICATION. The Trustee, and any
successor thereto, shall at all times 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 satisfactory to the Note Insurer; 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 Note Insurer upon request.
SECTION 6.12 RESERVED.
SECTION 6.13 APPOINTMENT AND POWERS. Subject to the terms and
conditions hereof, each of the Issuer Secured Parties hereby appoints Wells
Fargo Bank, National Association as the Trustee with respect to the Collateral,
and Wells Fargo Bank, National Association 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 6.14 PERFORMANCE OF DUTIES. The Trustee shall have no duties or
responsibilities except those expressly set forth in this Indenture and the
other Basic Documents to which the Trustee is a party or as directed by the
Controlling Party in accordance with this Indenture. The Trustee shall not be
required to take any discretionary actions hereunder except at the written
direction and with the indemnification of the Controlling Party and as provided
in Section 5.12. The Trustee shall, and hereby agrees that it will, perform all
of the duties and obligations required of it under the Sale and Servicing
Agreement.
SECTION 6.15 LIMITATION ON LIABILITY. Neither the Trustee nor any of
its directors, officers or employees shall be liable for any action taken or
omitted to be taken by it or them in good faith hereunder, or in connection
herewith, except that the Trustee shall be liable for its negligence, bad faith
or willful misconduct. Notwithstanding any term or provision of this Indenture,
the Trustee shall incur no liability to the Issuer or the Issuer Secured Parties
for any action taken or omitted by the Trustee in connection with the
Collateral, except for the negligence, bad faith or willful misconduct on the
part of the Trustee, and, 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 6.16 RESERVED.
SECTION 6.17 SUCCESSOR TRUSTEE.
(a) MERGER. Any Person into which the Trustee may be converted
or merged, or with which it may be consolidated, or to which it may
sell or transfer its trust business and assets as a whole or
substantially as a whole, or any Person resulting from any such
conversion, merger, consolidation, sale or transfer to which the
Trustee is a party, shall (provided it is otherwise qualified to serve
as the Trustee hereunder) be and become a successor Trustee hereunder
and be vested with all of the title to and interest in the Collateral
and all of the trusts, powers, discretions, immunities, privileges and
other matters as was its predecessor without the execution or filing of
any instrument or any further act, deed or conveyance on the part of
any of the parties hereto, anything herein to the contrary
notwithstanding, except to the extent, if any, that any such action is
necessary to perfect, or continue the perfection of, the security
interest of the 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 Note Insurer
(or, if an Insurer Default has occurred and is continuing, by a Note
Majority) at any time, with or without cause, by an instrument or
concurrent instruments in writing delivered to the Trustee, the other
Issuer Secured Party and the Issuer. A temporary successor may be
removed at any time to allow a successor Trustee to be appointed
pursuant to subsection (c) below. Any removal pursuant to the
provisions of this subsection (b) shall take effect only upon the date
which is the latest of (i) the effective date of the appointment of a
successor Trustee and the acceptance in writing by such successor
Trustee of such appointment and of its obligation to perform its duties
hereunder in accordance with the provisions hereof, and (ii) receipt by
the Controlling Party of an Opinion of Counsel to the effect described
in Section 3.6.
(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 6.18 RESERVED.
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SECTION 6.19 REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE. The Trustee
represents and warrants to the Issuer and to each Issuer Secured Party as
follows:
(a) DUE ORGANIZATION. The Trustee is a national banking
association, duly organized, validly existing and in good standing
under the laws of the United States and is duly authorized and licensed
under applicable law to conduct its business as presently conducted.
(b) CORPORATE POWER. The Trustee has all requisite right,
power and authority to execute and deliver this Indenture and to
perform all of its duties as Trustee hereunder.
(c) DUE AUTHORIZATION. The execution and delivery by the
Trustee of this Indenture and the other Basic Documents to which it is
a party, and the performance by the Trustee of its duties hereunder and
thereunder, have been duly authorized by all necessary corporate
proceedings and no further approvals or filings, including any
governmental approvals, are required for the valid execution and
delivery by the Trustee, or the performance by the Trustee, of this
Indenture and such other Basic Documents.
(d) VALID AND BINDING INDENTURE. The Trustee has duly executed
and delivered this Indenture and each other Basic Document to which it
is a party, and each of this Indenture and each such other Basic
Document constitutes the legal, valid and binding obligation of the
Trustee, enforceable against the Trustee in accordance with its terms,
except as (i) such enforceability may be limited by bankruptcy,
insolvency, reorganization and similar laws relating to or affecting
the enforcement of creditors' rights generally and (ii) the
availability of equitable remedies may be limited by equitable
principles of general applicability.
SECTION 6.20 WAIVER OF SETOFFS. The Trustee hereby expressly waives any
and all rights of setoff that the Trustee may otherwise at any time have under
applicable law with respect to any Trust Account and agrees that amounts in the
Trust Accounts shall at all times be held and applied solely in accordance with
the provisions hereof.
SECTION 6.21 CONTROL BY THE CONTROLLING PARTY. The Trustee shall comply
with notices and instructions given by the Issuer only if accompanied by the
written consent of the Controlling Party, except that if any Event of Default
shall have occurred and be continuing, the Trustee shall act upon and comply
with notices and instructions given by the Controlling Party alone in the place
and stead of the Issuer.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
------------------------------
SECTION 7.1 ISSUER TO FURNISH TO TRUSTEE NAMES AND ADDRESSES OF
NOTEHOLDERS. The Issuer will furnish or cause to be furnished to the Trustee (a)
not more than five days after the earlier of (i) each Record Date and (ii) three
months after the last Record Date, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders as of such Record
Date, (b) at such other times as the Trustee may request in writing, within 30
days after receipt by the Issuer of any such request, a list of similar form and
content as of a date not more than 10 days prior to the time such list is
furnished; provided, however, that so long as the Trustee is the Note Registrar,
no such list shall be required to be furnished. If the Notes are Definitive
Notes, the Trustee or, if the Trustee is not the Note Registrar, the Issuer
shall furnish to the Note Insurer in writing on an annual basis on each March 31
and at such other times as the Note Insurer may request a copy of the list.
SECTION 7.2 PRESERVATION OF INFORMATION; COMMUNICATIONS TO NOTEHOLDERS.
The Trustee shall preserve, in as current a form as is reasonably practicable,
the names and addresses of the Holders contained in the most recent list
furnished to the Trustee as provided in Section 7.1 and the names and addresses
of Holders received by the Trustee in its capacity as Note Registrar. The
Trustee may destroy any list furnished to it as provided in such Section 7.1
upon receipt of a new list so furnished.
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ARTICLE VIII
COLLECTION OF MONEY AND RELEASES OF TRUST ESTATE
------------------------------------------------
SECTION 8.1 COLLECTION OF MONEY. Except as otherwise expressly provided
herein, the Trustee may demand payment or delivery of, and shall receive and
collect, directly and without intervention or assistance of any fiscal agent or
other intermediary, all money and other property payable to or receivable by the
Trustee pursuant to this Indenture and the Sale and Servicing Agreement. The
Trustee shall apply all such money received by it as provided in this Indenture
and the Sale and Servicing Agreement. Except as otherwise expressly provided in
this Indenture or in the Sale and Servicing Agreement, if any default occurs in
the making of any payment or performance under any agreement or instrument that
is part of the Trust Estate, the Trustee may take such action as may be
appropriate to enforce such payment or performance, including the institution
and prosecution of appropriate proceedings. Any such action shall be without
prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.
