Exhibit 10.7
AMENDED AND RESTATED INDENTURE dated as of April 18, 2006, by and among
PAGE FUNDING LLC, a Delaware limited liability company (the "ISSUER"), UBS REAL
ESTATE SECURITIES INC., a Delaware corporation, as noteholder (in such capacity,
the "NOTEHOLDER") and as note purchaser (in such capacity, the "NOTE PURCHASER")
and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as
trustee (the "TRUSTEE").
WHEREAS, the Issuer, the Noteholder and the Trustee entered into that
Indenture dated as of June 30, 2004, as supplemented by Supplemental Indenture
No. 1 dated as of March 21, 2005, Supplemental Indenture No. 2 dated as June 29,
2005, and Supplemental Indenture No.3 dated as of August 31, 2005 (such
Indenture as so supplemented, the "ORIGINAL INDENTURE"), pursuant to which the
Issuer issued its $200,000,000 Second Amended and Restated Variable Funding Note
(the "SECOND AMENDED AND RESTATED NOTE") and pledged substantially all of its
assets to the Trustee for the benefit of the Noteholder as collateral security
for its repayment of the Second Amended and Restated Note; and
WHEREAS, the parties hereto desire to amend and restate the Original
Indenture and amend and restate the Second Amended and Restated Note as
hereinafter set forth.
NOW, THEREFORE, each party agrees as follows for the benefit of the
other parties and for the benefit of the Note Purchaser and each Holder of the
Issuer's Third Amended and Restated Variable Funding Notes (the "NOTES"):
To secure the payment of principal of and interest on, and any other
amounts owing in respect of the Notes and the other Secured Obligations, and to
secure compliance with this Indenture, the Issuer has agreed to pledge the
Collateral (as defined below) as collateral to the Trustee for the benefit of
the Noteholders and the Note Purchaser.
As security for the performance by the Issuer of the Secured
Obligations, the Issuer has agreed to assign the Collateral (as defined below)
as collateral to the Trustee for the benefit of the Noteholders and the Note
Purchaser.
GRANTING CLAUSE
The Issuer hereby Grants to the Trustee on each Funding Date, as
Trustee for the benefit of the Noteholders and the Note Purchaser, all right,
title and interest of the Issuer, whether now existing or hereafter arising, in
and to the following;
(a) the Receivables listed in the Schedule of Receivables and each
Addition Notice;
(b) all monies received under the Receivables on and after the related
Cutoff Date and all Net Liquidation Proceeds received with respect to the
Receivables on and after the related Cutoff Date;
(c) the security interests in the Financed Vehicles and any accessions
thereto granted by Obligors pursuant to the related Contracts and any other
interest of the Issuer in such Financed Vehicles, including, without limitation,
the certificates of title or, with respect to such Financed Vehicles in the
States listed in Annex B to the Sale and Servicing Agreement, other evidence of
title issued by the applicable Department of Motor Vehicles or similar authority
in such States, with respect to such Financed Vehicles;
(d) any proceeds from claims on any Receivables Insurance Policies or
certificates relating to the Financed Vehicles securing the Receivables or the
Obligors thereunder;
1
(e) all proceeds from recourse against Dealers with respect to the
Receivables and all other rights arising out of or with respect to the
Receivables (but none of the obligations) of the Seller under any agreements
with Dealers;
(f) refunds for the costs of extended service contracts with respect to
Financed Vehicles securing Receivables, refunds of unearned premiums with
respect to credit life and credit accident and health insurance policies or
certificates covering an Obligor or Financed Vehicle under a Receivable or his
or her obligations with respect to a Financed Vehicle and any recourse to
Dealers for any of the foregoing;
(g) the Receivable File related to each Receivable and all other
documents that the Issuer keeps on file in accordance with its customary
procedures relating to the Receivables, for Obligors of the Financed Vehicles;
(h) all amounts and property from time to time held in or credited to
the Collection Account, the Note Distribution Account, the Principal Funding
Account and the Lockbox Accounts;
(i) all property (including the right to receive future Net Liquidation
Proceeds) that secures a Receivable that has been acquired by or on behalf of
the Seller, the Purchaser or the Issuer pursuant to a liquidation of such
Receivable;
(j) all of the rights and benefits (but none of the obligations of the
Issuer) under the Sale and Servicing Agreement and all other Basic Documents,
including a direct right to cause the Seller to purchase Receivables from the
Issuer pursuant to the Sale and Servicing Agreement under the circumstances
specified therein;
(k) the Note Purchase Agreement (to the extent of the Issuer's rights
against, but not including any of its obligations to, the Servicer);
(l) the proceeds from any Servicer's errors and omissions policy or
fidelity bond, to the extent that such proceeds relate to any Receivable,
Financed Vehicle or other Collateral;
(m) each TFC Assignment; and
(n) 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").
The foregoing Grant is made in trust to the Trustee, for the benefit of
the Noteholders and the Note Purchaser, to secure the payment of principal of
and interest on, and any other amounts owing in respect of the Notes, to secure
the payment of all 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.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
2
Section 1.1 DEFINITIONS.
Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to them in Annex A to the Second Amended and Restated
Sale and Servicing Agreement dated as of April 18, 2006 among the Issuer, the
Purchaser, the Seller, the Servicer, the Backup Servicer and the Trustee, as the
same may be further amended or supplemented from time to time (the "Sale and
Servicing Agreement").
Section 1.2 [RESERVED].
Section 1.3 OTHER DEFINITIONAL PROVISIONS.
(i) All terms defined in this Indenture shall have the defined
meanings when used in any instrument governed hereby and in any
certificate or other document made or delivered pursuant hereto unless
otherwise defined therein.
(ii) Accounting terms used but not defined or partly defined
in this Indenture, in any instrument governed hereby or in any
certificate or other document made or delivered pursuant hereto, to the
extent not defined, shall have the respective meanings given to them
under GAAP or any such instrument, certificate or other document, as
applicable. To the extent that the definitions of accounting terms in
this Indenture or in any such instrument, certificate or other document
are inconsistent with the meanings of such terms under GAAP, the
definitions contained in this Indenture or in any such instrument,
certificate or other document shall control.
(iii) The words "HEREOF," "HEREIN," "HEREUNDER" and words of
similar import when used in this Indenture shall refer to this
Indenture as a whole and not to any particular provision of this
Indenture.
(iv) Section, Schedule and Exhibit references contained in
this Indenture are references to Sections, Schedules and Exhibits in or
to this Indenture unless otherwise specified; and the term "INCLUDING"
shall mean "INCLUDING WITHOUT LIMITATION."
(v) The definitions contained in this Indenture are applicable
to the singular as well as the plural forms of such terms and to the
masculine as well as to the feminine and neuter genders of such terms.
(vi) Any agreement, instrument or statute defined or referred
to herein or in any instrument or certificate delivered in connection
herewith means such agreement, instrument or statute as the same may
from time to time be amended, modified or supplemented and includes (in
the case of agreements or instruments) references to all attachments
and instruments associated therewith; all references to a Person
include its permitted successors and assigns.
(vii) The singular form of the terms "NOTE" and "NOTEHOLDER"
shall not preclude issuance of more than one Note or ownership of Notes
by more than one Noteholder. The singular forms of such terms shall
also mean the plural forms of such terms and the plural form of such
terms shall also mean the singular form thereof, in each case as the
context requires.
ARTICLE II
NOTES
Section 2.1 FORM.
3
The Notes, together with the Trustee's certificate of authentication,
shall be in substantially the form set forth in EXHIBIT A, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may,
consistently herewith, be determined by the officers executing the Notes, as
evidenced by their execution of the Notes. Any portion of the text of the Notes
may be set forth on the reverse thereof, with an appropriate reference thereto
on the face of the Notes. The Notes will be issued on the Restatement Effective
Date, which Notes shall be subject to Advances and prepayments from time to time
in accordance with SECTION 2.11 and ARTICLE X, respectively.
(a) The Notes shall be typewritten, printed, lithographed or engraved
or produced by any combination of these methods (with or without steel engraved
borders), all as determined by the officers executing the Notes, as evidenced by
their execution of the Notes.
(b) The terms of the Notes set forth in EXHIBIT A are part of the terms
of this Indenture.
Section 2.2 EXECUTION, AUTHENTICATION AND DELIVERY.
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.
(a) A Note bearing the manual or facsimile signature of individuals who
were at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Note or did not hold
such offices at the date of such Note.
(b) The Trustee shall upon receipt of an Issuer Order for
authentication and delivery, authenticate and deliver the Notes for original
issue in an aggregate principal amount up to, but not in excess of, the Maximum
Invested Amount.
(c) Each Note shall be dated the date of its authentication.
(d) No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears attached to such Note
a certificate of authentication substantially in the form provided for herein,
executed by the Trustee by the manual signature of one of its authorized
signatories, and such certificate attached to such Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder.
Section 2.3 [RESERVED]
Section 2.4 REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE.
The Issuer shall cause to be kept a register (the "NOTE REGISTER") in
which, subject to such reasonable regulations as it may prescribe and subject to
the provisions of Section 2.5, the Issuer shall provide for the registration of
the Notes, and the registration of transfers and exchanges of the Notes. The
Trustee shall be "NOTE REGISTRAR" for the purpose of registering the Notes and
transfers of the Notes as herein provided. Upon any resignation or removal of
any Note Registrar, the Issuer shall promptly appoint a successor.
(a) If a Person other than the Trustee is appointed by the Issuer as
Note Registrar, such Person must be acceptable to the Note Purchaser and, in
addition, the Issuer will give the Trustee, the Note Purchaser and the
Noteholders prompt written notice of the appointment of such Note Registrar
(once approved by the Note Purchaser) and of the location, and any change in the
4
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. The
Trustee shall have the right to conclusively rely upon a certificate executed on
behalf of the Note Registrar by an Executive Officer thereof as to the name and
address of the Holder of the Note and the Percentage Interest and number of the
Note.
(b) Subject to SECTION 2.5 hereof, upon surrender for registration of
transfer of a Note at the office or agency of the Issuer to be maintained as
provided in SECTION 3.2, if the requirements of Section 8-401(a) of the UCC are
met, the Trustee shall have the Issuer execute and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes in the minimum Percentage Interest of 1%
representing in the aggregate the Percentage Interest on the face of such Note
to be transferred.
(c) At the option of a Holder, a Note may be exchanged for another Note
in any authorized Percentage Interest, of the same class and a like aggregate
Percentage Interest, upon surrender of such Note to be exchanged at such office
or agency. Whenever a Note is so surrendered for exchange, subject to SECTION
2.5 hereof, if the requirements of Section 8-401(a) of the UCC are met, the
Issuer shall execute, and upon request by the Issuer the Trustee shall
authenticate, and the Noteholder shall obtain from the Trustee, the Note which
the Noteholder making the exchange is entitled to receive. Every Note presented
or surrendered for registration of transfer or exchange shall be accompanied by
a written instrument of transfer in form satisfactory to the Issuer, the Trustee
and the Note Registrar duly executed by the Holder thereof or his attorney duly
authorized in writing.
(d) The Note or Notes issued upon any registration of transfer or
exchange of a Note shall be the valid obligation of the Issuer, evidencing, in
the aggregate the same debt, and entitled to the same benefits under this
Indenture, as the Note surrendered upon such registration of transfer or
exchange.
(e) Every Note presented or surrendered for registration of transfer or
exchange shall be (i) duly endorsed by, or accompanied by a written instrument
of transfer in the form attached to EXHIBIT A duly executed by, the Holder
thereof or such Holder's attorney, duly authorized in writing, with such
signature guaranteed by an "ELIGIBLE GUARANTOR INSTITUTION" meeting the
requirements of the Note Registrar which requirements include membership or
participation in Securities Transfer Agents Medallion Program ("STAMP") or such
other "SIGNATURE GUARANTEE PROGRAM" as may be determined by the Note Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended, and (ii) accompanied by such other
documents as the Trustee may require.
(f) No service charge shall be made to a Holder for any registration of
transfer or exchange of a Note, but the Note Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of a Note, other
than exchanges pursuant to SECTION 9.6 not involving any transfer.
(g) The preceding provisions of this SECTION 2.4 notwithstanding, the
Issuer shall not be required to make and the Note Registrar shall not register
transfers or exchanges of a Note selected for redemption or of any Note for a
period of two (2) days preceding the due date for any payment with respect to
such Note.
