EXHIBIT 4.3
INDENTURE
between
BAY VIEW 2003-LJ-1 OWNER TRUST
as Issuer
and
DEUTSCHE BANK TRUST COMPANY AMERICAS
as Indenture Trustee
Dated as of August 1, 2003
Indenture
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE .............................................. 2
SECTION 1.01 Definitions ...................................................................... 2
SECTION 1.02 Incorporation by Reference of Trust Indenture Act ................................ 15
SECTION 1.03 Rules of Construction ............................................................ 15
SECTION 1.04 Directions ....................................................................... 16
ARTICLE II THE NOTES .............................................................................. 16
SECTION 2.01 Form ............................................................................. 16
SECTION 2.02 Execution, Authentication and Delivery ........................................... 16
SECTION 2.03 Temporary Notes .................................................................. 17
SECTION 2.04 Registration; Registration of Transfer and Exchange .............................. 17
SECTION 2.05 Mutilated, Destroyed, Lost or Stolen Notes ....................................... 19
SECTION 2.06 Payment of Principal and Interest; Defaulted Interest ............................ 20
SECTION 2.07 Cancellation ..................................................................... 21
SECTION 2.08 Book-Entry Notes ................................................................. 21
SECTION 2.09 Notices to Clearing Agency ....................................................... 22
SECTION 2.10 Definitive Notes ................................................................. 22
SECTION 2.11 Release of Pledged Assets ........................................................ 23
SECTION 2.12 Tax Treatment .................................................................... 23
SECTION 2.13 ERISA ............................................................................ 23
SECTION 2.14 CUSIP Numbers .................................................................... 23
ARTICLE III COVENANTS ............................................................................. 24
SECTION 3.01 Payment of Principal and Interest ................................................ 24
SECTION 3.02 Maintenance of Office or Agency .................................................. 24
SECTION 3.03 Money for Payments to be Held in Trust ........................................... 24
SECTION 3.04 Existence ........................................................................ 26
SECTION 3.05 Protection of Trust Estate ........................................................ 26
SECTION 3.06 Opinions as to Pledged Assets .................................................... 27
SECTION 3.07 Performance of Obligations; Servicing of Receivables ............................. 27
SECTION 3.08 Negative Covenants ............................................................... 29
SECTION 3.09 Annual Statement as to Compliance ................................................ 29
SECTION 3.10 Issuer May Consolidate, etc. Only on Certain Conditions ......................... 30
SECTION 3.11 Successor Transferee ............................................................. 32
SECTION 3.12 No Other Business ................................................................ 32
SECTION 3.13 No Borrowing ..................................................................... 33
SECTION 3.14 Servicer's Obligations ........................................................... 33
SECTION 3.15 Guarantees, Loans, Advances and Other Liabilities ................................ 33
SECTION 3.16 Capital Expenditures ............................................................. 33
SECTION 3.17 Restricted Payments .............................................................. 33
i
Indenture
SECTION 3.18 Notice of Events of Default ...................................................... 33
SECTION 3.19 Further Instruments and Acts ..................................................... 34
SECTION 3.20 Compliance with Laws ............................................................. 34
SECTION 3.21 Amendments of Trust Agreement .................................................... 34
SECTION 3.22 Certain Representations, Warranties and Covenants Related to Receivables ......... 34
ARTICLE IV SATISFACTION AND DISCHARGE ............................................................. 34
SECTION 4.01 Satisfaction and Discharge of
Indenture .......................................... 34
SECTION 4.02 Application of Trust Money ....................................................... 36
SECTION 4.03 Repayment of Monies Held by Paying Agent ......................................... 36
ARTICLE V EVENTS OF DEFAULT; REMEDIES ............................................................. 36
SECTION 5.01 Events of Default ................................................................ 36
SECTION 5.02 Rights Upon Event of Default ..................................................... 38
SECTION 5.03 Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee ........ 40
SECTION 5.04 Remedies ......................................................................... 42
SECTION 5.05 Optional Preservation of the Receivables ......................................... 43
SECTION 5.06 Priorities ....................................................................... 43
SECTION 5.07 Limitation of Suits .............................................................. 44
SECTION 5.08 Unconditional Rights of Noteholders to Receive Principal and Interest ............ 44
SECTION 5.09 Restoration of Rights and Remedies ............................................... 44
SECTION 5.10 Rights and Remedies Cumulative ................................................... 45
SECTION 5.11 Delay or Omission Not a Waiver ................................................... 45
SECTION 5.12 Control by Controlling Party ..................................................... 45
SECTION 5.13 Waiver of Past Defaults .......................................................... 45
SECTION 5.14 Undertaking for Costs ............................................................ 46
SECTION 5.15 Waiver of Stay or Extension Laws ................................................. 46
SECTION 5.16 Action on Notes .................................................................. 46
SECTION 5.17 Performance and Enforcement of Certain Obligations ............................... 47
SECTION 5.18 Optional Deposits by the Insurer ................................................. 47
ARTICLE VI THE
INDENTURE TRUSTEE .................................................................. 48
SECTION 6.01 Duties of
Indenture Trustee ...................................................... 48
SECTION 6.02 Rights of
Indenture Trustee ...................................................... 50
SECTION 6.03 Individual Rights of Indenture Trustee ........................................... 51
SECTION 6.04 Indenture Trustee's Disclaimer ................................................... 52
SECTION 6.05 Notice of Defaults ............................................................... 52
SECTION 6.06 Reports by Indenture Trustee to Holders .......................................... 52
SECTION 6.07 Compensation and Indemnity ....................................................... 52
SECTION 6.08 Replacement of Indenture Trustee ................................................. 53
SECTION 6.09 Successor Indenture Trustee by Merger ............................................ 54
SECTION 6.10 Appointment of Co-Indenture Trustee or Separate Indenture Trustee ................ 55
SECTION 6.11 Eligibility ...................................................................... 56
SECTION 6.12 Collateral Agent to Follow Indenture Trustee's Instructions ...................... 56
SECTION 6.13 Preferential Collection of Claims Against Issuer ................................. 57
ii
Indenture
SECTION 6.14 Representations and Warranties of Indenture Trustee .............................. 57
SECTION 6.15 Disqualification of the Indenture Trustee ........................................ 57
SECTION 6.16 Waiver of Setoffs ................................................................ 57
SECTION 6.17 Control by the Controlling Party ................................................. 57
ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS ........................................................ 57
SECTION 7.01 Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders ........... 57
SECTION 7.02 Preservation of Information; Communications to Noteholders ....................... 58
SECTION 7.03 Reports by Issuer ................................................................ 58
SECTION 7.04 Reports by Indenture Trustee ..................................................... 59
ARTICLE VIII DISTRIBUTIONS; STATEMENTS TO THE NOTEHOLDERS ......................................... 59
SECTION 8.01 Lock-Box Account ................................................................. 59
SECTION 8.02 Collection Account ............................................................... 59
SECTION 8.03 Collections ...................................................................... 59
SECTION 8.04 Purchase Amounts ................................................................. 60
SECTION 8.05 Distributions to Parties ......................................................... 60
SECTION 8.06 Servicer Advances ................................................................ 63
SECTION 8.07 Payahead Account ................................................................. 63
SECTION 8.08 [reserved] ....................................................................... 64
SECTION 8.09 Release of Pledged Assets ........................................................ 64
SECTION 8.10 Opinion of Counsel ............................................................... 64
SECTION 8.11 Calculation of Notional Principal Amount ......................................... 65
ARTICLE IX CREDIT ENHANCEMENT ..................................................................... 65
SECTION 9.01 Subordination .................................................................... 65
SECTION 9.02 Spread Account ................................................................... 65
SECTION 9.03 Policy ........................................................................... 66
SECTION 9.04 Surrender of the Policy .......................................................... 68
ARTICLE X SUPPLEMENTAL INDENTURES ................................................................. 69
SECTION 10.01 Supplemental Indentures Without Consent of Noteholders ........................... 69
SECTION 10.02 Supplemental Indentures With Consent of Noteholders .............................. 70
SECTION 10.03 Execution of Supplemental Indentures ............................................. 71
SECTION 10.04 Effect of Supplemental Indenture ................................................. 71
SECTION 10.05 Conformity with Trust Indenture Act .............................................. 72
SECTION 10.06 Reference in Notes to Supplemental Indentures .................................... 72
ARTICLE XI REDEMPTION OF NOTES .................................................................... 72
SECTION 11.01 Redemption ....................................................................... 72
SECTION 11.02 Form of Redemption Notice ........................................................ 72
SECTION 11.03 Notes Payable on Redemption Date ................................................. 73
ARTICLE XII MISCELLANEOUS ......................................................................... 73
SECTION 12.01 Compliance Certificates and Opinions, etc. ....................................... 73
SECTION 12.02 Form of Documents Delivered to Indenture Trustee ................................. 75
SECTION 12.03 Acts of Noteholders .............................................................. 75
iii
Indenture
SECTION 12.04 Notices, etc., to Indenture Trustee, Issuer, Insurer and Rating Agencies ......... 76
SECTION 12.05 Notices to Noteholders; Waiver ................................................... 77
SECTION 12.06 Alternate Payment and Notice Provisions .......................................... 78
SECTION 12.07 Conflict With Trust Indenture Act ................................................ 78
SECTION 12.08 Effect of Headings and Table of Contents ......................................... 78
SECTION 12.09 Successors and Assigns ........................................................... 78
SECTION 12.10 Separability ..................................................................... 79
SECTION 12.11 Benefits of Indenture ............................................................ 79
SECTION 12.12 Legal Holidays ................................................................... 79
SECTION 12.13 Governing Law .................................................................... 79
SECTION 12.14 Counterparts ..................................................................... 79
SECTION 12.15 Recording of Indenture ........................................................... 79
SECTION 12.16 Trust Obligation ................................................................. 79
SECTION 12.17 No Petition ...................................................................... 80
SECTION 12.18 Inspection ....................................................................... 80
SECTION 12.19 Limitation of Liability of Owner Trustee ......................................... 80
SECTION 12.20 Certain Matters Regarding the Insurer ............................................ 80
SECTION 12.21 No Legal Title in Holders ........................................................ 81
SECTION 12.22 Effect of Termination Date ....................................................... 81
SECTION 12.23 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certifications .................................................... 81
EXHIBITS
Schedule A Form of Depository Agreement
Exhibit A-1 Form of Class A-1 Note
Exhibit A-2 Form of Class A-2 Note
Exhibit A-3 Form of Class A-3 Note
Exhibit A-4 Form of Class A-4 Note
Exhibit A-5 Form of Class I Note
Schedule B Planned Notional Principal Amount Schedule
Cross Reference Table
Trust Indenture Indenture
Act Section Section
310(a) 6.11
310(b) 6.11
310(c) N/A
311(a) 6.13
311(b) 6.13
311(c) N/A
312(a) N/A
312(b) 7.02
312(c) 7.02
313(a) 7.04
313(b) 7.04
313(c) 7.03
iv
Indenture
Trust Indenture Indenture
Act Section Section
314(a) 7.03
314(b) 3.06
314(c) 2.11, 8.09, 12.01
314(d) 2.11, 8.09, 12.01
314(e) 13.01
314(f) N/A
315(a) N/A
315(b) N/A
315(c) N/A
315(d) N/A
315(e) N/A
316(a) N/A
316(b) N/A
316(c) 12.03
317(a) N/A
317(b) N/A
318(a) N/A
v
Indenture
This INDENTURE, dated as of August 1, 2003 is entered into between BAY
VIEW 2003-LJ-1 OWNER TRUST, a Delaware statutory trust, as issuer (the
"Issuer"), and DEUTSCHE BANK TRUST COMPANY AMERICAS, a
New York banking
corporation, as indenture trustee (the "Indenture Trustee").
Each party agrees as follows for the benefit of the other parties and
for the benefit of the Noteholders and the Insurer:
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee on the Closing Date,
on behalf of and for the benefit of the Noteholders and the Insurer without
recourse, all of the Issuer's right, title and interest in, to and under, (i)
the Receivables listed on Schedule A to the Trust Agreement, (ii) the security
interests in the Financed Vehicles or in any other property granted by Obligors
pursuant to the Receivables, (iii) any proceeds from claims and other amounts
relating to Insurance Policies and other items financed under the Receivables or
otherwise covering an Obligor or a Financed Vehicle, (iv) any Liquidation
Proceeds, (v) all property (including the right to receive future Liquidation
Proceeds) that secures a Receivable and that has been or may be acquired
pursuant to the liquidation of the Receivable, (vi) the interest of the Issuer
in any proceeds from recourse to Dealers relating to the Receivables, (vii) all
documents contained in the Receivable Files relating to the Receivables, (viii)
all monies paid on the Receivables, and all monies due thereon after the Cut-off
Date, (ix) the rights of the Transferor pursuant to the Purchase Agreement and
the rights of the Issuer pursuant to the Trust Agreement and the Transfer and
Contribution Agreement, including without limitation, a direct right to cause
BVAC to purchase Receivables from the Transferor upon the occurrence of a breach
of any of the representations and warranties contained in Section 3.02(b) of the
Purchase Agreement or the failure of BVAC to timely comply with its obligations
pursuant to Section 5.06 of the Purchase Agreement and (x) all proceeds
(including, without limitation, "proceeds" as defined in the UCC of the
jurisdiction the law of which governs the perfection of the interest in such
Receivables and such other property so transferred) of any of the foregoing.
Such property described in the preceding sentence, together with the following
other property (a) any and all other right, title and interest, including any
beneficial interest the Issuer may have in the Collection Account, the Payahead
Account, the Reserve Account and the Lock-Box Account (to the extent such
amounts and property in the Lock-Box Account relate to the Receivables), (b) the
funds deposited in and financial assets credited to and from time to time on
deposit in such accounts (to the extent such amounts and property in the
Lock-Box Account relate to the Receivables), and all Eligible Investments and
other securities, instruments and other investments purchased from such funds,
shall hereinafter be referred to as the "Pledged Assets" all of which the Issuer
hereby Grants to the Indenture Trustee on the Closing Date, on behalf of and for
the benefit of the Noteholders and the Insurer without recourse. The Issuer does
not convey to the Indenture Trustee, and the Pledged Assets do not include, any
interest in any contracts with Dealers related to any "dealer reserve" or any
rights to the recapture of any dealer reserve with respect to such Receivables.
The foregoing Grant is made in trust to secure the payment of principal
of and interest on, and any other amounts owing in respect of, the Notes,
equally and ratably without prejudice, priority or distinction (except as
provided herein with respect to the subordination of the Class I
1
Indenture
Notes), and to secure compliance with the provisions of this Indenture and the
Insurance Agreement, all as provided in this Indenture and the Insurance
Agreement.
The Indenture Trustee, as Indenture Trustee on behalf of the
Noteholders and the Insurer, acknowledges such Grant, accepts the trust under
this Indenture in accordance with the provisions of this Indenture and agrees to
perform its duties required in this Indenture to the best of its ability to the
end that the interests of the Noteholders and the Insurer may be adequately and
effectively protected.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 DEFINITIONS.
(a) Except as otherwise specified herein or as the context may
otherwise require, (i) capitalized terms that are used herein that are
not otherwise defined herein shall have the meanings assigned to them
in the Trust Agreement (as defined below) and (ii) the following terms
have the respective meanings set forth below for all purposes of this
Indenture.
"Act" shall have the meaning specified in Section 12.03(a).
"Authorized Officer" means, with respect to the Issuer, the Owner
Trustee the Servicer and the Spread Account Depositor, any officer of the
Issuer, the Owner Trustee, the Servicer or the Spread Account Depositor, as
applicable, or agent acting pursuant to a power of attorney, with respect to the
Back-up Servicer, any officer or agent of the Back-up Servicer, with respect to
the Standby Servicer, any officer or agent of the Standby Servicer, in each case
who is identified on the list of Authorized Officers delivered to the Indenture
Trustee on the Closing Date (as such list may be modified or supplemented from
time to time thereafter) and, so long as the Administration Agreement is in
effect, any Vice President or more senior officer of the Administrator who is
authorized to act for the Administrator in matters relating to the Issuer and to
be acted upon by the Administrator pursuant to the Administration Agreement and
who is identified on a list of Authorized Officers delivered by the
Administrator to the Indenture Trustee on the Closing Date (as such list may be
modified or supplemented from time to time thereafter).
"Book-Entry Notes" means a beneficial interest in the Notes, ownership
and transfers of which shall be made through book entries by a Clearing Agency
as described in Section 2.08.
"BVAC" means Bay View Acceptance Corporation, a Nevada corporation, and
its successors.
"Certificateholders" mean the owners or holders of the Certificates
pursuant to the Trust Agreement.
"Class" means all Notes whose form is identical except for variation in
denomination, principal amount or owner.
2
Indenture
"Class A Monthly Interest" means, for any Payment Date, the sum of
Class A-1 Monthly Interest, Class A-2 Monthly Interest, Class A-3 Monthly
Interest and Class A-4 Monthly Interest.
"Class A Monthly Principal" means, for any Payment Date, the sum of
Class A-1 Monthly Principal, Class A-2 Monthly Principal, Class A-3 Monthly
Principal and Class A-4 Monthly Principal.
"Class A Note" means a Class A-1 Note, a Class A-2 Note, a Class A-3
Note or a Class A-4 Note.
"Class A Note Balance" means, for any date of determination, the
aggregate of the Class A-1 Note Balance, Class A-2 Note Balance, Class A-3 Note
Balance and Class A-4 Note Balance for such date of determination.
"Class A Noteholder" means a Class A-1 Noteholder, a Class A-2
Noteholder, a Class A-3 Noteholder or a Class A-4 Noteholder.
"Class A-l Interest Rate" means 1.135% per annum.
"Class A-l Monthly Interest" means, (i) for the first Payment Date, the
product of (x) one-three hundred sixtieth (1/360th) of the Class A-l Interest
Rate, (y) the actual number of days from and including the Closing Date through
and including the day before the first Payment Date and (z) the Initial Class
A-l Note Balance and (ii) for any subsequent Payment Date, the product of (x)
one-three hundred sixtieth (1/360th) of the Class A-l Interest Rate, the (y)
actual number of days from and including the previous Payment Date through and
including the day before the related Payment Date and (z) the Class A-l Note
Balance as of the immediately preceding Payment Date (after giving effect to any
payment of Monthly Principal made on such immediately preceding Payment Date).
"Class A-1 Monthly Principal" means that portion of Monthly Principal
to be paid to Class A-1 Noteholders on each Payment Date in accordance with
Section 8.05.
"Class A-l Note" means a promissory note executed on behalf of the
Trust and authenticated by the Indenture Trustee substantially in the form
attached hereto as Exhibit A-l.
"Class A-l Note Balance" means, as of any date of determination, the
Initial Class A-l Note Balance minus all payments of Monthly Principal actually
distributed to Class A-l Noteholders as of such date of determination.
"Class A-1 Noteholder" means the Person in whose name the respective
Class A-1 Note shall be registered in the Note Register, except that, solely for
the purposes of giving any consent, waiver, request, or demand pursuant to this
Indenture, the interest evidenced by any Class A-1 Note registered in the name
of the Issuer, the Transferor, the Servicer or BVAC, or any Person controlling,
controlled by, or under common control with the Issuer, the Transferor or the
Servicer, shall not be taken into account in determining whether the requisite
percentage necessary to effect any such consent, waiver, request, or demand
shall have been obtained.
"Class A-2 Interest Rate" means 1.710% per annum.
3
Indenture
"Class A-2 Monthly Interest" means for any Payment Date, the product of
(x) one-twelfth of the Class A-2 Interest Rate and (y) the Class A-2 Note
Balance as of the immediately preceding Payment Date (after giving effect to any
payment of Monthly Principal made on such immediately preceding Payment Date)
or, in the case of the first Payment Date, the Closing Date.
"Class A-2 Monthly Principal" means that portion of Monthly Principal
to be paid to Class A-2 Noteholders on each Payment Date in accordance with
Section 8.05.
"Class A-2 Note" means a promissory note executed on behalf of the
Trust and authenticated by the Indenture Trustee substantially in the form
attached hereto as Exhibit A-2.
"Class A-2 Note Balance" means, as of any date of determination, the
Initial Class A-2 Note Balance minus all payments of Monthly Principal actually
distributed to Class A-2 Noteholders as of such date of determination.
"Class A-2 Noteholder" means the Person in whose name the respective
Class A-2 Note shall be registered in the Note Register, except that, solely for
the purposes of giving any consent, waiver, request, or demand pursuant to this
Indenture, the interest evidenced by any Class A-2 Note registered in the name
of the Issuer, the Transferor, the Servicer or BVAC, or any Person controlling,
controlled by, or under common control with the Issuer, the Transferor or the
Servicer, shall not be taken into account in determining whether the requisite
percentage necessary to effect any such consent, waiver, request, or demand
shall have been obtained.
"Class A-3 Interest Rate" means 2.430% per annum.
"Class A-3 Monthly Interest" means, for any Payment Date, the product
of (x) one twelfth of the Class A-3 Interest Rate and (y) the Class A-3 Note
Balance as of the immediately preceding Payment Date (after giving effect to any
payment of Monthly Principal made on such immediately preceding Payment Date)
or, in the case of the first Payment Date, the Closing Date.
"Class A-3 Monthly Principal" means that portion of Monthly Principal
to be paid to Class A-3 Noteholders on each Payment Date in accordance with
Section 8.05.
"Class A-3 Note" means a promissory note executed on behalf of the
Trust and authenticated by the Indenture Trustee substantially in the form
attached hereto as Exhibit A-3.
"Class A-3 Note Balance" means, as of any date of determination, the
Initial Class A-3 Note Balance minus all payments of Monthly Principal actually
distributed to Class A-3 Noteholders as of such date of determination.
"Class A-3 Noteholder" means the Person in whose name the respective
Class A-3 Note shall be registered in the Note Register, except that, solely for
the purposes of giving any consent, waiver, request, or demand pursuant to this
Indenture, the interest evidenced by any Class A-3 Note registered in the name
of the Issuer, the Transferor, the Servicer or BVAC, or any Person controlling,
controlled by, or under common control with the Issuer, the Transferor or the
Servicer, shall not be taken into account in determining whether the requisite
percentage necessary to effect any such consent, waiver, request, or demand
shall have been obtained.
4
Indenture
"Class A-4 Interest Rate" means, for any payment Date, the lesser of
(i) 3.440% per annum and (ii) the Net WAC Cap calculated with respect to such
Payment Date.
"Class A-4 Monthly Interest" means, for any Payment Date, the product
of (x) one twelfth of the Class A-4 Interest Rate and (y) the Class A-4 Note
Balance as of the immediately preceding Payment Date (after giving effect to any
payment of Monthly Principal made on such immediately preceding Payment Date)
or, in the case of the first Payment Date, the Closing Date.
"Class A-4 Monthly Principal" means that portion of Monthly Principal
to be paid to Class A-4 Noteholders on each Payment Date in accordance with
Section 8.05.
"Class A-4 Note" means a promissory note executed on behalf of the
Trust and authenticated by the Indenture Trustee substantially in the form
attached hereto as Exhibit A-4.
"Class A-4 Note Balance" means, as of any date of determination, the
Initial Class A-4 Note Balance minus all payments of Monthly Principal actually
distributed to Class A-4 Noteholders as of such date of determination.
"Class A-4 Noteholder" means the Person in whose name the respective
Class A-4 Note shall be registered in the Note Register, except that, solely for
the purposes of giving any consent, waiver, request, or demand pursuant to this
Indenture, the interest evidenced by any Class A-4 Note registered in the name
of the Issuer, the Transferor, the Servicer or BVAC, or any Person controlling,
controlled by, or under common control with the Issuer, the Transferor or the
Servicer, shall not be taken into account in determining whether the requisite
percentage necessary to effect any such consent, waiver, request, or demand
shall have been obtained.
"Class I Final Scheduled Payment Date" means November 25, 2006.
"Class I Monthly Interest" means (i) for the first Payment Date, the
product of (x) one-twelfth of the Class I Note Rate multiplied by (y) the
Original Notional Principal Amount, and (ii) for any subsequent Payment Date,
one-twelfth of the product of (x) the Class I Note Rate and (y) the Notional
Principal Amount as of the immediately preceding Payment Date (after giving
effect to any reduction of the Notional Principal Amount due to allocations of
principal on such preceding Payment Date); provided, however, that after the
Class I Final Scheduled Payment Date, the Class I Monthly Interest shall be
zero; provided, further, that in the event the Notes are accelerated pursuant to
Section 5.02(a) following an Event of Default, the Class I Monthly Interest for
any remaining Payment Date will be due to the Class I Noteholders based on the
Planned Notional Principal Amount for that Payment Date as set forth in the
Planned Notional Principal Amount Schedule.
"Class I Note" means a promissory note executed on behalf of the Trust
and authenticated by the Indenture Trustee substantially in the form attached
hereto as Exhibit A-5.
"Class I Noteholder" means the Person in whose name the respective
Class I Note shall be registered in the Note Register, except that, solely for
the purposes of giving any consent, waiver, request, or demand pursuant to this
Indenture, the interest evidenced by any Class I Note registered in the name of
the Issuer, the Transferor, the Servicer or BVAC, or any Person controlling,
controlled by, or under common control with the Issuer, the Transferor or the
5
Indenture
Servicer, shall not be taken into account in determining whether the requisite
percentage necessary to effect any such consent, waiver, request, or demand
shall have been obtained.
"Class I Note Rate" means 1.450% per annum.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral Agent" means Deutsche Bank Trust Company Americas, in its
capacity as collateral agent under the Spread Account Agreement.
"Companion Component" shall have the meaning specified in Section 8.11.
"Controlling Party" means the Insurer, so long as no Insurer Default
shall have occurred and be continuing and the Insurance Agreement has not
terminated, and the Indenture Trustee, at the direction of the Majority
Noteholders, for so long as an Insurer Default shall have occurred and be
continuing or if the Insurance Agreement has terminated.