SECTION 8.2 RELEASE OF TRUST ESTATE.
(a) Subject to the payment of its fees and expenses pursuant
to Section 6.7, the Trustee may, and when required by the provisions of
this Indenture shall, execute instruments to release property from the
lien 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.
(b) The Trustee shall, at such time as there are no Notes
outstanding, all Issuer Secured Obligations have been paid in full and
all sums due the Trustee pursuant to Section 6.7 have been paid,
release any remaining portion of the Trust Estate that secured the
Notes from the lien of this Indenture and release to the Issuer or any
other Person entitled thereto any funds then on deposit in the Trust
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 an Opinion
of Counsel meeting the applicable requirements of Section 11.1.
SECTION 8.3 OPINION OF COUNSEL. The Trustee shall receive at least
seven days' notice when requested by the Issuer to take any action pursuant to
Section 8.2(a), accompanied by copies of any instruments involved, and the
Trustee shall also require as a condition to such action, an Opinion of Counsel
in form and substance satisfactory to the Trustee, stating the legal effect of
any such action, outlining the steps required to complete the same, and
concluding that all conditions precedent to the taking of such action have been
complied with and such action will not materially and adversely affect the
security for the Notes or the rights of the 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 IX
SUPPLEMENTAL INDENTURES
-----------------------
SECTION 9.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS.
(a) Without the consent of the Holders of any Notes but with
the consent of the Note Insurer (unless an Insurer Default shall have
occurred and be continuing) and with prior notice to the Rating
Agencies by the Issuer, 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 (which shall conform to the
provisions of the Trust Indenture Act as in force at the date of the
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execution thereof), in form satisfactory to the Trustee, for any of the
following purposes; provided, however, if any party to this Indenture
is unable to sign any supplemental indenture due to its dissolution,
winding up or comparable circumstances, then the consent of the Note
Insurer or a Note Majority shall be sufficient to amend this Indenture
without such party's signature:
(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 Notes contained;
(iii) to add to the covenants of the Issuer, for the
benefit of the Holders of the Notes, or to surrender any right
or power herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge
any property to or with the Trustee;
(v) to cure any ambiguity, to correct or supplement
any provision herein or in any supplemental indenture which
may be inconsistent with any other provision herein or in any
supplemental indenture or to make any other provisions with
respect to matters or questions arising under this Indenture
or in any supplemental indenture; provided that such action
shall not adversely affect the interests of the Holders of the
Notes or the rating of the Notes; or
(vi) to evidence and provide for the acceptance of
the appointment hereunder by a successor trustee with respect
to the Notes and to add to or change any of the provisions of
this Indenture as shall be necessary to facilitate the
administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Article VI.
The Trustee is hereby authorized to join in the execution of any such
supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained not inconsistent with the foregoing.
(b) The Issuer and the Trustee, when authorized by an Issuer
Order, may, also without the consent of any of the Holders of the Notes
but with prior notice to the Rating Agencies by the Issuer with the
prior written consent of the Note Insurer (unless an Insurer Default
shall have occurred and be continuing), enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions
to, or changing in any manner or eliminating any of the provisions of,
this Indenture or of modifying in any manner the rights of the Holders
of the Notes under this Indenture; provided, however, that such action
shall not adversely affect the interests of any Noteholder in any
material respect. Any such action shall not be deemed to adversely
affect in any material respect the interests of any Noteholder if the
Rating Agency Condition has been satisfied.
SECTION 9.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS. The
Issuer and the Trustee, when authorized by an Issuer Order, also may, with prior
notice to the Rating Agencies and with the consent of the Note Insurer (unless
an Insurer Default shall have occurred and be continuing) or, if an Insurer
Default shall have occurred and be continuing, with the consent of a Note
Majority, by Act of such Holders delivered to the Issuer and the Trustee, enter
into an indenture or indentures supplemental hereto for the purpose of adding
any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or of modifying in any manner the rights of the
Holders of the Notes under this Indenture; provided, however, if any party to
44
this Indenture is unable to sign any supplemental indenture due to its
dissolution, winding up or comparable circumstances, then the consent of the
Note Insurer (unless an Insurer Default shall have occurred and be continuing)
or, if an Insurer Default shall have occurred and be continuing, the consent of
a Note Majority shall be sufficient to amend this Indenture without such party's
signature; provided, further however, that, subject to the express rights of the
Note Insurer under the Basic Documents and notwithstanding SECTION 11.20, no
such supplemental indenture shall, without the consent of the Holder of each
Outstanding Note affected thereby:
(i) change the date of payment of any installment of
principal of or interest on any Note, or reduce the principal
amount thereof, the interest rate thereon or the Redemption
Price with respect thereto, change the provision of this
Indenture relating to the application of collections on, or
the proceeds of the sale of, the Trust Estate to payment of
principal of or interest on the Notes, or change any place of
payment where, or the coin or currency in which, any Note or
the interest thereon is payable;
(ii) impair the right to institute suit for the
enforcement of the provisions of this Indenture requiring the
application of funds available therefor, as provided in
Article V, to the payment of any such amount due on the Notes
on or after the respective due dates thereof (or, in the case
of redemption, on or after the Redemption Date);
(iii) reduce the percentage of the Outstanding Amount
of the Notes, the consent of the Holders of which is required
for any such supplemental indenture, or the consent of the
Holders of which is required for any waiver of compliance with
certain provisions of this Indenture or certain defaults
hereunder and their consequences provided for in this
Indenture;
(iv) modify or alter the provisions of the proviso to
the definition of the term "Outstanding";
(v) reduce the percentage of the Outstanding Amount
of the Notes required to direct the Trustee to direct the
Issuer to sell or liquidate the Trust Estate pursuant to
Section 5.4;
(vi) modify any provision of this Section except to
increase any percentage specified herein or to provide that
certain additional provisions of this Indenture or the Basic
Documents cannot be modified or waived without the consent of
the Holder of each Outstanding Note affected thereby;
(vii) modify any of the provisions of this Indenture
in such manner as to affect the calculation of the amount of
any payment of interest or principal due on any Note on any
Payment Date (including the calculation of any of the
individual components of such calculation) or as to affect the
rights of the Holders of Notes to the benefit of any
provisions for the mandatory redemption of the Notes contained
herein; or
(viii) permit the creation of any lien ranking prior
to or on a parity with the lien of this Indenture with respect
to any part of the 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
any Note of the security provided by the lien of this
Indenture.
It shall not be necessary for any Act of Noteholders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to this Section, the Trustee shall mail to the
Holders of the Notes to which such amendment or supplemental indenture relates a
notice setting forth in general terms the substance of such supplemental
indenture. Any failure of the Trustee to mail such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
such supplemental indenture.