Section 2.5 RESTRICTIONS ON TRANSFER AND EXCHANGE.
(a) No transfer of a Note shall be made unless the transferor thereof
has provided a representation letter substantially in the form of EXHIBIT B that
such transfer is (i) to the Issuer or an Affiliate of the Issuer, or (ii) in
compliance with Section 2.5(b) hereof, to a qualified institutional buyer (as
defined in Rule 144A under the Securities Act) in a transaction meeting the
5
requirements of Rule 144A under the Securities Act, or (iii) in compliance with
Section 2.5(c) hereof, (A) to an institutional investor that is an "ACCREDITED
INVESTOR" as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D
promulgated under the Securities Act, or (iv) in a transaction complying with or
exempt from the registration requirements of the Securities Act and in
accordance with any applicable securities laws of any state of the United States
or any other jurisdiction; PROVIDED, that (except with respect to the transfer
of a Note or Advance made by the Noteholder), in the case of CLAUSES (iv) the
Trustee or the Issuer may require an Opinion of Counsel to the effect that such
transfer may be effected without registration under the Securities Act, which
Opinion of Counsel, if so required, shall be addressed to the Issuer and the
Trustee and shall be secured at the expense of the Holder. Each prospective
purchaser by its acquisition of a Note, acknowledges that such Note will contain
a legend substantially to the effect set forth in SECTION 2.5(e) (unless the
Issuer determines otherwise in accordance with applicable law).
Any transfer or exchange of a Note to a proposed transferee shall be conducted
in accordance with the provisions of Section 2.4, and shall be contingent upon
receipt by the Note Registrar of (A) such Note properly endorsed for assignment
or transfer, (B) written instruction from such transferring Holder directing the
Note Registrar to cause the transfer to such transferees, in such Percentage
Interests (not to exceed the Percentage Interest on the face of the Note to be
transferred) as the transferring Holder shall specify in such instructions; and
(C) such certificates or signatures as may be required under such Note or this
Section 2.5, in each case, in form and substance satisfactory to the Note
Registrar. The Note Registrar shall cause any such transfers and related
cancellations or increases and related reductions, as applicable, to be properly
recorded in its books in accordance with the requirements of Section 2.4.
(b) If a Note is sold to a "qualified institutional buyer" as defined
in Rule 144A of the Securities Act purchasing for its own account or for the
account of another "qualified institutional buyer," such Note shall be issued as
a certificated Note in definitive, fully registered form without interest
coupons with the applicable legends set forth in the form of the Note registered
in the name of the beneficial owner or a nominee thereof, duly executed by the
Issuer and authenticated by the Trustee as hereinafter provided. Any transfer to
an "qualified institutional buyer" is expressly conditioned upon the requirement
that such transferee shall deliver a representation letter in the form of
EXHIBIT C.
(c) If a Note is sold in the United States to U.S. Persons under
Section 4(2) of the Securities Act to institutional "ACCREDITED INVESTORS" (as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act), it shall
be issued in the form of certificated Note in definitive, fully registered form
without interest coupons with the applicable legends set forth in the form of
the Note registered in the name of the beneficial owner or a nominee thereof,
duly executed by the Issuer and authenticated by the Trustee as hereinafter
provided. Any transfer to an institutional "ACCREDITED INVESTOR" is expressly
conditioned upon the requirement that such transferee shall deliver a
representation letter in the form of EXHIBIT D.
(d) The Note Registrar shall not register any transfer or exchange of
any Note to the extent that upon such transfer or exchange there would be more
than four (4) Noteholders then reflected on the Note Register.
(e) Unless the Issuer determines otherwise in accordance with
applicable law, each Note shall have the following legend:
THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR "BLUE
SKY" LAWS AND MAY BE RESOLD, PLEDGED OR TRANSFERRED ONLY TO (I) THE ISSUER (UPON
REDEMPTION THEREOF OR OTHERWISE) OR AN AFFILIATE OF THE ISSUER (AS CERTIFIED BY
THE ISSUER) OR (2) AN INSTITUTIONAL INVESTOR THAT IS AN "ACCREDITED INVESTOR" AS
DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D PROMULGATED UNDER THE
SECURITIES ACT THAT EXECUTES A CERTIFICATE, SUBSTANTIALLY IN THE FORM SPECIFIED
6
IN THE INDENTURE, TO THE EFFECT THAT IT IS AN INSTITUTIONAL ACCREDITED INVESTOR
ACTING FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY
OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE INSTITUTIONAL ACCREDITED INVESTORS
UNLESS THE HOLDER IS A BANK ACTING IN ITS FIDUCIARY CAPACITY) (3) SO LONG AS
THIS NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT,
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A TO A PERSON THAT EXECUTES
A CERTIFICATE, SUBSTANTIALLY IN THE FORM SPECIFIED IN THE INDENTURE, TO THE
EFFECT THAT SUCH PERSON IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A), ACTING FOR ITS OWN ACCOUNT, OR AS A FIDUCIARY OR AGENT FOR OTHERS (WHICH
OTHERS ALSO ARE QUALIFIED INSTITUTIONAL BUYERS) TO WHOM NOTICE IS GIVEN THAT THE
SALE, PLEDGE, OR TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR (4) IN A
TRANSACTION OTHERWISE EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR
ANY OTHER JURISDICTION, IN EACH SUCH CASE, IN COMPLIANCE WITH THE INDENTURE AND
ALL APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
JURISDICTION: PROVIDED, THAT, IN THE CASE OF CLAUSE (4), THE TRUSTEE OR THE
ISSUER MAY REQUIRE AN OPINION OF COUNSEL TO THE EFFECT THAT SUCH TRANSFER MAY BE
EFFECTED WITHOUT REGISTRATION UNDER THE SECURITIES ACT, WHICH OPINION OF
COUNSEL, IF SO REQUIRED, SHALL BE ADDRESSED TO THE ISSUER AND THE TRUSTEE AND
SHALL BE SECURED AT THE EXPENSE OF THE HOLDER. NO REPRESENTATION IS MADE AS TO
THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144A FOR RESALES OF THIS
NOTE.
(f) THE NOTE REGISTRAR SHALL NOT REGISTER ANY TRANSFER OR EXCHANGE OF
THIS NOTE TO THE EXTENT THAT UPON SUCH TRANSFER OR EXCHANGE THERE WOULD BE MORE
THAN FOUR (4) NOTEHOLDERS THEN REFLECTED ON THE NOTE REGISTER.
Section 2.6 MUTILATED, DESTROYED, LOST OR STOLEN NOTE.
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 such security or indemnity as
may be required by it to hold the Issuer and the Trustee harmless, then, in the
absence of notice to the Issuer, the Note Registrar or the Trustee that such
Note has been acquired by a protected purchaser, and, provided that the
requirements of Section 8-405 and 8-406 of the UCC are met, the Issuer shall
execute, and upon request by the Issuer, the Trustee shall authenticate and
deliver in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Note, a replacement Note; PROVIDED, HOWEVER, that if any such destroyed,
lost or stolen Note, but not a mutilated Note, shall have become, or within
seven days shall be, due and payable or shall have been called for redemption,
instead of issuing a replacement Note, the Issuer may direct the Trustee, in
writing, to pay such destroyed, lost or stolen Note when so due or payable
without surrender thereof. If, after the delivery of such replacement Note or
payment of a destroyed, lost or stolen Note pursuant to the preceding sentence,
a protected purchaser of the original Note in lieu of which such replacement
Note was issued, presents for payment such original Note, the Issuer and the
Trustee shall be entitled to recover such replacement Note (or such payment)
from the Person to whom it was delivered or any assignee of such Person, except
a protected purchaser, and shall be entitled to recover upon the security or
indemnity provided therefor to the extent of any loss, damage, cost or expense
incurred by the Issuer or the Trustee in connection therewith.
(a) Upon the issuance of any replacement Note under this Section, the
Issuer may require the payment by the Holder of such Note of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Trustee) connected therewith.
7
(b) Every replacement Note issued pursuant to this Section in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with the Notes duly issued hereunder.
(c) The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of any mutilated, destroyed, lost or stolen Note.
Section 2.7 PERSONS DEEMED OWNER.
Prior to due presentment for registration of transfer of any Note, the
Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
Person in whose name any such 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
Trustee or any agent of the Issuer or the Trustee shall be affected by notice to
the contrary.
Section 2.8 PAYMENT OF PRINCIPAL AND INTEREST; DEFAULTED INTEREST.
(a) The Notes shall accrue interest as provided in the form of Note set
forth in EXHIBIT A, and such interest shall be due and payable on each
Settlement Date, as specified therein. Any installment of interest or principal,
if any, payable on any Note which is punctually paid or duly provided for by the
Issuer on the applicable Settlement Date shall be paid to the Person in whose
name such Note is registered on the Record Date, either by (i) wire transfer in
immediately available funds to such Person's account as it appears on the Note
Register on such Record Date if (A) such Noteholder has provided to the Note
Registrar appropriate written instructions at least five Business Days prior to
such Settlement Date and such Holder's Note in the aggregate evidence a
Percentage Interest of not less than 1% or (B) such Noteholder is the Seller, or
an Affiliate thereof, or if not (ii) by check mailed to such Noteholder at the
address of such Noteholder appearing on the Note Register, except for the final
installment of principal payable with respect to such Note on a Settlement Date
or on the Final Scheduled Settlement Date, which shall be payable as provided
below.
(b) If the Facility Termination Date is determined in accordance with
subsection (I) of the definition thereof, the outstanding principal balance of
the Notes and all accrued and unpaid interest thereon will be amortized and
shall be payable in full by the Final Scheduled Settlement Date. If the Facility
Termination Date is determined in accordance with subsection (II) of the
definition thereof, such Facility Termination Date will result in immediate
acceleration of the Notes in accordance with Section 5.2. If the Facility
Termination Date is determined in accordance with subsection (III) of the
definition thereof, the outstanding principal balance of the Notes and all
accrued and unpaid interest thereon will be amortized and shall be payable in
full by the third Settlement Date following the relevant anniversary of the
Original Closing Date. All principal payments on the Notes shall be made pro
rata to the Noteholders entitled thereto based on their respective Percentage
Interests. Upon written notice from the Issuer, the Trustee shall notify the
Person in whose name a Note is registered at the close of business on the Record
Date preceding the Settlement Date on which the Issuer expects that the final
installment of principal of and interest on such Note will be paid. Such notice
shall be mailed or transmitted by facsimile prior to such final Settlement Date
and shall specify that such final installment will be payable only upon
presentation and surrender of such Note and shall specify the place where such
Note may be presented and surrendered for payment of such installment.
8
(c) If the Issuer defaults in any payment of interest on a Note, the
Issuer shall pay defaulted interest (plus interest on such defaulted interest to
the extent lawful) at the Note Interest Rate then in effect (calculated for this
purpose using the Default Applicable Margin) in any lawful manner. The Issuer
shall pay such defaulted interest to the Noteholders on the immediately
following Settlement Date. At least three (3) days before any such Settlement
Date, the Issuer shall mail to the Noteholders and the Trustee a notice that
states the Settlement Date and the amount of defaulted interest to be paid.
Section 2.9 CANCELLATION.
Any Note surrendered for payment, registration of transfer, exchange or
redemption shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly canceled by the Trustee. The
Issuer may at any time deliver to the Trustee for cancellation any Note
previously authenticated and delivered hereunder which the Issuer may have
acquired in any manner whatsoever, and the Note so delivered shall be promptly
canceled by the Trustee. No Note shall be authenticated in lieu of or in
exchange for any Note canceled as provided in this Section, except as expressly
permitted by this Indenture. A canceled Note may be held or disposed of by the
Trustee in accordance with its standard retention or disposal policy as in
effect at the time unless the Issuer shall direct by an Issuer Order that they
be destroyed or returned to it; PROVIDED that such Issuer Order is timely and
such Note has not been previously disposed of by the Trustee.
Section 2.10 RELEASE OF COLLATERAL.