"Corporate Trust Office" means the corporate trust office of the
Indenture Trustee, which at time of execution of this Indenture is ▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ NYC 60-2606, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust and
Agency Services or at such other address as the Indenture Trustee may designate
from time to time by notice the Noteholders, the Servicer, the Back-up Servicer,
the Standby Servicer, the Insurer and the Issuer, or the principal corporate
trust office of any successor Indenture Trustee (the address of which the
successor Indenture Trustee will notify the Noteholders, the Insurer and the
Issuer). With respect only to the surrender of Notes for registration of
transfer or exchange or payment of the final distribution, "Corporate Trust
Office" means, on the date hereof, the office of the Indenture Trustee or its
agent which is DTC Transfer Agent Services, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
"Cram Down Loss" means, for any Receivable (other than a Charged-Off
Receivable), if a court of appropriate jurisdiction in an insolvency proceeding
issues a ruling that reduces the amount owed on the Receivable or otherwise
modifies or restructures the scheduled payments to be made on the Receivable, an
amount equal to: (1) the Principal Balance of the Receivable immediately prior
to the order minus the Principal Balance of the Receivable as so reduced,
modified or restructured; plus (2) if the court issued an order reducing the
effective interest rate on the Receivable, the excess of (a) the net present
value (using a discount rate equal to the adjusted APR on such receivable) of
the Scheduled Receivable Payments as so modified or restructured over (b) the
net present value (using a discount rate equal to the original APR on such
receivable) of the Scheduled Receivable Payments as so modified or restructured.
6
Indenture
"Default" means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.
"Definitive Notes" shall have the meaning specified in Section 2.08.
"Depository Agreement" means the agreement dated the Closing Date among
the Issuer, the Indenture Trustee and DTC, as the initial Clearing Agency,
relating to the Notes, substantially in the form attached hereto as Schedule A.
"Determination Date" means, for each Collection Period, the fifteenth
calendar day prior to the related Payment Date, if the fifteenth day is not a
Business Day, the next following Business Day.
"Draw Date" means a date no later than the third Business Day (as
defined in the Policy) prior to each Payment Date.
"DTC" means The Depository Trust Company, a
New York corporation.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Event of Default" shall have the meaning specified in Section 5.01(a).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Executive Officer" means, with respect to any corporation or bank, the
Chief Executive Officer, Chief Operating Officer, Chief Financial Officer,
President, Executive Vice President, any Vice President, the Secretary or the
Treasurer of such corporation or bank; and with respect to any partnership, any
general partner thereof.
"Final Maturity Date" means August 25, 2004 with respect to the Class
A-l Notes, March 25, 2007 with respect to the Class A-2 Notes, July 25, 2008
with respect to the Class A-3 Notes and April 25, 2012 with respect to the Class
A-4 Notes.
"Grant" means mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create and ▇▇▇▇▇ ▇ ▇▇▇▇ upon and a
security interest in and right of set-off against, deposit, set over and confirm
pursuant to this Indenture. A Grant of the Pledged Assets or of any other
agreement or instrument shall include all rights, powers and options (but none
of the obligations) of the granting party thereunder, including the immediate
and continuing right to claim for, collect, receive and give receipt for
principal and interest payments in respect of the Pledged Assets and all other
monies payable thereunder, to give and receive notices and other communications,
to make waivers or other agreements, to exercise all rights and options, to
bring Proceedings in the name of the granting party or otherwise and generally
to do and receive anything that the granting party is or may be entitled to do
or receive thereunder or with respect thereto.
"Holder" means the Person in whose name a Note is registered on the
Note Register on the applicable Record Date.
7
Indenture
"Indebtedness" means, with respect to any Person at any time, (i)
indebtedness or liability of such Person for borrowed money whether or not
evidenced by bonds, debentures, notes or other instruments, or for the deferred
purchase price of property or services (including trade obligations); (ii)
obligations of such Person as lessee under leases which should have been or
should be, in accordance with generally accepted accounting principles, recorded
as capital leases; (iii) current liabilities of such Person in respect of
unfunded vested benefits under plans covered by Title IV of ERISA; (iv)
obligations issued for or liabilities incurred on the account of such Person;
(v) obligations or liabilities of such Person arising under acceptance
facilities; (vi) obligations of such Person under any guarantees, endorsements
(other than for collection or deposit in the ordinary course of business) and
other contingent obligations to purchase, to provide funds for payment, to
supply funds to invest in any Person or otherwise to assure a creditor against
loss; (vii) obligations of such Person secured by any lien on property or assets
of such Person, whether or not the obligations have been assumed by such Person;
provided that the amount of such indebtedness if not so assumed shall in no
event be deemed to be greater than the fair market value from time to time (as
reasonably determined in good faith by the Issuer) of the property subject to
such lien; or (viii) obligations of such Person under any interest rate or
currency exchange agreement.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Indenture Trustee" means Deutsche Bank Trust Company Americas, a
New
York banking corporation, as the Indenture Trustee under this Indenture and its
permitted successors and assigns.
"Independent" when used with respect to any specified Person, means
such a Person who (i) is in fact independent of the Issuer, the Transferor and
any of their respective Affiliates, (ii) is not a director, officer or employee
of the Issuer, the Transferor or any of their respective Affiliates, (iii) is
not a person related to any officer or director of the Issuer, the Transferor or
any of their respective Affiliates, (iv) is not a holder (directly or
indirectly) of more than 10% of any voting securities of the Issuer, the
Transferor or any of their respective Affiliates, and (v) is not connected with
the Issuer, the Transferor or any of their respective Affiliates as an officer,
employee, promoter, underwriter, trustee, partner, director or person performing
similar functions.
"Independent Certificate" means a certificate or opinion to be
delivered to the Indenture Trustee and the Insurer, so long as it is the
Controlling Party, under the circumstances described in, and otherwise complying
with, the applicable requirements of Section 12.01, made by an Independent
appraiser or other expert appointed by an Issuer Order and approved by the
Indenture Trustee, and, so long as it is the Controlling Party, the Insurer, in
the exercise of reasonable care, and such opinion or certificate shall state
that the signer has read the definition of Independent in this Indenture and
that the signer is Independent within the meaning thereof.
"Initial Class A-1 Note Balance" means $24,300,000.
"Initial Class A-2 Note Balance" means $62,525,000.
"Initial Class A-3 Note Balance" means $40,650,000.
8
Indenture
"Initial Class A-4 Note Balance" means $65,812,508.
"Insurance Premium" means the Premium as defined in the Premium Letter.
"Insurance Policies" means any physical damage, credit life and credit
accident and health insurance policies or certificates or any vendor's single
interest physical damage insurance policy relating to the Receivables, the
Financed Vehicles or the Obligors.
"Insurer Optional Deposit" has the meaning given to such term in
Section 5.18 of this Indenture.
"Issuer" means Bay View 2003-LJ-1 Owner Trust as the issuer of the
Notes under this Indenture and its permitted successors and assigns.
"Issuer Order" and "Issuer Request" means a written order or request
signed in the name of the Issuer by an Authorized Officer and delivered to the
Indenture Trustee (a copy of which shall be delivered to the Insurer).
"Majority Noteholders" means, as of any date of determination, the
Holders holding in the aggregate 66 2/3% or more of the outstanding Note Balance
as of such date.
"Monthly Interest" means, with respect to any Payment Date, the sum of
Class A Monthly Interest and Class I Monthly Interest.
"Monthly Principal" means for any Payment Date, the sum of the
following: (i) the portion of Available Funds relating to principal for the
Collection Period immediately preceding such Payment Date; (ii) an amount equal
to (x) the aggregate Principal Balances of all Receivables that became
Charged-off Receivables during the related Collection Period, in each case
immediately prior to the charge-off of such Receivable minus (y) any Liquidation
Proceeds allocable to principal with respect to such Charged-off Receivables
received during such Collection Period; (iii) the aggregate amount of Cram Down
Losses on the Receivables incurred during the Collection Period immediately
preceding such Payment Date; and (iv) any portion refunded to Obligors during
the related Collection Period of extended warranty protection plan costs, or of
physical damage, credit life, or disability insurance premiums included in the
Amount Financed.
"Net WAC Cap" means for any Payment Date, the per annum weighted
average APR for the Receivables based on their respective Principal Balances as
of the beginning of the related Collection Period (prior to giving effect to any
collections of principal made during such Collection Period or writedowns due to
losses) minus the sum of (x) the per annum rates at which the Insurance Premium
and Servicing Fee are calculated, (y) the quotient of (i) the product of (A) the
sum of the Standby Servicer Fee, Indenture Trustee Fee and Owner Trustee Fee due
to be paid on the related Payment Date and (B) twelve, divided by (ii) the
outstanding Principal Balance of the Receivables as of the beginning of the
Collection Period (prior to giving effect to any collections of principal during
such Collection Period or writedowns due to losses) and (z) the quotient of (i)
the product of the interest due to be paid on the related Payment Date on the
Class I Notes and twelve, divided by (ii) the outstanding Principal Balance of
the Receivables
9
Indenture
as of the beginning of the Collection Period (prior to giving effect to any
collections of principal during such Collection Period or writedowns due to
losses).
"Note" means a Class A-1 Note, a Class A-2 Note, a Class A-3 Note, a
Class A-4 Note or a Class I Note.
"Note Balance" means the Class A-1 Note Balance, the Class A-2 Note
Balance, the Class A-3 Note Balance or the Class A-4 Note Balance, depending
upon the context. When the term "Note Balances" is used herein with respect to
an issue relating to the consent of or voting of Noteholders, such term shall
refer only to the classes of Class A Notes then Outstanding such that the Class
A Noteholders will vote as a single class. The Class I Notes shall have no
voting rights.
"Noteholder" means any Holder of a Note.
"Note Owner" means, with respect to a Book-Entry Note, the Person who
is the beneficial owner of such Book-Entry Note, as reflected on the books of
the Clearing Agency, or on the books of a Person maintaining an account with
such Clearing Agency (directly as a Clearing Agency Participant or as an
indirect participant, in each case in accordance with the rules of such Clearing
Agency).
"Note Register" and "Note Registrar" have the respective meanings
specified in Section 2.04.
"Notional Principal Amount" means, as of any date of determination, for
the purpose of calculating the Class I Monthly Interest, the Original Notional
Principal Amount minus all allocations of Monthly Principal to the PAC Component
as of such date of determination pursuant to Section 8.11 of this Indenture.
"Officer's Certificate" means a certificate signed by an Authorized
Officer of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 12.01, and delivered to,
the Indenture Trustee or the Insurer, as applicable.
"Opinion of Counsel" means one or more written opinions of counsel who
may, except as otherwise expressly provided in this Indenture, be employees of
or counsel to the Transferor or the Issuer and who shall be satisfactory to the
Indenture Trustee and, if addressed to the Insurer, satisfactory to the Insurer
(so long as it is the Controlling Party), and which shall comply with any
applicable requirements of Section 12.01.
"Original Notional Principal Amount" means $149,344,458.
"Outstanding" or "Outstanding Notes" means, as of the date of
determination, all Notes theretofore authenticated and delivered under this
Indenture except:
(i) Notes theretofore canceled by the Note Registrar
or delivered to the Note Registrar for cancellation;
10
Indenture
(ii) Notes or portions thereof the payment for which
money in the necessary amount has been theretofore deposited
with the Indenture Trustee or any Paying Agent in trust for
the Holders of such Notes (provided, however, that if such
Notes are to be redeemed, notice of such redemption has been
duly given pursuant to this Indenture or provision for such
notice has been made, satisfactory to the Indenture Trustee,
has been made); and
(iii) Notes in exchange for or in lieu of other Notes
which have been authenticated and delivered pursuant to this
Indenture unless proof satisfactory to the Indenture Trustee
is presented that any such Notes are held by a bona fide
purchaser; provided, however, that Notes which have been paid
with the proceeds of the Policy shall continue to remain
Outstanding for purposes of this Indenture until the Insurer
has been paid as subrogee hereunder or reimbursed pursuant to
the Insurance Agreement as evidenced by a written notice from
the Insurer delivered to the Indenture Trustee, and the
Insurer shall be deemed to be the Holder thereof to the extent
of any payments thereon made by the Insurer; provided,
further, that in determining whether the Holders of the
requisite Outstanding Class A Note Balance have given any
request, demand, authorization, direction, notice, consent or
waiver hereunder or under any other Basic Document, Notes
owned by the Issuer, the Transferor, BVAC, any other obligor
upon the Notes, or any of their respective Affiliates shall be
disregarded and deemed not to be Outstanding, except that, in
determining whether the Indenture Trustee shall be protected
in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes that a
Responsible Officer of the Indenture Trustee either actually
knows to be so owned or has received written notice thereof
shall be so disregarded. Notes so owned that have been pledged
in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Indenture Trustee the
pledgee's right so to act with respect to such Notes and that
the pledgee is not the Issuer, the Transferor, BVAC, any other
obligor upon the Notes, or any of their respective Affiliates.
"Owner Trustee" means Wilmington Trust Company, acting not in its
individual capacity but solely as owner trustee under the Trust Agreement on
behalf of the Trust.
"PAC Component" shall have the meaning specified in Section 8.11.
"Paying Agent" means the Indenture Trustee or any other Person that
meets the eligibility standards for the Indenture Trustee specified in Section
6.11 and is authorized by the Issuer to make the distributions from the
Collection Account, including payment of principal of or interest on the Notes
on behalf of the Issuer.
"Plan" means any Person that is (i) an "employee benefit plan" (as
defined in Section 3(3) of ERISA) that is subject to the provisions of Title I
of ERISA, (ii) a "plan" (as defined in Section 4975(e)(1) of the Code) that is
subject to Section 4975 of the Code or (iii) an entity whose underlying assets
include assets of a plan described in (i) or (ii) above by reason of such plan's
investment in the entity.
11
Indenture
"Planned Notional Principal Amount" means, for each respective Payment
Date, the corresponding amount specified in the Planned Notional Principal
Amount Schedule.
"Planned Notional Principal Amount Schedule" means the amortization
schedule of Planned Notional Principal Amount for each respective Payment Date,
attached hereto as Schedule B.
"Pledged Assets" has the meaning provided in the Granting Clause of
this Indenture.
"Predecessor Note" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.05 in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
"Principal Balance" means, for any Receivable as of any date,
(1) the Amount Financed
minus
(2) the sum, without duplication, of
(a) that portion of all Scheduled Receivable
Payments received on or prior to such day
allocable to principal;
plus
(b) any portion refunded to obligors of extended
warranty protection plan costs, or of
physical damage, credit life, or disability
insurance premiums included in the Amount
Financed;
plus
(c) any payment of the purchase amount with
respect to the Receivable allocable to
principal;
plus
(d) the principal portion of any Modified
Schedule Receivable Payments received on or
prior to such day;
plus
(e) any prepayment in full or any partial
prepayments applied to reduce the principal
balance of the Receivable;
plus
(f) the amount of any Cram Down Loss;
12
Indenture
provided, however, that any Charged-off Receivable or Purchased
Receivable will have a Principal Balance of zero as of the last day of the
Collection Period in which such Receivable was charged-off or repurchased, as
applicable.
"Principal Payment Sequence" means the order in which Monthly Principal
shall be distributed among the Noteholders. The order of distribution of Monthly
Principal is:
1. to the Class A-1 Noteholders until the Class A-1 Note Balance has
been reduced to zero;
2. to the Class A-2 Noteholders until the Class A-2 Note Balance has
been reduced to zero;
3. to the Class A-3 Noteholders until the Class A-3 Note Balance has
been reduced to zero; and
4. to the Class A-4 Noteholders until the Class A-4 Note Balance has
been reduced to zero;
provided, however, in the event the amount of Available Funds
(together with amounts withdrawn from the Spread Account and/or the
Policy), are not sufficient to pay the outstanding principal amount of
any class of Class A Notes on the final maturity date of such class of
Notes at any time after the occurrence and during the continuance of an
Insurer Default, the amount of such funds available to pay Class A
Monthly Principal to Class A Noteholders will be distributed pro rata
to the Class A Noteholders based upon the relative Note Balance of each
class of Class A Notes.
"Proceeding" means any suit in equity, action at law or other judicial
or administrative proceeding.
"Rating Agency Condition" means, with respect to any action, that (i)
Moody's shall have been given ten Business Days (or such shorter period as is
acceptable to Moody's) prior notice thereof and that Moody's shall have notified
the Transferor, the Servicer, the Insurer and the Issuer in writing that such
action will not result in a qualification, reduction or withdrawal of its
then-current rating of any Class of Notes, (ii) Standard & Poor's shall have
been given ten Business Days (or such shorter period as is acceptable to
Standard & Poor's) prior notice thereof and copies of all documentation relating
to the event requiring such Rating Agency Condition and (iii) each Rating Agency
shall have confirmed to the Insurer that the shadow risk of the Insurer with
respect to the Notes is investment grade.
"Rating Event" means the qualification, reduction or withdrawal by
either Rating Agency of its then-current rating of any Class of Notes.
"Record Date" means, with respect to a Payment Date or Redemption Date,
the close of business on the last day of the related Collection Period.
13
Indenture
"Recoveries of Advances" means, for any Collection Period, all payments
received by the Servicer by or on behalf of Obligors (other than Obligors with
respect to Defaulted Receivables and excluding reimbursements of Outstanding
Advances on Defaulted Receivables pursuant to Section 8.05(a)(ii) hereof) during
such Collection Period representing recoveries of Interest Shortfalls for which
Advances were made for prior Collection Periods.
"Redemption Date" means the Payment Date specified by the Servicer or
the Issuer pursuant to Section 11.01.
"Redemption Price" means an amount equal to the fair market value of
the Receivables but not less than the sum of: (i) the unpaid principal amount of
the Class A Notes redeemed plus (ii) accrued and unpaid interest on the Class A
Notes and Class I Notes at the respective interest rates of each Class of Notes
being so redeemed through the end of the related Collection Period plus (iii)
all amounts then due and owing to the Insurer, the Servicer, the Back-up
Servicer, the Standby Servicer, the Collateral Agent, the Indenture Trustee and
the Owner Trustee.
"Responsible Officer" means, when used with respect to the Indenture
Trustee, any officer within the corporate trust department of the Indenture
Trustee including any director, managing director, vice president, assistant
vice president, assistant treasurer, assistant secretary or any other officer of
the Indenture Trustee customarily performing functions similar to those
performed by the persons who at the time shall be such officers, respectively,
or to whom any corporate trust matter is referred because of his knowledge of
and familiarity with the particular subject.
"Securities Act" means the Securities Act of 1933, as amended.
"Servicer Default" means an Event of Servicer Default under the Trust
Agreement.
"State" means any one of the ▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ or the
District of Columbia.
"Termination Date" means the latest of (i) the expiration of the Policy
in accordance with its terms, (ii) the date on which the Insurer shall have
received payment and performance of all amounts and obligations owed to or on
behalf of the Insurer under this Indenture or the Insurance Agreement and (iii)
the date on which the Indenture Trustee shall have received payment and
performance of all amounts and obligations which the Issuer may owe to or on
behalf of the Indenture Trustee for the benefit of the Noteholders under this
Indenture or the Notes.
"Transferor" means
Bay View Transaction Corporation, a Delaware
corporation, in its capacity as the seller of the Receivables under the Trust
Agreement.
"Trust Agreement" means the Trust and Servicing Agreement, dated as of
the date hereof, between the Transferor, the Servicer, the Standby Servicer, the
Indenture Trustee, the Back-up Servicer and the Owner Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, as in force on the date hereof, unless otherwise specifically provided.
"Underwriters" means UBS Securities LLC and Barclays Capital Inc.
14
Indenture
"Underwriter Exemption" means the exemption granted to UBS Securities
LLC, by the U.S. Department of Labor, as amended by Prohibited Transaction
Exemption ("PTE") 97-34, PTE 2000-58 and PTE 2002-41.
"United States" means the United States of America.
SECTION 1.02 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the Trust Indenture Act, the
provision is incorporated by reference in and made a part of this Indenture. The
following Trust Indenture Act terms used in this Indenture have the following
meanings:
"Commission" means the Securities and Exchange Commission.
"Indenture Securities" means the Notes.
"Indenture Security Holder" means a Noteholder.
"Indenture to be Qualified" means this Indenture
"Indenture Trustee" or "Institutional Trustee" means the Indenture
Trustee.
"Obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other Trust Indenture Act terms used in this Indenture that are
defined by the Trust Indenture Act, defined by Trust Indenture Act reference to
another statute or defined by Commission rule have the meaning assigned to them
by such definitions.
SECTION 1.03 RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally accepted
accounting principles as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and
words in the plural include the singular;
(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 from time to time amended, modified
or supplemented and includes (in the case of agreements or
instruments) references to all attachments thereto and
instruments incorporated therein; references to a Person are
also to its permitted successors and assigns; and
15
Indenture
(vii) the words "hereof," "herein" and "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; Section, subsection and Schedule
references contained in this Indenture are references to
Sections, subsections and Schedules in or to this Indenture
unless otherwise specified.
SECTION 1.04 DIRECTIONS. Any direction required to be given by the
Noteholders shall be given hereunder by the Insurer, unless the Insurer is no
longer the Controlling Party, in which case the Majority Noteholders shall be
entitled to give such direction.
ARTICLE II
THE NOTES
SECTION 2.01 FORM.
(a) The Class A-1 Notes, Class A-2 Notes, Class A-3 Notes,
Class A-4 Notes and Class I Notes, in each case together with the
Indenture Trustee's certificate of authentication, shall be in
substantially the forms set forth as Exhibits ▇-▇, ▇-▇, ▇-▇, ▇-▇ and
A-5 to this Indenture with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may,
consistently herewith, be determined by the officers executing such
Notes, as evidenced by their execution of the Notes. Any portion of the
text of any Note may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Note.
(b) The Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or
without steel engraved borders), all as determined by the officers
executing such Notes, as evidenced by their execution of such Notes.
(c) Each Note shall be dated the date of its authentication.
The terms of the Notes set forth in the exhibits hereto are part of the
terms of this Indenture.
SECTION 2.02 EXECUTION, AUTHENTICATION AND DELIVERY.
(a) The Notes shall be executed on behalf of the Issuer by the
Owner Trustee, as provided herein. The signature of any such Authorized
Officer on the Notes may be manual or facsimile. Notes bearing the
manual or facsimile signature of individuals who were at any time
Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such
Notes or did not hold such offices at the date of such Notes.
(b) The Indenture Trustee shall, upon receipt of an Issuer
Order, authenticate and deliver for original issue Notes in the amount
of the Initial Class A-1 Note Balance, the Initial Class A-2 Note
Balance, the Initial Class A-3 Note Balance and the Initial
16
Indenture
Class A-4 Note Balance and in the case of the Class I Note, the
Original Notional Principal Amount. The aggregate principal amount of
the Class A Notes outstanding at any time may not exceed such
respective amounts, except as otherwise provided in Section 2.05. Each
Note shall be dated the date of its authentication. The Notes shall be
issuable as registered Notes in the minimum denomination of $1,000 and
in integral multiples of $1,000 ($1,000 Notional Principal Amount in
the case of the Class I Notes) in excess thereof, except that one Note
of each Class may be issued in a different denomination.
(c) No Note shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose, unless there
appears on such Note a certificate of authentication substantially in
the form provided for in the forms of Notes attached as exhibits to
this Indenture executed by the Indenture Trustee by the manual
signature of one of its authorized signatories, and such certificate
upon any Note shall be conclusive evidence, and the only evidence, that
such Note has been duly authenticated and delivered hereunder.
SECTION 2.03 TEMPORARY NOTES.
(a) Pending the preparation of Definitive Notes, the Issuer
may execute, and upon receipt of an Issuer Order the Indenture Trustee
shall authenticate and deliver, temporary Notes that are printed,
lithographed, typewritten, mimeographed or otherwise produced, of the
tenor of the Definitive Notes in lieu of which they are issued and with
such variations not inconsistent with the terms of this Indenture as
the officers executing such Notes may determine, as evidenced by their
execution of such Notes.
(b) If temporary Notes are issued, the Issuer will cause
Definitive Notes to be prepared without unreasonable delay. After the
preparation of Definitive Notes, the temporary Notes shall be
exchangeable for Definitive Notes upon surrender of the temporary Notes
at the office or agency of the Issuer to be maintained as provided in
Section 3.02, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Notes, the Issuer shall
execute and the Indenture Trustee shall authenticate and deliver in
exchange therefor a like tenor and principal amount of Definitive Notes
of authorized denominations. Until so exchanged, the temporary Notes
shall in all respects be entitled to the same benefits under this
Indenture as Definitive Notes.
SECTION 2.04 REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE.
(a) The Issuer shall cause to be kept a register (the "Note
Register") in which, subject to such reasonable regulations as it may
prescribe, the Issuer shall provide for the registration of Notes and
the registration of transfers of Notes. The Indenture Trustee shall be
"Note Registrar" for the purpose of registering Notes and transfers of
Notes as herein provided. Upon any resignation of any Note Registrar,
the Issuer shall promptly appoint a successor or, if it elects not to
make such an appointment, assume the duties of Note Registrar.
17
Indenture
(b) If a Person other than the Indenture Trustee is appointed
by the Issuer as Note Registrar, the Issuer will give the Indenture
Trustee and the Insurer prompt written notice of the appointment of
such Note Registrar and of the location, and any change in the
location, of the Note Register, and the Indenture Trustee shall have
the right to inspect the Note Register at all reasonable times and to
obtain copies thereof, and the Indenture Trustee and the Insurer shall
have the right to rely upon a certificate executed on behalf of the
Note Registrar by an Executive Officer thereof as to the names and
addresses of the Noteholders and the principal amounts and number of
such Notes.
(c) Upon surrender for registration of transfer of any Note at
the office or agency of the Issuer to be maintained as provided in
Section 3.02, the Issuer shall execute, and the Indenture Trustee shall
authenticate and the Noteholder shall obtain from the Indenture
Trustee, in the name of the designated transferee or transferees, one
or more new Notes of the same Class in any authorized denominations, of
a like aggregate principal amount.
(d) At the option of the Holder, Notes may be exchanged for
other Notes of the same Class in any authorized denominations, of a
like aggregate principal amount, upon surrender of the Notes to be
exchanged at such office or agency. Whenever any Notes are so
surrendered for exchange, the Issuer shall execute, and the Indenture
Trustee shall authenticate and the Noteholder shall obtain from the
Indenture Trustee, the Notes which the Noteholder making the exchange
is entitled to receive.
(e) All Notes issued upon any registration of transfer or
exchange of Notes shall be the valid obligations of the Issuer,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Notes surrendered upon such registration of transfer
or exchange.
(f) Every Note presented or surrendered for registration of
transfer or exchange shall be duly endorsed by, or be accompanied by a
written instrument of transfer in form satisfactory to the Indenture
Trustee duly executed by, the Holder thereof or such Holder's attorney
duly authorized in writing, with such signature guaranteed by a
commercial bank or trust company located, or having a correspondent
located, in the city of
New York or the city in which the Corporate
Trust Office is located, or by a member firm of a national securities
exchange, and such other documents as the Indenture Trustee may
require.