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SECTION 9.3 EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts created
by this Indenture, the Trustee shall be entitled to receive, and subject to
Sections 6.1 and 6.2, shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture that affects the Trustee's own
rights, duties, liabilities or immunities under this Indenture or otherwise.
SECTION 9.4 EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and be deemed to be modified and amended in accordance therewith with respect
to the Notes affected thereby, and the respective rights, limitations of rights,
obligations, duties, liabilities and immunities under this Indenture of the
Trustee, the Issuer and the Holders of the Notes shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.
SECTION 9.5 RESERVED.
SECTION 9.6 REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Issuer shall, bear a
notation in form approved by the Issuer as to any matter provided for in such
supplemental indenture. If the Issuer shall so determine, new Notes so modified
as to conform, in the opinion of the Issuer, to any such supplemental indenture
may be prepared and executed by the Issuer and authenticated and delivered by
the Trustee in exchange for Outstanding Notes.
ARTICLE X
REDEMPTION OF NOTES
-------------------
SECTION 10.1 REDEMPTION.
(a) The Notes are subject to redemption in whole, but not in
part, at the direction of the Servicer pursuant to Section 11.1(a) of
the Sale and Servicing Agreement, on any Payment Date on which the
Servicer exercises its option to purchase the Trust Estate pursuant to
said Section 11.1(a), for a purchase price at least equal to the
Redemption Price; provided, however, that the Issuer has available
funds sufficient to pay the Redemption Price. The Servicer or the
Issuer shall furnish the Note Insurer and the Rating Agencies notice of
such redemption. If the Notes are to be redeemed pursuant to this
Section 10.1(a), the Servicer or the Issuer shall furnish notice of
such election to the Trustee not later than 35 days prior to the
Redemption Date and the Servicer shall deposit with the Trustee in the
Note Distribution Account the Redemption Price of the Notes to be
redeemed at least one Business Day prior to the Redemption Date. If the
Servicer fails to so deposit the Redemption Price with the Trustee at
least one Business Day prior to the Redemption Date, such redemption
shall be deemed to be automatically rescinded and the Noteholders shall
receive the payments of interest and principal that would be due to the
Noteholders on such Payment Date as if such option to redeem the Notes
had never been exercised. For the avoidance of any doubt, no Event of
Default shall occur solely as a result of such rescission.
(b) If, on the Mandatory Redemption Date, the Pre-Funded
Amount is greater than zero after giving effect to the purchase of all
Subsequent Receivables during the Funding Period, including any such
purchase on the last day of the Funding Period, the Class A-1 and Class
A-2 Notes will be redeemed in part pursuant to Section 5.8(a)(ii) of
the Sale and Servicing Agreement in an amount equal to the Note
Prepayment Amount.
SECTION 10.2 FORM OF REDEMPTION NOTICE.
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(a) Notice of redemption under Section 10.1 shall be given by
the Trustee by facsimile or by first-class mail, postage prepaid,
transmitted or mailed prior to the applicable Redemption Date to each
Holder of Notes, as of the close of business on the Record Date
preceding the applicable Redemption Date, at such Holder's address
appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) that the Record Date otherwise applicable to
such Redemption Date is not applicable and that payments shall
be made only upon presentation and surrender of such Notes and
the place where such Notes are to be surrendered for payment
of the Redemption Price (which shall be the office or agency
of the Issuer to be maintained as provided in Section 3.2);
and
(iv) that interest on the Notes shall cease to accrue
on the Redemption Date.
Notice of redemption of the Notes shall be given by the Trustee in the
name and at the expense of the Issuer. Failure to give notice of redemption, or
any defect therein, to any Holder of any Note shall not impair or affect the
validity of the redemption of any other Note.
(b) Prior notice of redemption under Section 10.1(b) is not
required to be given to Noteholders.
SECTION 10.3 NOTES PAYABLE ON REDEMPTION DATE. The Notes to be redeemed
shall, following notice of redemption as required by Section 10.2 (in the case
of redemption pursuant to Section 10.1), on the Redemption Date become due and
payable at the Redemption Price and (unless the Issuer shall default in the
payment of the Redemption Price) no interest shall accrue on the Redemption
Price for any period after the date to which accrued interest is calculated for
purposes of calculating the Redemption Price.
ARTICLE XI
MISCELLANEOUS
-------------
SECTION 11.1 COMPLIANCE CERTIFICATES AND OPINIONS, ETC.
(a) Upon any application or request by the Issuer to the
Trustee to take any action under any provision of this Indenture, the
Issuer shall furnish to the Trustee and to the Note 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;
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(iii) a statement that, in the opinion of each such
signatory, such signatory has made such examination or
investigation as is necessary to enable such signatory to
express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(iv) a statement as to whether, in the opinion of
each such signatory such condition or covenant has been
complied with.
(b) (i) Prior to the deposit of any Collateral or other
property or securities with the 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 and the Note Insurer an Officer's Certificate certifying or
stating the opinion of each person signing such certificate as to the
fair value (on the date of such deposit) to the Issuer of the
Collateral or other property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to
the Trustee and the Note Insurer an Officer's Certificate
certifying or stating the opinion of any signer thereof as to
the matters described in clause (i) above, the Issuer shall
also deliver to the Trustee and the Note Insurer an
Independent Certificate as to the same matters, if the fair
value to the Issuer of the securities to be so deposited and
of all other such securities made the basis of any such
withdrawal or release since the commencement of the
then-current fiscal year of the Issuer, as set forth in the
certificates delivered pursuant to clause (i) above and this
clause (ii) is 10% or more of the Outstanding Amount of the
Notes, but such a certificate need not be furnished with
respect to any securities so deposited, if the fair value
thereof to the Issuer as set forth in the related Officer's
Certificate is less than $25,000 or less than 1% of the
Outstanding Amount of the Notes.
(iii) Other than with respect to the release of any
Purchased Receivables or Liquidated Receivables, whenever any
property or securities are to be released from the lien of
this Indenture, the Issuer shall also furnish to the Trustee
and the Note Insurer an Officer's Certificate certifying or
stating the opinion of each person signing such certificate as
to the fair value (within 90 days of such release) of the
property or securities proposed to be released and stating
that in the opinion of such person the proposed release will
not impair the security under this Indenture in contravention
of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to
the Trustee and the Note Insurer an Officer's Certificate
certifying or stating the opinion of any signer thereof as to
the matters described in clause (iii) above, the Issuer shall
also furnish to the Trustee and the Note 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 Defaulted Receivables, or
securities released from the lien of this Indenture since the
commencement of the then current calendar year, as set forth
in the certificates required by clause (iii) above and this
clause (iv), equals 10% or more of the Outstanding Amount of
the Notes, but such certificate need not be furnished in the
case of any release of property or securities if the fair
value thereof as set forth in the related Officer's
Certificate is less than $25,000 or less than 1% of the then
Outstanding Amount of the Notes.