Subject to the terms of the other Basic Documents and SECTIONS 10.1 and
11.1, the Trustee shall, on or after the Termination Date, release any remaining
portion of the Trust Estate from the lien created by this Indenture and deposit
in the Collection Account any funds then on deposit in any other Pledged
Account. In addition, the Trustee shall release Ineligible Receivables from the
lien created by this Indenture upon any dividend of such Ineligible Receivables
that is permitted under Section 5.10 of the Sale and Servicing Agreement. The
Trustee shall release property from the lien created by this Indenture pursuant
to this SECTION 2.10 only upon receipt of an Issuer Request accompanied by an
Officer's Certificate meeting the applicable requirements of SECTION 11.1.
Section 2.11 AMOUNT LIMITED; ADVANCES.
The maximum aggregate principal amount of the Notes that may be
authenticated and delivered and Outstanding at any time under this Indenture is
limited to the Maximum Invested Amount.
On each Business Day prior to the Facility Termination Date that is a Funding
Date, and upon the satisfaction of all conditions precedent to (a) the funding
of an Advance and (b) the purchase of Receivables, in each case as set forth in
SECTION 2.1(b) of the Sale and Servicing Agreement, and SECTION 6.02 and SECTION
6.03 of the Note Purchase Agreement, the Issuer shall be entitled to borrow
additional funds pursuant to an Advance on such Funding Date in an aggregate
principal amount equal to the Advance Amount with respect to such Funding Date.
Each request by the Issuer for an Advance shall be deemed to be a certification
by the Issuer as to the satisfaction of the conditions specified in the previous
sentence.
The aggregate outstanding principal amount of the Notes may be
increased through the funding of the Advances. Each Advance and corresponding
Advance Amount shall be recorded on the grid attached to the Notes or in an
electronic file substantially in the same form as such grid. The grid (or such
electronic file) shall show all Advance Amounts and prepayments. The Note
Purchaser shall be responsible for maintaining the grid with respect to the
Notes. Absent manifest error, all such grid entries (whether manual or in
electronic form) shall be dispositive with respect to the determination of the
outstanding principal amount of the Notes. The Notes (i) can be funded by
Advances on any Funding Date in a minimum amount of $2,000,000 and any higher
9
amount (subject to the Maximum Invested Amount), and (ii) subject to subsequent
Advances pursuant to this SECTION 2.11, are subject to prepayment in whole or in
part, at the option of the Issuer as provided in Article X herein. In addition,
and independent of optional prepayments pursuant to ARTICLE X, in the event that
an Borrowing Base Deficiency exists on any date of determination as determined
by the Note Purchaser in its sole discretion, the Issuer shall on the same
Business Day of the receipt of notice from the Note Purchaser (or if notice is
received after 10:01 a.m. New York time, then on the next Business Day), prepay
the Invested Amount by an amount equal to such Borrowing Base Deficiency by
paying such amount to or at the direction of the Note Purchaser.
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
Settlement Date all amounts deposited in the Note Distribution Account pursuant
to the Sale and Servicing Agreement to the Noteholders and the Note Purchaser.
Amounts properly withheld under the Code by any Person from a payment to the
Noteholders of interest and/or principal shall be considered as having been paid
by the Issuer to the Noteholders 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 the 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, the Note Purchaser and the Noteholders 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.
On or before each Settlement Date, the Trustee 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.
Except as provided in Section 3.3(c) hereof, all payments of amounts due and
payable with respect to the Notes that are to be made from amounts withdrawn
from the Note Distribution Account shall be made on behalf of the Issuer by the
Trustee or by the Note Paying Agent, and no amounts so withdrawn from the Note
Distribution Account for payment of the Notes shall be paid to the Issuer.
(a) The Issuer shall cause each Note Paying Agent other than the
Trustee to execute and deliver to the Trustee 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;
10
(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 the
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 the Notes of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith.
(b) The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Note Paying Agent to pay to the Trustee all sums held in trust
by such Note Paying Agent, such sums to be held by the Trustee upon the same
trusts as those upon which the sums were held by such Note Paying Agent; and
upon such a payment by any Note Paying Agent to the Trustee, such Note Paying
Agent shall be released from all further liability with respect to such money.
(c) Subject to applicable laws with respect to the escheat of funds,
any money held by the Trustee or any Note Paying Agent in trust for the payment
of any amount due with respect to the Notes and remaining unclaimed for two
years after such amount has become due and payable shall be discharged from such
trust and be paid to the Issuer on Issuer Request and shall be deposited by the
Trustee in the Collection Account; and the Noteholders shall thereafter, as
unsecured general creditors, 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 the Trustee or such Note Paying Agent,
before being required to make any such repayment, shall at the expense of the
Issuer cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general circulation
in the City of New York, notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Issuer. The Trustee shall also adopt and employ, at the
expense of the Issuer, any other reasonable means of notification of such
repayment (including, but not limited to, mailing notice of such repayment to
the Holder whose Notes have been called but have not been surrendered for
redemption or whose right to or interest in moneys due and payable but not
claimed is determinable from the records of the Trustee or of any Note Paying
Agent, at the last address of record for each such Holder).
Section 3.4 EXISTENCE.
Except as otherwise permitted by the provisions of SECTION 3.10, the
Issuer will keep in full effect its existence, rights and franchises as a
limited liability company under the laws of the State of Delaware (unless it
becomes, or any successor Issuer hereunder is or becomes, organized under the
laws of any other state or of the United States of America, in which case the
Issuer will keep in full effect its existence, rights and franchises under the
laws of such other jurisdiction) and will obtain and preserve its qualification
to do business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Indenture, the
Notes, the Collateral and each other instrument or agreement included in the
Trust Estate.
Section 3.5 PROTECTION OF TRUST ESTATE.
11
The Issuer intends the security interest Granted pursuant to this
Indenture in favor of the Trustee, for the benefit of the Noteholders and the
Note Purchaser, 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 Noteholders and the Note Purchaser, 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
Noteholders and the Note Purchaser 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, the Noteholders and the Note Purchaser 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.
Subject to Section 4.5 of the Sale and Servicing Agreement, the Issuer
hereby authorizes the Note Purchaser, the Trustee and their respective agents to
file such financing statements and continuation statements and take such other
actions as the Note Purchaser or the Trustee may deem advisable in connection
with the security interest granted by the Issuer under the Indenture to the
extent permitted by applicable law. Any such financing statements and
continuation statements shall be prepared by the Issuer.
Section 3.6 OPINIONS AS TO TRUST ESTATE.
(a) On the Restatement Effective Date, the Issuer shall furnish to the
Trustee an Opinion of Counsel either stating that, in the opinion of such
counsel, such action has been taken with respect to the recording and filing of
this Indenture, any indentures supplemental hereto, and any other requisite
documents, and with respect to the execution and filing of any financing
statements and continuation statements, as are necessary to perfect and make
effective the first priority lien and security interest in favor of the Trustee,
for the benefit of the Noteholders and the Note Purchaser, created by this
Indenture in the Receivables and such other items of Collateral that the Note
Purchaser may reasonably request be the subject of such opinion (the "Opinion
Collateral") and reciting the details of such action, or stating that, in the
opinion of such counsel, no such action is necessary to make such lien and
security interest effective.
(b) Within 90 days after the beginning of each calendar year, beginning
in 2007, the Issuer shall furnish to the Trustee and the Note Purchaser an
Opinion of Counsel either stating that, in the opinion of such counsel, such
action has been taken with respect to the recording, filing, re-recording and
refiling of this Indenture, any indentures supplemental hereto and any other
requisite documents and with respect to the execution and filing of any
12
financing statements and continuation statements as are necessary to maintain
the lien and security interest created by this Indenture in the Receivables and
the Opinion Collateral 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 in the Receivables.
Section 3.7 PERFORMANCE OF OBLIGATIONS; SERVICING OF RECEIVABLES.
The Issuer will not take any action and will use its best efforts not
to permit any action to be taken by others that would release any Person from
any of such Person's material covenants or obligations under any instrument or
agreement included in the Trust Estate or that would result in the amendment,
hypothecation, subordination, termination or discharge of or impair the validity
or effectiveness of, any such instrument or agreement, except as ordered by any
bankruptcy or other court or as expressly provided in this Indenture, the other
Basic Documents or such other instrument or agreement.
(a) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Trustee in an Officer's Certificate of the Issuer
shall be deemed to be action taken by the Issuer. Initially, the Issuer has
contracted with the Servicer to assist the Issuer in performing its duties under
this Indenture.
(b) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the other Basic
Documents and in the instruments and agreements included in the Trust Estate,
including but not limited to preparing (or causing to be prepared) and filing
(or causing to be filed) all UCC financing statements and continuation
statements required to be filed by the terms of this Indenture and the Sale and
Servicing Agreement in accordance with and within the time periods provided for
herein and therein. Except as otherwise expressly provided therein, the Issuer
shall not waive, amend, modify, supplement or terminate any Basic Document or
any provision thereof without the prior written consent of the Note Purchaser
and the Majority Noteholders.
(c) If a responsible officer of the Issuer shall have written notice or
actual knowledge of the occurrence of a Default, an Event of Default, a Servicer
Termination Event or Funding Termination Event under the Sale and Servicing
Agreement, the Issuer shall promptly notify the Trustee, the Noteholders and the
Note Purchaser thereof in accordance with SECTION 11.4, and shall specify in
such notice the action, if any, the Issuer is taking in respect of such default.
If a Servicer Termination Event or Funding Termination Event shall arise from
the failure of the Servicer to perform any of its duties or obligations under
the Sale and Servicing Agreement with respect to the Receivables, the Issuer
shall take all reasonable steps available to it to remedy such failure.
(d) The Issuer agrees that it will not waive (and shall not have any
right to waive) timely performance or observance by the Servicer or the Seller
of their respective duties under the Basic Documents without the prior written
consent of the Note Purchaser and the Majority Noteholders.
Section 3.8 NEGATIVE COVENANTS.
So long as any Note is Outstanding, the Issuer shall not:
(i) except as expressly permitted by this Indenture or the
other Basic Documents, sell, transfer, exchange or otherwise dispose of
any of the properties or assets of the Issuer, including those included
in the Trust Estate, unless directed to do so by the Majority
Noteholders and the Note Purchaser or the Majority Noteholders and the
Note Purchaser have approved such disposition;
13
(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 the Note Purchaser or any present or former
Noteholders 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
for the benefit of the Noteholders and the Note Purchaser created by
this Indenture to be amended, hypothecated, subordinated, terminated or
discharged, or permit any Person to be released from any covenants or
obligations under this Indenture or any other Basic Document except as
may be expressly permitted hereby or thereby, (B) permit any lien,
charge, excise, claim, security interest, mortgage or other encumbrance
(other than the lien of this Indenture) to be created on or extend to
or otherwise arise upon or burden the Trust Estate, any Collateral or
any part thereof or any interest therein or the proceeds thereof (other
than tax liens, mechanics' liens and other liens that arise by
operation of law, in each case on a Financed Vehicle and arising solely
as a result of an action or omission of the related Obligor), (C)
permit the lien of this Indenture not to constitute a valid first
priority (other than with respect to any such tax, mechanics' or other
lien) perfected security interest in the Trust Estate or any Collateral
or (D) amend, modify or fail to comply with the provisions of any of
the Basic Documents without the prior written consent of the Note
Purchaser and the Majority Noteholders.
Section 3.9 ANNUAL STATEMENT AS TO COMPLIANCE.
The Issuer will deliver to the Trustee, the Note Purchaser and the
Noteholders on or before February 28 of each year, beginning February 28, 2005
an Officer's Certificate, dated as of December 31 of the preceding year,
stating, as to the Authorized Officer signing such Officer's Certificate, that:
(i) a review of the activities of the Issuer during the
preceding year (or portion of such year from the initial Funding Date
through December 31, 2004) and of performance under this Indenture has
been made under such Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based
on such review, the Issuer has complied with all conditions and
covenants under this Indenture throughout such year and no event has
occurred and is continuing which is, or after notice or lapse of time
or both would become, an Event of Default, 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 WITH CONSENT.
The Issuer shall not consolidate or merge with or into any other
Person, or convey or transfer all or substantially all of its properties to any
Person without the prior written consent of the Note Purchaser and the Majority
Noteholders.
Section 3.11 SUCCESSOR OR TRANSFEREE.
(a) Upon any consolidation or merger of the Issuer with the prior
written consent of the Note Purchaser and the Majority Noteholders in accordance
with SECTION 3.10, 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, and be obligated to meet the requirements
of the Issuer under this Indenture and the other Basic Documents with the same
effect as if such Person had been named as the Issuer herein.