(g) No service charge shall be made to a Holder for any
registration of transfer or exchange of Notes, but the Issuer or the
Indenture Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with
any registration of transfer or exchange of Notes, other than exchanges
pursuant to Section 2.03 or 10.06 not involving any transfer.
(h) The preceding provisions of this Section notwithstanding,
the Issuer shall not be required to make and the Note Registrar need
not register transfers or exchanges of Notes selected for redemption or
of any Note for a period of 15 days preceding the due date for any
payment with respect to the Note.
18
Indenture
SECTION 2.05 MUTILATED, DESTROYED, LOST OR STOLEN NOTES.
(a) If (i) any mutilated Note is surrendered to the Indenture
Trustee, or the Indenture Trustee receives evidence to its satisfaction
of the destruction, loss or theft of any Note, and (ii) there is
delivered to the Indenture Trustee and the Insurer (unless an Insurer
Default shall have occurred and be continuing) such security or
indemnity as may be required by them to hold the Issuer, the Indenture
Trustee and the Insurer harmless, then, in the absence of notice to the
Issuer, the Note Registrar or the Indenture Trustee that such Note has
been acquired by a bona fide purchaser, the Issuer shall execute and
upon its request the Indenture Trustee shall authenticate and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Note, a replacement Note of the same Class; 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 pay such destroyed, lost or stolen
Note when so due or payable or upon the Redemption Date without
surrender thereof. If, after the delivery of such replacement Note or
payment of a destroyed, lost or stolen Note pursuant to the proviso to
the preceding sentence, a bona fide purchaser of the original Note in
lieu of which such replacement Note was issued presents for payment
such original Note, the Issuer, the Insurer and the Indenture Trustee
shall be entitled to recover such replacement Note (or such payment)
from the Person to whom it was delivered or any Person taking such
replacement Note from such Person to whom such replacement Note was
delivered or any assignee of such Person, except a bona fide purchaser,
and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense
incurred by the Issuer, the Insurer or the Indenture Trustee in
connection therewith.
(b) Upon the issuance of any replacement Note under this
Section, the Issuer or the Indenture Trustee may require the payment by
the Holder of such Note of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any
other reasonable expenses (including the fees and expenses of the
Indenture Trustee and/or the Note Registrar) connected therewith.
(c) Every replacement Note issued pursuant to this Section in
replacement of any mutilated, destroyed, lost or stolen Note shall
constitute an original additional contractual obligation of the Issuer,
whether or not the mutilated, destroyed, lost or stolen Note shall be
at any time enforceable by anyone, and shall be entitled to all the
benefits of this Indenture equally and proportionately with any and all
other Notes duly issued hereunder.
(d) The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with
respect to the replacement or payment of mutilated, destroyed, lost or
stolen Notes. In the case of the registration of transfer of any Note,
the Issuer, the Indenture Trustee, the Insurer and any of their
respective agents may treat the Person in whose name any Note is
registered (as of the day of determination) as the owner of such Note
for the purpose of receiving payments of principal of and interest, if
any, on such Note and for all other purposes whatsoever, whether or not
such Note be
19
Indenture
overdue, and none of the Issuer, the Insurer, the Indenture Trustee nor
any of their respective agents shall be affected by notice to the
contrary.
SECTION 2.06 PAYMENT OF PRINCIPAL AND INTEREST; DEFAULTED INTEREST.
(a) Each Class of Notes shall accrue interest as provided in
this Indenture at the related interest rate for such Class, and such
interest shall be payable on each Payment Date as specified herein,
subject to Section 3.01. Interest accrued on any Note but not paid on
any Payment Date will be due on the immediately succeeding Payment
Date, together with, to the extent permitted by applicable law,
interest on such shortfall at the related interest rate. Any
installment of interest or principal, if any, payable on any Note which
is punctually paid or duly provided for by the Issuer on the applicable
Payment Date shall be paid to the Person in whose name such Note (or
one or more Predecessor Notes) is registered on the Record Date, by
check mailed first-class, postage prepaid to such Person's address as
it appears on the Note Register on such Record Date, except that,
unless Definitive Notes have been issued pursuant to Section 2.10, with
respect to Notes registered on the Record Date in the name of the
nominee of the Clearing Agency (initially, such nominee to be Cede &
Co.), payment will be made by wire transfer in immediately available
funds to the account designated by such nominee and except for the
final installment of principal payable with respect to such Note on a
Payment Date, a Redemption Date or on the related Final Maturity Date,
as the case may be (and except for the Redemption Price for any Note
called for redemption pursuant to Section 11.01), which shall be
payable as provided below. The funds represented by any such checks
returned undelivered shall be held in accordance with Section 3.03.
(b) The principal of each Class A Note shall be payable on
each Payment Date to the extent provided in this Indenture and in the
form of the related Note set forth as an Exhibit hereto.
Notwithstanding the foregoing, the entire unpaid principal amount of
the Notes of a Class of Class A Notes shall be due and payable, if not
previously paid, on the earlier of:
(i) the Final Maturity Date of such Class;
(ii) the Redemption Date;
(iii) if (A) an Event of Default shall have occurred
and be continuing, and (B) an Insurer Default shall not have
occurred and be continuing, the date on which the Insurer
shall have declared the Notes to be immediately due and
payable in the manner provided in Section 5.02; or
(iv) if (A) an Event of Default shall have occurred
and be continuing and (B) an Insurer Default shall have
occurred and be continuing or the Policy shall have expired in
accordance with its terms, the date on which the Majority
Noteholders shall have declared the Notes to be immediately
due and payable in the manner provided in Section 5.02.
All principal payments on each Class of Notes shall be made
pro rata to the Noteholders of such Class entitled thereto. The
Indenture Trustee shall notify the Person
20
Indenture
in whose name a Note is registered at the close of business on the
Record Date preceding the Payment Date on which the Issuer expects that
the final installment of principal of and interest on such Note will be
paid. Such notice shall be mailed within five Business Days of such
Payment Date (or, in the case of Notes registered in the name of Cede &
Co., as nominee of DTC, such notice shall be provided within one
Business Day of such Payment Date) or receipt of notice of termination
of the Trust pursuant to Section 16.01 of the Trust Agreement and shall
specify that such final installment will be payable only upon
presentation and surrender of such Note and shall specify the place
where such Note may be presented and surrendered for payment of such
installment. Notices in connection with redemptions of Notes shall be
mailed to Noteholders as provided in Section 11.02. In addition, the
Administrator shall notify the Insurer and the Rating Agencies upon the
final payment of interest and principal of each Class of Notes, and
upon the termination of the Trust, in each case pursuant to the
Administration Agreement.
(c) In furtherance of and in limitation of the foregoing, each
Noteholder, by its acceptance of a Note, specifically acknowledges that
it has no right to or interest in any monies at anytime held pursuant
to the Spread Account Agreement prior to the release of such monies
pursuant to Section 3.03(b) of the Spread Account Agreement, such
monies being held in trust for the benefit of the Secured Parties (as
defined therein).
(d) Promptly following the date on which all principal of and
interest on the Notes has been paid in full and the Notes have been
surrendered to the Indenture Trustee, the Indenture Trustee shall, if
the Insurer has paid any amount in respect of the Notes under the
Policy or otherwise which has not been reimbursed to it, deliver such
surrendered Notes to the Insurer.
SECTION 2.07 CANCELLATION. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly cancelled by the Indenture Trustee. The Issuer may at any
time deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly cancelled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for
any Notes cancelled as provided in this Section, except as expressly permitted
by this Indenture. All cancelled Notes may be held or disposed of by the
Indenture Trustee in accordance with its standard retention or disposal policy
as in effect at the time unless the Issuer shall direct by an Issuer Order that
they be destroyed or returned to it; provided that such Issuer Order is timely
and the Notes have not been previously disposed of by the Indenture Trustee.
SECTION 2.08 BOOK-ENTRY NOTES. The Notes, upon original issuance, will
be issued in the form of a typewritten Note or Notes representing the Book-Entry
Notes, to be delivered to DTC, the initial Depository, by, or on behalf of, the
Issuer (except for any fractional units which cannot be accepted by DTC). Such
Notes shall initially be registered on the Note Register in the name of Cede &
Co., the nominee of the initial Clearing Agency, and no Note Owner will receive
a Definitive Note representing such Note Owner's interest in such Note,
21
Indenture
except as provided in Section 2.10. Unless and until definitive, fully
registered Notes (the "Definitive Notes") have been issued to Note Owners
pursuant to Section 2.10:
(i) the provisions of this Section shall be in full
force and effect
(ii) the Note Registrar and the Indenture Trustee
shall be entitled to deal with the Clearing Agency for all
purposes of this Indenture (including the payment of principal
of and interest on the Notes and the giving of instructions or
directions hereunder) as the sole holder of the Notes, and
shall have no obligation to the Note Owners;
(iii) to the extent that the provisions of this
Section conflict with any other provisions of this Indenture,
the provisions of this Section shall control
(iv) the rights of Note Owners shall be exercised
only through the Clearing Agency and shall be limited to those
established by law and agreements between such Note Owners and
the Clearing Agency and/or the Clearing Agency Participants.
Pursuant to the Depository Agreement, unless and until
Definitive Notes are issued pursuant to Section 2.10, the
Clearing Agency will make book-entry transfers among the
Clearing Agency Participants and receive and transmit payments
of principal of and interest on the Notes to such Clearing
Agency Participants; and
(v) whenever this Indenture requires or permits
actions to be taken based upon instructions or directions of
Noteholders evidencing a specified percentage of the Note
Balances, the Clearing Agency shall be deemed to represent
such percentage only to the extent that it has received
instructions to such effect from Note Owners and/or Clearing
Agency Participants owning or representing, respectively, such
required percentage of the beneficial interest in the Notes
and has delivered such instructions to the Indenture Trustee.
SECTION 2.09 NOTICES TO CLEARING AGENCY. Whenever a notice or other
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Note Owners pursuant to Section
2.10, the Indenture Trustee shall give all such notices and communications
specified herein to be given to Noteholders to the Clearing Agency, and shall
have no obligation to the Note Owners.
SECTION 2.10 DEFINITIVE NOTES.
(a) If (i) the Administrator advises the Indenture Trustee in
writing that the Clearing Agency is no longer willing or able to
properly discharge its responsibilities as described in the Depository
Agreement, and the Administrator or the Indenture Trustee is unable to
locate a qualified successor to which the Insurer (unless the Insurer
is not the Controlling Party) has provided its prior written consent,
or (ii) after the occurrence of an Event of Default or a Servicer
Default, the Controlling Party advises the Indenture Trustee through
the Clearing Agency Participants in writing that the continuation of a
book-entry system through the Clearing Agency is no longer in the best
interests of the related Note Owners, then the Indenture Trustee shall
notify all Note Owners, through the
22
Indenture
Clearing Agency, and the Insurer of the availability of Definitive
Notes to Note Owners requesting the same. Upon surrender to the
Indenture Trustee of the Note or Notes evidencing the Book Entry Notes
by the Clearing Agency, accompanied by registration instructions from
the Clearing Agency, the Issuer shall execute and the Indenture Trustee
shall authenticate the Definitive Notes and deliver such Definitive
Notes in accordance with the instructions of the Clearing Agency. None
of the Issuer, the Note Registrar, the Insurer or the Indenture Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Notes of a Class, the
Indenture Trustee shall recognize the Holders of the Definitive Notes
as Noteholders hereunder.
(b) The Indenture Trustee shall not be liable if the Indenture
Trustee or the Administrator is unable to locate a qualified successor
Clearing Agency. The Definitive Notes shall be typewritten, printed,
lithographed or engraved or produced by any combination of these
methods (with or without steel engraved borders), all as determined by
the officers executing such Notes, as evidenced by their execution of
such Notes.
SECTION 2.11 RELEASE OF PLEDGED ASSETS. Subject to Section 12.01 and
the terms of the Basic Documents, the Indenture Trustee shall release property
from the lien of this Indenture only upon receipt by the Indenture Trustee and
the Insurer of an Issuer Request accompanied by an Officer's Certificate, an
Opinion of Counsel and Independent Certificates in accordance with Sections
314(c) and 314(d)(1) of the Trust Indenture Act or an Opinion of Counsel in lieu
of such Independent Certificates to the effect that the Trust Indenture Act does
not require any such Independent Certificates.
SECTION 2.12 TAX TREATMENT. The Issuer has entered into this Indenture,
and the Notes will be issued, with the intention that, for federal, state and
local income, single business and franchise tax purposes, the Notes will qualify
as indebtedness of the Issuer secured by the Pledged Assets. The Issuer and the
Indenture Trustee, by entering into this Indenture, and each Noteholder, by its
acceptance of its Note (and each Note Owner by its acceptance of an interest in
the applicable Book-Entry Note), agree to treat the Notes for federal, state and
local income, single business and franchise tax purposes as indebtedness of the
Issuer.
SECTION 2.13 ERISA. Each purchaser or transferee of a Note that is a
Benefit Plan (as such term is defined in ERISA) shall be deemed to have
represented that the relevant conditions for exemptive relief under Prohibited
Transaction Class Exemption ("PTCE") ▇▇-▇▇, ▇▇▇▇ ▇▇-▇, ▇▇▇▇ 91-38, PTCE 95-60 or
PTCE 96-23, the Underwriter Exemption or other applicable exemption providing
substantially similar relief have been satisfied.
SECTION 2.14 CUSIP NUMBERS. The Issuer in issuing the notes may use
"CUSIP" numbers (if then generally in use), and, if so, the Indenture Trustee
may use such "CUSIP" numbers in notices of redemption as a convenience to the
Holders; provided that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Notes or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Notes, and any such redemption
shall not be affected by any defect in or omission of such numbers. The Issuer
will promptly notify the Indenture Trustee of any change in the "CUSIP" numbers.
23
Indenture
ARTICLE III
COVENANTS
SECTION 3.01 PAYMENT OF PRINCIPAL AND INTEREST. The Issuer will duly
and punctually pay Monthly Interest and Monthly Principal on the Notes in
accordance with the terms of the Notes and this Indenture. Without limiting the
foregoing, subject to Section 8.05(a), the Issuer will cause to be distributed
the amount of Available Funds on each Payment Date. The Issuer will cause the
deposits received on Receivables to be deposited into the Collection Account
pursuant to the Trust Agreement for the benefit of the Noteholders and the
Insurer to the extent expressly set forth herein or the other Basic Documents.
Amounts properly withheld under the Code by any Person from a payment of
interest and/or principal to any Noteholder shall be considered as having been
paid by the Issuer to such Noteholder for all purposes of this Indenture.
SECTION 3.02 MAINTENANCE OF OFFICE OR AGENCY. The Issuer will maintain
or will cause the Administrator or the Indenture Trustee to maintain in the City
of
New York, an office or agency where Notes may be surrendered for registration
of transfer or exchange, and where notices and demands to or upon the Issuer in
respect of the Notes and this Indenture may be served. The Issuer hereby
initially appoints CT Corporation System, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ to serve as its agent for the foregoing purposes. The Issuer will give
prompt written notice to the Indenture Trustee and the Insurer 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 Indenture Trustee with the address thereof, such surrenders may be
made or served at the Corporate Trust Office, and the Issuer hereby appoints the
Indenture Trustee as its agent to receive all such surrenders.
SECTION 3.03 MONEY FOR PAYMENTS TO BE HELD IN TRUST.
(a) As provided in Section 9.02 of the Trust Agreement, all
payments of amounts due and payable with respect to any Notes that are
to be made from amounts withdrawn from the Collection Account and the
Payahead Account shall be made on behalf of the Issuer by the Indenture
Trustee or by another Paying Agent, and no amounts so withdrawn from
the Collection Account and the Payahead Account for payments of Notes
shall be paid over to the Issuer except as provided in this Section.
(b) The Notes shall be non-recourse obligations of the Issuer
and shall be limited in right of payment to amounts available from the
Pledged Assets, the Spread Account and the Policy as provided in this
Indenture, the Spread Account Agreement and the Policy and the Issuer
shall not otherwise be liable for payments on the Notes. No Person
shall be personally liable for any amounts payable under the Notes. If
any other provision of this Indenture conflicts or is deemed to
conflict with the provisions of this paragraph, the provisions of this
paragraph shall control.
(c) The Insurer will cause each Paying Agent other than the
Indenture Trustee to execute and deliver to the Indenture Trustee and
the Insurer an instrument in which such Paying Agent shall agree with
the Indenture Trustee (and if the Indenture Trustee
24
Indenture
acts as Paying Agent, it hereby so agrees), subject to the provisions
of this Section, that such Paying Agent will:
(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 by the Paying Agent or otherwise disposed of
as herein provided and pay such sums to such Persons as herein
provided;
(ii) give the Indenture Trustee and the Insurer
notice of any default by the Issuer (or any other obligor upon
the Notes) in the making of any payment required to be made
with respect to the Notes;
(iii) at anytime during the continuance of any such
default, upon the written request of the Indenture Trustee, or
so long as it is the Controlling Party, the Insurer, forthwith
pay to the Indenture Trustee all sums so held in trust by such
Paying Agent;
(iv) immediately resign as Paying Agent and forthwith
pay to the Indenture Trustee all sums held by it in trust for
the payment of Notes if at any time it ceases to meet the
standards required to be met by a Paying Agent at the time of
its appointment; and
(v) comply with all requirements of the Code with
respect to the withholding from any payments made by it on any
Notes of any applicable withholding taxes imposed thereon and
with respect to any applicable reporting requirements in
connection therewith.
(d) 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 Paying Agent to pay to the
Indenture Trustee all sums held in trust by such Paying Agent, such
sums to be held by the Indenture Trustee upon the same trusts as those
upon which the sums were held by such Paying Agent; and upon such
payment by any Paying Agent to the Indenture Trustee, such Paying Agent
shall be released from all further liability with respect to such sums.
Subject to applicable laws with respect to escheat of funds, any money
held by the Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Note and remaining unclaimed for two years
after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuer upon receipt of an Issuer Request with the prior
written consent of the Insurer (so long as the Insurer is the Controlling
Party), and the Holder of such Note shall thereafter, as an unsecured general
creditor, look only to the Issuer for payment thereof, and all liability of the
Indenture Trustee or such Paying Agent with respect to such trust money shall
thereupon cease; provided, however, that if such money or any portion thereof
had been previously deposited by the Insurer or the Indenture Trustee for the
payment of principal or interest on the Notes, to the extent any amounts are
owing to the Insurer in accordance with the terms of the Insurance Agreement,
such amounts shall be paid promptly
25
Indenture
to the Insurer upon the Indenture Trustee's receipt of a written request by the
Insurer to such effect; and provided, further, that the Indenture Trustee or
such Paying Agent, before being required to make any such repayment, shall at
the expense and direction 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 or for the account of the
Issuer. The Indenture Trustee may also adopt and employ, at the expense of the
Issuer, any other reasonable means of notification of such repayment (including,
but not limited to, mailing notice of such repayment to Holders whose Notes have
been called but have not been surrendered for redemption or whose right to or
interest in monies due and payable but not claimed is determinable from the
records of the Indenture Trustee or of any Paying Agent, at the last address of
record for each such Holder).
SECTION 3.04 EXISTENCE. The Issuer will keep in full effect its
existence, rights and franchises as a statutory trust under the laws of the
State of Delaware (unless it becomes, or any successor Issuer hereunder is or
becomes, organized under the laws of any other state or of the United States, 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, and the Pledged Assets.
SECTION 3.05 PROTECTION OF TRUST ESTATE. The Issuer intends the
security interest Granted pursuant to this Indenture in favor of the Indenture
Trustee on behalf of the Noteholders to be prior to all other liens in respect
of the Pledged Assets, and the Issuer shall take all actions necessary to obtain
and maintain, for the benefit of the Indenture Trustee on behalf of the
Noteholders and, to the extent expressly set forth herein or in the other Basic
Documents, the Insurer, so long as the Insurance Agreement is in effect, a first
lien on and a first priority, perfected security interest in the Pledged Assets.
The Issuer will from time to time execute and deliver all such supplements and
amendments hereto and all such financing statements, continuation statements,
instruments of further assurance and other instruments, all as prepared by the
Servicer and delivered to the Issuer, and will take such other action necessary
or advisable to:
(i) Grant more effectively all or any portion of the
Pledged Assets;
(ii) maintain or preserve the lien and security
interest (and the priority thereof) created by this Indenture
in favor of the Indenture Trustee for the benefit of the
Noteholders to the extent expressly set forth herein or the
other Basic Documents and, to the extent expressly set forth
herein and so long as it is the Controlling Party, the
Insurer, 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 Pledged Assets;
26
Indenture
(v) preserve and defend title to the Pledged Assets
and the rights of the Indenture Trustee, the Noteholders and,
to the extent expressly set forth herein and so long as it is
the Controlling Party, the Insurer, in such Pledged Assets
against the claims of all persons and parties; or
(vi) pay all taxes or assessments levied or assessed
upon the Pledged Assets when due.
The Issuer hereby designates the Indenture Trustee (without any obligation) its
agent and attorney-in-fact to execute all financing statements, continuation
statements or other instruments required to be executed pursuant to this
Section.
SECTION 3.06 OPINIONS AS TO PLEDGED ASSETS.
(a) Promptly after the execution and delivery of this
Indenture, the Issuer shall furnish to the Indenture Trustee and the
Insurer an Opinion of Counsel to the effect that, in the opinion of
such counsel, either (i) all UCC financing statements and continuation
statements have been executed (or otherwise authorized) and filed that
are necessary to create and continue the Indenture Trustee's first
priority perfected security interest in the Pledged Assets for the
benefit of the Noteholders and, to the extent expressly set forth
herein or the other Basic Documents, the Insurer, and reciting the
details of such filings or referring to prior Opinions of Counsel in
which such details are given, or (ii) no such action shall be necessary
to perfect such security interest.
(b) Within 90 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three months
after the Cut-off Date, the Issuer shall furnish to the Indenture
Trustee and the Insurer an Opinion of Counsel, dated as of a date
during such 90-day period, to the effect that, in the opinion of such
counsel, either (i) all UCC financing statements and continuation
statements have been executed (or otherwise authorized) and filed that
are necessary to create and continue the Indenture Trustee's first
priority perfected security interest in the Pledged Assets for the
benefit of the Noteholders and, to the extent expressly set forth
herein or the other Basic Documents, the Insurer, and reciting the
details of such filings or referring to prior Opinions of Counsel in
which such details are given, or (ii) no such action shall be necessary
to perfect such security interest.
SECTION 3.07 PERFORMANCE OF OBLIGATIONS; SERVICING OF RECEIVABLES.
(a) The Issuer will not take any action and will use its best
efforts not to permit any action to be taken by others that would
release any Person from any of such Person's material covenants or
obligations under any instrument or agreement included in the Pledged
Assets 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 expressly
provided in the Basic Documents or such other instrument or agreement.
(b) The Issuer may contract with or otherwise obtain the
assistance of other Persons (including, without limitation, the
Administrator under the Administration
27
Indenture
Agreement) acceptable to the Insurer to assist it in performing its
duties and obligations under this Indenture, and any performance of
such duties by a Person identified to the Indenture Trustee and the
Insurer in an Officer's Certificate shall be deemed to be action taken
by the Issuer. The Indenture Trustee shall not be responsible for the
action or inaction of the Servicer or the Administrator. Initially, the
Issuer has contracted with BVAC as the Administrator to assist the
Issuer in performing its duties under this Indenture.
(c) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the other Basic
Documents and in the instruments and agreements included in the Pledged
Assets, including but not limited to 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 Trust Agreement in
accordance with and within the time periods provided for herein and
therein. Except as otherwise expressly provided therein, the Issuer
shall not waive, amend, modify, supplement or terminate any Basic
Document or any provision thereof without the consent of the Indenture
Trustee and the Insurer (so long as the Insurer is the Controlling
Party).
(d) If the Issuer shall have actual knowledge of the
occurrence of a Servicer Default, the Issuer shall promptly notify the
Indenture Trustee, the Insurer and each Rating Agency thereof, and
shall specify in such notice the action, if any, the Issuer is taking
with respect to such default. If a Servicer Default shall arise from
the failure of the Servicer to perform any of its duties or obligations
under the Trust Agreement with respect to the Receivables, the Issuer
shall take all reasonable steps available to it to remedy such failure.
(e) Upon the resignation or termination of the Servicer
pursuant to Sections 13.05 or 14.01 of the Trust Agreement, the Standby
Servicer shall automatically become Servicer, unless the Controlling
Party directs otherwise, as provided in Section 14.03 of the Trust
Agreement. If the Backup Servicer shall succeed to the Servicer's
duties as servicer of the Receivables as provided in Section 14.03 of
the Trust Agreement, it shall do so in its individual capacity and not
in its capacity as Indenture Trustee and, accordingly, the provisions
of Article VI shall be inapplicable to the Indenture Trustee in its
duties as the successor to the Servicer and the servicing of the
Receivables. In case the Back-up Servicer shall become successor to the
Servicer under the Trust Agreement, the Back-up Servicer shall be
entitled to appoint as Servicer one of its Affiliates or with the
consent of the Insurer (so long as it is the Controlling Party), which
consent shall not be unreasonably withheld, any other agent designated
by the Back-up Servicer, provided that the Back-up Servicer shall not
be liable for the actions and omissions of any such Affiliate or agent
in such capacity as successor Servicer appointed with due care.
(f) Upon any termination of the Servicer's rights and powers
pursuant to the Trust Agreement, the Issuer shall promptly notify the
Indenture Trustee and the Insurer. As soon as a successor Servicer is
appointed, the Issuer shall notify the Indenture Trustee and the
Insurer of such appointment, specifying in such notice the name and
address of such successor Servicer.
28
Indenture
(g) The Issuer agrees that it will not waive timely
performance or observance by the Servicer or the Transferor of their
respective duties under the Basic Documents: (i) without the prior
consent of the Insurer (so long as it is the Controlling Party) or (ii)
if the effect thereof would adversely affect the Noteholders.