(v) Notwithstanding Section 2.9 or any provision of
this Section, the Issuer may (A) collect, liquidate, sell or
otherwise dispose of Receivables as and to the extent
permitted or required by the Basic Documents and (B) make cash
payments out of the Trust Accounts as and to the extent
permitted or required by the Basic Documents.
SECTION 11.2 FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
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(a) In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person, it is
not necessary that all such matters be certified by, or covered by the
opinion of, only one such Person, or that they be so certified or
covered by only one document, but one such Person may certify or give
an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.
(b) Any certificate or opinion of an Authorized Officer of the
Issuer may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless such
officer knows, or in the exercise of reasonable care should know, that
the certificate or opinion or representations with respect to the
matters upon which his or her certificate or opinion is based are
erroneous. Any such certificate of an Authorized Officer or Opinion of
Counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or
officers of the Servicer, the Seller or the Issuer, stating that the
information with respect to such factual matters is in the possession
of the Servicer, the Seller or the Issuer, unless such counsel knows,
or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are
erroneous.
(c) Where any Person is required to make, give or execute two
or more applications, requests, consents, certificates, statements,
opinions or other instruments under this Indenture, they may, but need
not, be consolidated and form one instrument.
(d) Whenever in this Indenture, in connection with any
application or certificate or report to the Trustee, it is provided
that the Issuer shall deliver any document as a condition of the
granting of such application, or as evidence of the Issuer's compliance
with any term hereof, it is intended that the truth and accuracy, at
the time of the granting of such application or at the effective date
of such certificate or report (as the case may be), of the facts and
opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted
or to the sufficiency of such certificate or report. The foregoing
shall not, however, be construed to affect the Trustee's right to rely
upon the truth and accuracy of any statement or opinion contained in
any such document as provided in Article VI.
SECTION 11.3 ACTS OF NOTEHOLDERS.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given
or taken by Noteholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Noteholders
in person or by agents duly appointed in writing; and except as herein
otherwise expressly provided such action shall become effective when
such instrument or instruments are delivered to the Trustee, and, where
it is hereby expressly required, to the Issuer. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "Act" of the Noteholders signing
such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section
6.1) conclusive in favor of the Trustee and the Issuer, if made in the
manner provided in this Section.
(b) The fact and date of the execution by any person of any
such instrument or writing may be proved in any customary manner of the
Trustee.
(c) The ownership of Notes shall be proved by the Note
Register.
49
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Notes shall bind
the Holder of every Note issued upon the registration thereof or in
exchange therefor or in lieu thereof, in respect of anything done,
omitted or suffered to be done by the Trustee or the Issuer in reliance
thereon, whether or not notation of such action is made upon such Note.
SECTION 11.4 NOTICES, ETC., TO TRUSTEE, ISSUER, NOTE INSURER AND RATING
AGENCIES.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or Act of Noteholders or other documents provided or
permitted by this Indenture to be made upon, given or furnished to or
filed with:
(i) the Trustee by any Noteholder or by the Issuer
shall be sufficient for every purpose hereunder if personally
delivered, delivered by overnight courier or mailed certified
mail, return receipt requested and shall be deemed to have
been duly given upon receipt to the Trustee at its Corporate
Trust Office;
(ii) the Issuer by the Trustee or by any Noteholder
shall be sufficient for every purpose hereunder if personally
delivered, delivered by overnight courier or mailed certified
mail, return receipt requested and shall deemed to have been
duly given upon receipt to the Issuer addressed to: CPS Auto
Receivables Trust 2005-D, in care of Wilmington Trust Company,
Rodney Square North, 1100 N. Market Street, Wilmington,
Delaware 19890-0001, or at such other address previously
furnished in writing to the Trustee by the Issuer. The Issuer
shall promptly transmit any notice received by it from the
Noteholders to the Trustee; or
(iii) the Note 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 Note Insurer:
Financial Security Assurance Inc.
31 West 52nd Street
New York, New York 10019
Attention: Transaction Oversight Department
Re: Policy No. 51705-N
Telex No.: (212) 688-3101
Confirmation: (212) 826-0100
Telecopy Nos.: (212) 339-3518 or (212) 339-3529
(In each case in which notice or other communication to the Note
Insurer refers to an Event of Default, a claim on the Note Policy or with
respect to which failure on the part of the Note Insurer to respond shall be
deemed to constitute consent or acceptance, then a copy of such notice or other
communication should also be sent to the attention of the General Counsel and
the Head - Financial Guaranty Group "URGENT MATERIAL ENCLOSED" at the foregoing
address.)
(b) Notices required to be given to the Rating Agencies by the
Issuer, the Trustee or the Owner Trustee shall be in writing,
personally delivered, electronically 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, via electronic delivery to Servicer_reports@sandp.com;
for any information not available in electronic format, send hard
copies to: Standard & Poor's Ratings Services, 55 Water Street, 41st
Floor, New York, New York 10041-0003, Attention: ABS Surveillance
Group; or as to each of the foregoing, at such other address as shall
be designated by written notice to the other parties.
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SECTION 11.5 NOTICES TO NOTEHOLDERS; WAIVER.
(a) Where this Indenture provides for notice to Noteholders of
any event, such notice shall be sufficiently given (unless otherwise
expressly provided herein) if in writing and mailed, first-class,
postage prepaid to each Noteholder affected by such event, at his
address as it appears on the Note Register, not later than the latest
date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Noteholders is given by
mail, neither the failure to mail such notice nor any defect in any
notice so mailed to any particular Noteholder shall affect the
sufficiency of such notice with respect to other Noteholders, and any
notice that is mailed in the manner herein provided shall conclusively
be presumed to have been duly given.
(b) Where this Indenture provides for notice in any manner,
such notice may be waived in writing by any Person entitled to receive
such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Noteholders shall
be filed with the Trustee but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such a
waiver.
(c) In case, by reason of the suspension of regular mail
service as a result of a strike, work stoppage or similar activity, it
shall be impractical to mail notice of any event to Noteholders when
such notice is required to be given pursuant to any provision of this
Indenture, then any manner of giving such notice as shall be
satisfactory to the Trustee shall be deemed to be a sufficient giving
of such notice.
(d) Where this Indenture provides for notice to the Rating
Agencies, failure to give such notice shall not affect any other rights
or obligations created hereunder, and shall not under any circumstance
constitute a Default or Event of Default.
SECTION 11.6 ALTERNATE PAYMENT AND NOTICE PROVISIONS. Notwithstanding
any provision of this Indenture or any of the Notes to the contrary, the Issuer
may enter into any agreement with any Holder of a Note providing for a method of
payment, or notice by the Trustee or any Note Paying Agent to such Holder, that
is different from the methods provided for in this Indenture for such payments
or notices, provided that such methods are reasonable and consented to by the
Trustee (which consent shall not be unreasonably withheld). The Issuer will
furnish to the Trustee a copy of each such agreement and the Trustee will cause
payments to be made and notices to be given in accordance with such agreements.
SECTION 11.7 RESERVED.
SECTION 11.8 EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 11.9 SUCCESSORS AND ASSIGNS. All covenants and agreements in
this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Trustee in this
Indenture shall bind its successors. All agreements of the Trustee in this
Indenture shall bind its successors.