14
(b) Upon a conveyance or transfer of all the assets and properties of
the Issuer with the prior written consent of the Note Purchaser and the Majority
Noteholders in accordance with SECTION 3.10, the Issuer will be released from
every covenant and agreement of this Indenture to be observed or performed on
the part of the Issuer with respect to the Notes immediately upon the delivery
of written notice to the Trustee, the Note Purchaser and the Noteholders stating
that the Issuer is to be so released.
Section 3.12 NO OTHER BUSINESS.
The Issuer shall not engage in any business other than financing,
purchasing, owning, selling and managing the Related Receivables in the manner
contemplated by this Indenture and the other Basic Documents and activities
incidental thereto. After the Facility Termination Date, the Issuer shall not
purchase any additional Receivables.
Section 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, and (ii) any other Indebtedness permitted by or arising under the Basic
Documents. The proceeds of the Notes shall be used solely to fund the Issuer's
purchase of the Related Receivables and the other assets specified in the Sale
and Servicing Agreement 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 5.9 of the Sale and Servicing Agreement.
Section 3.15 GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES.
Except as contemplated by the Sale and Servicing Agreement, this
Indenture or the other Basic Documents, the Issuer shall not make any loan or
advance or credit to, or guarantee (directly or indirectly or by an instrument
having the effect of assuring another's payment or performance on any obligation
or capability of so doing or otherwise), endorse or otherwise become
contingently liable, directly or indirectly, in connection with the obligations,
stocks or dividends of, or own, purchase, repurchase or acquire (or agree
contingently to do so) any stock, obligations, assets or securities of, or any
other interest in, or make any capital contribution to, any other Person.
Section 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,
including, without limitation, Consumer Laws.
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 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, (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;
15
provided, however, that the Issuer may make, or cause to be made, distributions
to the Trustee and to any owner of a beneficial interest in the Issuer as
permitted by, and to the extent funds are available for such purpose from
distributions under the Sale and Servicing Agreement. The Issuer will not,
directly or indirectly, make payments to or distributions from the Collection
Account and the other Pledged Accounts except in accordance with this Indenture
and the Basic Documents.
Section 3.19 NOTICE OF EVENTS OF DEFAULT AND FUNDING TERMINATION
EVENTS.
Upon a responsible officer of the Issuer having notice or actual
knowledge thereof, the Issuer agrees to give each of the Trustee, the Note
Purchaser and the Noteholders prompt written notice of each Event of Default
hereunder and each Funding Termination Event, Servicer Termination Event or
other Default on the part of the Issuer, the Servicer, the Purchaser or the
Seller of its obligations under any Basic Document.
Section 3.20 FURTHER INSTRUMENTS AND ACTS.
Upon request of the Trustee, the Note Purchaser or the Majority
Noteholders, 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.
The Issuer shall not agree to any amendment to Section 11.1 of the Sale
and Servicing Agreement to eliminate the requirements thereunder that the
Trustee, the Note Purchaser and the Majority Noteholders consent to amendments
thereto as provided therein.
Section 3.22 INCOME TAX CHARACTERIZATION.
It is the intent of the Issuer and the Noteholders that, for Federal,
State and local income and franchise tax purposes, the Notes will evidence
indebtedness of the Issuer secured by the Collateral. Each Noteholder, by its
acceptance of a Note, agrees to treat such Note for Federal, State and local
income and franchise tax purposes as indebtedness of the Issuer.
Section 3.23 SEPARATE EXISTENCE OF THE ISSUER.
During the term of the Indenture, the Issuer shall observe and comply
with the applicable legal requirements for the recognition of the Issuer as a
legal entity separate and apart from its Affiliates, including, without
limitation, those requirements set forth in Section 9(b) of the Issuer's Limited
Liability Company Agreement.
Section 3.24 AMENDMENT OF ISSUER'S ORGANIZATIONAL DOCUMENTS.
The Issuer shall not amend its Limited Liability Company Agreement
except in accordance with the provisions thereof and with the prior written
consent of the Note Purchaser and the Majority Noteholders.
Section 3.25 OTHER AGREEMENTS.
The Issuer shall not enter into any agreement that does not contain
non-petition or limited recourse language with respect to the Issuer.
Section 3.26 RULE 144A INFORMATION.
16
At any time when the Issuer is not subject to Section 13 or 15(d) of
the Securities Exchange Act of 1934, as amended, upon the request of a
Noteholder, the Issuer shall promptly furnish to such Noteholder or to a
prospective purchaser of a Note designated by such Noteholder, as the case may
be, the information required to be delivered pursuant to Rule 144A(d)(4) under
the Securities Act ("Rule 144A Information") in order to permit compliance by
such Noteholder with Rule 144A in connection with the resale of a Note by such
Noteholder; provided, however, that the Issuer shall not be required to furnish
Rule 144A Information in connection with any request made on or after the date
which is three years from the later of (i) the date such Note (or any
predecessor Note) was acquired from the Issuer or (ii) the date such Note (or
any predecessor Note) was last acquired from an "affiliate" of the Issuer within
the meaning of Rule 144 under the Securities Act; and provided further that the
Issuer shall not be required to furnish such information at any time to a
prospective purchaser located outside of the United States who is not a "United
States Person" within the meaning of Regulation S under the Securities Act if
such Note may then be sold to such prospective purchaser in accordance with Rule
904 under the Securities Act (or any successor provision thereto).
Section 3.27 CHANGE OF CONTROL.
CPS will and shall at all times be the legal and beneficial owner of
all of the issued and outstanding membership interests of the Issuer.
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 the
Noteholders to receive payments of principal thereof and interest thereon and
rights of the Note Purchaser to receive payments in respect of amounts owed by
the Issuer to the Note Purchaser under the Basic Documents, (iv) SECTIONS 3.3,
3.4, 3.5, 3.6, 3.8, 3.10, 3.11, 3.18, 3.19, 3.20, 3.21, 3.23, 3.24 and 11.17,
(v) the rights, obligations and immunities of the Trustee hereunder (including
the rights of the Trustee under SECTION 6.7 and the obligations of the Trustee
under SECTION 4.2) and (vi) the rights of the Noteholders and the Note Purchaser
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) the Notes theretofore authenticated and delivered (other than (i)
Notes that have been destroyed, lost or stolen and that have been replaced or
paid as provided in Section 2.6 and (ii) Notes for which 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;
(b) the Issuer has paid or caused to be paid all Secured Obligations;
and
(c) the Issuer has delivered to the Trustee, the Note Purchaser and the
Noteholders an Officer's Certificate meeting the applicable requirements of
Section 11.1(a) and stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of this Indenture have been complied
with.
Section 4.2 APPLICATION OF TRUST MONEY.
All moneys deposited with the Trustee pursuant to SECTION 4.1 or
SECTION 4.3 hereof shall be held in trust and applied by it, in accordance with
the provisions of the Notes and this Indenture, to the payment, either directly
or through the Note Paying Agent, as the Trustee may determine, to the
Noteholders and the Note Purchaser for the payment or redemption of which such
moneys have been deposited with the Trustee, of all sums due and to become due
17
thereon for principal and interest (in the case of the Noteholders) and all sums
due and payable by the Issuer under the Basic Documents (in the case of the Note
Purchaser); but such moneys need not be segregated from other funds except to
the extent required herein, in the Sale and Servicing Agreement or in the other
Basic Documents or required by law. Any funds remaining with the Trustee or on
deposit in the Pledged Accounts following the repayment in full of the Notes and
the other Secured Obligations, the termination of the Commitment, the payment in
full of all other amounts owed to the Noteholders and all amounts owed by the
Issuer to the Note Purchaser, Trustee and Backup Servicer under the Basic
Documents, and the satisfaction and discharge of this Indenture, shall be
remitted to the Issuer.
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 the Note Paying Agent other
than the Trustee under the provisions of this Indenture with respect to the
Notes shall, upon demand of the Issuer, be remitted to the Trustee to be held
and applied according to SECTION 4.2 and thereupon the Note Paying Agent shall
be released from all further liability with respect to such moneys.
ARTICLE V
REMEDIES
Section 5.1 EVENTS OF DEFAULT.
(a) "EVENT OF DEFAULT", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(i) default in the payment of (A) any interest on the Notes or
any other amount (except principal) due with respect to the Notes or
(B) any amount in excess of $50,000 due to the Note Purchaser pursuant
to the Basic Documents, when the same becomes due and payable, which
default continues for a period of two (2) days;
(ii) default in the payment of the principal of or any
installment of the principal of the Notes when the same becomes due and
payable;
(iii) default in the observance or performance of any covenant
or agreement of the Issuer, the Purchaser, the Seller or the Servicer
made in any Basic Document (other than a covenant or agreement, a
default in the observance or performance of which is elsewhere in this
Section specifically dealt with and other than the failure by the
Seller or the Servicer to repurchase any Receivable in accordance with
the terms of the Sale and Servicing Agreement), or any representation
or warranty of the Issuer, the Purchaser, the Seller or the Servicer
made in any Basic Document or any Original Basic Document or in any
certificate or other writing delivered pursuant to any Basic Document
or Original Basic Document or in connection therewith (including any
Servicer's Certificate or any Borrowing Base Certificate) proving to
have been incorrect in any material respect as of the time when the
same shall have been made or deemed to have been made, and such default
shall continue or not be cured within 30 days from written notice by
the Note Purchaser or a Noteholder, or the circumstance or condition in
respect of which such misrepresentation or warranty was incorrect shall
not have been eliminated or otherwise cured within 30 days from written
notice by the Noteholders or the Note Purchaser; provided that no
breach shall be deemed to occur hereunder in respect of any
representation or warranty relating to eligibility of any Receivable on
the Original Closing Date, the Restatement Effective Date or any
related Funding Date to the extent the Seller has repurchased such
Receivable in accordance with the provisions of the Sale and Servicing
Agreement;
18
(iv) the failure by the Seller or the Servicer to repurchase
any Receivable in accordance with the terms of the Sale and Servicing
Agreement;
(v) an Insolvency Event with respect to the Issuer, the Seller
or the Servicer shall have occurred;
(vi) a Borrowing Base Deficiency shall exist and not be cured
within two (2) Business Days;
(vii) the Internal Revenue Service shall file notice of a Lien
pursuant to Section 6323 of the Code with regard to any assets of the
Issuer or any material portion of the assets of the Seller and such
Lien shall not have been released within 30 days, or the Pension
Benefit Guaranty Corporation shall file notice of a Lien pursuant to
Section 4068 of ERISA with regard to any of the assets of the Issuer or
the Seller and such Lien shall not have been released within 30 days;
(viii) (a) any Basic Document or any Lien granted thereunder
by the Issuer or the Seller shall (except in accordance with its
terms), in whole or in part, terminate, cease to be effective or cease
to be the legally valid, binding and enforceable obligation of the
Issuer or the Seller; or (b) the Issuer or the Seller or any other
party shall, directly or indirectly, contest in any manner such
effectiveness, validity, binding nature or enforceability of any Basic
Document;
(ix) a Servicer Termination Event shall have occurred;
(x) the Issuer or the Seller shall fail to pay any principal
of or premium or interest on any indebtedness having a principal amount
of $250,000 or $1,000,000, respectively, or greater when the same
becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) and such failure shall
continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such indebtedness; or any other
default under any agreement or instrument relating to any such
indebtedness of the Issuer or the Seller, as applicable, or any other
event, shall occur and shall continue after the applicable grace
period, if any, specified in such agreement or instrument if the effect
of such default or event is to accelerate, or to permit the
acceleration of, the maturity of such indebtedness; or any such
indebtedness shall be declared to be due and payable or required to be
prepaid (other than by a regularly scheduled required prepayment),
redeemed, purchased or defeased, or an offer to prepay, redeem,
purchase or defease such indebtedness shall be required to be made, in
each case, prior to the stated maturity thereof;
(xi) a Change of Control or a Material Adverse Change (in the
reasonable opinion of the Noteholder) shall have occurred with respect
to the Issuer or the Seller;
(xii) the Issuer shall become an investment company required
to be registered under the Investment Company Act;
(xiii) any final judgment or ruling shall have been rendered
against, or any settlement entered into by, the Seller or any
subsidiary thereof, excluding the Issuer, which judgment, ruling or
settlement exceeds, in the aggregate, $6,000,000 or any final judgment
or ruling shall have been rendered against the Issuer; provided, in
either case, that such final judgment, ruling or settlement shall have
remained unpaid, and enforcement thereof shall have remained unstayed
and unbonded, for a period in excess of 30 days from the date of entry
of such judgment or ruling or the date of effectiveness of such
settlement;
19
(xiv) the Trustee shall for any reason fail to have a first
priority perfected security interest in the Collateral for the benefit
of the Noteholders and the Note Purchaser; or
(xv) any Basic Document shall be terminated or cease to be in
full force or effect; provided, however, in the case of a termination
of any Lockbox Agreement, an Event of Default shall occur only upon the
failure of the Seller or the Issuer to obtain a successor lockbox
arrangement reasonably acceptable to the Note Purchaser within thirty
(30) days of such termination.