SECTION 3.08 NEGATIVE COVENANTS. Until the Termination Date, the Issuer
shall not:
(i) except as expressly permitted by the Basic
Documents, sell, transfer, exchange or otherwise dispose of
any of the properties or assets of the Issuer, including those
included in the Pledged Assets, unless directed to do so by
the Indenture Trustee with the prior written consent of the
Insurer (so long as the Insurer is the Controlling Party);
(ii) claim any credit on, or make any deduction from
the principal or interest payable in respect of, the Notes
(other than amounts properly withheld from such payments under
the Code or applicable state law) or assert any claim against
any present or former Noteholder by reason of the payment of
the taxes levied or assessed upon any part of the Pledged
Assets;
(iii) (A) permit the validity or effectiveness of
this Indenture to be impaired, or permit the lien created by
this Indenture to be amended, hypothecated, subordinated,
terminated or discharged, or permit any Person to be released
from any covenants or obligations with respect to the Notes
under this Indenture except as may be expressly permitted
hereby, (B) permit any lien, charge, excise, claim, security
interest, mortgage or other encumbrance (other than the lien
of this Indenture) to be created on or extend to or otherwise
arise upon or burden the Pledged Assets or any part thereof or
any interest therein or the proceeds thereof (other than tax
liens, mechanics' liens and other liens that arise by
operation of law, in each case on a Financed Vehicle and
arising solely as a result of an action or omission of the
related Obligor), (C) permit the lien created by this
Indenture not to constitute a valid first priority security
interest (other than with respect to any such tax, mechanics'
or other lien) in the Pledged Assets, or (D) amend, modify or
fail to comply with the provisions of the Basic Documents,
prior to the Termination Date, without the prior written
consent of the Insurer, so long as the Insurer is the
Controlling Party;
(iv) engage in any business or activity other than as
permitted by the Trust Agreement;
(v) incur or assume any indebtedness or guarantee any
indebtedness of any Person, except for such indebtedness
incurred pursuant to Section 3.10; or
(vi) dissolve or liquidate in whole or in part or
merge or consolidate with any other Person, other than in
compliance with Section 3.10.
SECTION 3.09 ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer will deliver
to the Indenture Trustee, the Rating Agencies and the Insurer, on or before
March 15 of each year,
29
Indenture
beginning on March 15, 2004, 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
such year and of performance under this Indenture has been
made under such Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's
knowledge, based on such review, the Issuer has complied with
all conditions and covenants under this Indenture throughout
such year, or, if there has been a default in the compliance
of any such condition or covenant, specifying each such
default known to such Authorized Officer and the nature and
status thereof.
SECTION 3.10 ISSUER MAY CONSOLIDATE, ETC. ONLY ON CERTAIN CONDITIONS.
(a) The Issuer shall not consolidate or merge with or into any
other Person, unless:
(i) the Person (if other than the Issuer) formed by
or surviving such consolidation or merger shall (A) be a
Person organized and existing under the laws of the United
States or any State, (B) shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the
Indenture Trustee and the Insurer, in form and substance
satisfactory to the Indenture Trustee and the Insurer (so long
as it is the Controlling Party), the due and punctual payment
of the principal of and interest on all Notes and the
performance or observance of every agreement and covenant of
this Indenture and each other Basic Document on the part of
the Issuer to be performed or observed, all as provided
herein, and (C) expressly agree by means of such supplemental
indenture that such Person (or if a group of Persons, then one
specified person) shall make all filings, with the Commission
( and any other appropriate Person) required by the Exchange
Act in connection with the Notes;
(ii) immediately after giving effect to such
consolidation or merger, no Default or Event of Default shall
have occurred and be continuing;
(iii) the Rating Agency Condition shall have been
satisfied with respect to such consolidation or merger;
(iv) the Issuer shall have received an Opinion of
Counsel which shall be delivered to and shall be satisfactory
to the Indenture Trustee and the Insurer (so long as the
Insurer is the Controlling Party) to the effect that such
consolidation or merger will not have any material adverse tax
consequence to the Trust, the Insurer, any Noteholder or any
Certificateholder;
(v) any action as is necessary to maintain the lien
and security interest created by this Indenture shall have
been taken;
30
Indenture
(vi) the Issuer shall have delivered to the Indenture
Trustee and the Insurer (so long as the Insurer is the
Controlling Party) an Officer's Certificate and an Opinion of
Counsel (which shall describe the actions taken as required by
clause (v) above or that no such actions will be taken) each
stating that such consolidation or merger and such
supplemental indenture comply with this Article III and that
all conditions precedent herein provided for relating to such
transaction have been compiled with (including any filings
required by the Exchange Act); and
(vii) so long as the Insurer is the Controlling
Party, the Issuer shall have given the Insurer and the
Indenture Trustee written notice of such consolidation or
merger at least 20 Business Days prior to the consummation of
such action and shall have received the prior written approval
of the Insurer of such consolidation or merger and the Issuer
or the Person (if other than the Issuer) formed by or
surviving such consolidation or merger has a net worth,
immediately after such consolidation or merger, that is (A)
greater than zero and (B) not less than the net worth of the
Issuer immediately prior to giving effect to such
consolidation or merger.
(b) The Issuer shall not convey or transfer all or
substantially all of its properties or assets, including those included
in the Pledged Assets, to any Person (except as expressly permitted by
the Basic Documents), unless:
(i) the Person that acquires by conveyance or
transfer the properties and assets of the Issuer shall (A) be
a United States citizen or a Person organized and existing
under the laws of the United States or any State, (B)
expressly assume, by an indenture supplemental hereto,
executed and delivered to the Indenture Trustee and the
Insurer, in form and substance satisfactory to the Indenture
Trustee and the Insurer (so long as the Insurer is the
Controlling Party), the due and punctual payment of the
principal of and interest on all Notes and the performance or
observance of every agreement and covenant of this Indenture
and each other Basic Document on the part of the Issuer to be
performed or observed, all as provided herein, (C) expressly
agree by means of such supplemental indenture that all right,
title and interest so conveyed or transferred shall be subject
and subordinate to the rights of Noteholders, (D) unless
otherwise provided in such supplemental indenture, expressly
agree to indemnify, defend and hold harmless the Issuer
against and from any loss, liability or expense arising under
or related to this Indenture and the Notes and (E) expressly
agree by means of such supplemental indenture that such Person
(or if a group of Persons, then one specified Person) shall
make all filings with the Commission (and any other
appropriate Person) required by the Exchange Act in connection
with the Notes;
(ii) immediately after giving effect to such
conveyance or transfer, no Default or Event of Default shall
have occurred and be continuing;
(iii) the Rating Agency Condition shall have been
satisfied with respect to such conveyance or transfer;
31
Indenture
(iv) the Issuer shall have received an Opinion of
Counsel which shall be delivered to and shall be satisfactory
to the Controlling Party (with a copy to the Insurer so long
as the Insurance Agreement has not terminated) to the effect
that such conveyance or transfer will not have any material
adverse tax consequence to the Trust, the Insurer, any
Noteholder or any Certificateholder;
(v) any action as is necessary to maintain the lien
and security interest created by this Indenture shall have
been taken;
(vi) the Issuer shall have delivered to the Indenture
Trustee and the Insurer (so long as the Insurance Agreement
has not terminated) an Officer's Certificate and an Opinion of
Counsel (which shall describe the actions taken as required by
clause (v) above or that no such actions will be taken) each
stating that such conveyance or transfer and such supplemental
indenture comply with this Article Three and that all
conditions precedent herein provided for relating to such
transaction have been complied with (including any filings
required by the Exchange Act); and
(vii) so long as the Insurer is the Controlling
Party, the Issuer shall have given the Insurer written notice
of such conveyance or transfer of properties or assets at
least 20 Business Days prior to the consummation of such
action and shall have received the prior written approval of
the Insurer of such conveyance or transfer and the Person
acquiring by conveyance or transfer the properties or assets
of the Issuer has a net worth, immediately after such
conveyance or transfer, that is (A) greater than zero and (B)
not less than the net worth of the Issuer immediately prior to
giving effect to such conveyance or transfer.
SECTION 3.11 SUCCESSOR TRANSFEREE.
(a) Upon any consolidation or merger of the Issuer in
accordance with Section 3.10(a), the Person formed by or surviving such
consolidation or merger (if other than the Issuer) shall succeed to,
and be substituted for, and may exercise every right and power of, the
Issuer under this Indenture with the same effect as if such Person had
been named as the Issuer herein.
(b) Upon a conveyance or transfer of all or substantially all
the assets or properties of the Issuer pursuant to Section 3.10(b), the
Issuer will be released from every covenant and agreement of this
Indenture to be observed or performed on the part of the Issuer with
respect to the Notes immediately upon the delivery of written notice to
the Indenture Trustee and the Insurer stating that the Issuer is to be
so released.
SECTION 3.12 NO OTHER BUSINESS. The Issuer shall not engage in (i) any
business other than financing, purchasing, owning, selling and managing the
Receivables in the manner contemplated by this Indenture and the other Basic
Documents and activities incidental thereto or (ii) any other business or
activities as contemplated by Section 1.03 of the Trust Agreement.
32
Indenture
SECTION 3.13 NO BORROWING. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
Indebtedness except for (i) the Notes, (ii) obligations owing from time to time
to the Insurer under the Insurance Agreement and the other Basic Documents, and
(iii) any other Indebtedness permitted by or arising under the Basic Documents.
The proceeds of the Notes shall be used exclusively to fund the Issuer's
purchase of the Receivables and the other assets specified in the Trust
Agreement, to fund the required deposit in the Spread Account, and to pay the
Issuer's organizational, transactional and start-up expenses.
SECTION 3.14 SERVICER'S OBLIGATIONS. The Issuer shall cause the
Servicer to comply with the Servicer's obligations under the Trust Agreement.
SECTION 3.15 GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES. Except
as contemplated by the Trust Agreement or this Indenture, the Issuer shall not
make any loan or advance or credit to, or guarantee (directly or indirectly or
by an instrument having the effect of assuring another's payment or performance
on any obligation or capability of so doing or otherwise), endorse or otherwise
become contingently liable, directly or indirectly, in connection with the
obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or
agree contingently to do so) any stock, obligations, assets or securities of, or
any other interest in, or make any capital contribution to, any other Person.
SECTION 3.16 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 RESTRICTED PAYMENTS. Except as expressly permitted by the
Basic Documents, the Issuer shall not, directly or indirectly, (i) pay any
dividend or make any distribution (by reduction of capital or otherwise),
whether in cash, property, securities or a combination thereof, to the Owner
Trustee or any owner of a beneficial interest in the Issuer or otherwise with
respect to any ownership or equity interest or security in or of the Issuer or
to the Servicer, (ii) redeem, purchase, retire or otherwise acquire for value
any such ownership or equity interest or security or (iii) set aside or
otherwise segregate any amounts for any such purpose; provided, however, that
the Issuer may make, or cause to be made, (A) distributions to the Servicer, the
Back-up Servicer, the Standby Servicer, the Indenture Trustee, the Owner
Trustee, the Insurer and the Noteholders as contemplated by, and to the extent
funds are available for such purpose under, Section 8.05(a) hereof, the Trust
Agreement and the Spread Account Agreement and (B) payments to the Indenture
Trustee and the Owner Trustee pursuant to the Administration Agreement. The
Issuer will not, directly or indirectly, make payments to or distributions from
the Collection Account or any other Trust Account except in accordance with this
Indenture and the other Basic Documents.
SECTION 3.18 NOTICE OF EVENTS OF DEFAULT. The Issuer agrees to give the
Indenture Trustee, the Insurer (so long as the Insurance Agreement has not
terminated) and each Rating Agency prompt written notice of each Event of
Default hereunder (but no later than five (5) days after the Issuer obtains
actual knowledge of such Event of Default) and each default on the part of the
Servicer, the Back-up Servicer, the Standby Servicer or the Transferor of their
respective obligations under the Trust Agreement.
33
Indenture
SECTION 3.19 FURTHER INSTRUMENTS AND ACTS. Upon request of the
Indenture Trustee or, so long as it is the Controlling Party, the Insurer, the
Issuer will execute and deliver such further instruments and do such further
acts as may be reasonably necessary or proper to carry out more effectively the
purpose of this Indenture.
SECTION 3.20 COMPLIANCE WITH LAWS. The Issuer shall comply with the
requirements of all applicable laws, the non-compliance with which would,
individually or in the aggregate, materially and adversely affect the ability of
the Issuer to perform its obligations under the Notes, this Indenture or any
other Basic Document.
SECTION 3.21 AMENDMENTS OF TRUST AGREEMENT. The Issuer shall not agree
to any amendment to Section 16.01 of the Trust Agreement to eliminate the
requirements thereunder that the Insurer (so long as it is the Controlling
Party) and/or the Noteholders, as applicable, consent to any amendment to the
Trust Agreement to the extent provided therein.
SECTION 3.22 CERTAIN REPRESENTATIONS, WARRANTIES AND COVENANTS RELATED
TO RECEIVABLES. The Issuer hereby represents and warrants that this Agreement
creates a valid and continuing security interest (as defined in the applicable
UCC) in the Receivables in favor of the Indenture Trustee, for the benefit of
the Noteholders and the Insurer, which security interest is prior to all other
Liens, and is enforceable as such as against creditors of and purchasers from
Issuer. Issuer has taken all steps necessary to perfect its security interest
against each Obligor in the property securing the Receivables. The Receivables
constitute "tangible chattel paper" within the meaning of the applicable UCC.
Issuer owns and has good and marketable title to the Receivables free and clear
of any Lien, claim or encumbrance of any Person. All original executed copies of
each written agreement that constitute or evidence the Receivables will be
delivered to the Custodian on or prior to the Closing Date. Issuer has not
authorized the filing of and is not aware of any financing statements against
Issuer that includes a description of collateral covering the Receivables other
than any financing statement (i) relating to the security interest granted to
the Indenture Trustee, for the benefit of the Noteholders and the Insurer, under
this Indenture or (ii) that has been terminated. None of the documents that
constitute or evidence the Receivables has any marks or notations indicating
that it has been pledged, assigned or otherwise conveyed to any Person other
than to the Indenture Trustee, for the benefit of the Noteholders and the
Insurer, other than certain Receivables that will be re-marked on or prior to
the Closing Date to reflect the interests of the Indenture Trustee, for the
benefit of the Noteholders and the Insurer, under this Indenture. The
representations and warranties contained in this Section 3.22 shall survive the
execution and delivery of this Indenture. Compliance with the representations
and warranties contained in this Section 3.22 may not be waived without the
consent of Standard & Poor's and the Indenture Trustee.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01 SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture
shall cease to be of further effect with respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.03,
34
Indenture
3.04, 3.05, 3.07, 3.08, 3.10, 3.11, 3.12, 3.17 and 3.18, (v) the rights,
obligations and immunities of the Indenture Trustee hereunder (including the
rights of the Indenture Trustee under Section 6.07 and the obligations of the
Indenture Trustee under Section 4.02), (vi) the rights of Noteholders as
beneficiaries hereof with respect to the property so deposited with the
Indenture Trustee payable to all or any of them and (vii) the obligation of the
Indenture Trustee to make claims under the Policy, which shall survive the Final
Maturity Date of the Class A Notes and extend through any preference period
applicable with respect to the Notes or any payments made in respect of the
Notes, and the Indenture 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) either
1. all Notes theretofore authenticated and delivered
(other than (i) Notes that have been destroyed, lost or stolen
and that have been replaced or paid as provided in Section
2.05 and (ii) Notes for whose payment money has theretofore
been deposited in trust or segregated and held in trust by the
Issuer and thereafter repaid to the Issuer or discharged from
such trust, as provided in Section 3.03) have been delivered
to the Indenture Trustee for cancellation and the Policy has
expired and been returned to the Insurer for cancellation; or
2. all Notes not theretofore delivered to the
Indenture Trustee for cancellation
(i) have become due and payable,
(ii) will become due and payable at the
respective Final Maturity Date of the Class A Notes
within one year, or
(iii) are to be called for redemption within
one year under arrangements satisfactory to the
Indenture Trustee for the giving of notice of
redemption by the Indenture Trustee in the name, and
at the expense, of the Issuer,
and the Issuer, in the case of clauses (i), (ii) or (iii)
above, has irrevocably deposited or caused to be irrevocably
deposited with the Indenture Trustee cash or Eligible
Investments for such purpose, in an amount sufficient to pay
and discharge the entire indebtedness on such Notes not
theretofore delivered to the Indenture Trustee for
cancellation when due to the Final Maturity Date of the Class
A-4 Notes or Redemption Date (if Notes shall have been called
for redemption pursuant to Section 11.01), as the case may be;
(B) the Issuer has paid or performed or caused to be paid or
performed all amounts and obligations which the Issuer may owe to or on
behalf of (1) the Indenture Trustee for the benefit of the Noteholders
under this Indenture or the Notes and (2) the Insurer to the extent
expressly set forth under this Indenture and/or the Basic Documents;
35
Indenture
(C) the Issuer has delivered to the Indenture Trustee and the
Insurer (so long as the Insurance Agreement has not terminated) an
Officer's Certificate, an Opinion of Counsel and (if required by the
Trust Indenture Act) an Independent Certificate from a firm of
certified public accountants, each meeting the applicable requirements
of Section 12.01(a) and, subject to Section 12.02, each stating that
all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with;
and
(D) upon the satisfaction and discharge of the Indenture
pursuant to this Section 4.01, the Indenture Trustee shall deliver to
the Owner Trustee and the Insurer (so long as the Insurance Agreement
has not terminated) a certificate of a Responsible Officer stating (i)
that the Insurer (based on a certificate delivered to the Indenture
Trustee by the Issuer), Noteholders and the Indenture Trustee have been
paid all amounts owed to them, and (ii) either (a) stating that to the
actual knowledge of such Responsible Officer, no claims remain against
the Issuer, or (b) stating that the only pending or threatened claims
actually known to such Responsible Officer (including contingent and
unliquidated claims) are those listed on a schedule to such
certificate.
SECTION 4.02 APPLICATION OF TRUST MONEY. All monies deposited with the
Indenture Trustee pursuant to Section 4.01 shall be held in trust and applied by
it, in accordance with the provisions of the Notes and this Indenture, to the
payment, either directly or through any Paying Agent, as the Indenture Trustee
may determine, to the Holders of the particular Notes for the payment or
redemption of which such monies have been deposited with the Indenture Trustee,
of all sums due and to become due thereon for principal and interest; but such
monies need not be segregated from other funds except to the extent required
herein or in the Trust Agreement or required by law.
SECTION 4.03 REPAYMENT OF MONIES HELD BY PAYING AGENT. In connection
with the satisfaction and discharge of this Indenture with respect to the Notes,
all monies then held by any Paying Agent other than the Indenture Trustee under
the provisions of this Indenture with respect to such Notes shall, upon demand
of the Issuer, be paid to the Indenture Trustee to be held and applied according
to Section 3.03 and thereupon such Paying Agent shall be released from all
further liability with respect to such monies.
ARTICLE V
EVENTS OF DEFAULT; REMEDIES
SECTION 5.01 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):
36
Indenture
(i) default in the payment of any interest on any
Note when the same becomes due and payable (solely for
purposes of this clause, a payment on the Notes funded by the
Insurer or the Collateral Agent from the Spread Account shall
be deemed to be a payment made by the Issuer);
(ii) default in the payment of any principal of or
any installment of the principal of the Class A Notes on the
Final Maturity Date for such Class of Notes (solely for
purposes of this clause, a payment on the Class A Notes funded
by the Insurer or the Collateral Agent from the Spread Account
shall be deemed to be a payment made by the Issuer);
(iii) so long as the Insurer is the Controlling
Party, an Insurance Agreement Indenture Cross Default shall
have occurred; provided, however, that the occurrence of an
Insurance Agreement Indenture Cross Default may not form the
basis of an Event of Default unless the Insurer shall, upon
prior written notice to the Rating Agencies, have delivered to
the Issuer and the Indenture Trustee and not rescinded a
written notice specifying that such Insurance Agreement
Indenture Cross Default constitutes an Event of Default under
this Indenture;
(iv) so long as the Insurer is not the Controlling
Party, default in the observance or performance of any
covenant or agreement of the Issuer made in this Indenture
(other than a covenant or agreement, a default in the
observance or performance of which is elsewhere in this
Section specifically dealt with), or any representation or
warranty of the Issuer made in this Indenture, in any Basic
Document or in any certificate or any other writing delivered
pursuant hereto or in connection herewith or therewith proving
to have been incorrect in any material respect as of the time
when the same shall have been made, and such default shall (A)
materially and adversely affect the Noteholders or the Insurer
and (B) continue or not be cured, or the circumstance or
condition in respect of which such misrepresentation or
warranty was incorrect shall not have been eliminated or
otherwise cured, for a period of 60 days after there shall
have been given to the Issuer by the Indenture Trustee or to
the Issuer and the Indenture Trustee by the Majority
Noteholders or the Insurer, a written notice by registered or
certified mail, specifying such default or incorrect
representation or warranty and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder;
(v) so long as the Insurer is not the Controlling
Party, the filing of a decree or order for relief by a court
having jurisdiction in the premises in respect of the Issuer
or any substantial part of the Pledged Assets in an
involuntary case under any applicable federal or state
bankruptcy, insolvency or other similar law now or hereafter
in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the
Issuer or for any substantial part of the Pledged Assets, or
ordering the winding-up or liquidation of the Issuer's
affairs, and such decree or order shall remain unstayed and in
effect for a period of 60 consecutive days;
37
Indenture
(vi) so long as the Insurer is not the Controlling
Party, the commencement by the Issuer of a voluntary case
under any applicable federal or state bankruptcy, insolvency
or other similar law now or hereafter in effect, or the
consent by the Issuer to the entry of an order for relief in
an involuntary case under any such law, or the consent by the
Issuer to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Issuer or for any substantial part of
the Pledged Assets, or the making by the Issuer of any general
assignment for the benefit of creditors, or the failure by the
Issuer generally to pay its debts as such debts become due, or
the taking of action by the Issuer in furtherance of any of
the foregoing;
(vii) the Issuer becoming taxable as an association
(or publicly traded partnership) taxable as a corporation for
federal or state income tax purposes; or
(viii) the Issuer or the Transferor being treated as
an investment company pursuant to the Investment Company Act
of 1940, as amended.
(b) The Issuer shall deliver to the Indenture Trustee, the
Rating Agencies and the Insurer (so long as the Insurance Agreement has
not terminated), within five days after obtaining knowledge of the
occurrence thereof, written notice in the form of an Officer's
Certificate of any event which with the giving of notice or the lapse
of time would become an Event of Default, its status and what action
the Issuer is taking or proposes to take with respect thereto.
SECTION 5.02 RIGHTS UPON EVENT OF DEFAULT.
(a) So long as the Insurer is the Controlling Party, if an
Event of Default shall have occurred and is continuing, then the
Insurer shall have the right, but not the obligation, upon prior
written notice to each Rating Agency, to declare by written notice to
the Issuer, the Servicer and the Indenture Trustee that the entire
principal amount of the Class A Notes, together with interest accrued
on the Class A Notes and Class I Notes, become immediately due and
payable, and upon any such declaration the unpaid principal amount of
the Class A Notes, together with accrued and unpaid interest on the
Class A and Class I Notes, shall become immediately due and payable.
The Indenture Trustee will have no discretion with respect to the
acceleration of the Notes under the foregoing circumstances. In the
event of any such acceleration of the Notes, the Indenture Trustee
shall continue to make claims under the Policy with respect to the
Notes.
(b) If the Insurer is no longer the Controlling Party, and an
Event of Default shall have occurred and be continuing, the Indenture
Trustee shall, if so requested in writing by the Majority Noteholders,
upon prior written notice to each Rating Agency, declare that the
entire principal amount of the Class A Notes, together with interest
accrued on the Class A Notes and Class I Notes, become immediately due
and payable, and upon any such declaration the unpaid principal amount
of the Class A Notes, together with accrued and unpaid interest on the
Class A and Class I Notes, shall become immediately due and payable.
38
Indenture
(c) If an Event of Default occurs and the Notes have been
accelerated, the Indenture Trustee may exercise any of the remedies
specified in Section 5.04(a). Payments following acceleration of any
Notes shall be applied by the Indenture Trustee pursuant to Section
8.05(g).
(d) In the event any Notes are accelerated due to an Event of
Default, the Insurer shall have the right (in addition to its
obligation to pay Scheduled Payments on the Notes in accordance with
the Policy), but not the obligation, to make payments under the Policy
or otherwise of interest and principal due on such Notes, in whole or
in part, on any date or dates following such acceleration as the
Insurer, in its sole discretion, shall elect. In addition, if an Event
of Default occurs and the Insurer accelerates the Notes whether in full
or in part (including, without limitation, as a result of the sale of
any Receivable), the Insurer will from and after such acceleration
guarantee pursuant to the Policy the continued payment of Class I
Monthly Interest to the Class I Noteholders based on the Planned
Notional Principal Amount Schedule for all remaining Payment Dates
included in the Planned Notional Principal Amount Schedule.
(e) At any time after 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 Indenture Trustee as hereinafter in this
Article V provided, the Insurer, so long as it is the Controlling
Party, and otherwise, the Majority Noteholders, by written notice to
the Issuer and the Indenture Trustee, may rescind and annul such
declaration and its consequences if:
(i) the Issuer has paid or deposited with the
Indenture Trustee a sum sufficient to pay:
(A) all payments of principal on the Class A
Notes and interest on all Notes and all other amounts
that would then be due hereunder or upon such Notes
if the Event of Default giving rise to such
acceleration had not occurred, which funds shall be
deposited into the Collection Account;
(B) all sums paid or advanced by the
Indenture Trustee hereunder and the reasonable
compensation, expenses and disbursements of the
Indenture Trustee and its agents and counsel, which
funds shall be deposited into the Collection Account;
and
(C) all sums paid or advanced by or due to
the Insurer and any unpaid Insurance Premium, which
funds shall be paid to the Insurer; and
(ii) all Events of Default, other than the nonpayment
of the interest on or 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.
39
Indenture
SECTION 5.03 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
INDENTURE TRUSTEE.