SECTION 11.10 SEVERABILITY. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 11.11 BENEFITS OF INDENTURE. The Note Insurer and its
successors and assigns shall be third-party beneficiaries to the provisions of
this Indenture, and shall be entitled to rely upon and directly to enforce such
provisions of this Indenture so long as no Insurer Default shall have occurred
and be continuing. Nothing in this Indenture or in the Notes, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder, and the Noteholders, and any other party secured
hereunder, and any other person with an ownership interest in any part of the
Trust Estate, any benefit or any legal or equitable right, remedy or claim under
this Indenture. The Note Insurer may disclaim any of its rights and powers under
this Indenture (in which case the Trustee may exercise such right or power
hereunder), but not its duties and obligations under the Note Policy, upon
delivery of a written notice to the Trustee.
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SECTION 11.12 LEGAL HOLIDAYS. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
SECTION 11.13 GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH, AND THIS INDENTURE AND ALL MATTERS ARISING OUT OF OR RELATING
IN ANY WAY TO THIS INDENTURE SHALL BE GOVERNED BY, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
SECTION 11.14 COUNTERPARTS. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 11.15 RECORDING OF INDENTURE. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the Trustee or any other counsel reasonably acceptable
to the Trustee and the Note Insurer) to the effect that such recording is
necessary either for the protection of the Noteholders or any other person
secured hereunder or for the enforcement of any right or remedy granted to the
Trustee under this Indenture or to the Collateral Agent under the Master Spread
Account Agreement.
SECTION 11.16 TRUST OBLIGATION. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Seller, the
Servicer, the Depositor, the Owner Trustee or the Trustee on the Notes or under
this Indenture or any certificate or other writing delivered in connection
herewith or therewith, against (i) the Seller, the Servicer, the Depositor, the
Trustee or the Owner 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
Depositor, the Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Seller, the Servicer, the
Depositor, the Owner Trustee or the Trustee or of any successor or assign of the
Seller, the Servicer, the Depositor, the Trustee or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Trustee and the Owner Trustee have no such obligations
in their 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 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 11.17 NO PETITION. The Trustee, by entering into this
Indenture, and each Noteholder and Note Owner, by accepting a Note or a
beneficial interest therein, hereby covenant and agree that they will not at any
time institute against the Seller, the Depositor, or the Issuer, or join in any
institution against the Seller, the Depositor, or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States Federal or State bankruptcy or similar law
in connection with any obligations relating to the Notes, this Indenture or any
of the Basic Documents.
52
SECTION 11.18 INSPECTION. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Trustee or of the Note Insurer,
during the Issuer's normal business hours, to examine all the books of account,
records, reports, and other papers of the Issuer, to make copies and extracts
therefrom, to cause such books to be audited by independent certified public
accountants, and to discuss the Issuer's affairs, finances and accounts with the
Issuer's officers, employees, and independent certified public accountants, all
at such reasonable times and as often as may be reasonably requested. The
Trustee shall and shall cause its representatives to hold in confidence all such
information except to the extent disclosure may be required by law (and all
reasonable applications for confidential treatment are unavailing) and except to
the extent that the Trustee may reasonably determine that such disclosure is
consistent with its Obligations hereunder.
SECTION 11.19 ACTION UPON DIRECTION OF NOTEHOLDERS. Except where this
Indenture specifically states otherwise, the Trustee, provided it has sent out
notices in accordance with this Indenture, may act as directed by a Note
Majority responding in writing to such request for amendment or written
direction, provided however, that a Note Majority as of the time such voting
response is due back to the Trustee must have responded in writing to the
Trustee's notice to amend or for written direction. In addition, the Trustee
shall not have any liability to any Noteholder or Note Owner with respect to any
action taken pursuant to such notice if the Noteholder or Note Owner does not
respond to such notice within the time period set forth in such notice. By
acceptance of a Note, each Noteholder and Note Owner agree to the foregoing
provisions.
SECTION 11.20 NOTE INSURER AS CONTROLLING PARTY. Each Noteholder by
purchase of the Notes held by it acknowledges that the Trustee, as partial
consideration of the issuance of the Note Policy, has agreed that the Note
Insurer shall have certain rights hereunder for so long as no Insurer Default
shall have occurred and be continuing. So long as no Insurer Default has
occurred and is continuing, except as otherwise provided herein, whenever
Noteholder action, consent or approval is required under this Indenture, such
action, consent or approval shall be deemed taken or given on behalf of, and
shall be binding upon, all Noteholders if the Note Insurer agrees to take such
action or give such consent or approval. So long as an Insurer Default has
occurred and is continuing, any provision giving the Note Insurer the right to
direct, appoint or consent to, approve of, or take any action as Controlling
Party under this Indenture shall be inoperative during the period of such
Insurer Default and such right shall instead vest in the Trustee acting, unless
otherwise specified, at the direction of a Note Majority. The Note Insurer may
disclaim any of its rights and powers under this Indenture (but not its duties
and obligations under the Note Policy) upon delivery of a written notice to the
Trustee. The Note Insurer may give or withhold any consent hereunder in its sole
and absolute discretion.
IN WITNESS WHEREOF, the Issuer and the Trustee have caused this
Indenture to be duly executed by their respective officers, hereunto duly
authorized, all as of the day and year first above written.
CPS AUTO RECEIVABLES TRUST 2005-D,
By: WILMINGTON TRUST COMPANY,
not in its individual capacity, but
solely as Owner Trustee
By: _______________________________________
Name: _______________________________________
Title: _______________________________________
WELLS FARGO BANK, NATIONAL ASSOCIATION, as
Trustee
By: _______________________________________
Name: _______________________________________
Title: _______________________________________
53
EXHIBIT A-1
FORM OF CLASS A-1 NOTE
REGISTERED $___________________
NO. R-A-1
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. 12615W CL3
[Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.]
THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF
ANY STATE OF THE UNITED STATES ("BLUE SKY LAWS"), AND THIS NOTE MAY NOT BE
OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A UNDER THE 1933 ACT IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE 1933 ACT, (C) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED
UNDER THE 1933 ACT (IF AVAILABLE) OR (D) TO THE SELLER OR AN AFFILIATE OF THE
SELLER, IN EACH CASE IN ACCORDANCE WITH THE INDENTURE AND ALL APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF THE EXEMPTION
PROVIDED BY RULE 144A FOR RESALES OF THIS NOTE.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
CPS AUTO RECEIVABLES TRUST 2005-D
CLASS A-1 4.93% ASSET-BACKED NOTES
CPS Auto Receivables Trust 2005-D, a statutory trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to [CEDE & CO.], or
registered assigns, the principal sum of
__________________________________________ AND NO/100 DOLLARS payable on each
Payment Date in an amount equal to the aggregate amount, if any, payable from
the Note Distribution Account in respect of principal on the Class A-1 Notes
pursuant to Section 3.1 of the Indenture and Section 5.7 of the Sale and
Servicing Agreement; provided, however, that the entire unpaid principal amount
of this Note shall be due and payable on the Payment Date occurring in May 2010
(the "Class A-1 Final Scheduled Payment Date"). The Issuer will pay interest on
this Note at the rate per annum shown above on each Payment Date until the
principal of this Note is paid or made available for payment, on the principal
amount of this Note outstanding on the preceding Payment Date (after giving
effect to all payments of principal made on the preceding Payment Date).