(b) The Issuer shall deliver to the Trustee, the Note Purchaser and
each Noteholder, within two days after the occurrence thereof, written notice in
the form of an Officer's Certificate of any Event of Default which has occurred
or any event which either with the giving of notice or the lapse of time, or
both, 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.
(c) After the earlier of the receipt of notice by the Trustee and the
date of actual knowledge by a Responsible Officer of the Trustee of the
occurrence of any Default or Event of Default hereunder, the Trustee shall give
prompt written notice to the Note Purchaser and each Noteholder of each such
Default or Event of Default hereunder so known to the Trustee.
Section 5.2 RIGHTS UPON EVENT OF DEFAULT.
If an Event of Default or a Funding Termination Event specified in
clauses (i) through (iii) of the definition thereof shall have occurred and be
continuing, the Trustee may, and at the direction of the Note Purchaser and the
Majority Noteholders shall, and with respect to an Event of Default pursuant to
Section 5.1(a)(v) hereof, the Trustee shall declare the Notes to be immediately
due and payable at par, together with accrued interest thereon (calculated for
those purposes using the Default Applicable Margin). In addition, if an Event of
Default shall have occurred and be continuing, the Trustee may, and at the
direction of the Note Purchaser and the Majority Noteholders shall, exercise any
of the remedies specified in SECTION 5.4.
At any time after such declaration of acceleration of maturity has been
made and before a judgment or decree for payment of the money due has been
obtained by the Trustee as hereinafter in this Article V provided, the Note
Purchaser and the Majority Noteholders may, by written notice to the Issuer and
the Trustee, rescind and annul such declaration and its consequences if the
Issuer has paid or deposited with the Trustee a sum sufficient to pay:
(i) all payments of principal of and interest (calculated for
these purposes using the Default Applicable Margin) on the Notes, all
amounts due the Note Purchaser from the Issuer under the Basic
Documents, and all other amounts that would then be due from the Issuer
hereunder, upon the Notes or under the Basic Documents if the Event of
Default giving rise to such acceleration had not occurred; and
(ii) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances of
the Trustee and its agents and counsel; and
(iii) all Events of Default, other than the nonpayment of the
principal of the 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.
20
Section 5.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
(a) The Issuer covenants that if (i) default is made in the payment of
any interest on, or principal of, the Notes, or any amount due from the Issuer
to the Note Purchaser under the Basic Documents, when the same becomes due and
payable, the Issuer will, upon demand of the Trustee, pay to it, for the benefit
of the Noteholders and the Note Purchaser, as applicable, the whole amount then
due and payable on the Notes for principal and interest, with interest upon the
overdue principal, and, to the extent payment at such rate of interest shall be
legally enforceable, upon overdue installments of interest, at the Note Interest
Rate all amounts due and owing by the Issuer under the Basic Documents and, in
each case, 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) If an Event of Default occurs and is continuing, the Trustee may in
its discretion subject to the prior written consent of the Note Purchaser and
the Majority Noteholders and shall, at the direction of the Note Purchaser and
the Majority Noteholders, proceed to protect and enforce its rights and the
rights of the Note Purchaser and the Noteholders by such appropriate Proceedings
as the Trustee, the Note Purchaser and the Majority Noteholders shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture, any other Basic
Document 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, any other Basic Document or by law.
(c) [RESERVED].
(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 the
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
the whole amount then due to the Note Purchaser by the Issuer under the
Basic Documents 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 Note Purchaser and the Noteholders allowed in
such proceedings;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Noteholders and the Note Purchaser 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, the Note
Purchaser and of the Trustee on their behalf; and
21
(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, the Note Purchaser or the Noteholders allowed in any
judicial proceedings relative to the Issuer, its creditors and its
property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such proceeding is hereby authorized by the Noteholders and the Note
Purchaser to make payments to the Trustee, and, in the event that the Trustee
shall consent to the making of payments directly to the Noteholders or the Note
Purchaser, 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 the
Noteholders or the Note Purchaser any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of the Noteholders
or the Note Purchaser or to authorize the Trustee to vote in respect of the
claim of the Noteholders or the Note Purchaser 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,
any other Basic Document or under the Notes, may be enforced by the Trustee
without the possession 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 benefit of
the Noteholders and the Note Purchaser.
(g) In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture or any other
Basic Document), the Trustee shall be held to represent the Note Purchaser and
the Noteholders, and it shall not be necessary to make the Note Purchaser or the
Noteholders a party to any such proceedings. Notwithstanding the foregoing,
nothing contained in this Indenture shall be deemed to prohibit the Note
Purchaser from representing itself in any such action or proceeding.
Section 5.4 REMEDIES.
If an Event of Default shall have occurred and be continuing, the Note
Purchaser and the Majority Noteholders 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 by the Issuer under any Basic Document 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 the Notes moneys adjudged
due;
(ii) institute or direct the Trustee to institute Proceedings
from time to time for the complete or partial foreclosure of this
Indenture with respect to the Trust Estate;
(iii) exercise or direct the Trustee to exercise any remedies
of a secured party under the UCC and take any other appropriate action
to protect and enforce the rights and remedies of the Trustee and the
Secured Parties; and
(iv) sell or direct the Trustee to sell the Trust Estate or
any portion thereof or rights or interest therein, at one or more
public or private sales (including, without limitation, the sale of the
Collateral in connection with a securitization thereof) called and
conducted in any manner permitted by law.
22
Section 5.5 OPTIONAL PRESERVATION OF THE RECEIVABLES.
If the Notes have been declared to be due and payable under SECTION 5.2
following an Event of Default and such declaration and its consequences have not
been rescinded and annulled, the 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) If the Trustee collects any money or property pursuant to this
Article V, it shall pay out the money or property in the following order:
(i) FIRST: to the Trustee for amounts due under Section 6.7;
(ii) SECOND: to the Noteholders for amounts due and unpaid on
the Notes in respect of interest (including any premium), ratably,
without preference or priority of any kind, according to the amounts
due and payable on the Notes in respect of interest (including any
premium);
(iii) THIRD: to the Noteholders for amounts due and unpaid on
the Notes in respect of principal, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Notes in respect of principal, until the outstanding principal amounts
of the Notes is reduced to zero;
(iv) FOURTH: to the Note Purchaser for any amounts due and
owing thereto under the Basic Documents; and
(v) FIFTH: any excess amounts remaining after making the
payments described in clauses FIRST through FOURTH above, to be applied
pursuant to Section 5.7(a) of the Sale and Servicing Agreement to the
extent that any amounts payable thereunder have not been previously
paid pursuant to clauses FIRST through FOURTH above.
(b) The Trustee may fix a record date and Settlement Date for any
payment to the Note Purchaser and the Noteholders pursuant to this Section. At
least 15 days before such record date the Trustee shall mail to the Issuer, the
Note Purchaser and each Noteholder a notice that states such record date, the
Settlement Date and the amount to be paid.
Section 5.7 LIMITATION OF SUITS.
Unless the Notes shall be held by the Note Purchaser or an Affiliate
thereof, no Holder of a 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:
23
(i) the Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(ii) the Majority Noteholders have made a written request to
the Trustee to institute such proceeding in respect of such Event of
Default in its own name as Trustee hereunder;
(iii) the Majority Noteholders have offered to the Trustee
indemnity reasonably satisfactory to it against the costs, expenses and
liabilities to be incurred in complying with such request; and
(iv) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute such
proceedings;
it being understood and intended that no Holder of a Note shall have any right
in any manner whatever by virtue of, or by availing of, any provision of this
Indenture to affect, disturb or prejudice the rights of any other Holder of the
Notes or to obtain or to seek to obtain priority or preference over any other
Holder or to enforce any right under this Indenture, except in the manner herein
provided and it being understood that if a Note is held by the Note Purchaser or
an Affiliate thereof, the Holder may directly 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.
Section 5.8 UNCONDITIONAL RIGHTS OF THE NOTEHOLDERS TO RECEIVE
PRINCIPAL AND INTEREST.
Notwithstanding any other provisions of this Indenture, (i) each
Noteholder shall have the right, which is absolute and unconditional, to receive
payment of the applicable Percentage Interest of 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; and (ii) the Note Purchaser shall have the right,
which is absolute and unconditional, to receive payment of all amounts owed to
it by the Issuer under the Basic Documents when the same shall become due, and,
in each case, to institute suit for the enforcement of any such payment, and
such right shall not be impaired without the consent of the Note Purchaser or
the Majority Noteholders, as applicable.
Section 5.9 RESTORATION OF RIGHTS AND REMEDIES.
If the Note Purchaser or a 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, the Note Purchaser or to such Noteholder, then and in every such case
the Issuer, the Trustee, the Note Purchaser 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, the Note Purchaser and the Noteholder 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 Note
Purchaser or 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.
24
No delay or omission of the Note Purchaser or the Noteholders 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, the Note Purchaser or the Noteholders
may be exercised from time to time, and as often as may be deemed expedient, by
the Trustee, the Note Purchaser or the Noteholders, as the case may be.
Section 5.12 [RESERVED].
Section 5.13 WAIVER OF PAST DEFAULTS.
Prior to the declaration of the acceleration of the maturity of the
Notes as provided in SECTION 5.2, the Note Purchaser and the Majority
Noteholders may waive any past Default or Event of Default and its consequences
except a Default or Event of Default (i) in payment of principal of or interest
on the Notes or (ii) in respect of a covenant or provision hereof which cannot
be modified or amended without the consent of the Note Purchaser and all of the
Noteholders. In the case of any such waiver, the Issuer, the Trustee, the Note
Purchaser and the Noteholders shall be restored to their former positions and
rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other Default or 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.
Each of the Issuer, the Trustee and the Note Purchaser agrees, and each
Noteholder by its acceptance of a Note shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to (a) any suit instituted by
the Trustee, (b) any suit instituted by the Note Purchaser or Noteholders
holding in the aggregate more than 10% of Percentage Interests of the Notes or
(c) any suit instituted by the Noteholders for the enforcement of the payment of
principal of or interest on the Notes on or after the respective due dates
expressed in the Notes and in this Indenture.
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
25
SALE OF TRUST ESTATE.
(a) To the extent permitted by applicable law, the Trustee shall not in
any private sale sell to a third party the Trust Estate, or any portion thereof
unless,
(i) the Note Purchaser and the Majority Noteholders consent to
or direct the Trustee in writing to make such sale; or
(ii) the proceeds of such sale would be not less than the sum
of (x) all amounts due on the entire unpaid principal amount of the
Notes and interest due or to become due thereon in accordance with
Section 5.6 hereof on the Settlement Date next succeeding the date of
such sale and (y) all amounts due the Note Purchaser from the Issuer
under the Basic Documents.
(b) For any public sale of the Trust Estate, the Trustee shall have
provided the Note Purchaser and the Noteholders with notice of such sale at
least two weeks in advance of such sale which notice shall specify the date,
time and location of such sale.