(a) The Issuer covenants that, if the Notes are accelerated
following the occurrence of an Event of Default, the Issuer will, upon
demand of the Indenture Trustee, pay to the Indenture Trustee, for the
benefit of the Noteholders, the whole amount then due and payable on
such Notes for principal and interest, with interest upon the overdue
principal, and, to the extent payment at such rate of interest shall be
legally enforceable, upon overdue installments of interest, at the
applicable interest rates and in addition thereto such further amount
as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses and disbursements of
the Insurer and the Indenture Trustee and their respective agents and
counsel. In furtherance of the foregoing, the Issuer hereby irrevocably
and unconditionally appoints the Indenture Trustee as the true and
lawful attorney-in-fact of the Issuer, with full power of substitution,
to execute, acknowledge and deliver any notice, document, certificate,
paper, pleading or instrument and to do in the name of the Indenture
Trustee as well as in the name, place and stead of the Issuer such
acts, things and deeds for or on behalf of and in the name of the
Issuer under this Indenture (including specifically under Section 5.04)
and under the Basic Documents which the Issuer could or might do or
which may be necessary, desirable or convenient in the Indenture
Trustee's sole discretion to effect the purposes contemplated hereunder
and under the Basic Documents and, without limitation, following the
occurrence of an Event of Default, so long as the Insurer is the
Controlling Party, acting at the instruction or with the consent of the
Insurer, and thereafter acting at the instruction or with the consent
of the Majority Noteholders, exercise full right, power and authority
to take, or defer from taking, any and all acts with respect to the
administration, maintenance or disposition of the Pledged Assets.
(b) If an Event of Default shall have occurred and be
continuing, the Indenture Trustee shall (i) if the Insurer is the
Controlling Party, at the direction of the Insurer, or (ii) if the
Insurer is not the Controlling Party, at the direction of the Majority
Noteholders, as more particularly provided in Section 5.04, proceed to
protect and enforce the rights of the Noteholders, by such appropriate
Proceedings as the Indenture Trustee shall deem most effective to
protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or to enforce any other
proper remedy or legal or equitable right vested in the Indenture
Trustee by this Indenture or by law.
(c) 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 Pledged Assets, 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, Insurer or Servicer or other obligor upon the
Notes, or to the creditors or property of the Issuer or such other
obligor, the Indenture Trustee, irrespective of whether the principal
of any Notes shall then be due and payable as
40
Indenture
therein expressed or by declaration or otherwise and irrespective of
whether the Indenture Trustee shall have made any demand pursuant to
the provisions of this Section, shall be entitled and empowered, by
intervention in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole
amount of principal and interest owing and unpaid in respect
of the Notes and to file such other papers or documents as may
be necessary or advisable in order to have the claims of the
Indenture Trustee (including any claim for reasonable
compensation to the Indenture Trustee and each predecessor
Indenture Trustee, and their respective agents, attorneys and
counsel, and for reimbursement of all expenses and liabilities
incurred by the Indenture Trustee and each predecessor
Indenture Trustee, except as a result of negligence or bad
faith) and of the Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and
regulations, to vote on behalf of the Noteholders in any
election of a trustee, a standby trustee or Person performing
similar functions in any such Proceedings;
(iii) to collect and receive any monies or other
property payable or deliverable on any such claims and to
distribute all amounts received with respect to the claims of
the Noteholders and of the Indenture Trustee on their behalf;
and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have
the claims of the Indenture Trustee or the Noteholders allowed
in any judicial Proceedings relative to the Issuer, the
Insurer or the Servicer, or any of their respective creditors
and their respective properties; and any trustee, receiver,
liquidator, custodian or other similar official in any such
Proceeding is hereby authorized by each of such Noteholders to
make payments to the Indenture Trustee, and, in the event that
the Indenture Trustee shall consent to the making of payments
directly to such Noteholders, to pay to the Indenture Trustee
such amounts as shall be sufficient to cover reasonable
compensation to the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents, attorneys and
counsel, and all other expenses and liabilities incurred by
the Indenture Trustee and each predecessor Indenture Trustee
except as a result of negligence or bad faith.
(d) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
(e) All rights of action and of asserting claims under this Indenture,
or under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such action or Proceedings instituted by
the Indenture Trustee shall be brought in
41
Indenture
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
Indenture Trustee, each predecessor Indenture Trustee and their respective
agents and attorneys, shall be for the ratable benefit of the Noteholders.
(f) In any Proceedings brought by the Indenture Trustee (including any
Proceedings involving the interpretation of any provision of this Indenture),
the Indenture Trustee shall be held to represent all the Noteholders, and it
shall not be necessary to make any Noteholder a party to any such Proceedings.
SECTION 5.04 REMEDIES.
(a) If (i) an Event of Default shall have occurred and be
continuing and the Notes have been declared due and payable under
Section 5.02, the Indenture Trustee shall (subject to Section 5.04(b)
below and Section 5.05), if the Insurer is the Controlling Party, at
the direction of the Insurer, or (ii) if an Event of Default shall have
occurred and be continuing and the Notes have been declared due and
payable under Section 5.02, the Indenture Trustee shall (subject to
Section 5.04(b) below and Section 5.05), if the Insurer is no longer
the Controlling Party, at the direction of the Majority Noteholders,
take one or more of the following actions as so directed:
(i) institute Proceedings in its own name and as or
on behalf of a trustee of an express trust for the collection
of all amounts then payable on the Notes, or to the Insurer
under this Indenture or any other Basic Document with respect
thereto, whether by declaration or otherwise, enforce any
judgment obtained, and collect from the Issuer and any other
obligor upon such Notes monies adjudged due;
(ii) institute Proceedings from time to time for the
complete or partial foreclosure of this Indenture with respect
to the Pledged Assets;
(iii) exercise any remedies of a secured party under
the UCC and any other remedy available to the Indenture
Trustee and take any other appropriate action to protect and
enforce the rights and remedies of the Indenture Trustee on
behalf of the Noteholders and the Insurer under this Indenture
or the Notes;
(iv) sell or cause the Servicer to otherwise
liquidate the Pledged Assets or any portion thereof or rights
or interests therein, at one or more public or private sales
called and conducted in any manner permitted by law and
deliver the proceeds of such sale or liquidation to the
Indenture Trustee for distribution in accordance with the
terms of this Indenture; and
(v) maintain possession of the Pledged Assets
(b) Notwithstanding the foregoing,
(i) in the event that the Indenture Trustee is acting
at the direction of the Insurer, so long as the Insurer is the
Controlling Party, if an Event of Default
42
Indenture
specified in Section 5.01(a)(i), (ii), (iii) or (iv) shall
have occurred and be continuing, the Insurer shall not have
the right to cause the Indenture Trustee or the Servicer to,
and neither the Indenture Trustee nor the Servicer shall,
liquidate the Pledged Assets in whole or in part if the
proceeds of such sale or liquidation would not be sufficient
to pay, subject to Section 5.02(d), all outstanding principal
of and accrued interest on the Notes; and
(ii) in the event that the Indenture Trustee is
acting at the direction of the Majority Noteholders (so long
as an Insurer Default shall have occurred and be continuing or
the Insurance Agreement has terminated), the Noteholders shall
not have the right to direct the Indenture Trustee or the
Servicer to, and neither the Indenture Trustee nor the
Servicer shall, liquidate the Pledged Assets in whole or in
part unless an Event of Default as specified in Section
5.01(a)(v) or (vi) shall have occurred and be continuing.
(c) In determining the sufficiency or insufficiency of the
proceeds of a sale or liquidation of the Pledged Assets to pay all
amounts required pursuant to Section 5.04(b)(i) above, the Indenture
Trustee may, but need not, at the sole expense of the Issuer 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 Pledged Assets for such
purpose.
SECTION 5.05 OPTIONAL PRESERVATION OF THE RECEIVABLES. If the Notes
have been declared to be due and payable under Section 5.02 following an Event
of Default and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee shall, absent direction to the contrary from the
Insurer or the Noteholders pursuant to Section 5.04, maintain possession of the
Pledged Assets.
SECTION 5.06 PRIORITIES.
(i) If the Notes have been declared to be due and
payable under Section 5.02 following an Event of Default and
such declaration and its consequences have not been rescinded
and annulled, any money collected by the Indenture Trustee
with respect to the Pledged Assets, the Notes or the
Certificates pursuant to this Article or otherwise and any
money that may then be held or thereafter received by the
Indenture Trustee with respect to the Pledged Assets, the
Notes or the Certificates (excluding any payments made under
the Policy), shall be applied pursuant to Section 8.05(g).
(ii) The Indenture Trustee may fix a record date and
payment date for any payment to Noteholders pursuant to this
Section. At least 15 days before such record date, the Issuer
shall mail to each Noteholder and the Indenture Trustee a
notice that states the record date, the payment date and the
amount to be paid.
43
Indenture
SECTION 5.07 LIMITATION OF SUITS.
(a) No Holder of any Note shall have any right to institute
any Proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(i) such Holder has previously given written notice
to the Indenture Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Note
Balances have made written request to the Indenture Trustee to
institute such Proceeding in respect of such Event of Default
in its own name as Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the
Indenture Trustee reasonable indemnity against the costs,
expenses and liabilities to be incurred in complying with such
request;
(iv) the Indenture Trustee for 60 days after its
receipt of such notice, request and offer of indemnity has
failed to institute such Proceedings;
(v) no direction inconsistent with such written
request shall have been given to the Indenture Trustee during
such 60-day period by the Holders of a majority of the Class A
Note Balances, voting together as a single class; and
(vi) the Insurer is no longer the Controlling Party.
It is understood and intended that no one or more Noteholders 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
Noteholders or to obtain or to seek to obtain priority or preference over any
other Holders or to enforce any right under this Indenture, except in the manner
herein provided.
(b) In the event the Indenture Trustee shall receive
conflicting or inconsistent requests and indemnity from two or more
groups of Noteholders, each representing less than a majority of the
Note Balances (voting as a single Class), the Indenture Trustee in its
sole discretion may determine that action, if any, shall be taken,
notwithstanding any other provisions of this Indenture and any such
action shall be binding on all parties.
SECTION 5.08 UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE PRINCIPAL
AND INTEREST. Notwithstanding any other provisions in this Indenture, the Holder
of any Note shall have the right, which is absolute and unconditional, to
receive payments of Monthly Interest and (in the case of Class A Notes) Monthly
Principal on such Note on or after the respective due dates thereof expressed in
such Note or in this Indenture (or, in the case of redemption, on or after the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such right shall not be impaired without the consent of such Holder.
SECTION 5.09 RESTORATION OF RIGHTS AND REMEDIES. If the Indenture
Trustee, the Insurer or any Noteholder shall have instituted any Proceeding to
enforce any right or remedy
44
Indenture
under this Indenture and such Proceeding shall have been discontinued or
abandoned for any reason or shall have been determined adversely to the
Indenture Trustee, the Insurer or to such Noteholder, then and in every such
case the Issuer, the Indenture Trustee, the Insurer and the Noteholders shall,
subject to any determination in such Proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter all rights and
remedies of the Indenture Trustee and the Noteholders shall continue as though
no such Proceeding had been instituted.
SECTION 5.10 RIGHTS AND REMEDIES CUMULATIVE. No right or remedy herein
conferred upon or reserved to the Indenture Trustee, the Insurer or to the
Noteholders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 5.11 DELAY OR OMISSION NOT A WAIVER. No delay or omission of
the Indenture Trustee, the Insurer or any Holder of any Note to exercise any
right or remedy accruing upon any Default or Event of Default shall impair any
such right or remedy or constitute a waiver of any such Default or Event of
Default or an acquiescence therein. Every right and remedy given by this Article
Five or by law to the Indenture Trustee, the Insurer or to the Noteholders may
be exercised from time to time, and as often as may be deemed expedient, by the
Indenture Trustee, the Insurer or by the Noteholders, as the case may be.
SECTION 5.12 CONTROL BY CONTROLLING PARTY. The Insurer, if the Insurer
is the Controlling Party, and otherwise the Indenture Trustee at the direction
of the Majority Noteholders shall have the right to direct the time, method and
place of conducting any Proceeding for any remedy available to the Indenture
Trustee with respect to the Notes or exercising any trust or power conferred on
the Indenture Trustee; provided that:
(i) such direction shall not be in conflict with any
rule of law or with this Indenture;
(ii) any direction to the Indenture Trustee to sell
or liquidate the Pledged Assets shall be subject to the terms
of Section 5.04; and
(iii) the Indenture Trustee shall have been provided
with indemnification satisfactory to it in connection with
such direction.
Notwithstanding the rights of Noteholders set forth in this Section, subject to
Section 6.01, the Indenture Trustee need not take any action that it determines,
in its sole discretion, might involve it in liability or might materially
adversely affect the rights of any Noteholders not consenting to such action.
SECTION 5.13 WAIVER OF PAST DEFAULTS.
(a) Prior to the declaration of the acceleration of the
maturity of the Notes as provided in Section 5.02, the Insurer so long
as it is the Controlling Party and otherwise
45
Indenture
the Indenture Trustee, at the direction of Holders holding in the
aggregate more than 50% of the outstanding Class A Note Balance, may
waive any past Default and/or Event of Default and its consequences
except a Default (a) in the payment of principal of or interest on any
of the Notes or (b) in respect of a covenant or provision hereof that
cannot be modified or amended without the consent of the Holder of each
Note, as applicable. In the case of any such waiver, the Issuer, the
Indenture Trustee, the Insurer 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 impair any
right consequent thereto.
(b) Upon any such waiver, such Default shall cease to exist
and be deemed to have been cured and not to have occurred, and any
Event of Default arising therefrom shall be deemed to have been cured
and not to have occurred, for every purpose of this Indenture; but no
such waiver shall extend to any subsequent or other Default or Event of
Default or impair any right consequent thereto.
SECTION 5.14 UNDERTAKING FOR COSTS. All parties to this Indenture
agree, and each Holder of any Note by such Holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit and that such court may in its
discretion assess reasonable costs, including attorneys' fees and expenses,
against any party litigant in such suit, in the manner and to the extent
provided by the Trust Indenture Act; but the provisions of this Section shall
not apply to (i) any suit instituted by the Indenture Trustee, (ii) any suit
instituted by any Noteholder, or group of Noteholders, in each case holding in
the aggregate more than 10% of the Note Balances or (iii) any suit instituted by
any Noteholder for the enforcement of the payment of principal of or interest on
any Note on or after the respective due dates expressed in such Note and in this
Indenture (or, in the case of redemption, on or after the Redemption Date).
SECTION 5.15 WAIVER OF STAY OR EXTENSION LAWS. The Issuer covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead or in any manner whatsoever, claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture; and
the Issuer (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantages of any such law, and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the
Indenture Trustee, but will suffer and permit the execution of every such power
as though no such law had been enacted.
SECTION 5.16 ACTION ON NOTES. The Indenture Trustee's right to seek and
recover judgment on the Notes or under this Indenture shall not be affected by
the seeking, obtaining or application of any other relief under or with respect
to this Indenture. Neither the lien of this Indenture nor any rights or remedies
of the Indenture Trustee or the Noteholders shall be impaired by the recovery of
any judgment by the Indenture Trustee against the Issuer or by the levy of any
execution under such judgment upon any portion of the Pledged Assets or upon
46
Indenture
any of the assets of the Issuer. Any money or property collected by the
Indenture Trustee shall be applied in accordance with Section 5.06.
SECTION 5.17 PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS.
(a) Promptly following a request from the Indenture Trustee
or, so long as it is the Controlling Party, the Insurer, to do so and
at the Administrator's expense, the Issuer shall take all such lawful
action as the Indenture Trustee or the Insurer may request to compel or
secure the performance and observance by the Transferor and the
Servicer as applicable, of each of their obligations to the Issuer
under or in connection with the Trust Agreement in accordance with the
terms thereof, and to exercise any and all rights, remedies, powers and
privileges lawfully available to the Issuer under or in connection with
the Trust Agreement to the extent and in the manner directed by the
Indenture Trustee or, the Insurer, so long as it is the Controlling
Party, including the transmission of notices of default on the part of
the Transferor, the Servicer, the Back-up Servicer or the Standby
Servicer thereunder and the institution of legal or administrative
actions or Proceedings to compel or secure performance by the
Transferor, the Servicer, the Back-up Servicer or the Standby Servicer
of each of their obligations under the Trust Agreement.
(b) If the Indenture Trustee is the Controlling Party and if
an Event of Default has occurred and is continuing, the Indenture
Trustee may, and at the direction (which direction shall be given in
writing and may include a facsimile) of the Majority Noteholders shall,
exercise all rights, remedies, powers, privileges and claims of the
Issuer against the Transferor or the Servicer under or in connection
with the Trust Agreement, including the right or power to take any
action to compel or secure performance or observance by the Transferor,
the Servicer, the Back-up Servicer or the Standby Servicer of each of
their obligations to the Issuer thereunder and to give any consent,
request, notice, direction, approval, extension or waiver under the
Trust Agreement, and any right of the Issuer to take such action shall
be suspended.
SECTION 5.18 OPTIONAL DEPOSITS BY THE INSURER. The Insurer shall at any
time, and from time to time, with respect to a Payment Date, have the option to
deliver amounts (any such amount, an "Insurer Optional Deposit") to the
Indenture Trustee for deposit into the Collection Account for any of the
following purposes: (i) to provide funds in respect of the payment of fees or
expenses of any provider of services to the Trust with respect to such Payment
Date, (ii) to pay Class A Monthly Principal or (iii) to include such amount as
part of the Monthly Interest for such Payment Date to the extent that without
such amount a draw would be required to be made on the Policy.
47
Indenture
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.01 DUTIES OF INDENTURE TRUSTEE.
(a) If an Event of Default shall have occurred and be
continuing, and of which the Indenture Trustee shall have actual
knowledge, the Indenture Trustee shall exercise the rights and powers
vested in it by this Indenture and with the same degree of care and
skill in its exercise as a prudent person would exercise or use under
the circumstances in the conduct of such person's own affairs;
provided, however, that if the Indenture Trustee shall assume the
duties of the Servicer pursuant to Section 3.07(e), the Indenture
Trustee in performing such duties shall use the degree of care and
skill customarily exercised by a prudent institutional servicer with
respect to automobile retail installment sales contracts that it
services for itself or others.
(b) Except during the continuance of an Event of Default of
which a Responsible Officer of the Indenture Trustee shall have actual
knowledge or written notice:
(i) the Indenture Trustee undertakes to perform such
duties and only such duties as are specifically set forth in
this Indenture and no implied covenants or obligations shall
be read into this Indenture against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the
Indenture Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Indenture Trustee and conforming to the requirements of this
Indenture; provided, however, the Indenture Trustee shall
examine the certificates and opinions to determine whether or
not they conform on their face to the requirements of this
Indenture and the other Basic Documents to which the Indenture
Trustee is a party; provided, however, that the Indenture
Trustee shall not be responsible for the accuracy or content
of any of the aforementioned documents and the Indenture
Trustee shall have no obligation to verify, re-compute or
recalculate any numerical information provided to it pursuant
to the Basic Documents.
(c) The Indenture Trustee may not be relieved from liability
for its own negligent action, its own negligent failure to act or its
own willful misconduct except that:
(i) this paragraph does not limit the effect of
Section 6.01(b);
(ii) the Indenture Trustee shall not be liable for
any error of judgment made in good faith by a Responsible
Officer unless it is proved that the Indenture Trustee was
negligent in ascertaining the pertinent facts; and
48
Indenture
(iii) the Indenture Trustee shall not be liable with
respect to any action it takes or omits to take in good faith
in accordance with a direction received by it pursuant to
Section 5.12.
(d) Every provision of this Indenture that in any way relates
to the Indenture Trustee is subject to paragraphs (a), (b) and (c) of
this Section.
(e) The Indenture Trustee shall not be liable for interest on
any money received by it.
(f) Money held in trust by the Indenture Trustee need not be
segregated from other funds except to the extent required by law or the
terms of this Indenture or the Trust Agreement.
(g) No provision of this Indenture shall require the Indenture
Trustee to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds to believe that repayments of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Indenture
Trustee shall be subject to the provisions of this Section and to the
provisions of the Trust Indenture Act.
(i) The Indenture Trustee shall, and hereby agrees that it
will hold the Policy in trust, and will hold any proceeds of any claim
on the Policy in trust solely for application as provided in the Trust
Agreement and this Indenture.
(j) The Indenture Trustee shall not be liable in its
individual capacity with respect to any action taken, suffered or
omitted to be taken by it in good faith in accordance with this
Indenture or at the direction of the Majority Noteholders, relating to
the time, method and place of conducting any Proceeding for any remedy
available to the Indenture Trustee, or exercising or omitting to
exercise any trust or power conferred upon the Indenture Trustee, under
this Indenture.
(k) The Indenture Trustee shall not be required to take notice
or be deemed to have notice or knowledge of any Default, Insurer
Default, Servicer Default or Event of Default unless a Responsible
Officer of the Indenture Trustee shall have received written notice
thereof. In the absence of receipt of such notice, the Indenture
Trustee may conclusively assume that there is no Default, Insurer
Default, Servicer Default or Event of Default.
(l) Subject to the other provisions of this Indenture, the
Indenture Trustee shall have no duty (i) to see to any recording,
filing, or depositing of this Indenture or any agreement referred to
herein or any financing statement or continuation statement evidencing
a security interest, or to see to the maintenance of any such recording
or filing or depositing or to any rerecording, refiling or redepositing
of any thereof, (ii) to see to any insurance, (iii) to see to the
payment or discharge of any tax, assessment, or other
49
Indenture
governmental charge or any lien or encumbrance of any kind owing with
respect to, assessed or levied against, any part of the Pledged Assets,
or (iv) to confirm or verify the contents of any reports or
certificates delivered to the Indenture Trustee pursuant to this
Indenture believed by the Indenture Trustee to be genuine and to have
been signed or presented by the proper party or parties.
(m) Anything in this Indenture to the contrary
notwithstanding, in no event shall the Indenture Trustee be liable for
special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the
Indenture Trustee has been advised of the likelihood of such loss or
damage regardless of the form of action.
SECTION 6.02 RIGHTS OF INDENTURE TRUSTEE.
(a) Except as otherwise provided in the second succeeding
sentence, the Indenture Trustee may conclusively rely and shall be
protected in acting upon or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, note, direction, demand, election or other paper or
document believed by it to be genuine and to have been signed or
presented by the proper person. The Indenture Trustee need not
investigate any fact or matter stated in the document. Notwithstanding
the foregoing, the Indenture Trustee, subject to Section 6.01(b)(ii)
upon receipt of all resolutions, certificates, statements, opinions,
reports, documents, orders or other instruments furnished to the
Indenture Trustee that shall be specifically required to be furnished
pursuant to any provision of this Indenture, shall examine them to
determine whether they comply as to form to the requirements of this
Indenture.
(b) Before the Indenture Trustee acts or refrains from acting,
it may require an Officer's Certificate (with respect to factual
matters) or an Opinion of Counsel, as applicable. The Indenture Trustee
shall not be liable for any action it takes or omits to take in good
faith in reliance on the Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents or attorneys or a custodian or nominee and the
Indenture Trustee shall not be responsible for any misconduct or
negligence on the part of any such agent, attorney, custodian or
nominee appointed by the Indenture Trustee with due care.
(d) The Indenture Trustee shall not be liable for any action
it takes or omits to take in good faith which it believes to be
authorized or within its rights or powers; provided, however, that the
Indenture Trustee's conduct does not constitute willful misconduct,
negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the
advice or opinion of counsel with respect to legal matters relating to
this Indenture and the Notes shall be full and complete authorization
and protection from liability in respect to any action
50
Indenture
taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.
(f) Subject to Section 6.01(a), the Indenture Trustee shall be
under no obligation to exercise any of the trusts or powers vested in
it by this Indenture or to institute, conduct or defend any litigation
hereunder or in relation hereto at the request, order or direction of
any of the Noteholders, or Controlling Party, as the case may be,
pursuant to the provisions of this Indenture, unless such Noteholders
shall have offered to the Indenture Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities which
may be incurred therein or thereby.
(g) The Indenture Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document, unless
requested in writing to do so by the Majority Noteholders or the
Insurer; provided, however, that if the payment within a reasonable
time to the Indenture Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in
the opinion of the Indenture Trustee, not reasonably assured to the
Indenture Trustee by the security afforded to it by the terms of this
Indenture, the Indenture Trustee may require reasonable indemnity
against such cost, expense or liability as a condition to taking any
such action.
(h) The right of the Indenture Trustee to perform any
discretionary act enumerated in this Indenture shall not be construed
as a duty, and the Indenture Trustee shall not be answerable for other
than its willful misconduct, negligence or bad faith in the performance
of such act.
(i) The rights and privileges pertaining to the Indenture
Trustee set forth in Section 6.01 and 6.02 hereof shall apply to the
Indenture Trustee in all of the Basic Documents.
(j) The Indenture Trustee or its Affiliates are permitted to
receive additional compensation that could be deemed to be in the
Indenture Trustee's economic self-interest and which are not
contemplated by this Indenture for (i) serving as investment adviser,
administrator, shareholder servicing agent, custodian or sub-custodian
with respect to certain of the Eligible Investments, (ii) using
Affiliates to effect transactions in certain Permitted Investments and
(iii) effecting transactions in certain Eligible Investments; provided
that this Section 6.02(j) shall not entitle the Indenture Trustee or
any of its Affiliates to any such additional compensation or permit the
payment of any such additional compensation pursuant to Section 8.05(a)
or any other provision of this Indenture unless, in each case,
otherwise expressly permitted pursuant to the terms of this Indenture
or the Trust Agreement.
SECTION 6.03 INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE. The Indenture
Trustee in its individual or any other capacity may become the owner or pledgee
of Notes and may otherwise deal with the Issuer or its Affiliates with the same
rights it would have if it were not Indenture Trustee. Any Paying Agent, Note
Registrar, co-registrar or co-paying agent may do
51
Indenture
the same with like rights. However, the Indenture Trustee is required to comply
with Sections 6.11 and 6.12.
SECTION 6.04 INDENTURE TRUSTEE'S DISCLAIMER. The Indenture Trustee
shall not be responsible for and makes no representation as to the validity or
adequacy of this Indenture, the Pledged Assets or the Notes, it shall not be
accountable for the Issuer's use of the proceeds from the Notes, and it shall
not be responsible for any statement of the Issuer in this Indenture or in any
document issued in connection with the sale of the Notes or in the Notes other
than the Indenture Trustee's certificate of authentication.
SECTION 6.05 NOTICE OF DEFAULTS. If a Default shall have occurred and
be continuing and a Responsible Officer of the Indenture Trustee shall have
actual knowledge or shall have received written notice thereof, the Indenture
Trustee shall mail to each Noteholder, the Insurer and the Rating Agency notice
of the Default within 5 days after such knowledge or notice occurs.