Interest on this Note will accrue for each Payment Date from the most recent
Payment Date on which interest has been paid to but excluding such current
Payment Date; provided that for the January 2006 Payment Date interest will
accrue for the number of days from and including the Closing Date to and
including January 16, 2006. Interest will be computed on the basis of a 360-day
year of twelve 30-day months. Such principal of and interest on this Note shall
be paid in the manner specified on the reverse hereof.
A-1-1
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
The Notes are entitled to the benefits of a financial guaranty
insurance policy (the "Policy") issued by Financial Security Assurance Inc. (the
"Note Insurer"), pursuant to which the Note Insurer has unconditionally
guaranteed payments of the Class A Noteholders' Interest Distributable Amount
and the Noteholders' Parity Deficit Amount on each Payment Date and the Note
Balance, together with any accrued and unpaid interest on a class of Notes, on
the Final Scheduled Payment Date for such class of Notes, all as more fully set
forth in the Indenture.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse hereof,
or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer as of the date set forth
below.
CPS AUTO RECEIVABLES TRUST 2005-D
By: WILMINGTON TRUST COMPANY,
not in its individual capacity,
but solely as Owner Trustee
By: _________________________________
Name: _________________________________
Title: _________________________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
WELLS FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Trustee
By: ______________________________________
Authorized Signatory
Date: ____________, 20__
A-1-2
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-1 4.93% Asset-Backed Notes (herein called the "Class
A-1 Notes"), all issued under an Indenture dated as of December 1, 2005 (such
indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and Wells Fargo Bank, National Association, as trustee (the
"Trustee", which term includes any successor Trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights and obligations thereunder of the
Issuer, the Trustee and the Holders of the Notes. The Notes are subject to all
terms of the Indenture. All terms used in this Note that are defined in the
Indenture, supplemented or amended, shall have the meanings assigned to them in
or pursuant to the Indenture, as so supplemented or amended.
The Class A-1 Notes and the Class A-2 Notes (together, the "Notes") are
and will be equally and ratably secured by the collateral pledged as security
therefor as provided in the Indenture.
Principal of the Class A-1 Notes will be payable on each Payment Date
in an amount described on the face hereof. "Payment Date" means the fifteenth
day of each month, or, if any such date is not a Business Day, the next
succeeding Business Day, commencing January 17, 2006.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Class A-1 Final Scheduled Payment
Date and the Redemption Date, if any, pursuant to Section 10.1(a) of the
Indenture. In addition, a portion of the unpaid principal balance of this Note
shall be due and payable on the Mandatory Redemption Date, if any, pursuant to
Section 10.1(b) of the Indenture. Notwithstanding the foregoing, the entire
unpaid principal amount of the Notes shall be due and payable (i) on the date on
which an Event of Default shall have occurred and be continuing so long as an
Insurer Default shall not have occurred and be continuing and the Note Insurer
has declared the Notes to be immediately due and payable in the manner provided
in Section 5.2 of the Indenture, or (ii) if an Insurer Default shall have
occurred and be continuing, on the date on which an Event of Default shall have
occurred and be continuing and the Trustee or a Note Majority has declared the
Notes to be immediately due and payable in the manner provided in Section 5.2 of
the Indenture. All principal payments on the Class A-1 Notes shall be made pro
rata to the Class A-1 Noteholders entitled thereto.
Payments of interest on this Note due and payable on each Payment Date,
together with the installment of principal, if any, to the extent not in full
payment of this Note, shall be made by check mailed to the Person whose name
appears as the Holder of this Note (or one or more Predecessor Notes) in the
Note Register as of the close of business on each Record Date or by wire
transfer of immediately available funds to the account designated in writing to
the Trustee by such Person at least five Business Days prior to the related
Record Date, except that with respect to Notes registered on the Record Date in
the name of the nominee of the Clearing Agency (initially, such nominee to be
Cede & Co.), payments will be made by wire transfer in immediately available
funds to the account designated by such nominee. Such checks shall be mailed to
the Person entitled thereto at the address of such Person as it appears on the
Note Register as of the applicable Record Date without requiring that this Note
be submitted for notation of payment. Any reduction in the principal amount of
this Note (or any one or more Predecessor Notes) effected by any payments made
on any Payment Date shall be binding upon all future Holders of this Note and of
any Note issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not noted hereon. If funds are expected to be
available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Note on a Payment Date, then the
Trustee, in the name of and on behalf of the Issuer, will notify the Person who
was the Holder hereof as of the Record Date preceding such Payment Date by
notice mailed prior to such Payment Date and the amount then due and payable
shall be payable only upon presentation and surrender of this Note at the
Trustee's principal Corporate Trust Office.
The Issuer shall pay interest on overdue installments of interest at
the Class A-1 Interest Rate to the extent lawful.
A-1-3
As provided in the Indenture, the Notes may be redeemed (a) pursuant to
Section 10.1(a) of the Indenture, in whole, but not in part, at the option of
the Servicer, on any Payment Date on or after the date on which the Collateral
Balance is less than or equal to 10% of the Original Collateral Balance; and (b)
pursuant to Section 10.1(b) of the Indenture, in part, on a pro rata basis, on
the Mandatory Redemption Date if any Pre-Funded Amount remains on deposit in the
Pre-Funding Account after giving effect to the purchase of all Subsequent
Receivables during the Funding Period.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, (i) duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or his attorney duly authorized in
writing, with such signature guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar which requirements include
membership or participation in Securities Transfer Agents Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Note Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Exchange Act, and (ii) accompanied by such other documents
as the Trustee may require, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange. Notwithstanding anything to the contrary in the Indenture or any other
Basic Document, (i) the transfer of a Note, including the right to receive
principal and any stated interest thereon, may be effected only by surrender of
the old Note (or satisfactory evidence of the destruction, loss or theft of such
Note) to the Note Registrar, and the issuance by the Issuer (through the Note
Registrar) of a new Note to the new Holder, and (ii) each Note must be
registered in the name of the Holder thereof as to both principal and any stated
interest with the Note Registrar.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note agrees to treat the Notes as
indebtedness of the Issuer for Federal and State income tax reporting purposes
and further covenants and agrees that no recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Trustee on the Notes or under the Indenture or any certificate or other
writing delivered in connection therewith, against (i) the Seller, the Servicer,
the Depositor, the Trustee or the Owner Trustee in its individual capacity, (ii)
any owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director or employee of the Issuer, the Seller, the
Servicer, the Depositor, the Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Seller, the
Servicer, the Depositor, the Owner Trustee or the Trustee or of any successor or
assign of the Issuer, the Seller, the Servicer, the Depositor, the Trustee or
the Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed (it being understood that the Trustee and the Owner Trustee
have no such obligations in their 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.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note covenants and agrees by
accepting the benefits of the Indenture that such Noteholder will not at any
time institute against the Depositor or the Issuer or join in any institution
against the Depositor or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings, under
any United States Federal or State bankruptcy or similar law in connection with
any obligations relating to the Notes, the Indenture or the Basic Documents.