(c) In connection with a sale of all or any portion of the Trust
Estate:
(i) the Note Purchaser or the Noteholders may bid for and
purchase the property offered for sale, and may hold, retain, possess
and dispose of such property, without further accountability, and (x)
the Noteholders may, in paying the purchase money therefor, deliver in
lieu of cash any Outstanding Note or claims for interest thereon for
credit in the amount that shall, upon distribution of the net proceeds
of such sale, be payable thereon, and the Note so delivered shall be
cancelled and extinguished except that, in case the amounts so payable
thereon shall be less than the amount due thereon, such Notes shall be
returned to the Noteholders after being appropriately stamped to show
such partial payment and (y) the Note Purchaser may, in paying the
purchase money therefor, set-off against any amount owed to it by the
Issuer under the Basic Documents;
(ii) the Trustee shall execute and deliver an appropriate
instrument of conveyance transferring its interest in any portion of
the Trust Estate in connection with a sale thereof; and
(iii) the Trustee is hereby irrevocably appointed the agent
and attorney-in-fact of the Issuer to transfer and convey its interest
in any portion of the Trust Estate in connection with a sale thereof,
and to take all action necessary to effect such sale.
(d) The method, manner, time, place and terms of any sale of all or any
portion of the Trust Estate shall be commercially reasonable.
Section 5.17 CONSEQUENCES OF A TFC FUNDING TERMINATION EVENT.
Upon a responsible officer of the Issuer having notice or actual
knowledge thereof, the Issuer agrees to give the Trustee, the Noteholders and
the Note Purchaser prompt written notice of any TFC Funding Termination Event.
Upon the occurrence and continuation of a TFC Funding Termination Event, the
Note Purchaser and the Majority Noteholders may terminate CPS and TFC as the
Servicer and subservicer, respectively, of the TFC Receivables, and direct the
Trustee to sell the TFC Receivables or any portion thereof or rights or interest
therein, at one or more public or private sales (including, without limitation,
the sale of the TFC Receivables in connection with a securitization thereof)
called and conducted in any manner permitted by applicable law. The proceeds of
any such sale shall be applied first, to reimburse the Trustee for any amounts
to which it is entitled under this Indenture, second, to cure any Borrowing Base
Deficiency, and, third, any remaining amounts shall be distributed to CPS. Upon
the occurrence of a TFC Funding Termination Event, no future Advance may be made
with respect to a TFC Receivable.
26
ARTICLE VI
THE TRUSTEE
Section 6.1 DUTIES OF TRUSTEE.
If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture and the
other Basic Documents and use the same degree of care and skill in their
exercise as a prudent person would exercise or use under the circumstances in
the conduct of such person's own affairs.
(a) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and each of
the other Basic Documents to which it is a party and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; however, the Trustee shall examine the certificates and
opinions to determine whether or not they conform on their face to the
requirements of this Indenture.
(b) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section; and
(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.
(c) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Issuer.
(d) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law or the terms of this Indenture
or the Sale and Servicing Agreement.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or
powers, if it shall have reasonable grounds to believe that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
(f) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
(g) The Trustee shall permit any representative of the Note Purchaser
or the Noteholders, 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 and the transactions contemplated by the Basic Documents, 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 and the Note Purchaser, with the Trustee's officers and employees
responsible for carrying out the Trustee's duties with respect to the Notes and
the Note Purchaser.
27
(h) The Trustee shall, and hereby agrees that it will, perform all of
the obligations and duties required of it under the other Basic Documents.
(i) 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.
(j) 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.
Subject to Sections 6.1 and this Section 6.2, the Trustee shall be
protected and shall incur no liability to the Issuer, the Note Purchaser or the
Noteholders in relying upon the accuracy, acting in reliance upon the contents,
and assuming the genuineness of any notice, demand, certificate, signature,
instrument or other document reasonably believed by the Trustee to be genuine
and to have been duly executed by the appropriate signatory, and, except to the
extent the Trustee has actual knowledge to the contrary or as required pursuant
to Section 6.1 the Trustee shall not be required to make any independent
investigation with respect thereto.
(a) Before the Trustee acts or refrains from acting, it may require an
Officer's Certificate. Subject to Section 6.1(c), the Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on the
Officer's Certificate.
(b) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian or nominee, and the Trustee shall not be responsible
for any misconduct or negligence on the part of, or for the supervision of the
Servicer, the Backup Servicer or any other such agent, attorney, custodian or
nominee appointed with due care by it hereunder.
(c) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute
willful misconduct, negligence or bad faith.
(d) The Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the 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.
(e) The Trustee shall be under no obligation to institute, conduct or
defend any litigation under this Indenture or in relation to this Indenture, at
the request, order or direction of the Note Purchaser or the Noteholders,
pursuant to the provisions of this Indenture, unless the Note Purchaser and/or
the Noteholders, as applicable, shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that may be
incurred therein or thereby; provided, however, that the Trustee shall, upon the
occurrence of an Event of Default (that has not been cured), exercise the rights
and powers vested in it by this Indenture in accordance with Section 6.1.
(f) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other paper
or document, unless requested in writing to do so by the Note Purchaser or the
Majority Noteholders; provided, however, that if the payment within a reasonable
time to the Trustee of the costs, expenses or liabilities likely to be incurred
28
by it in the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the terms of
this Indenture or the Sale and Servicing Agreement, the Trustee may require
reasonable indemnity against such cost, expense or liability as a condition to
so proceeding; the reasonable expense of every such examination shall be paid by
the Person making such request, or, if paid by the Trustee, shall be reimbursed
by the Person making such request upon demand.
Section 6.3 INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of a Note and may otherwise deal with the Issuer or its
Affiliates with the same rights it would have if it were not the Trustee. Any
Note Paying Agent, Note Registrar, co-registrar or co-paying agent may do the
same with like rights. However, the Trustee must comply with Section 6.11.
Section 6.4 TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation as
to the validity or adequacy of this Indenture, the Trust Estate, the Collateral
or the Notes, it shall not be accountable for the Issuer's use of the proceeds
from the Notes, and it shall not be responsible for any statement of the Issuer
in the Indenture or in any document issued in connection with the sale of the
Notes or in the Notes other than the Trustee's certificate of authentication.
Section 6.5 NOTICE OF DEFAULTS.
If an Event of Default occurs and is continuing and if it is either
known by, or written notice of the existence thereof has been delivered to, a
Responsible Officer of the Trustee, the Trustee shall mail to the Note Purchaser
and each Noteholder a notice of the Default within three (3) Business Days after
such knowledge or notice occurs. Except in the case of a Default in payment of
principal of or interest on the Notes (including payments pursuant to the
mandatory redemption provisions of the Notes, if any), the Trustee may withhold
the notice if and so long as a committee of its Responsible Officers in good
faith determines that withholding the notice is in the interests of the
Noteholders.
Section 6.6 REPORTS BY TRUSTEE TO THE NOTEHOLDERS.
The Trustee shall on behalf of the Issuer deliver to the Noteholders
and the Note Purchaser such information as may be reasonably required to enable
the Noteholders and the Note Purchaser to prepare their respective Federal and
State income tax returns.
Section 6.7 COMPENSATION AND INDEMNITY.
(a) Pursuant to Section 5.7 of the Sale and Servicing Agreement, the
Issuer shall pay to the Trustee from time to time compensation for its services.
The Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Issuer shall reimburse the Trustee, pursuant
and subject to Section 5.7 of the Sale and Servicing Agreement, for all
reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, in addition to the compensation for its services. Such expenses
shall include the reasonable compensation and expenses, disbursements and
advances of the Trustee's agents, counsel, accountants and experts. The Issuer
shall or shall cause the Servicer to indemnify the Trustee against any and all
loss, liability or expense incurred by the Trustee without willful misfeasance,
negligence or bad faith on its part arising out of or in connection with the
acceptance or the administration of this trust and the performance of its duties
hereunder, including the costs and expenses of defending itself against any
claim or liability in connection therewith. The Trustee shall notify the Issuer
and the Servicer promptly of any claim for which it may seek indemnity. Failure
29
by the Trustee to so notify the Issuer and the Servicer shall not relieve the
Issuer of its obligations hereunder or the Servicer of its obligations under
Article XII of the Sale and Servicing Agreement. The Trustee may have separate
counsel and the Issuer shall or shall cause the Servicer to pay the reasonable
fees and expenses of such counsel. Neither the Issuer nor the Servicer need
reimburse any expense or indemnify against any loss, liability or expense
incurred by the Trustee through the Trustee's own willful misconduct, negligence
or bad faith.
(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 other Basic Documents, the recourse of
the Trustee hereunder and under the other Basic Documents specifically shall not
be recourse to the assets of the Noteholders or the Note Purchaser.
Section 6.8 REPLACEMENT OF TRUSTEE.
The Issuer may, with the consent of the Note Purchaser and the Majority
Noteholders, and at the request of the Note Purchaser and the Majority
Noteholders shall, remove the Trustee if:
(i) the Trustee fails to comply with Section 6.11 or the
Trustee fails to perform any other material covenant or agreement of
the Trustee set forth in the Basic Documents to which the Trustee is a
party and such failure continues for 45 days after written notice of
such failure from the Note Purchaser or a Noteholder;
(ii) an Insolvency Event with respect to the Trustee occurs;
or
(iii) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Issuer shall promptly appoint a successor
Trustee acceptable to the Note Purchaser and the Majority Noteholders. If the
Issuer fails to appoint such a successor Trustee, the Note Purchaser and the
Majority Noteholders may appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee, the Note Purchaser, the Noteholders 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. 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 Purchaser or the Majority Noteholders 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.
30
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 Noteholders and the Note Purchaser prior written notice of any
such transaction.
(a) In case at the time such successor or successors to the Trustee by
merger, conversion or consolidation shall succeed to the trusts created by this
Indenture the 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 the Notes so authenticated; and in case at that
time the Notes shall not have been authenticated, any successor to the Trustee
may authenticate the 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.
Notwithstanding any other provisions of this Indenture, at any time,
for the purpose of meeting any legal requirement of any jurisdiction in which
any part of the Trust Estate may at the time be located, the Trustee with the
consent of the Note Purchaser and the Majority Noteholders shall have the power
and may execute and deliver all instruments to appoint one or more Persons to
act as a co-trustee or co-trustees, or separate trustee or separate trustees, of
all or any part of the Trust Estate, and to vest in such Person or Persons, in
such capacity and for the benefit of the Noteholders and the Note Purchaser,
such title to the Trust Estate, or any part thereof, and, subject to the other
provisions of this Section, such powers, duties, obligations, rights and trusts
as the Trustee may consider necessary or desirable. No co-trustee or separate
trustee hereunder shall be required to meet the terms of eligibility as a
successor trustee under Section 6.11 and no notice to the Note Purchaser or the
Noteholders of the appointment of any co-trustee or separate trustee shall be
required under Section 6.8 hereof.
(a) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
the Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust or any portion thereof in
any such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the
Trustee;
(ii) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder, including acts
or omissions of predecessor or successor trustees; and
(iii) the Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
(b) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Indenture and the conditions
of this Article VI. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
31
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.
(c) Any separate trustee or co-trustee may at any time constitute the
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Indenture on its behalf and in its name. If any separate trustee or co-trustee
shall die, dissolve, become insolvent, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall 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 shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of condition
and subject to supervision or examination by federal or state authorities; and
having a rating, both with respect to long-term and short-term unsecured
obligations, of not less than investment grade by the Rating Agencies. The
Trustee shall provide copies of such reports to the Note Purchaser and the
Noteholders upon request.
Section 6.12 [RESERVED].
Section 6.13 APPOINTMENT AND POWERS.
Wells Fargo Bank, National Association confirms its prior appointment
as Trustee, custodian and bailee with respect to the Collateral and its
acceptance of the obligations of the Trustee, custodian and bailee under the
Original Indenture (which obligations on and after the Restatement Effective
Date are superseded by the obligations described in this Indenture and are
hereby accepted by Wells Fargo Bank, National Association). Subject to the terms
and conditions hereof, Wells Fargo Bank, National Association is hereby further
appointed as Trustee, custodian and bailee with respect to the Collateral for
the benefit of the Note Purchaser, and Wells Fargo Bank, National Association
hereby accepts such appointment, and further agrees to continue to act as
Trustee, custodian and bailee with respect to the Collateral for the benefit of
the Noteholders, to maintain custody and possession of such Collateral (except
as otherwise provided hereunder) and to perform the other duties of the Trustee
for the benefit of the Noteholders and the Note Purchaser in accordance with the
provisions of this Indenture and the other Basic Documents. Each Noteholder, by
its acceptance of a Note, hereby authorizes the Trustee to take such action on
its behalf, and to exercise such rights, remedies, powers and privileges
hereunder, as such Noteholder 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 Note Purchaser or the Majority Noteholders 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 Noteholders or the Note Purchaser in
accordance with this Indenture. The Trustee shall not be required to take any
32
discretionary actions hereunder except at the written direction of the Note
Purchaser or the Majority Noteholders. The Trustee shall, and hereby agrees that
it will, perform all of the duties and obligations required of it under the
Basic Documents.