SECTION 6.06 REPORTS BY INDENTURE TRUSTEE TO HOLDERS. The Indenture
Trustee shall deliver to each Noteholder such information as may be required to
enable such holder to prepare its federal and state income tax returns.
SECTION 6.07 COMPENSATION AND INDEMNITY. Pursuant to Section 8.05(a)
hereof, the Indenture Trustee shall receive compensation on each Payment Date
for its services, in its capacities as Indenture Trustee, Collateral Agent and
Back-up Servicer under the Basic Documents. The Indenture Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. Pursuant to Section 8.05(a) hereof, the Indenture Trustee shall also be
entitled to receive reimbursement for all reasonable out-of-pocket expenses
incurred or made by it in its capacities as Indenture Trustee, Collateral Agent
and Back-up Servicer, including costs of collection, in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation and expenses and disbursements and advances of the Indenture
Trustee's agents, counsel, accountants and experts. The Issuer shall, or shall
cause the Administrator to, indemnify the Indenture Trustee against any and all
loss, liability or expense (including attorneys' fees) incurred by it in
connection with the administration of this trust and the performance of its
duties hereunder. The Indenture Trustee shall notify the Issuer, the
Administrator and the Insurer promptly of any claim for which it may seek
indemnity but failure to do so shall not constitute a waiver of any rights
hereunder. Failure by the Indenture Trustee to so notify the Issuer and the
Administrator shall not relieve the Issuer or the Administrator of its
obligations hereunder. The Issuer shall, or shall cause the Administrator to,
defend any such claim, and the Indenture Trustee may have separate counsel and
the Issuer shall, or shall cause the Administrator to, pay the fees and expenses
of such counsel. Neither the Issuer nor the Administrator need reimburse any
expense or indemnify against any loss, liability or expense incurred by the
Indenture Trustee through the Indenture Trustee's own willful misconduct,
negligence or bad faith.
The Issuer's obligations to the Indenture Trustee pursuant to this
Section shall survive the resignation or removal of the Indenture Trustee,
Collateral Agent and Back-up Servicer and the discharge of this Indenture. When
the Indenture Trustee incurs expenses after the occurrence of an Event of
Default specified in Section 5.01(a)(v) or (vi) with respect to the Issuer, the
expenses
52
Indenture
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. The Indenture Trustee shall have a lien prior to the
Noteholders on the Pledged Assets for amounts due to it under this Section 6.07;
provided, however, the Indenture Trustee agrees that no amounts owed or paid
under the Policy shall be paid to the Indenture Trustee.
SECTION 6.08 REPLACEMENT OF INDENTURE TRUSTEE.
(a) The Indenture Trustee may resign at any time by so
notifying the Issuer, the Servicer and the Insurer. The Issuer, may,
with the consent of the Insurer (unless an Insurer Default shall have
occurred and be continuing), and, at the request of the Insurer shall,
remove the Indenture Trustee, if:
(i) the Indenture Trustee fails to comply with
Section 6.11;
(ii) a court having jurisdiction in the premises in
respect of the Indenture Trustee in an involuntary case or
proceeding under federal or state banking or bankruptcy laws,
as now or hereafter constituted, or any other applicable
federal or state bankruptcy, insolvency or other similar law,
shall have entered a decree or order granting relief or
appointing a receiver, liquidator, assignee, custodian,
trustee, conservator, sequestrator (or similar official) for
the Indenture Trustee or for any substantial part of the
Indenture Trustee's property, or ordering the winding-up or
liquidation of the Indenture Trustee's affairs, provided any
such decree or order shall have continued unstayed and in
effect for a period of 30 consecutive days;
(iii) the Indenture Trustee commences a voluntary
case under any federal or state banking or bankruptcy laws, as
now or hereafter constituted, or any other applicable federal
or state bankruptcy, insolvency or other similar law, or
consents to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee,
conservator, sequestrator or other similar official for the
Indenture Trustee or for any substantial part of the Indenture
Trustee's property, or makes any assignment for the benefit of
creditors or fails generally to pay its debts as such debts
become due or takes any corporate action in furtherance of any
of the foregoing; or
(iv) the Indenture Trustee otherwise becomes
incapable of acting.
(b) The Insurer, so long as it is the Controlling Party, may
remove the Indenture Trustee for any reason upon 30 days' written
notice.
(c) If the Indenture Trustee resigns or is removed or if a
vacancy exists in the office of Indenture Trustee for any reason (the
Indenture Trustee in such event being referred to herein as the
retiring Indenture Trustee), the Issuer shall promptly appoint a
successor Indenture Trustee acceptable to the Insurer (so long as the
Insurer is the Controlling Party).
53
Indenture
(d) A successor Indenture Trustee shall deliver a written
acceptance of its appointment to the retiring Indenture Trustee, the
Insurer and to the Issuer. Thereupon the resignation or removal of the
retiring Indenture Trustee shall become effective, and the successor
Indenture Trustee shall have all the rights, powers and duties of the
Indenture Trustee under this Indenture. The Issuer or the successor
Indenture Trustee shall mail a notice of its succession to Noteholders,
the Insurer and the Rating Agencies. The retiring Indenture Trustee
shall promptly transfer all property held by it as Indenture Trustee to
the successor Indenture Trustee.
(e) If a successor Indenture Trustee does not take office
within 30 days after the retiring Indenture Trustee resigns or is
removed, the retiring Indenture Trustee, the Issuer or the Majority
Noteholders may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee that is acceptable to the
Insurer so long as it is the Controlling Party.
(f) If the Indenture Trustee fails to comply with Section
6.11, any Noteholder may petition any court of competent jurisdiction
for the removal of the Indenture Trustee and the appointment of a
successor Indenture Trustee.
(g) Any resignation or removal of the Indenture Trustee and
appointment of a successor Indenture Trustee pursuant to the provisions
of this Section shall not become effective until acceptance of
appointment by the successor Indenture Trustee pursuant to this Section
and payment of all fees and expenses owed to the outgoing Indenture
Trustee. Notwithstanding the replacement of the Indenture Trustee
pursuant to this Section, the retiring Indenture Trustee shall be
entitled to payment or reimbursement of such amounts as such Person is
entitled pursuant to Section 6.07.
(h) Any resignation or removal of the Indenture Trustee
hereunder shall also result in the resignation or removal of such
Person as Back-up Servicer and Collateral Agent in accordance with the
same terms and conditions unless otherwise directed by the Controlling
Party.
SECTION 6.09 SUCCESSOR INDENTURE TRUSTEE BY MERGER.
(a) If the Indenture Trustee consolidates with, merges or
converts into, or transfers all or substantially all of its corporate
trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without
any further act shall be the successor Indenture Trustee; provided,
that such corporation or banking association shall be otherwise
qualified and eligible under Section 6.11. The Indenture Trustee shall
provide the Insurer and each Rating Agency prompt notice of any such
transaction.
(b) In case at the time such successor by merger, conversion
or consolidation to the Indenture Trustee shall succeed to the trusts
created by this Indenture any of the Notes shall have been
authenticated but not delivered, any such successor to the Indenture
Trustee may adopt the certificate of authentication of any predecessor
trustee, and deliver such Notes so authenticated; and in case at that
time any of the Notes shall
54
Indenture
not have been authenticated, any successor to the Indenture Trustee may
authenticate such Notes either in the name of any predecessor hereunder
or in the name of the successor to the Indenture Trustee; and in all
such cases such certificates shall have the full force and effect of
the certificate of the Indenture Trustee pursuant to the Notes or this
Indenture.
SECTION 6.10 APPOINTMENT OF CO-INDENTURE TRUSTEE OR SEPARATE INDENTURE
TRUSTEE.
(a) Notwithstanding any other provision of this Indenture, at
any time, for the purpose of meeting any legal requirement of any
jurisdiction in which any part of the Pledged Assets may at the time be
located, the Indenture Trustee, with the consent of the Insurer so long
as it is the Controlling Party, shall have the power and may execute
and deliver all instruments to appoint one or more Persons to act as a
co-trustee or co-trustees, jointly with the Indenture Trustee, or
separate trustee or separate trustees, of all or any part of the Trust,
and to vest in such Person or Persons, in such capacity and for the
benefit of the Noteholders and to the extent expressly set forth herein
or the other Basic Documents, and the Insurer, such title to the
Pledged Assets, or any part hereof, and, subject to the other
provisions of this Section, such powers, duties, obligations, rights
and trusts as the Indenture Trustee may consider necessary or
desirable. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor Indenture
Trustee under Section 6.11 and no notice to Noteholders of the
appointment of any co-trustee or separate trustee shall be required
under Section 6.08.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following
provisions and conditions:
(i) all rights, powers, duties and obligations
conferred or imposed upon the Indenture Trustee shall be
conferred or imposed upon and exercised or performed by the
Indenture 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
Indenture Trustee joining in such act), except to the extent
that under any law of any jurisdiction in which any particular
act or acts are to be performed the Indenture Trustee shall be
incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations
(including the holding of title to the 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 Indenture Trustee;
(ii) no trustee hereunder shall be personally liable
by reason of any act or omission of any other trustee
hereunder; and
(iii) the Indenture Trustee may at any time accept
the resignation of or remove any separate trustee or
co-trustee.
(c) Any notice, request or other writing given to the
Indenture Trustee shall be deemed to have been given to each of the
then separate trustees and co-trustees, as
55
Indenture
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. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the
estates or property specified in its instrument of co-appointment,
either jointly with the Indenture Trustee or separately, as may be
provided therein, subject to all the provisions of this Indenture,
specifically including every provision relating to the conduct of,
affecting the liability of, or affording protection to, the Indenture
Trustee. Every such instrument shall be filed with the Indenture
Trustee.
(d) Any separate trustee or co-trustee may at any time
constitute the Indenture Trustee, its agent or attorney-in-fact with
full power and authority, to the extent not prohibited by law, to do
any lawful act under or in respect of this Indenture on its behalf and
in its name. If any separate trustee or co-trustee shall die, 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 Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee. Notwithstanding anything to
the contrary in this Indenture, the appointment of any separate trustee
or co-trustee shall not relieve the Indenture Trustee of its
obligations and duties under this Indenture.
SECTION 6.11 ELIGIBILITY. The Indenture Trustee shall at all times
satisfy the requirements of Trust Indenture Act Section 310(a). The Indenture
Trustee hereunder shall at all times be a financial institution, acceptable to
the Insurer (so long as it is the Controlling Party) organized and doing
business under the laws of the United States of America or any state, authorized
under such laws to exercise corporate trust powers, whose long term unsecured
debt is rated at least A2 by Moody's and A by Standard & Poor's and shall have a
combined capital and surplus of at least $50,000,000 or shall be a member of a
bank holding system to the aggregate combined capital and surplus of which is
$50,000,000 and subject to supervision or examination by federal or state
authority, provided that the Indenture Trustee's separate capital and surplus
shall at all times be at least the amount required by Section 310(a) (2) of the
Trust Indenture Act. If such Person publishes reports of condition at least
annually, pursuant to law or to the requirements of a supervising or examining
authority, then for the purposes of this Section 6.11, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. In case at any
time the Indenture Trustee shall cease to be eligible in accordance with the
provisions of this Section 6.11, the Indenture Trustee shall resign immediately
in the manner and with the effect specified in Section 6.08. The Indenture
Trustee shall comply with Trust Indenture Act Section 310(b); provided, however,
that there shall be excluded from the operation of Trust Indenture Act Section
310(b)(1) any indenture or indentures under which other securities of the Issuer
are outstanding if the requirements for such exclusion set forth in Trust
Indenture Act Sections 310(b)(1) are met.
SECTION 6.12 COLLATERAL AGENT TO FOLLOW INDENTURE TRUSTEE'S
INSTRUCTIONS. The Indenture Trustee hereby authorizes the Collateral Agent to
take such action on its behalf, and to exercise such rights, remedies, powers
and privileges hereunder, as the Indenture Trustee may direct and as are
specifically authorized to be exercised by the Collateral Agent by the terms
hereof, together with such actions, rights, remedies, powers and privileges as
are reasonably incidental thereto.
56
Indenture
SECTION 6.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER. The
Indenture Trustee shall comply with Trust Indenture Act Section 311(a),
excluding any creditor relationship listed in Trust Indenture Act Section
311(b). An Indenture Trustee who has resigned or been removed shall be subject
to Section 311(a) to the extent indicated.
SECTION 6.14 REPRESENTATIONS AND WARRANTIES OF INDENTURE TRUSTEE. The
Indenture Trustee hereby makes the following representations and warranties on
which the Issuer and Noteholders shall rely:
(a) the Indenture Trustee is a corporation duly organized,
validly existing and in good standing under the laws of its place of
incorporation;
(b) the Indenture Trustee has full power, authority and legal
right to execute, deliver, and perform this Indenture and has taken all
necessary action to authorize the execution, delivery and performance
by it of this Indenture;
(c) this Indenture shall have been duly executed and delivered
by the Indenture Trustee; and
(d) this Indenture is a legal, valid and binding obligation of
the Indenture Trustee enforceable in accordance with its terms, subject
to the effects of bankruptcy, insolvency, reorganization, or other
similar laws affecting the enforcement of creditors' rights generally
and to general principles of equity.
SECTION 6.15 DISQUALIFICATION OF THE INDENTURE TRUSTEE. If the
Indenture Trustee has or shall acquire a conflicting interest within the meaning
of the Trust Indenture Act, as amended, the Indenture Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by
and subject to, the provisions of this Indenture.
SECTION 6.16 WAIVER OF SETOFFS. The Indenture Trustee hereby expressly
waives any and all rights of setoff that the Indenture Trustee may otherwise at
any time have under applicable law with respect to any of the Collection
Account, Payahead Account, Spread Account, Lock-Box Account or Reserve Account
and agrees that amounts in the Collection Account, Payahead Account and Lock-Box
Account shall at all times be held and applied solely in accordance with the
provisions hereof and the Trust Agreement.
SECTION 6.17 CONTROL BY THE CONTROLLING PARTY. The Indenture Trustee
shall comply with notices and instructions given by the Issuer only if
accompanied by the written consent of the Controlling Party, except that if any
Event of Default shall have occurred and be continuing, the Indenture Trustee
shall act upon and comply with notices and instructions given by the Controlling
Party alone in the place and stead of the Issuer.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.01 ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND ADDRESSES OF
NOTEHOLDERS. The Issuer will furnish or cause to be furnished to the Indenture
Trustee (i) not
57
Indenture
more than five days after the earlier of (a) each Record Date and (b) three
months after the last Record Date, a list, in such form as the Indenture Trustee
may reasonably require, of the names and addresses of the Noteholders as of such
Record Date and (ii) at such other times as the Indenture Trustee may request in
writing, within 15 days after receipt by the Issuer of any such request, a list
of similar form and content as of a date not more than ten days prior to the
time such list is furnished; provided, however, that so long as the Indenture
Trustee is the Note Registrar, no such list shall be required to be furnished.
The Indenture Trustee or, if the Indenture Trustee is not the Note Registrar,
the Issuer shall furnish to the Insurer in writing at such times as the Insurer
may reasonably request a copy of the list.
SECTION 7.02 PRESERVATION OF INFORMATION; COMMUNICATIONS TO
NOTEHOLDERS.
(a) The Indenture Trustee shall preserve, in as current a form
as is reasonably practicable, the names and addresses of the
Noteholders contained in the most recent list furnished to the
Indenture Trustee as provided in Section 7.01 and the names and
addresses of Noteholders received by the Indenture Trustee in its
capacity as Note Registrar. The Indenture Trustee may destroy any list
furnished to it as provided in such Section 7.01 upon receipt of a new
list so furnished.
(b) Noteholders may communicate pursuant to Trust Indenture
Act Section 312 (b) with other Noteholders with respect to their rights
under this Indenture or under the Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar
shall have the protection of Trust Indenture Act Section 312(c).
SECTION 7.03 REPORTS BY ISSUER.
(a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days
after the Issuer is required to file the same with the
Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the
Issuer may be required to file with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the
Commission in accordance with rules and regulations prescribed
from time to time by the Commission such additional
information, documents and reports with respect to compliance
by the Issuer with the conditions and covenants of this
Indenture as may be required from time to time by such rules
and regulations; and
(iii) supply to the Indenture Trustee (and the
Indenture Trustee shall transmit by mail to all Noteholders
described in Trust Indenture Act Section 313(c)) such
summaries of any information, documents and reports required
to be filed by the Issuer pursuant to clauses (i) and (ii) of
this Section 7.03(a) as may be
58
Indenture
required by rules and regulations prescribed from time to time
by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of
the Issuer shall end on December 31 of each year.
SECTION 7.04 REPORTS BY INDENTURE TRUSTEE. To the extent that any of
the events described in Trust Indenture Act Section 313(a) shall have occurred,
the Indenture Trustee shall, within 60 days after each December 15 beginning
with December 15, 2003, mail to the Issuer, the Insurer and each Noteholder as
required by Trust Indenture Act Section 313(c) a brief report dated as of such
date that complies with Trust Indenture Act Section 313(a). The Indenture
Trustee also shall comply with Trust Indenture Act Section 313(b).
ARTICLE VIII
DISTRIBUTIONS; STATEMENTS TO THE NOTEHOLDERS
SECTION 8.01 LOCK-BOX ACCOUNT. The Issuer shall cause the Servicer to
establish the Lock-Box Account as an Eligible Account with the Lock-Box Bank, in
accordance with Section 9.01 of the Trust Agreement.
SECTION 8.02 COLLECTION ACCOUNT. The Issuer shall cause BVAC, as
initial Servicer to establish the Collection Account with the Indenture Trustee
or another Eligible Bank as a segregated non-interest bearing trust account in
the name of the Indenture Trustee for the benefit of the Secured Parties. The
amounts in the Collection Account shall be invested upon receipt of written
direction from the Servicer (provided that, if the Standby Servicer is then
acting as Servicer, such direction shall be made by the Transferor) in Eligible
Investments that mature not later than the Business Day prior to the next
succeeding Payment Date and such Eligible Investments shall be held to maturity.
The Indenture Trustee (or its custodian) shall (i) maintain possession of any
negotiable instruments or securities evidencing Eligible Investments until the
time of sale or maturity and each certificated security or negotiable instrument
evidencing an Eligible Investment shall be endorsed in blank or to the Indenture
Trustee or registered in the name of the Indenture Trustee and (ii) cause any
Eligible Investment represented by an uncertificated security to be registered
in the name of the Indenture Trustee.
SECTION 8.03 COLLECTIONS
(a) The Indenture Trustee shall review the Servicer's
Certificate prepared by the Servicer immediately upon receipt thereof
pursuant to Section 8.12 of the Trust Agreement for purposes of making
the distributions under Section 8.05.
(b) For any Payment Date on which there will not be sufficient
Available Funds to make the distributions required pursuant to Sections
8.05(a) (i) through (vi), the Indenture Trustee shall deliver to the
Collateral Agent, the Insurer, the Fiscal Agent (as such term is
defined in the Insurance Agreement) and the Servicer, by hand delivery
or facsimile transmission, a written notice (a "Deficiency Notice")
specifying the Deficiency Claim Amount for such Distribution Date. Any
Deficiency Notice shall be delivered by 10:00 am., Eastern time, on the
Determination Date and in any event no later
59
Indenture
than the fourth Business Day preceding such Payment Date. Such
Deficiency Notice shall direct the Collateral Agent to remit such
Deficiency Claim Amount (to the extent funds are available to be
distributed pursuant to the Spread Account Agreement) to the Indenture
Trustee for deposit of such amount in the Collection Account. If such
deficiency exceeds the Available Spread Amount, the Indenture Trustee
shall submit a claim under the Policy to the Insurer pursuant to
Section 9.03 hereof and shall comply with the requirements under the
Policy and the Insurance Agreement for the making of a claim under the
Policy.
(c) The Indenture Trustee shall, immediately upon receipt,
deposit in the Collection Account for application in accordance with
the Policy any funds received by the Indenture Trustee in respect of
funds drawn under the Policy from the Insurer.
SECTION 8.04 PURCHASE AMOUNTS. Pursuant to the Trust Agreement, the
Servicer and the Transferor have agreed to remit to the Collection Account not
later than the Determination Date, the aggregate Purchase Amount for such
Collection Period pursuant to Sections 7.02 and 8.10 of the Trust Agreement.
SECTION 8.05 DISTRIBUTIONS TO PARTIES.
(a) On each Payment Date (unless the Notes shall have been
declared to be due and payable under Section 5.02 following an Event of
Default), the Indenture Trustee, solely in reliance on the Servicer's
Certificate, shall apply or cause to be applied the Available Funds in
the Collection Account for the prior Collection Period, (plus any
amounts withdrawn from the Spread Account or drawn on the Policy
pursuant to Section 8.03 and Section 9.03 for application in accordance
with the terms hereof and the Policy), to make the following payments
in the listed order of priority:
(i) the monthly Indenture Trustee Fee (which
Indenture Trustee Fee shall not exceed $50,000 in the
aggregate) including any overdue monthly Indenture Trustee
Fee, to the Indenture Trustee, as well as reasonable expense
reimbursements and indemnities owed to the Indenture Trustee
(subject to the foregoing limitation);
(ii) without duplication, an amount equal to the sum
of (y) Outstanding Advances on all Receivables that became
Charged-off Receivables during the prior Collection Period,
plus (z) Outstanding Advances which the Servicer determines to
be unrecoverable pursuant to Section 9.07(b) of the Trust
Agreement, to the Servicer;
(iii) the monthly Servicing Fee, including any
overdue monthly Servicing Fee, to the Servicer, to the extent
not previously distributed to the Servicer, the monthly
Standby Servicing Fee, (which Standby Servicing Fee shall not
exceed $50,000) including any overdue monthly Standby
Servicing Fee to the Standby Servicer to the extent not
previously distributed to the Standby Servicer, the monthly
Owner Trustee Fee (which Owner Trustee Fee shall not exceed
$25,000 in the aggregate), including any overdue monthly Owner
Trustee Fee, to
60
Indenture
the Owner Trustee, as well as expense reimbursements and
indemnities owed to the Servicer, Standby Servicer and Owner
Trustee (subject to the foregoing limitations), and, to any
successor Servicer, Transition Costs (which Transition Costs
shall not exceed $200,000 in the aggregate without the prior
written consent of the Insurer and the satisfaction of the
Rating Agency Condition), and, to the extent Available Funds
are insufficient on any Payment Date to make all such
payments, such Available Funds shall be distributed pro rata
with respect to the foregoing payments;
(iv) Class A Monthly Interest (including any overdue
amounts) to the Class A Noteholders and Class I Monthly
Interest (including any overdue amounts) to the Class I
Noteholders;
(v) Monthly Principal (including any overdue amounts)
to the Class A Noteholders, in accordance with the Principal
Payment Sequence;
(vi) the Insurance Premium, including any overdue
Insurance Premium, the aggregate amount of all unreimbursed
draws made on the Policy, and any other amounts payable to the
Insurer under the Insurance Agreement, plus accrued interest
thereon at the rate provided in the Insurance Agreement, to
the Insurer;
(vii) the Spread Account, up to the Requisite Amount;
(viii) the Servicing Fee, Standby Servicer Fee,
Indenture Trustee Fee, and Owner Trustee Fee, as well as
expense reimbursements and indemnities owed to the Servicer,
Standby Servicer, Indenture Trustee and Owner Trustee and
Transition Costs incurred by any successor Servicer (to the
extent not paid pursuant to (i) or (iii) above), to the
Servicer, Standby Servicer, Indenture Trustee, Owner Trustee
and any successor Servicer, respectively;
(ix) the amount of Recoveries of Advances, to the
Servicer (to the extent not applied pursuant to (ii) above on
or prior to such Payment Date); and
(x) the balance for deposit in the Spread Account for
application in accordance with the Spread Account Agreement.
provided, however, that in no event shall any amounts received pursuant to the
Policy be paid to any party other than pursuant to clauses (iv) and (v) above.
(b) If on any Payment Date there are not sufficient Available
Funds (together with amounts withdrawn from the applicable Spread
Account and/or the Policy) to pay the distributions required by Section
8.05(a)(iv) and (v), the Available Funds payable under Section
8.05(a)(iv) and (v) shall be allocated first to Class A and Class I
Noteholders pari passu for the payment of Class A and Class I Monthly
Interest, and second for Class A Monthly Principal in accordance with
the proviso to the definition of Principal Payment Sequence. The amount
of Monthly Interest allocated to Class A and Class I Noteholders shall
be based upon the amount of interest due each class of Class A
61
Indenture
Noteholders and the Class I Noteholders and the amount of Monthly
Principal allocated to Class A Noteholders shall be based upon the
relative outstanding Note Balance of each class of Class A Notes then
Outstanding.
(i) Notwithstanding the foregoing, if on any Payment
Date, the Servicer exercises its option to cause a disposition
of the remaining corpus of the Trust pursuant to Section 16.02
of the Trust Agreement: (A) the Available Funds and amounts
withdrawn from the Spread Account or drawn on the Policy in
respect only of Monthly Interest and principal payable on any
class of Class A Notes equal to the Outstanding Note Balance
on the Final Maturity Date of such class of Class A Notes with
respect to the immediately preceding Payment Date as
determined in accordance with Sections 8.03 and 8.05 shall be
distributed to the Noteholders on such Payment Date; (B) the
Policy will not be available to pay any shortfall of Monthly
Interest or Monthly Principal after a prepayment of the Note
Balances pursuant to this Section 8.05(b)(ii); and (C) any
remaining Pledged Assets (including all remaining Available
Spread Amounts) shall be paid first to the Noteholders and
then the Insurer on such Payment Date until the Note Balances
shall have been reduced to zero and all amounts due and owing
to the Insurer under the Insurance Agreement have been paid in
full. Any amounts in excess thereof shall be remitted to the
Spread Account for application in accordance with the terms
thereof.
(c) On each Payment Date, if the Servicer has reported to the
Indenture Trustee in the Servicer's Certificate for any Collection
Period that an Obligor or an Obligor's representative or successor
successfully shall have asserted a claim or defense under bankruptcy
law or similar laws for the protection of creditors generally
(including the avoidance of a preferential transfer under bankruptcy
law) that results in a liability to such Obligor for monies previously
collected and remitted to the Indenture Trustee and not otherwise
netted against collections pursuant to this Section 8.05, the Indenture
Trustee shall make all payments in respect of such claims or defenses
out of the amounts on deposit in the Collection Account with respect to
such Collection Period before making the distributions required by
paragraph (a) of this Section 8.05.