Each Noteholder by its acquisition of any Notes (or a beneficial
interest therein) shall be deemed to have represented and warranted for the
benefit of the Issuer, the Trustee, the Owner Trustee and the Noteholders, that
either (i) it is not acquiring any Notes with the assets of any "employee
benefit plan" as defined in Section 3(3) of ERISA which is subject to Title I of
ERISA or any "plan" as defined in Section 4975 of the Internal Revenue Code or
(ii) the acquisition and holding of the Notes will be covered by Prohibited
Transaction Class Exemption ("PTCE") 84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60,
PTCE 96-23 or a similar U.S. Department of Labor class exemption.
A-1-4
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Trustee and the Note Insurer and any agent of the Issuer, the
Trustee or the Note Insurer may treat the Person in whose name this Note (as of
the day of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and neither the Issuer, the Trustee nor any such agent
shall be affected by notice to the contrary.
The Indenture permits, subject to certain limitations and exceptions as
therein provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Notes under the
Indenture at any time by the Issuer with the consent of the Note Insurer (unless
an Insurer Default has occurred and is continuing) but without the consent of
Noteholders. The Indenture also contains provisions permitting the Note Insurer
and/or the Holders of Notes representing specified percentages of the
Outstanding Amount of each class of Notes, on behalf of the Holders of all the
Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one of more
Predecessor Notes) shall be conclusive and binding upon such Holder and upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits the
Trustee to amend or waive certain terms and conditions set forth in the
Indenture without the consent of Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Trustee and the Holders of
Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Indenture or the Basic Documents, neither the Owner Trustee in
its individual capacity, any owner of a beneficial interest in the Issuer, nor
any of their respective partners, beneficiaries, agents, officers, directors,
employees or successors or assigns shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest on,
or performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture, it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Owner Trustee for the sole purposes of binding the interests of the Owner
Trustee in the assets of the Issuer. The Holder of this Note by the acceptance
hereof agrees that except as expressly provided in the Indenture or the Basic
Documents, in the case of an Event of Default under the Indenture, the Holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; provided, however, that nothing contained herein shall be taken
to prevent recourse to, and enforcement against, the assets of the Issuer for
any and all liabilities, obligations and undertakings contained in the Indenture
or in this Note.
A-1-5
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of
assignee:___________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
_________________________________________________________________
_________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints, attorney, to transfer said Note on the books kept for
registration thereof, with full power of substitution in the premises.
Dated: _________________________
1/ Signature Guaranteed:________________________
1/ NOTE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
A-1-6
EXHIBIT A-2
[Form of Class A-2 Note]
REGISTERED $_______________
NO. R-A-1
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. 12615W CM1
[Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.]
THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF
ANY STATE OF THE UNITED STATES ("BLUE SKY LAWS"), AND THIS NOTE MAY NOT BE
OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A UNDER THE 1933 ACT IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE 1933 ACT, (C) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED
UNDER THE 1933 ACT (IF AVAILABLE) OR (D) TO THE SELLER OR AN AFFILIATE OF THE
SELLER, IN EACH CASE IN ACCORDANCE WITH THE INDENTURE AND ALL APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF THE EXEMPTION
PROVIDED BY RULE 144A FOR RESALES OF THIS NOTE.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
CPS AUTO RECEIVABLES TRUST 2005-D
CLASS A-2 5.06% ASSET-BACKED NOTES
CPS Auto Receivables Trust 2005-D, a statutory trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to [CEDE & CO.], or
registered assigns, the principal sum of ___________________________________ AND
NO/100 DOLLARS payable on each Payment Date in an amount equal to the aggregate
amount, if any, payable from the Note Distribution Account in respect of
principal on the Class A-2 Notes pursuant to Section 3.1 of the Indenture and
Section 5.7 of the Sale and Servicing Agreement provided, however, that the
entire unpaid principal amount of this Note shall be due and payable on the
Payment Date occurring in July 2012 (the "Class A-2 Final Scheduled Payment
Date"). The Issuer will pay interest on this Note at the rate per annum shown
above on each Payment Date until the principal of this Note is paid or made
available for payment, on the principal amount of this Note outstanding on the
preceding Payment Date (after giving effect to all payments of principal made on
the preceding Payment Date). Interest on this Note will accrue for each Payment
Date from the most recent Payment Date on which interest has been paid to but
excluding such current Payment Date; provided that for the January 2006 Payment
Date interest will accrue for the number of days from and including the Closing
Date to and including January 16, 2006. Interest will be computed on the basis
of a 360-day year of twelve 30-day months. Such principal of and interest on
this Note shall be paid in the manner specified on the reverse hereof.
B-1
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
The Notes are entitled to the benefits of a financial guaranty
insurance policy (the "Policy") issued by Financial Security Assurance Inc. (the
"Note Insurer"), pursuant to which the Note Insurer has unconditionally
guaranteed payments of the Class A Noteholders' Interest Distributable Amount
and the Noteholders' Parity Deficit Amount on each Payment Date and the Note
Balance, together with any accrued and unpaid interest on a class of Notes, on
the Final Scheduled Payment Date for such class of Notes, all as more fully set
forth in the Indenture.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse hereof,
or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer as of the date set forth
below.
CPS AUTO RECEIVABLES TRUST 2005-D
By: WILMINGTON TRUST COMPANY,
not in its individual capacity,
but solely as Owner Trustee
By: __________________________________
Name: __________________________________
Title: __________________________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
WELLS FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but solely
as Trustee
By: _______________________________________
Authorized Signatory___________________
Date: ___________, 20__
B-2
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-2 5.06% Asset-Backed Notes (herein called the "Class
A-2 Notes"), all issued under an Indenture dated as of December 1, 2005 (such
indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and Wells Fargo Bank, National Association, as trustee (the
"Trustee", which term includes any successor Trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights and obligations thereunder of the
Issuer, the Trustee and the Holders of the Notes. The Notes are subject to all
terms of the Indenture. All terms used in this Note that are defined in the
Indenture, as supplemented or amended, shall have the meanings assigned to them
in or pursuant to the Indenture, as so supplemented or amended.
The Class A-1 Notes and the Class A-2 Notes (together, the "Notes") are
and will be equally and ratably secured by the collateral pledged as security
therefor as provided in the Indenture.