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, the Note Purchaser or the Noteholders 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 Note Purchaser or the Noteholders
except for negligence, bad faith or willful misconduct in carrying out its
duties to the Note Purchaser and the Noteholders. 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 Note Purchaser or the Noteholders unless it shall have
received reasonable security or indemnity satisfactory to the Trustee against
the costs, expenses and liabilities which might be incurred by it.
Section 6.16 [RESERVED].
Section 6.17 SUCCESSOR TRUSTEE.
(a) MERGER. Any Person into which the Trustee may be converted or
merged, or with which it may be consolidated, or to which it may sell or
transfer its trust business and assets as a whole or substantially as a whole,
or any Person resulting from any such conversion, merger, consolidation, sale or
transfer to which the Trustee is a party, shall (provided it is otherwise
qualified to serve as the Trustee hereunder) be and become a successor Trustee
hereunder and be vested with all of the title to and interest in the Collateral
and all of the trusts, powers, descriptions, immunities, privileges and other
matters and have all of the obligations as 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 Trustee for the benefit
of the Note Purchaser and the Noteholders 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 Purchaser or the
Majority Noteholders at any time, with or without cause, by an instrument or
concurrent instruments in writing delivered to the Trustee 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 Note Purchaser and the Noteholders of
an Opinion of Counsel to the effect described in Section 3.4.
33
(c) ACCEPTANCE BY SUCCESSOR. The Majority Noteholders and the Note
Purchaser 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, the Note
Purchaser, the Noteholders 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 the Majority Noteholders and the Note Purchaser 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 the Note Purchaser and the Majority
Noteholders is reasonably required by a successor Trustee to more fully and
certainly vest in such successor the estates, properties, rights, powers, duties
and obligations vested or intended to be vested hereunder in the Trustee, any
and all such written instruments shall at the request of the temporary or
permanent successor Trustee, be forthwith executed, acknowledged and delivered
by the Trustee or the Issuer, as the case may be. The designation of any
successor Trustee and the instrument or instruments removing any Trustee and
appointing a successor hereunder, together with all other instruments provided
for herein, shall be maintained with the records relating to the Collateral and,
to the extent required by applicable law, filed or recorded by the successor
Trustee in each place where such filing or recording is necessary to effect the
transfer of the Collateral to the successor Trustee or to protect or continue
the perfection of the security interests granted hereunder.
Section 6.18 [RESERVED].
Section 6.19 REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE.
The Trustee represents and warrants to the Issuer, the Note Purchaser
and the Majority Noteholders as follows:
(a) 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) 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) 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) 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.
34
The Trustee hereby expressly waives any and all rights of setoff that
the Trustee may otherwise at any time have under applicable law with respect to
any Pledged Account and agrees that amounts in the Pledged Accounts shall at all
times be held and applied solely in accordance with the provisions hereof.
Section 6.21 CONTROL BY THE NOTE PURCHASER AND THE MAJORITY
NOTEHOLDERS.
The Trustee shall comply with notices and instructions given by the
Issuer only if accompanied by the written consent of the Note Purchaser and the
Majority Noteholders, 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 Note Purchaser or the Majority Noteholders alone in
the place and stead of the Issuer.
ARTICLE VII
[RESERVED]
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 other Basic Documents. 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
other Basic Documents, 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.
Subject to the payment of its fees and expenses pursuant to Section
6.7, the Trustee may, and when required by the provisions of this Indenture
shall, execute instruments to release property from the lien of this Indenture,
in a manner and under circumstances that are not inconsistent with the
provisions of this Indenture. No party relying upon an instrument executed by
the Trustee as provided in this Article VIII shall be bound to ascertain the
Trustee's authority, inquire into the satisfaction of any conditions precedent
or see to the application of any moneys.
(a) The Trustee shall, at such time as there is no Note Outstanding,
all amounts due and owing to the Note Purchaser and the Noteholders under any of
the Basic Documents have been paid in full, all sums due the Trustee pursuant to
Section 6.7 have been paid and the term of the Commitment shall have expired,
release any remaining portion of the Trust Estate that secured the Notes and the
other obligations of the Issuer, the Purchaser and the Seller to the Note
Purchaser and the Noteholders pursuant to the Basic Documents from the lien of
this Indenture and release to the Issuer or any other Person entitled thereto
any funds then on deposit in the Pledged Accounts. The Trustee shall release
property from the lien of this Indenture pursuant to this Section 8.2(b) only
upon receipt of an Issuer Request accompanied by an Officer's Certificate, a
copy of each of which shall also be delivered to the Note Purchaser and the
Noteholders.
(b) OPINION OF COUNSEL. The Trustee shall receive at least seven days'
notice when requested by the Issuer to take any action pursuant to Section
8.2(a), accompanied by copies of any instruments involved, and the Trustee shall
also require as a condition to such action, an Opinion of Counsel in form and
substance satisfactory to the Trustee, stating the legal effect of any such
action, outlining the steps required to complete the same, and concluding that
35
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 Note Purchaser and/or the Noteholders in
contravention of the provisions of this Indenture or any of the other Basic
Documents; provided, however, that such Opinion of Counsel shall not be required
to express an opinion as to the fair value of the Trust Estate. Counsel
rendering any such opinion may rely, without independent investigation, on the
accuracy and validity of any certificate or other instrument delivered to the
Trustee in connection with any such action.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.1 SUPPLEMENTAL INDENTURES WITH CONSENT OF THE NOTE PURCHASER
AND THE MAJORITY NOTEHOLDERS.
(a) With the prior written consent of the Note Purchaser and the
Majority Noteholders, the Issuer and the Trustee, when authorized by an Issuer
Order, at any time and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any of the
following purposes:
(i) to correct or amplify the description of any property at
any time subject to the lien 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 Noteholders and the Note Purchaser, 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 Note Purchaser or the Noteholders; or
(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to the Notes
and to add to or change any of the provisions of this Indenture as
shall be necessary to facilitate the administration of the trusts
hereunder by more than one trustee, pursuant to the requirements of
Article VI.
The Trustee is hereby authorized to join in the execution of any such
supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained.
(b) The Issuer and the Trustee, when authorized by an Issuer Order,
may, also with the consent of the Note Purchaser and the Majority Noteholders,
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
36
Note Purchaser or the Noteholders under this Indenture; provided, however, that
such action shall not, as evidenced by an Opinion of Counsel, adversely affect
in any material respect the interests of the Note Purchaser or the Noteholders.
Section 9.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF THE NOTE PURCHASER
AND ALL OF THE NOTEHOLDERS.
The Issuer and the Trustee, when authorized by an Issuer Order, also
may, with the prior written consent of the Note Purchaser and the Majority
Noteholders, enter into an indenture or indentures supplemental hereto for any
purpose; provided, however, that, no such supplemental indenture shall, without
the prior written consent of the Note Purchaser and all of the Noteholders:
(i) change the date of payment of any installment of principal
of or interest on the Notes or any other amount owed by the Issuer
under the Basic Documents, or reduce the Percentage Interest thereof,
the interest rate thereon, change the provision of this Indenture
relating to the application of collections on, or the proceeds of the
sale of, the Trust Estate to payment of principal of or interest on the
Notes or any other amount owed by the Issuer under the Basic Documents,
or change any place of payment where, or the coin or currency in which,
the Notes or the interest thereon or any other amount owed by the
Issuer under the Basic Documents 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 or any other amount owed by the Issuer
under the Basic Documents on or after the respective due dates thereof;
(iii) reduce the Percentage Interest, the consent of the
Holders which is required for any such supplemental indenture, or
eliminate the requirement that the Note Purchaser consent thereto, or
the consent of the Holders of which or the Note Purchaser 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 Interest required to direct the
Trustee to direct the Issuer to sell or liquidate the Trust Estate or
eliminate the requirement that the Note Purchaser so direct pursuant to
Section 5.4;
(vi) modify any provision of this Section except to increase
any percentage specified herein or to provide that certain additional
provisions of this Indenture or the other Basic Documents cannot be
modified or waived without the consent of the Note Purchaser and the
Majority Noteholders;
(vii) modify any of the provisions of this Indenture in such
manner as to affect the calculation of the amount or timing of any
payment of (x) interest or principal due on the Notes on any Settlement
Date (including the calculation of any of the individual components of
such calculation) or to affect the rights of the Noteholders to the
benefit of any provisions for the mandatory redemption of the Notes
contained herein or (y) any amount due to the Note Purchaser from the
Issuer under the Basic Documents, or affect the rights of the Note
Purchaser under the Basic Documents; 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
Noteholders or the Note Purchaser of the security provided by the Lien
of this Indenture.
37
(b) Unless otherwise specified by the Note Purchaser, the Trustee may
determine whether or not the Notes would be affected by any supplemental
indenture and any such determination shall be conclusive upon the Note Purchaser
and the Noteholders, whether theretofore or thereafter authenticated and
delivered hereunder. The Trustee shall not be liable for any such determination
made in good faith.
(c) Unless otherwise specified by the Note Purchaser or the
Noteholders, it shall not be necessary for any Act of the Note Purchaser or the
Noteholders under this Section to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such Act shall approve the
substance thereof.
(d) Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to this Section, the Trustee shall mail to the
Note Purchaser and each Noteholder a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Trustee to mail
such notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any such supplemental indenture.
Section 9.3 EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or permitting the additional trusts created by, any
supplemental indenture permitted by this Article IX or the modifications thereby
of the trusts created by this Indenture, the Trustee shall be entitled to
receive, and subject to Sections 6.1 and 6.2, shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture. The Trustee
may, but shall not be obligated to, enter into any such supplemental indenture
that affects the Trustee's own rights, duties, liabilities or immunities under
this Indenture or otherwise.
Section 9.4 EFFECT OF SUPPLEMENTAL INDENTURE.
Upon the execution of any supplemental indenture pursuant to the
provisions hereof, this Indenture shall be and be deemed to be modified and
amended in accordance therewith, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under this Indenture of
the Trustee, the Issuer, the Note Purchaser and the Noteholders shall thereafter
be determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
ARTICLE X
REPAYMENT AND PREPAYMENT OF NOTES
Section 10.1 REPAYMENT OF THE NOTES; OPTIONAL PREPAYMENT OF THE NOTES.
If the Facility Termination Date is determined in accordance with
subsection (I) of the definition thereof, the outstanding principal balance of
the Notes and all accrued and unpaid interest thereon will be amortized and
shall be payable in full by the Final Scheduled Settlement Date. If the Facility
Termination Date is determined in accordance with subsection (II) of the
definition thereof, such Facility Termination Date will result in immediate
acceleration of the Notes pursuant to Section 5.2 hereof. If the Facility
Termination Date is determined in accordance with subsection (III) of the
definition thereof, the outstanding principal balance of the Notes and all
accrued and unpaid interest thereon will be amortized and shall be payable in
full by the third Settlement Date following the relevant anniversary of the
Original Closing Date. The Issuer may, at its option, prepay the Invested Amount
of the Notes, in whole or in part, at any time and without premium or penalty on
any Business Day (such day the "PREPAYMENT DATE") in accordance with Section
38
10.2; provided that no such prepayment may occur (I) unless and until all
amounts due and payable in respect of clauses (i) through (v) of Section 5.7(a)
of the Sale and Servicing Agreement have been paid in full and (II) if, after
giving effect to such prepayment and the release of any related Collateral, a
Borrowing Base Deficiency shall exist. Simultaneous with any such prepayment,
the Issuer shall pay all accrued and unpaid interest on the Invested Amount to
be prepaid and all other amounts then due and owing under the Basic Documents.