(d) If the Servicer has failed to provide the Indenture
Trustee with Servicer's Certificate required pursuant to Section 8.03,
the Indenture Trustee may calculate Monthly Interest and Monthly
Principal and apply funds, if any, in the Collection Account as of the
last day of the Collection Period, to make a distribution of Monthly
Interest and Monthly Principal to the Noteholders.
(e) In making such payments under this Section 8.05 the
Indenture Trustee shall be entitled to solely rely (without
investigation, confirmation or recalculation) upon all information and
calculations contained in the Servicer's Certificate delivered to the
Indenture Trustee pursuant to Section 8.12 of the Trust Agreement.
(f) All monthly payments shall be made by wire transfer of
immediately available funds to the Noteholder of record on the
preceding Record Date. Notwithstanding the foregoing, the final payment
on the Notes shall be made only against
62
Indenture
presentation and surrender of the Notes at the office or agency then
maintained by the Indenture Trustee in accordance with Section 3.02.
(g) If an Event of Default occurs and the Notes have been
accelerated, the Indenture Trustee may exercise any of the remedies
specified in Section 5.04(a). Payments following acceleration of any
Notes shall be applied by the Indenture Trustee:
(i) first, to pay any unpaid monthly Indenture
Trustee Fee and expense reimbursements and indemnities owed to
the Indenture Trustee, Collateral Agent and Backup Servicer;
(ii) second, pro rata, to pay any unpaid monthly
Servicing Fee, Standby Servicing Fee and Owner Trustee Fee, as
well as expense reimbursements and indemnities owed to the
Servicer, Standby Servicer and Owner Trustee;
(iii) third, to pay accrued interest on each class of
Class A and Class I Notes on a pro rata basis based on the
interest accrued (including interest accrued on past due
interest) on each class of Class A Notes and on Class I Notes
based on the interest accrued on the Class I Notes;
(iv) fourth, to pay principal on each class of Class
A Notes, on a pro rata basis based on the Class A Note
Balance, until the Note Balance of each Class of Class A Notes
is reduced to zero;
(v) fifth, to pay the Insurance Premium and all other
amounts owing the Insurer under the Insurance Agreement; and
(vi) sixth, to the Spread Account to be applied in
accordance with the Spread Account Agreement;
provided, however, that in no event shall any amounts received
pursuant to the Policy be paid to any party other than
pursuant to clauses (iii) and (iv) above.
SECTION 8.06 SERVICER ADVANCES. The Servicer is required to make
certain Advances pursuant to Section 9.07 of the Trust Agreement. If the
Servicer shall determine that an Outstanding Advance with respect to any
Receivable shall not be recoverable, the Servicer shall be entitled to
reimbursement from any collections made on other Receivables pursuant to Section
8.05(a)(ii) and Outstanding Advances with respect to such Receivable shall be
reduced accordingly.
SECTION 8.07 PAYAHEAD ACCOUNT. The Servicer shall establish the
Payahead Account with the Indenture Trustee or another Eligible Bank in the name
of the Indenture Trustee on behalf of the Obligors and the Noteholders as their
interests may appear pursuant to Section 9.10 of the Trust Agreement. Investment
income or interest earned on the Payahead Account during each Collection Period
shall be included as Available Funds. On or prior to each Payment Date, the
Indenture Trustee (as instructed in the Servicer's Certificate) shall transfer
(a) from the Collection Account to the Payahead Account, in immediately
available funds, all
63
Indenture
Payaheads received by the Servicer and previously deposited to the Collection
Account during the Collection Period as described in Section 8.05 of the Trust
Agreement; and (b) from the Payahead Account to the Collection Account, in
immediately available funds, the aggregate amount of previously deposited
Payaheads to be applied to the related Scheduled Receivable Payments on
Precomputed Receivables for the related Collection Period or prepayments for the
related Collection Period, pursuant to Section 8.05(b) of the Trust Agreement,
each in the amounts set forth in the Servicer's Certificate delivered on the
related Determination Date. A single, net transfer between the Payahead Account
and the Collection Account may be made. Any amount deposited in any Payahead
Account other than interest income shall not constitute Available Funds under
Section 8.03. Any amount deposited to the Collection Account from a Payahead
Account pursuant to this Section 8.07 shall be included in Available Funds under
Section 8.03. On the last scheduled payment date, for any non-delinquent
Precomputed Receivable, any remaining balance on the loan based on the actuarial
method shall be transferred (as instructed by the Servicer) from the Payahead
Account to Available Funds to be distributed as principal. On the Final
Distribution Date, any remaining money in the Payahead Account shall be released
from the Lien of this Indenture and transferred to the Servicer.
SECTION 8.08 [RESERVED] RELEASE OF PLEDGED ASSETS.
(a) Subject to the payment of its fees and expenses pursuant
to Section 6.07, the Indenture Trustee may, and when required by the
provisions of this Indenture shall, execute instruments to release
property from the lien of this Indenture, or convey the Indenture
Trustee's interest in the same, in a manner and under circumstances
that are not inconsistent with the provisions of this Indenture. No
party relying upon an instrument executed by the Indenture Trustee as
provided in this Article shall be bound to ascertain the Indenture
Trustee's authority, inquire into the satisfaction of any conditions
precedent or see to the application of any monies.
(b) The Indenture Trustee shall, at such time as there are no
Notes Outstanding and all sums due the Indenture Trustee pursuant to
Section 6.07 and to the Insurer pursuant to the Insurance Agreement
have been paid, release any remaining portion of the Pledged Assets
that secured the Notes from the lien of this Indenture and release to
the Issuer or any other Person entitled thereto any funds then on
deposit in the Trust Accounts. The Indenture Trustee shall release
property from the lien of this Indenture pursuant to this Section
8.09(b) only upon receipt of an Issuer Request accompanied by an
Officer's Certificate, an Opinion of Counsel and (if required by the
Trust Indenture Act) Independent Certificates in accordance with Trust
Indenture Act Sections 314(c) and 314(d)(1) meeting the applicable
requirements of Section 12.01.
SECTION 8.10 OPINION OF COUNSEL. The Indenture Trustee shall receive at
least seven days' notice when requested by the Issuer to take any action
pursuant to Section 8.09(a), accompanied by copies of any instruments involved,
and the Indenture Trustee shall also require, as a condition to such action, an
Opinion of Counsel, in form and substance satisfactory to the Indenture Trustee
(and not at the expense of the Indenture Trustee), stating the legal effect of
any such action, outlining the steps required to complete the same, and
concluding that all conditions precedent to the taking of such action have been
complied with and such action will not materially and adversely impair the
security for the Notes or the rights of the Noteholders in
64
Indenture
contravention of the provisions of this Indenture; provided, however, that such
Opinion of Counsel shall not be required to express an opinion as to the fair
value of the Pledged Assets. Counsel rendering any such opinion may rely,
without independent investigation, on the accuracy and validity of any
certificate or other instrument delivered to the Indenture Trustee in connection
with any such action.
SECTION 8.11 CALCULATION OF NOTIONAL PRINCIPAL AMOUNT.
(a) Solely for the purpose of calculating the Class I Monthly
Interest, the aggregate Class A Note Balance will be divided into, and
equal the sum of, two principal components: (i) the "PAC Component" and
(ii) the "Companion Component." The PAC Component shall initially equal
the Original Notional Principal Amount.
(b) On each Payment Date, solely for the purposes of
calculating the Notional Principal Amount, the Monthly Principal will
be allocated (i) first, to the PAC Component up to the amount necessary
to reduce the PAC Component to its Planned Notional Principal Amount
for such Payment Date, as specified on the Planned Notional Principal
Amount Schedule attached as Schedule B, (ii) second, to the Companion
Component until the balance thereof is reduced to zero, and (iii)
third, to the PAC Component without regard to the Planned Notional
Principal Amount for such Payment Date, until reduced to zero. If the
amount of Available Funds (together with amounts withdrawn from the
Spread Account) are not sufficient on any Payment Date to pay the
required payment of Class A Monthly Principal to the Class A
Noteholders in full on any Payment Date at any time after the
occurrence and during the continuance of an Insurer Default, any
shortfall in the principal payments on the Class A Notes will be
allocated to reduce the PAC Component and the Companion Component on a
pro rata basis. To the extent there are any recoveries on the
Receivables creating such shortfall, such recoveries, to the extent of
any portion thereof allocable to Class I Monthly Interest, shall be
allocated to pay Class I Monthly Interest.
ARTICLE IX
CREDIT ENHANCEMENT
SECTION 9.01 SUBORDINATION. The rights of the Certificateholder shall
be subordinated to the rights of Class A Noteholders and the Class I
Noteholders.
SECTION 9.02 SPREAD ACCOUNT.
(a) The Transferor, simultaneously with the execution and
delivery of this Indenture and pursuant to Section 9.06 of the Trust
Agreement, caused the Spread Account Depositor to execute and deliver
the Series 2003-LJ-1 to the Spread Account Agreement and, pursuant to
the terms thereof, to deposit the Spread Account Initial Deposit in the
Spread Account on the Closing Date. Although the Spread Account
Depositor as Certificateholder, has pledged the Spread Account to the
Collateral Agent and the Insurer pursuant to the Spread Account
Agreement, the Spread Account shall not
65
Indenture
under any circumstances be deemed to be a part of or otherwise
includible in the Issuer or the Pledge Assets.
(b) If on any Payment Date, as set forth in the Servicer's
Certificate, the amount of Available Funds is insufficient to make the
distributions required by Sections 8.05(a)(i) through (vi), the
Indenture Trustee shall notify the Collateral Agent, in accordance with
Section 9.05(b) of the Trust Agreement to withdraw from the Spread
Account, for deposit in the Collection Account the lesser of (i) the
entire Available Spread Amount and (ii) the Deficiency Claim Amount.
(c) On each Payment Date, all distributions made pursuant to
Section 8.05(a)(vii) and (x) shall be deposited into the Spread
Account.
(d) Provided that investments are made in compliance with the
terms of this Indenture and the other Basic Documents, the Indenture
Trustee shall not be liable for investments losses, including without
limitation, losses incurred as a result of the liquidation at any
investment prior to its stated maturity.
SECTION 9.03 POLICY.
(a) In the event that the Indenture Trustee has delivered a
Deficiency Notice with respect to any Determination Date, the Indenture
Trustee shall determine on the Determination Date for the related Draw
Date whether the sum of (i) the Available Funds with respect to such
Determination Date (as stated in the Servicer's Certificate with
respect to such Determination Date) plus (ii) the amount of the
Deficiency Claim Amount, if any, available to be distributed pursuant
to the Spread Account Agreement by the Collateral Agent to the
Indenture Trustee pursuant to a Deficiency Notice delivered with
respect to such Payment Date (as stated in the certificate delivered on
the immediately preceding Deficiency Claim Date by the Collateral Agent
pursuant to Section 3.03(a) of the Spread Account Agreement) plus (iii)
the Insurer Optional Deposit, if any, with respect to such
Determination Date, would be insufficient, after giving effect to the
payments required by Section 8.05(a)(i), (ii) and (iii) to pay the
Scheduled Payments (as defined in the Policy) for the related Payment
Date, then in such event the Indenture Trustee shall furnish to the
Insurer no later than 12:00 noon
New York City time on the
Determination Date and in no event later than the Draw Date a completed
Notice of Claim in the amount of the shortfall in amounts so available
to pay the Scheduled Payments with respect to such Payment Date (the
amount of such shortfall being hereinafter referred to as the "Policy
Claim Amount"). Amounts paid by the Insurer under the Policy shall be
deposited by the Indenture Trustee into the Collection Account for
payment to Noteholders on the related Payment Date (or promptly
following payment by the Insurer on a later date as set forth in the
Policy) solely in accordance with the terms of the Policy.
(b) Any notice delivered by the Indenture Trustee to the
Insurer pursuant to Section 9.03(b) shall specify the Policy Claim
Amount claimed under the Policy and shall constitute a "Notice of
Claim" under the Policy. In accordance with the provisions of the
Policy, the Insurer is required to pay to the Indenture Trustee the
Policy Claim Amount
66
Indenture
properly claimed thereunder by 12:00 noon,
New York City time, on the
later of (i) the third Business Day (as defined in the Policy)
following receipt on a Business Day (as defined in the Policy) of the
Notice of Claim, and (ii) the applicable Payment Date. Any payment made
by the Insurer under the Policy shall be applied solely to the payment
of Scheduled Payments on the Notes, and for no other purpose.
(c) The Indenture Trustee shall (i) receive as
attorney-in-fact of each Noteholder any Policy Claim Amount from the
Insurer and (ii) deposit the same in the Collection Account for
distribution to the Noteholders solely in accordance with the terms of
the Policy. Any and all Policy Claim Amounts disbursed by the Indenture
Trustee from claims made under the Policy shall not be considered
payment by the Trust or from the Spread Account with respect to such
Notes, and shall not discharge the obligations of the Trust with
respect thereto. The Insurer shall, to the extent it makes any payment
with respect to the Notes, become subrogated to the rights of the
recipients of such payments to the extent of such payments. Subject to
and conditioned upon any payment with respect to the Notes by or on
behalf of the Insurer, each Noteholder shall be deemed without further
action, to have directed the Indenture Trustee to assign to the Insurer
all rights to the payment of interest or principal with respect to the
Notes which are then due for payment to the extent of all payments made
by the Insurer, and the Insurer may exercise any option, vote, right,
power or the like with respect to the Notes to the extent that it has
made payment pursuant to the Policy. Notwithstanding the foregoing, the
order of priority of payments to be made pursuant to Section 8.05(a)
shall not be modified by this Section 9.03. To evidence such
subrogation, the Note Registrar shall note the Insurer's rights as
subrogee upon the register of Noteholders upon receipt from the Insurer
of proof of payment by the Insurer of any Scheduled Payments (as
defined in the Policy). The foregoing subrogation shall in all cases be
subject to the rights of the Noteholders to receive all Scheduled
Payments (as defined in the Policy) in respect of the Notes.
(d) The Indenture Trustee shall keep a complete and accurate
record of all funds received by it from the Insurer, amounts deposited
by the Indenture Trustee into the Collection Account and the allocation
of such funds to payment of interest on and principal paid in respect
of any Note. The Insurer shall have the right to inspect such records
at reasonable times upon one Business Day's prior notice to the
Indenture Trustee.
(e) The Indenture Trustee shall be entitled, but not
obligated, to enforce on behalf of the Noteholders the obligations of
the Insurer under the Policy. Notwithstanding any other provision of
this Agreement or any Basic Document, the Noteholders are not entitled
to institute proceedings directly against the Insurer.
(f) In the event that the Indenture Trustee has received a
certified copy of an order of the appropriate court that any Scheduled
Payment (as defined in the Policy) paid on a Note has been avoided in
whole or in part as a preference payment under applicable bankruptcy
law, the Indenture Trustee shall so notify the Insurer, shall comply
with the provisions of the Policy to obtain payment by the Insurer of
such avoided payment, and shall, at the time it provides notice to the
Insurer, notify Holders of the Notes by mail
67
Indenture
that, in the event that any Noteholder's payment is so recoverable,
such Noteholder will be entitled to payment pursuant to the terms of
the Policy. The Indenture Trustee shall furnish to the Insurer its
records evidencing the payments of principal and interest on Notes, if
any, which have been made by the Indenture Trustee and subsequently
recovered from Noteholders, and the dates on which such payments were
made. Pursuant to the terms of the Policy, the Insurer will make such
payment on behalf of the Noteholder to the receiver, conservator,
debtor-in-possession or trustee in bankruptcy named in the Order (as
defined in the Policy) and not to the Indenture Trustee or any
Noteholder directly (unless a Noteholder has previously paid such
payment to the receiver, conservator, debtor-in-possession or trustee
in bankruptcy, in which case the Insurer will make such payment to the
Indenture Trustee for distribution in accordance with the instructions
to be provided by the Insurer, to such Noteholder upon proof of such
payment reasonably satisfactory to the Insurer).
(g) Each Notice of Claim shall provide that the Indenture
Trustee, on its behalf and on behalf of the Noteholders, thereby
appoints the Insurer as agent and attorney-in-fact for the Indenture
Trustee and each Noteholder in any legal proceeding with respect to the
Notes. The Indenture Trustee shall promptly notify the Insurer of any
proceeding or the institution of any action (of which a Responsible
Officer of the Indenture Trustee has actual knowledge) seeking the
avoidance as a preferential transfer under applicable bankruptcy,
insolvency, receivership, rehabilitation or similar law (a "Preference
Claim") of any distribution made with respect to the Notes. Each
Holder, by its purchase of Notes, and the Indenture Trustee hereby
agree that so long as the Insurer is the Controlling Party the Insurer
may at any time during the continuation of any proceeding relating to a
Preference Claim direct all matters relating to such Preference Claim,
including, without limitation, (i) the direction of any appeal of any
order relating to any Preference Claim and (ii) the posting of any
surety, supersedeas or performance bond pending any such appeal at the
expense of the Insurer, but subject to reimbursement as provided in the
Insurance Agreement. In addition, and without limitation of the
foregoing, as set forth in Section 9.03(c), the Insurer shall be
subrogated to, and each Noteholder and the Indenture Trustee hereby
delegate and assign, to the fullest extent permitted by law, the rights
of the Indenture Trustee and each Noteholder in the conduct of any
proceeding with respect to a Preference Claim, including, without
limitation, all rights of any party to an adversary proceeding action
with respect to any court order issued in connection with any such
Preference Claim. Any right of the Insurer to receive payments in
respect of the subrogation resulting from payments made pursuant to the
Policy shall be subject in every case to (i) the priority of payment
set forth in the Indenture and (ii) the prior payment in full to
Noteholders of all payments by the Policy that are then due.
SECTION 9.04 SURRENDER OF THE POLICY. The Indenture Trustee shall
surrender the Policy to the Insurer for cancellation upon its expiration in
accordance with the terms thereof and payment of all amounts due thereunder.
68
Indenture
ARTICLE X
SUPPLEMENTAL INDENTURES
SECTION 10.01 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS.
(a) Without the consent of the Holders of any Notes but with
the consent of the Insurer (so long as it is the Controlling Party) and
with prior notice to each Rating Agency, the Issuer and the Indenture
Trustee, when authorized by an Issuer Order, and the other parties
hereto at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions
of the Trust Indenture Act as in force at the date of the execution
thereof), in form satisfactory to the Indenture 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 Indenture
Trustee any property subject or required to be subjected to
the lien created by this Indenture, or to subject to the lien
created by 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, or to surrender any right or power
herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge
any property to or with the Indenture Trustee;
(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 the Basic Documents 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 Noteholders;
(vi) to evidence and provide for the acceptance of
the appointment hereunder by 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; or
(vii) to modify, eliminate or add to the provisions
of this Indenture to such extent as shall be necessary to
effect the qualification of this Indenture under the Trust
Indenture Act or under any similar federal statute hereafter
enacted and to add to this Indenture such other provisions as
may be expressly required by the Trust Indenture Act.
69
Indenture
The Indenture Trustee is hereby authorized to join in the execution of
any such supplemental indenture and to make any further appropriate agreements
and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by
an Issuer Order, may, also without the consent of any of the
Noteholders but with the consent of the Insurer so long as it is the
Controlling Party and with prior notice to each Rating Agency, 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 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 any Noteholder.
SECTION 10.02 SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS.
(a) The Issuer and the Indenture Trustee, when authorized by
an Issuer Order, also may, with prior notice to each Rating Agency,
with the consent of the Insurer (so long as it is the Controlling
Party) and with the consent of the Holders of not less than a majority
of the Note Balances, by Act of such Holders delivered to the Issuer
and the Indenture Trustee, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or
changing in any manner or eliminating any of the provisions of, this
Indenture or of modifying in any manner the rights of the Noteholders
under this Indenture; provided, however, that, subject to the express
rights of the Insurer under the Basic Documents, no such supplemental
indenture shall, without the consent of the Holder of each Outstanding
Note affected thereby:
(i) change the date of payment of any installment of
principal of or interest on any Note, or reduce the principal
amount thereof, the interest rate thereon or the Redemption
Price with respect thereto, or change any place of payment
where, or the coin or currency in which, any Note or the
interest thereon is payable;
(ii) impair the right to institute suit for the
enforcement of the provisions of this Indenture requiring the
application of funds available therefor, as provided in
Article V, to the payment of any such amount due on the Notes
on or after the respective due dates thereof (or, in the case
of redemption, on or after the Redemption Date);
(iii) reduce the percentage of the Note Balances, the
consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which
is required for any waiver of compliance with certain
provisions of this Indenture or certain defaults hereunder and
their consequences provided for in this Indenture;
(iv) modify or alter the provisions of the second
proviso to the definition of the term "Outstanding";
70
Indenture
(v) reduce the percentage of the Note Balances, the
consent of the Holders of which is required to direct the
Indenture Trustee to sell or liquidate the Pledged Assets
pursuant to Section 5.04;
(vi) decrease the percentage of the Note Balances
required to amend this Indenture or the other Basic Documents;
(vii) permit the creation of any lien ranking prior
to or on a parity with the lien created by this Indenture with
respect to any part of the Pledged Assets or, except as
otherwise permitted or contemplated herein, terminate the lien
created by this Indenture on any property at any time subject
hereto or deprive the Holder of any Note of the security
provided by the lien created by this Indenture.
(b) The Indenture Trustee may in its discretion determine
whether or not any Notes would be affected by any supplemental
indenture and any such determination shall be conclusive upon the
Holders of all Notes, whether theretofore or thereafter authenticated
and delivered hereunder. The Indenture Trustee shall not be liable for
any such determination made in good faith.
(c) It shall not be necessary for any act of Noteholders under
this Section 10.02 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 parties hereto of any
supplemental indenture pursuant to this Section 10.02, the Indenture
Trustee shall mail to the Noteholders to which such amendment or
supplemental indenture relates a notice setting forth in general terms
the substance of such supplemental indenture. Any failure of the
Indenture Trustee to mail such notice, or any defect therein, shall
not, however, in any way impair or affect the validity of any such
supplemental indenture.
SECTION 10.03 EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article or the modifications thereby of the trusts created by
this Indenture, the Insurer and the Indenture Trustee shall be entitled to
receive, and subject to Sections 6.01 and 6.02 shall be fully protected in
relying upon, an Opinion of Counsel and an Officers' Certificate stating that
the execution of such supplemental indenture is authorized or permitted by this
Indenture. The Indenture Trustee may, but shall not be obligated to, enter into
any such supplemental indenture that affects the Indenture Trustee's own rights,
duties, liabilities or immunities under this Indenture or otherwise.
SECTION 10.04 EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith with
respect to the Notes affected thereby, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under this Indenture of
the parties hereto and the Noteholders shall thereafter be determined, exercised
and enforced hereunder subject in all respects to such modifications and
amendments,
71
Indenture
and all the terms and conditions of any such supplemental indenture shall be and
be deemed to be part of the terms and conditions of this Indenture for any and
all purposes.
SECTION 10.05 CONFORMITY WITH TRUST INDENTURE ACT. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article shall conform to the requirements of the Trust Indenture Act as then in
effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.
SECTION 10.06 REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes.
ARTICLE XI
REDEMPTION OF NOTES
SECTION 11.01 REDEMPTION. In the event that the Servicer exercises its
right to require disposition of the corpus of the Trust pursuant to Section
16.02 of the Trust Agreement, the Notes are subject to redemption in whole, but
not in part, on the Payment Date on which such repurchase occurs, for a purchase
price equal to the Redemption Price; provided, however, that the Issuer has
available funds sufficient to pay the Redemption Price. The Servicer or the
Issuer shall furnish the Insurer and each Rating Agency notice of such
redemption. If the Notes are to be redeemed pursuant to this Section 11.01, the
Servicer or the Issuer shall furnish notice of such election to the Insurer and
Indenture Trustee not later than ten (10) days prior to the Redemption Date and
the Issuer shall deposit with the Indenture Trustee in the Collection Account
the Redemption Price of the Notes to be redeemed whereupon all such Notes shall
be due and payable on the Redemption Date upon the furnishing of a notice
complying with Section 11.02 to each Holder of the Notes.
SECTION 11.02 FORM OF REDEMPTION NOTICE. Notice of redemption under
Section 11.01 shall be given by the Indenture Trustee by first-class mail,
postage prepaid, mailed not less than five days prior to the applicable
Redemption Date to each Holder of Notes, as of the close of business on the
Record Date preceding the applicable Redemption Date, at such Holder's address
appearing in the Note Register. In addition, the Administrator shall notify the
Insurer and Rating Agencies upon the redemption of any Class of Notes, pursuant
to Section 2.06(b).
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) CUSIP numbers; and
72
Indenture
(iv) the place where such Notes are to be surrendered
for payment of the Redemption Price (which shall be the office
or agency of the Issuer to be maintained as provided in
Section 3.02).
Notice of redemption of the Notes shall be given by the Indenture
Trustee in the name and at the expense of the Issuer. Failure to give notice of
redemption, or any defect therein, to any Holder of any Note shall not impair or
affect the validity of the redemption of any other Note.
SECTION 11.03 NOTES PAYABLE ON REDEMPTION DATE. The Notes or portions
thereof to be redeemed shall, following notice of redemption (if any) as
required by Section 11.02, on the Redemption Date become due and payable at the
Redemption Price and (unless the Issuer shall default in the payment of the
Redemption Price) no interest shall accrue on the Redemption Price for any
period after the date to which accrued interest is calculated for purposes of
calculating the Redemption Price.
ARTICLE XII
MISCELLANEOUS
SECTION 12.01 COMPLIANCE CERTIFICATES AND OPINIONS, ETC.
(a) Upon any application or request by the Issuer or the
Insurer (so long as it is the Controlling Party) to the Indenture
Trustee to take any action under any provision of this Indenture, the
Issuer or the Insurer, as applicable, shall furnish to the Indenture
Trustee (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, (ii) an Opinion of Counsel
stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with and (iii) (if required by
the Trust Indenture Act) an Independent Certificate from a firm of
certified public accountants meeting the applicable requirements of
this Section and Trust Indenture Act Sections 314(c) and 314(d) (1).
Notwithstanding the foregoing, in the case of any such application or
request as to which the furnishing of such documents is specifically
required by any provision of this Indenture, no additional certificate
or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such
certificate or opinion has read or has caused to be read such
covenant or condition and the definitions herein relating
thereto;
(ii) a brief statement as to the nature and scope of
the examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such
signatory, such signatory has made such examination or
investigation as is necessary to enable
73
Indenture
such signatory to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of
each such signatory, such condition or covenant has been
complied with.