Principal of the Class A-2 Notes will be payable on each Payment Date
in an amount described on the face hereof. "Payment Date" means the fifteenth
day of each month, or, if any such date is not a Business Day, the next
succeeding Business Day, commencing January 17, 2006.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Class A-2 Final Scheduled Payment
Date and the Redemption Date, if any, pursuant to Section 10.1(a) of the
Indenture. In addition, a portion of the unpaid principal balance of this Note
shall be due and payable on the Mandatory Redemption Date, if any, pursuant to
Section 10.1(b) of the Indenture. Notwithstanding the foregoing, the entire
unpaid principal amount of the Notes shall be due and payable (i) on the date on
which an Event of Default shall have occurred and be continuing so long as an
Insurer Default shall not have occurred and be continuing and the Note Insurer
has declared the Notes to be immediately due and payable in the manner provided
in Section 5.2 of the Indenture, or (ii) if an Insurer Default shall have
occurred and be continuing, on the date on which an Event of Default shall have
occurred and be continuing and the Trustee or a Note Majority has declared the
Notes to be immediately due and payable in the manner provided in Section 5.2 of
the Indenture. All principal payments on the Class A-2 Notes shall be made pro
rata to the Class A-2 Noteholders entitled thereto.
Payments of interest on this Note due and payable on each Payment Date,
together with the installment of principal, if any, to the extent not in full
payment of this Note, shall be made by check mailed to the Person whose name
appears as the Holder of this Note (or one or more Predecessor Notes) in the
Note Register as of the close of business on each Record Date or by wire
transfer of immediately available funds to the account designated in writing to
the Trustee by such Person at least five Business Days prior to the related
Record Date, except that with respect to Notes registered on the Record Date in
the name of the nominee of the Clearing Agency (initially, such nominee to be
Cede & Co.), payments will be made by wire transfer in immediately available
funds to the account designated by such nominee. Such checks shall be mailed to
the Person entitled thereto at the address of such Person as it appears on the
Note Register as of the applicable Record Date without requiring that
this Note be submitted for notation of payment. Any reduction in the principal
amount of this Note (or any one or more Predecessor Notes) effected by any
payments made on any Payment Date shall be binding upon all future Holders of
this Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not noted hereon. If funds are
expected to be available, as provided in the Indenture, for payment in full of
the then remaining unpaid principal amount of this Note on a Payment Date, then
the Trustee, in the name of and on behalf of the Issuer, will notify the Person
who was the Holder hereof as of the Record Date preceding such Payment Date by
notice mailed prior to such Payment Date and the amount then due and payable
shall be payable only upon presentation and surrender of this Note at the
Trustee's principal Corporate Trust Office.
The Issuer shall pay interest on overdue installments of interest at
the Class A-2 Interest Rate to the extent lawful.
B-3
As provided in the Indenture, the Notes may be redeemed (a) pursuant to
Section 10.1(a) of the Indenture, in whole, but not in part, at the option of
the Servicer, on any Payment Date on or after the date on which the Collateral
Balance is less than or equal to 10% of the Original Collateral Balance; and (b)
pursuant to Section 10.1(b) of the Indenture, in part, on a pro rata basis, on
the Mandatory Redemption Date if any Pre-Funded Amount remains on deposit in the
Pre-Funding Account after giving effect to the purchase of all Subsequent
Receivables during the Funding Period.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, (i) duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or his attorney duly authorized in
writing, with such signature guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar which requirements include
membership or participation in Securities Transfer Agents Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Note Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Exchange Act, and (ii) accompanied by such other documents
as the Trustee may require, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange. Notwithstanding anything to the contrary in the Indenture or any other
Basic Document, (i) the transfer of a Note, including the right to receive
principal and any stated interest thereon, may be effected only by surrender of
the old Note (or satisfactory evidence of the destruction, loss or theft of such
Note) to the Note Registrar, and the issuance by the Issuer (through the Note
Registrar) of a new Note to the new Holder, and (ii) each Note must be
registered in the name of the Holder thereof as to both principal and any stated
interest with the Note Registrar.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note agrees to treat the Notes as
indebtedness of the Issuer for federal and State income tax reporting purposes
and further covenants and agrees that no recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Trustee on the Notes or under the Indenture or any certificate or other
writing delivered in connection therewith, against (i) the Seller, the Servicer,
the Depositor, the Trustee or the Owner Trustee in its individual capacity, (ii)
any owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director or employee of the Issuer, the Seller, the
Servicer, the Depositor, the Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Seller, the
Servicer, the Depositor, the Owner Trustee or the Trustee or of any successor or
assign of the Issuer, the Seller, the Servicer, the Depositor, the Trustee or
the Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed (it being understood that the Trustee and the Owner Trustee
have no such obligations in their 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.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note covenants and agrees by
accepting the benefits of the Indenture that such Noteholder will not at any
time institute against the Depositor or the Issuer or join in any institution
against the Depositor or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings, under
any United States Federal or State bankruptcy or similar law in connection with
any obligations relating to the Notes, the Indenture or the Basic Documents.
Each Noteholder by its acquisition of any Notes (or a beneficial
interest therein) shall be deemed to have represented and warranted for the
benefit of the Issuer, the Trustee, the Owner Trustee and the Noteholders, that
either (i) it is not acquiring any Notes with the assets of any "employee
benefit plan" as defined in Section 3(3) of ERISA which is subject to Title I of
ERISA or any "plan" as defined in Section 4975 of the Internal Revenue Code or
(ii) the acquisition and holding of the Notes will be covered by Prohibited
Transaction Class Exemption ("PTCE") 84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60,
PTCE 96-23 or a similar U.S. Department of Labor class exemption.
B-4
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Trustee and the Note Insurer and any agent of the Issuer, the
Trustee or the Note Insurer may treat the Person in whose name this Note (as of
the day of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and neither the Issuer, the Trustee nor any such agent
shall be affected by notice to the contrary.
The Indenture permits, subject to certain limitations and exceptions as
therein provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Notes under the
Indenture at any time by the Issuer with the consent of the Note Insurer (unless
an Insurer Default has occurred and is continuing) but without the consent of
Noteholders. The Indenture also contains provisions permitting the Note Insurer
and/or the Holders of Notes representing specified percentages of the
Outstanding Amount of each class of Notes, on behalf of the Holders of all the
Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one of more
Predecessor Notes) shall be conclusive and binding upon such Holder and upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits the
Trustee to amend or waive certain terms and conditions set forth in the
Indenture without the consent of Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Trustee and the Holders of
Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Indenture or the Basic Documents, neither the Owner Trustee in
its individual capacity, any owner of a beneficial interest in the Issuer, nor
any of their respective partners, beneficiaries, agents, officers, directors,
employees or successors or assigns shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest on,
or performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture, it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Owner Trustee for the sole purposes of binding the interests of the Owner
Trustee in the assets of the Issuer. The Holder of this Note by the acceptance
hereof agrees that except as expressly provided in the Indenture or the Basic
Documents, in the case of an Event of Default under the Indenture, the Holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; provided, however, that nothing contained herein shall be taken
to prevent recourse to, and enforcement against, the assets of the Issuer for
any and all liabilities, obligations and undertakings contained in the Indenture
or in this Note.
B-5
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of
assignee:___________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
_________________________________________________________________
_________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints, attorney, to transfer said Note on the books kept for
registration thereof, with full power of substitution in the premises.
Dated: _________________________
1/ Signature Guaranteed:________________________
1/ NOTE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
B-6