Upon the deposit of any prepayment and all such other amounts then due and owing
under the Basic Documents into the Collection Account, the Trustee shall release
the Collateral that is the subject of such prepayment from the lien of this
Indenture. In connection with such prepayment, the Trustee shall be entitled to
conclusively rely upon the direction of the Issuer to the Trustee (a form of
which is attached hereto as Exhibit E) to release such Collateral as may be
identified by the Issuer in writing and consented to in writing by the Note
Purchaser as being the subject of such prepayment upon the conditions specified
in such writing. All prepayments in part shall be in principal amounts of at
least $100,000.
Section 10.2 NOTICE OF PREPAYMENT.
Notice of the prepayment of the Notes shall be given, upon the
direction of the Issuer, by the Trustee by facsimile transmission, courier or
first class mail, postage prepaid, mailed, faxed or couriered not less than five
(5) days prior to the related Prepayment Date, to the Note Purchaser and each
Noteholder. All notices of prepayment shall state (i) the Prepayment Date, (ii)
the Invested Amount to be prepaid, (iii) the estimated accrued and unpaid
interest on the Invested Amount to be prepaid, and (iv) any other amounts due
and owing to the Note Purchaser under the Basic Documents. Failure to give
notice of prepayment, or any defect therein, to a Noteholder or the Note
Purchaser shall not impair or affect the validity of such prepayment.
Section 10.3 GENERAL PROCEDURES.
The Invested Amount of the Notes and amounts due to the Note Purchaser
by the Issuer under the Basic Documents shall not be considered reduced by any
allocation, setting aside or distribution of any portion of the Available Funds
unless such Available Funds shall have been actually paid to the Noteholders or
the Note Purchaser, as applicable. The Invested Amount of the Notes and amounts
due to the Note Purchaser by the Issuer under the Basic Documents shall not be
considered repaid by any distribution of any portion of the Available Funds if
at any time such distribution is rescinded or must otherwise be returned for any
reason, in which event, if such amount has been returned by the Noteholders or
the Note Purchaser, as applicable, such principal, interest and/or other amount
shall be reinstated in an amount equal to the amount returned by the Noteholders
or the Note Purchaser, as applicable. No provision of this Indenture shall
require the payment or permit the collection of interest in excess of the
maximum permitted by applicable law.
ARTICLE XI
MISCELLANEOUS
Section 11.1 COMPLIANCE CERTIFICATES AND OPINIONS, ETC.
Except as set forth herein, upon any application or request by the
Issuer to the Trustee to take any action under any provision of this Indenture
(other than any request hereunder by the Issuer for an Advance), the Issuer
shall furnish to the Trustee, with a copy of each to the Note Purchaser and the
Noteholders, (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:
39
(i) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory,
such signatory has made such examination or investigation as is
necessary to enable such signatory to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
signatory such condition or covenant has been complied with.
(v) Other than with respect to Dollars, prior to the deposit
of any Collateral or other property or securities with the Trustee that
is to be made the basis for the release of any property or securities
subject to the lien of this Indenture, the Issuer shall, in addition to
any obligation imposed in Section 11.1(a) or elsewhere in this
Indenture, furnish to the Trustee, with a copy thereof to the Note
Purchaser and the Noteholders, 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.
(b) Other than with respect to the release of any Purchased Receivables
or Liquidated Receivables or the release, if any, of any Receivables upon a
mandatory or partial prepayment of the Notes and other amounts due to the Note
Purchaser from the Issuer under the Basic Documents pursuant to Section 10.1,
whenever any property or securities are to be released from the lien of this
Indenture, the Issuer shall also furnish, prior to or contemporaneous with such
release, to the Trustee, with a copy thereof to the Note Purchaser and the
Noteholders, an Officer's Certificate certifying or stating the opinion of each
person signing such certificate as to the fair value (such fair value to be as
of a date 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.
(c) Notwithstanding Section 2.10 or any provision of this Section, the
Issuer may (A) collect, liquidate, sell or otherwise dispose of Receivables as
and to the extent permitted or required by the Basic Documents and (B) make cash
payments out of the Pledged Accounts as and to the extent permitted or required
by the Basic Documents.
Section 11.2 FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
(a) Any certificate or opinion of an Authorized Officer of the Issuer
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his or her certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Servicer, the Seller, the Purchaser or the Issuer, stating that the
40
information with respect to such factual matters is in the possession of the
Servicer, the Seller, the Purchaser or the Issuer, unless such counsel knows, or
in the exercise of reasonable care should know, that the certificate or opinion
or representations with respect to such matters are erroneous.
(b) Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
(c) Whenever in this Indenture, in connection with any application or
certificate or report to the Trustee, it is provided that the Issuer shall
deliver any document as a condition of the granting of such application, or as
evidence of the Issuer's compliance with any term hereof, it is intended that
the truth and accuracy, at the time of the granting of such application or at
the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Trustee's right to rely upon the truth and accuracy of
any statement or opinion contained in any such document as provided in Article
VI.
Section 11.3 ACTS OF THE NOTEHOLDERS OR THE NOTE PURCHASER.
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by a Noteholder
or the Note Purchaser may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Noteholder or the Note
Purchaser 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 or the Note Purchaser signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 6.1) conclusive in favor of the Trustee and the Issuer,
if made in the manner provided in this Section.
(a) The fact and date of the execution by any person of any such
instrument or writing may be proved in any customary manner of the Trustee.
(b) The ownership of the Notes shall be proved by the Note Register.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other action by a Holder of a Note shall bind each Holder of such 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, THE NOTE PURCHASER AND
NOTEHOLDERS.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of the Noteholders or the Note Purchaser or other documents provided or
permitted by this Indenture to be made upon, given or furnished to or filed
with:
(i) the Trustee by the Note Purchaser, the Noteholders 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 of the Trustee at its Corporate Trust
Office;
(ii) the Issuer by the Trustee or by the Note Purchaser or the
Noteholders 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
41
duly given upon receipt by the Issuer at the Corporate Trust Office of
the Owner Trustee, with a copy to Consumer Portfolio Services, Inc.
16355 Laguna Canyon Road, Irvine, California 92618 Attention: Mark
Creatura, Esq. Confirmation: (888) 785-6691, Telecopy No. (949)
753-6897 or at such other address previously furnished in writing to
the Trustee by the Issuer. The Issuer shall promptly transmit any
notice received by it from the Noteholders or the Note Purchaser to the
Trustee;
(iii) the Note Purchaser shall be sufficient for any purpose
hereunder if in writing and delivered by overnight courier or mailed
certified mail, return receipt requested or personally delivered or
telexed or telecopied to the recipient as follows (or such other
address previously furnished in writing to the Trustee):
To the Note Purchaser:
UBS Real Estate Securities Inc.
1285 Avenue of the Americas, 11th Floor
New York, New York 10019
Attention: Prakash Wadhwani
Telephone: (212) 713-3983
Telecopy: (212) 713-7999; or
(iv) the Noteholders shall be sufficient for any purpose
hereunder if in writing and delivered by overnight courier or mailed
certified mail, return receipt requested to the recipient's contact
information in the Note Register.
The Note Purchaser may deliver to the Noteholders any notices, reports,
Servicer's Certificates or any other documentation delivered to the
Note Purchaser hereunder or under any Basic Document but is under no
obligation to so deliver such documentation and shall not be liable for
the content thereof.
Section 11.5 WAIVER.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice with respect
to itself only, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by the Note Purchaser or a
Noteholder shall be filed with the Trustee but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon such a
waiver.
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 the Note Purchaser or a Noteholder when such
notice is required to be given pursuant to any provision of this Indenture, then
any manner of giving such notice as shall be satisfactory to the Trustee shall
be deemed to be a sufficient giving of such notice.
Section 11.6 ALTERNATE PAYMENT AND NOTICE PROVISIONS.
Notwithstanding any provision of this Indenture or the Notes to the
contrary, the Issuer may enter into any agreement with a Holder of a Note or the
Note Purchaser providing for a method of payment, or notice by the Trustee or
the Note Paying Agent to such Holder or the Note Purchaser, 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.
42
Section 11.7 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 11.8 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.
Section 11.9 BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Notes, express or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, the Note Purchaser (which shall be a third-party beneficiary of this
Indenture) and its successors and assigns, 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.
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 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, this
Indenture or any other Basic Document) 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 11.12 GOVERNING LAW.
THIS INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER
THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
Section 11.13 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. Any signature page to
this Indenture containing a manual signature may be delivered by facsimile
transmission or other electronic communication device capable of transmitting or
creating a printable written record, and when so delivered shall have the effect
of delivery of an original manually signed signature page.
Section 11.14 RECORDING OF INDENTURE.
43
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) to the effect
that such recording is necessary either for the protection of the Noteholders,
the Note Purchaser or any other Person secured hereunder or for the enforcement
of any right or remedy granted to the Trustee under this Indenture.
Section 11.15 ISSUER OBLIGATION.
The obligations of the Issuer under this Indenture and the other Basic
Documents shall be full recourse obligations of the Issuer. Notwithstanding the
foregoing, no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer or the Trustee on the Notes, under this Indenture, any
other Basic Document or any certificate or other writing delivered in connection
herewith or therewith, against (i) the Trustee in its individual capacity (ii)
any owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Issuer or the
Trustee in its individual capacity, any holder of a beneficial interest in the
Issuer or the Trustee or of any successor or assign of the Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Trustee has no such obligations in its individual
capacity) and except that any such partner, owner or beneficiary shall be fully
liable, to the extent provided by applicable law, for any unpaid consideration
for stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity. Nothing contained in this Section shall limit or be deemed
to limit any obligations of the Issuer, the Purchaser, the Seller or the
Servicer hereunder or under any other Basic Document, as applicable, which
obligations are full recourse obligations of the Issuer, the Purchaser, the
Seller and the Servicer.
Section 11.16 NO PETITION.
The Trustee, by entering into this Indenture, hereby covenants and
agrees that it will not at any time institute against the Issuer, or join in any
institution against the Issuer of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any United
States Federal or state bankruptcy or similar law in connection with any
obligations relating to the Notes, this Indenture or any of the Basic Documents.
Section 11.17 INSPECTION.
The Issuer agrees that, on reasonable prior notice, it will permit any
representative of the Note Purchaser, a Noteholder or the Trustee, during the
Issuer's normal business hours, to examine all the books of account, records,
reports, and other papers of the Issuer, to make copies and extracts therefrom,
to cause such books to be audited by independent certified public accountants,
and to discuss the Issuer's affairs, finances and accounts with the Issuer's
officers, employees, and independent certified public accountants, all at such
reasonable times and as often as may be reasonably requested. Each of the
Trustee, the Note Purchaser and the Noteholders shall and shall cause their
respective 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 11.18 ENTIRE AGREEMENT.
This Agreement, together with the other Basic Documents, including the
exhibits and schedules thereto, contains a final and complete integration of all
prior expressions by the parties hereto with respect to the subject matter
hereof and shall constitute the entire agreement among the parties hereto with
respect to the subject matter hereof, superseding all previous oral statements
and other writings with respect thereto.
Section 11.19 NO NOVATION.
44
It is expressly understood and agreed by the parties hereto that the
amendment and restatement of this Indenture is in no way intended to and shall
not be deemed to constitute a novation or repayment of the outstanding Advances
and the other obligations and liabilities existing under the Original Basic
Documents and the security interest of the Trustee in the Collateral for the
benefit of the Noteholders and the Note Purchaser shall remain in full force and
effect after giving effect to the amendment and restatement of this Indenture
and such security interest is hereby reaffirmed by the Issuer.
Section 11.20 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND INDEMNITIES
UNDER ORIGINAL INDENTURE.
The representations, warranties and indemnity obligations of the Issuer
made in the Original Indenture and each other Basic Document prior to the
Restatement Effective Date shall survive the Restatement Effective Date and the
execution and delivery of this Agreement, and each such representation and
warranty so made is true and correct as of the date originally made and as of
the date hereof.
45
IN WITNESS WHEREOF, the Issuer, the Trustee, the Note Purchaser and the
Noteholder 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.
PAGE FUNDING LLC, as Issuer
By:__________________________________
Name:________________________________
Title:_______________________________
WELLS FARGO BANK, NATIONAL ASSOCIATION, as
Trustee
By:__________________________________
Name:________________________________
Title:_______________________________
UBS REAL ESTATE SECURITIES INC., as Note
Purchaser and Noteholder
By:__________________________________
Name:________________________________
Title:_______________________________
By:__________________________________
Name:________________________________
Title:_______________________________
46