(b) (i) Prior to the deposit of any Pledged Assets or other
property or securities with the Indenture Trustee that is to be made
the basis for the release of any property subject to the lien created
by this Indenture, the Issuer shall, in addition to any obligation
imposed in Section 12.01(a) or elsewhere in this Indenture, furnish to
the Indenture Trustee and the Insurer an Officer's Certificate
certifying or stating the opinion of the signer thereof as to the fair
value (within 90 days of such deposit) to the Issuer of the Pledged
Assets or other property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to
the Indenture Trustee and the Insurer an Officer's Certificate
certifying or stating the opinion of any signer thereof as to
the matters described in clause (i) above, the Issuer shall
also deliver to the Indenture Trustee and the Insurer an
Independent Certificate as to the named matters, if the fair
value to the Issuer of the property to be so deposited and of
all other such property made the basis of any such withdrawal
or release since the commencement of the then-current fiscal
year of the Issuer, as set forth in the Officer's Certificates
delivered pursuant to clause (i) above and this clause (ii),
is 10% or more of the Note Balances, but such Officer's
Certificate need not be furnished with respect to any property
so deposited, if the fair value thereof to the Issuer as set
forth in the related Officer's Certificate is less than
$25,000 or less than one percent of the Note Balances.
(iii) Whenever any property or securities are to be
released from the lien created by this Indenture, the Issuer
shall also furnish to the Indenture Trustee and the Insurer an
Officer's Certificate certifying or stating the opinion of
each person signing such certificate as to the fair value
(within 90 days of such release) of the property or securities
proposed to be released and stating that in the opinion of
such person the proposed release will not impair the security
created by this Indenture in contravention of the provisions
hereof.
(iv) Whenever the Issuer is required to furnish to
the Indenture Trustee and the Insurer an Officer's Certificate
certifying or stating the opinion of any signer thereof as to
the matters described in clause (iii) above, the Issuer shall
also furnish to the Indenture Trustee and the Insurer an
Independent Certificate as to the same matters if the fair
value of the property or securities and of all other property
or securities released from the lien created by this Indenture
since the commencement of the then current fiscal year, as set
forth in the Officer's Certificate required by clause (iii)
above and this clause (iv), equals 10% or more of the Note
Balances, but such Officer's Certificate need not be furnished
in the case of any release of property or securities if the
fair value thereof as set forth in the related Officer's
Certificate is less than $25,000 or less than one percent of
the then Note Balances.
74
Indenture
SECTION 12.02 FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE.
(a) In any case where several matters are required to
be certified by, or covered by an opinion of, any specified
Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person, or
that they be so certified or covered by only one document, but
one such Person may certify or give an opinion with respect to
some matters and one or more other such Persons as to other
matters, and any such Person may certify or give an opinion as
to such matters in one or several documents.
(b) Any certificate or opinion of an Authorized
Officer of the Issuer may be based, insofar as it relates to
legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to the
matters upon which his certificate or opinion is based are
erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Servicer,
the Transferor or the Issuer, stating that the information
with respect to such factual matters is in the possession of
the Servicer, the Transferor or the Issuer, unless such
officer or counsel knows, or in the exercise of reasonable
care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
(c) Where any Person is required to make, give or
execute two or more applications, requests, consents,
certificates, statements, opinions or other instruments under
this Indenture, they may, but need not, be consolidated and
form one instrument.
(d) Whenever in this Indenture, in connection with
any application or certificate or report to the Indenture
Trustee, it is provided that the Issuer shall deliver any
document as a 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 Indenture Trustee's right to rely upon
the truth and accuracy of any statement or opinion contained
in any such document as provided in Article Six.
SECTION 12.03 ACTS OF NOTEHOLDERS.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given
or taken by Noteholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Noteholders
in person or by agents duly appointed in writing; and except as herein
otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Indenture Trustee,
and, where it is hereby
75
Indenture
expressly required, to the Issuer. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Noteholders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 6.01) conclusive in favor of the
Indenture Trustee and the Issuer, if made in the manner provided in
this Section 12.03.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved in any manner that the
Indenture Trustee deems sufficient.
(c) The ownership of Notes shall be proved by the Note
Register and the record date applicable to any solicitation for an Act
of the Noteholders shall comply with Section 316(c) of the Trust
Indenture Act.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Notes shall bind
the Holder of every Note issued upon the registration thereof or in
exchange therefor or in lieu thereof, in respect of anything done,
omitted or suffered to be done by the Indenture Trustee or the Issuer
in reliance thereon, whether or not notation of such action is made
upon such Note.
SECTION 12.04 NOTICES, ETC., TO INDENTURE TRUSTEE, ISSUER, INSURER AND
RATING AGENCIES.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or Act of Noteholders or other documents provided or
permitted by this Indenture shall be in writing and if such request,
demand, authorization, direction, notice, consent, waiver or Act of
Noteholders is to be made upon, given or furnished to or filed with:
(i) the Indenture Trustee by any Noteholder, the
Insurer or by the Issuer shall be sufficient for every purpose
hereunder if in writing, personally delivered, sent by
facsimile transmission and confirmed or mailed by overnight
service, to or with the Indenture Trustee at its Corporate
Trust Office;
(ii) the Issuer by the Indenture Trustee, the Insurer
or by any Noteholder shall be sufficient for every purpose
hereunder if in writing, personally delivered, sent by
facsimile transmission and confirmed or mailed by overnight
service, to the Issuer addressed to: Bay View 2003-LJ-1 Owner
Trust in care of Wilmington Trust Company, as Owner Trustee,
Plaza Building, 1st Floor, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Corporate Trust Administration
or at any other address furnished in writing to the Indenture
Trustee by the Issuer; or
(iii) the Insurer by the Issuer or the Indenture
Trustee shall be sufficient for any purpose hereunder if in
writing, personally delivered, sent by facsimile transmission
and confirmed or mailed by overnight service, to the Insurer
addressed to:
76
Indenture
Financial Security Assurance Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Transaction Oversight
Re: Auto Receivables Trust 2003-LJ-1
Telex No: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy Nos.: (▇▇▇) ▇▇▇-▇▇▇▇ or
(▇▇▇) ▇▇▇-▇▇▇▇
(In each case in which notice or other communication to the Insurer refers to an
Event of Default, a claim on the Policy or with respect to which failure on the
part of the Insurer to respond shall be deemed to constitute consent or
acceptance, then a copy of such notice or other communication should also be
sent to the attention of the General Counsel and the Head-Financial Guaranty
Group marked "URGENT MATERIAL ENCLOSED.")
(b) Notices required to be given to the Rating Agencies by the
Issuer, the Indenture Trustee or the Owner Trustee shall be in writing,
personally delivered, sent by facsimile transmission and confirmed or
mailed by overnight service, to (i) in the case of Moody's at the
following address:
▇▇▇▇▇'▇ Investors Service, Inc.
ABS Monitoring Department
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
and (ii) in the case of Standard & Poor's, at the following address:
Standard & Poor's Ratings Services,
a division of the ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇▇ ▇▇▇▇▇)
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Structured Finance/Asset Backed
Surveillance Department
or as to each of the foregoing, at such other address as shall be designated by
written notice to the other parties.
SECTION 12.05 NOTICES TO NOTEHOLDERS; WAIVER.
(a) Where this Indenture provides for notice to Noteholders of
any event, such notice shall be sufficiently given (unless otherwise
herein expressly provided) if in writing and mailed, first-class,
postage prepaid to each Noteholder affected by such event, at his
address as it appears on the Note Register, not later than the latest
date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Noteholders is given by
mail, neither the failure to mail such notice nor
77
Indenture
any defect in any notice so mailed to any particular Noteholder shall
affect the sufficiency of such notice with respect to other
Noteholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given.
(b) Where this Indenture provides for notice in any manner,
such notice may be waived in writing by any Person entitled to receive
such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Noteholders shall
be filed with the Indenture Trustee but such filing shall not be a
condition precedent to the validity of any action taken in reliance
upon such a waiver.
(c) In case, by reason of the suspension of regular mail
service as a result of a strike, work stoppage or similar activity, it
shall be impractical to mail notice of any event to Noteholders when
such notice is required to be given pursuant to any provision of this
Indenture, then any manner of giving such notice as shall be
satisfactory to the Indenture Trustee shall be deemed to be a
sufficient giving of such notice.
(d) Where this Indenture provides for notice to the Rating
Agencies, failure to give such notice shall not affect any other rights
or obligations created hereunder, and shall not under any circumstance
constitute a Default or Event of Default.
SECTION 12.06 ALTERNATE PAYMENT AND NOTICE PROVISIONS. Notwithstanding
any provision of this Indenture or any of the Notes to the contrary, the Issuer
may enter into any agreement with any Holder of a Note providing for a method of
payment, or notice by the Indenture Trustee or any Paying Agent to such Holder,
that is different from the methods provided for in this Indenture for such
payments or notices. The Issuer will furnish to the Indenture Trustee a copy of
each such agreement and the Indenture Trustee will cause payments to be made and
notices to be given in accordance with such agreements.
SECTION 12.07 CONFLICT WITH TRUST INDENTURE ACT.
(a) If any provision hereof limits, qualifies or conflicts
with another provision hereof that is required to be included in this
indenture by any of the provisions of the Trust Indenture Act, such
required provision shall control.
(b) The provisions of Trust Indenture Act Sections 310 through
317 that impose duties on any Person (including the provisions
automatically deemed included herein unless expressly excluded by this
Indenture) are a part of and govern this Indenture, whether or not
physically contained herein.
SECTION 12.08 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 12.09 SUCCESSORS AND ASSIGNS. All covenants and agreements in
this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee in
this Indenture shall bind its successors, co-trustees and agents.
78
Indenture
SECTION 12.10 SEPARABILITY. 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 12.11 BENEFITS OF INDENTURE. The Insurer and its successors and
assigns shall be a third-party beneficiary to the provisions of this Indenture,
and shall be entitled to rely upon and directly to enforce such provisions of
this Indenture so long as the Insurer is the Controlling Party. Nothing in this
Indenture or in the Notes, express or implied, shall give to any Person, other
than the parties hereto and their successors hereunder, and the Noteholders, and
any other party secured hereunder, and any other Person with an ownership
interest in any part of the Pledged Assets, any benefit or any legal or
equitable right, remedy or claim under this Indenture. The Insurer may disclaim
any of its rights and powers under this Indenture, but not its duties and
obligations under the Policy, upon delivery of a written notice to the Indenture
Trustee.
SECTION 12.12 LEGAL HOLIDAYS. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
SECTION 12.13 GOVERNING LAW. This Indenture shall be construed in
accordance with the laws of the State of
New York, without regard to the
conflict of laws principles thereof, (except with regard to the UCC) and the
obligations, rights, and remedies of the parties under this Indenture shall be
determined in accordance with such laws.
SECTION 12.14 COUNTERPARTS. This Indenture may be executed in several
counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
SECTION 12.15 RECORDING OF INDENTURE. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the Indenture Trustee or any other counsel reasonably
acceptable to the Indenture Trustee and the Insurer) to the effect that such
recording is necessary either for the protection of the Noteholders or any other
Person secured hereunder or for the enforcement of any right or remedy granted
to the Indenture Trustee under this Indenture.
SECTION 12.16 TRUST OBLIGATION. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer or of any successor or assign of the Indenture
Trustee or the Owner Trustee in its individual capacity, except as any such
Person may have expressly agreed (it being understood that the Indenture
79
Indenture
Trustee and the Owner Trustee have no such obligations in their individual
capacity) and except that any such partner, owner or beneficiary shall be fully
liable, to the extent provided by applicable law, for any unpaid consideration
for stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity. For all purposes of this Indenture, in the performance of
any duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of
Articles Six, Seven and Eight of the Trust Agreement.
SECTION 12.17 NO PETITION. The parties hereto, by entering into this
Indenture, and each Noteholder, by accepting a Note or a beneficial interest in
a Note, hereby covenant and agree that they will not at any time institute
against the Transferor or the Issuer, or join in any institution against the
Transferor or the Issuer of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any United
States Federal or state bankruptcy or similar law in connection with any
obligations relating to the Notes, this Indenture or any of the other Basic
Documents.
SECTION 12.18 INSPECTION. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Indenture Trustee or of the
Insurer (so long as it is the Controlling Party), during the Issuer's normal
business hours, to examine all the books of account, records, reports and other
papers of the Issuer, to make copies and extracts therefrom, to cause such books
to be audited by independent certified public accountants, and to discuss the
Issuer's affairs, finances and accounts with the Issuer's officers, employees
and independent certified public accountants, all at such reasonable times and
as often as may be reasonably requested. The Indenture Trustee and the Insurer
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 Indenture Trustee or the Insurer may reasonably determine
that such disclosure is consistent with its obligations hereunder.
SECTION 12.19 LIMITATION OF LIABILITY OF OWNER TRUSTEE. Notwithstanding
anything contained herein to the contrary, this instrument has been
countersigned by the Owner Trustee not in its individual capacity but solely in
its capacity as Owner Trustee of the Issuer and in no event shall the Owner
Trustee in its individual capacity or any beneficial owner of the Issuer have
any liability for the representations, warranties, covenants, agreements or
other obligations of the Issuer hereunder, as to all of which recourse shall be
had solely to the assets of the Issuer. For all purposes of this Indenture, in
the performance of any duties or obligations of the Issuer hereunder, the Owner
Trustee shall be subject to, and entitled to the benefits of, the terms and
provisions of Articles VIII, XIII and XV of the Trust Agreement.
SECTION 12.20 CERTAIN MATTERS REGARDING THE INSURER. So long as the
Insurer is the Controlling Party, the Insurer shall have the right to exercise
all rights (other than to receive payments), including voting rights, which the
Noteholders or Certificateholders are entitled to exercise pursuant to this
Indenture, without any consent of such Noteholders or Certificateholders;
provided, however, that without the consent of each Noteholder and
Certificateholder affected thereby, the Insurer shall not exercise such rights
to amend this Indenture in any manner that would (i) reduce the amount of, or
delay the timing of, collections of payments on the Receivables or distributions
which are required to be made on any Note or
80
Indenture
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Notes or Certificates, or (iii) alter the rights of any such
Holder to consent to such amendment.
SECTION 12.21 NO LEGAL TITLE IN HOLDERS. No Holder of a Note shall have
legal title to any part of the Trust Property. No transfer, by operation of law
or otherwise, of any Note or other right, title and interest of any Holder of a
Note in and to the Trust Property or hereunder shall operate to terminate this
Indenture or the trusts hereunder or entitle any successor or transferee of such
Holder to an accounting or to the transfer to it of legal title to any part of
the Trust Property.
SECTION 12.22 EFFECT OF TERMINATION DATE. Notwithstanding anything to
the contrary set forth herein, all references to any right of the Insurer to
direct, appoint, consent to, accept, approve of, take or omit to take any action
under this Indenture or any other Basic Document shall be inapplicable at all
times after the Termination Date or Insurer Default, and (i) if such reference
provides for another party or parties to take or omit to take such action
following an Insurer Default, such party or parties shall also be entitled to
take or omit to take such action following the Termination Date or Insurer
Default and (ii) if such reference does not provide for another party or parties
to take or omit to take such action following an Insurer Default, then the
Indenture Trustee acting at the direction of the Majority Noteholders shall have
the right to take or omit to take any such action following the Termination Date
or Insurer Default. In addition, any other provision of this Indenture or any
other Basic Document which is operative based in whole or in part on whether an
Insurer Default has or has not occurred shall, at all times on or after the
Termination Date or Insurer Default, be deemed to refer to whether or not the
Termination Date has occurred.
SECTION 12.23 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ CERTIFICATIONS. The certifications
required by the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules of the Securities and
Exchange Commission promulgated thereunder to be included in filings with
respect to the Issuer pursuant to the Securities Exchange Act of 1934, as
amended, shall be made by BVAC, so long as BVAC is the Servicer; if BVAC is no
longer the Servicer, such certifications shall be made by the Transferor. If
BVAC is no longer the Servicer, the successor Servicer shall provide to the
Transferor all information as the Transferor may reasonably request in order to
fulfill its obligations to make such certifications. In addition, the Indenture
Trustee shall provide to BVAC or the Transferor (whichever of the two is then
required to make such certifications) with a certification signed by a
Responsible Officer stating that such Responsible Officer is not actually aware
(without any independent duty of inquiry or investigation) of any matters which
would cause the certification to be made by BVAC or the Transferor, as the case
may be, to be incorrect.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGES FOLLOW]
81
Indenture
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed and delivered as of the day and year first above written.
BAY VIEW 2003-LJ-1 OWNER TRUST
By: Wilmington Trust Company
not in its individual capacity but
solely on behalf of the Issuer as Owner
Trustee under the Trust Agreement
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
DEUTSCHE BANK TRUST COMPANY AMERICAS not in
its individual capacity but solely as
Indenture Trustee
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Indenture
SCHEDULE A
FORM OF DEPOSITORY AGREEMENT
Indenture
EXHIBIT A-1
[FORM OF CLASS A-l NOTE]
PRINCIPAL IN RESPECT OF THIS CLASS A-l NOTE IS DISTRIBUTABLE AS SET FORTH
HEREIN. ACCORDINGLY, THE UNPAID PRINCIPAL AMOUNT OF THE FRACTIONAL INTEREST
EVIDENCED HEREBY AT ANY TIME MAY BE LESS THAN THE ORIGINAL PRINCIPAL AMOUNT SET
FORTH HEREIN.
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a
New York corporation ("DTC"), to the issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner thereof, Cede & Co., has an
interest herein.
PRINCIPAL IN RESPECT OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN.
BAY VIEW 2003-LJ-1 OWNER TRUST
% CLASS A-l AUTOMOBILE RECEIVABLE BACKED NOTE
Evidencing the indebtedness of the Bay View 2003-LJ-1 Owner
Trust, a Delaware statutory trust, secured by the Pledged
Assets, as defined below, including a pool of simple and
precomputed interest installment loan and security agreements
and installment sales contracts secured by new and used
automobiles, light-duty trucks, sport utility vehicles and
vans.
(This Note does not represent an interest in
Bay View
Transaction Corporation nor an interest in or obligation of
any of its affiliates. Neither this Note nor the underlying
Receivables, as defined below, are insured or guaranteed by
any government agency).
NUMBER $__________
CUSIP __________
Bay View 2003-LJ-1 Owner Trust, a Delaware statutory trust, for value
received, hereby promises to pay to the order of [__________] ("the Noteholder")
or its registered assigns, the principal sum of [____________________ dollars
($__________)], which amount shall be payable in the amounts and at the times
set forth in the Indenture dated as of August 1, 2003 (the "Indenture"; such
term to include any amendment, restatement, supplement or other modification
thereof or thereto); provided, however, that the entire unpaid amount of this
Note shall be due and payable on or before [__________]. However, principal with
respect to the Notes may be paid earlier or later under certain limited
circumstances under the Indenture. The Issuer will pay
Indenture
interest on this Note at the Class A-1 Interest Rate. Such interest shall be
payable in the manner and at the times set forth in the Indenture. To the extent
not otherwise defined herein, the capitalized terms used herein have the
meanings assigned to them in the Indenture. This Note is issued under and is
subject to the terms, provisions, and conditions of the Indenture, to which the
holder of this Note by virtue of the acceptance hereof assents and by which such
holder is bound.
This Note is secured by the Pledged Assets. The Pledged Assets consist
of (i) the Receivables listed on Schedule A to the Trust Agreement, (ii) the
security interests in the Financed Vehicles or in any other property granted by
Obligors pursuant to the Receivables, (iii) any proceeds from claims and other
amounts relating to Insurance Policies and other items financed under the
Receivables or otherwise covering an Obligor or a Financed Vehicle, (iv) any
Liquidation Proceeds, (v) all property (including the right to receive future
Liquidation Proceeds) that secures a Receivable and that has been or may be
acquired pursuant to the liquidation of the Receivable, (vi) the interest of the
Issuer in any proceeds from recourse to Dealers relating to the Receivables,
(vii) all documents contained in the Receivable Files relating to the
Receivables, (viii) all monies paid on the Receivables, and all monies due
thereon after the Cut-off Date, (ix) the rights of the Transferor pursuant to
the Purchase Agreement and the Trust Agreement and the rights of the Issuer
pursuant to the Trust Agreement, including, without limitation, a direct right
to cause BVAC to purchase Receivables from the Transferor upon the occurrence of
a breach of any of the representations and warranties contained in Section
3.02(b) of the Purchase Agreement or the failure of BVAC to timely comply with
its obligations pursuant to Section 5.06 of the Purchase Agreement and (x) all
proceeds (including, without limitation, "proceeds" as defined in the UCC of the
jurisdiction the law of which governs the perfection of the interest in such
Receivables and such other property so transferred) of any of the foregoing.
Pledged Assets shall also include (a) any and all other right, title and
interest, including any beneficial interest the Issuer may have in the
Collection Account, the Payahead Account, the Reserve Account and the Lock-Box
Account (to the extent such amounts and property in the Lock-Box Account relate
to the Receivables), (b) the funds deposited in and financial assets credited to
and from time to time on deposit in such accounts (to the extent such amounts
and property in the Lock-Box account relate to the Receivables), and all
Eligible Investments and other securities, instruments and other investments
purchased from such funds.
Under the Indenture, the Issuer will pay, on the twenty-fifth calendar
day of each month, or if such day is not a Business Day, on the first Business
Day thereafter (the "Payment Date"), commencing September 25, 2003, to the
person in whose name this Note is registered on the Record Date, the portion of
Monthly Interest and Monthly Principal to which the Noteholder is entitled
pursuant to the Indenture.
Payments on this Note will be made by the Indenture Trustee by wire
transfer through the facilities of the Depository Trust Company if this note is
held by Cede & Co. and otherwise by check mailed to the Person entitled thereto
without the presentation or surrender of this Note or the making of any notation
hereon. Except as otherwise provided in the Indenture and notwithstanding the
above, the final payment on this Note will be made only upon presentation and
surrender of this Note at the office or agency maintained for that purpose by
the Indenture Trustee.
Indenture
Unless the certificate of authentication hereon shall have been
executed by a Responsible Officer of the Indenture Trustee, by manual or
facsimile signature, this Note shall not entitle the holder hereof to any
benefit under the Indenture or be valid for any purpose.
This Note constitutes an obligation of the Issuer. The Note does not
represent an interest in the Issuer nor an interest in or obligation of any
affiliate of the Issuer, including
Bay View Transaction Corporation or Bay View
Acceptance Corporation. The Note is limited in right of payment to certain
collections and recoveries respecting the Receivables, all as more specifically
set forth in the Indenture. In addition to the Class A-1 Notes, the Issuer has
also issued Class A-2 Notes, Class A-3 Notes, Class A-4 Notes and Class I Notes.
The Indenture provides for certain amounts to be deposited into the Spread
Account. In the event amounts available for withdrawal from the Spread Account
are insufficient to make payments relating to this Note and the other notes
issued by the Issuer, the Indenture Trustee will draw on the Policy to pay such
deficiency to the extent provided therein. In furtherance of and in limitation
of the foregoing, the Noteholder, by its acceptance of this Note, specifically
acknowledges that it has no right to or interest in any monies at any time held
pursuant to the Spread Account Agreement prior to the release of such monies
pursuant to the Spread Account Agreement, such monies being held in trust for
the benefit of the Secured Parties (as defined therein).
The Indenture permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholder under the Indenture at any time by the
Issuer and the Indenture Trustee with the consent of the Insurer and the
Noteholder. Any such consent by the holder of this Note shall be conclusive and
binding on the Noteholder.
This Note is transferable solely in accordance with Section 2.04 of the
Indenture.
The obligations and responsibilities to the Noteholder created by the
Indenture shall terminate upon the payment to Noteholder of all amounts required
to be paid to it pursuant to the Indenture. The Servicer may at its option cause
the Indenture Trustee to sell the Pledged Assets at a price not to be less than
the price specified in the Indenture, and such sale of the Receivables and other
property may effect early retirement of the Note.
Although this Note summarizes certain provisions of the Indenture, this
Note does not purport to summarize the Indenture and reference is made to the
Indenture for information with respect to the interests, rights, benefits,
obligations, proceeds and duties evidenced hereby and the rights, duties and
obligations of the Indenture Trustee. In the event of any inconsistency or
conflict between the terms of this Note and the terms of the Indenture, the
terms of the Indenture shall control.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly
executed.
Dated:
---------------
Indenture
BAY VIEW 2003-LJ-1 OWNER TRUST
By Wilmington Trust Company, not in its
individual capacity but solely as Owner
Trustee
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Indenture
CERTIFICATE OF AUTHENTICATION
This is the Note referred to in the within-mentioned Indenture.
Deutsche Bank Trust Company Americas, solely in its capacity as Indenture
Trustee,
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Dated: , 2003
---------
Indenture
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
_______________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints, ____________________ attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: ____________________
Signature Guaranteed: _________________________
*
* NOTICE: The signature to this assignment must correspond with the
name of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in 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.
Indenture
EXHIBIT A-2
[FORM OF CLASS A-2 NOTE]
PRINCIPAL IN RESPECT OF THIS CLASS A-2 NOTE IS DISTRIBUTABLE AS SET FORTH
HEREIN. ACCORDINGLY, THE UNPAID PRINCIPAL AMOUNT OF THE FRACTIONAL INTEREST
EVIDENCED HEREBY AT ANY TIME MAY BE LESS THAN THE ORIGINAL PRINCIPAL AMOUNT SET
FORTH HEREIN.
Unless this Note is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the issuer or its agent for
registration of transfer, exchange or payment, and any Note issued is registered
in the name of Cede & Co. or in such other name as requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner thereof, Cede & Co., has an interest
herein.
PRINCIPAL IN RESPECT OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN.
BAY VIEW 2003-LJ-1 OWNER TRUST
% CLASS A-2 AUTOMOBILE RECEIVABLE BACKED NOTE
Evidencing the indebtedness of the Bay View 2003-LJ-1 Owner
Trust, a Delaware statutory trust, secured by the Pledged
Assets, as defined below, including a pool of simple and
precomputed interest installment loan and security agreements
and installment sales contracts secured by new and used
automobiles, light-duty trucks, sport utility vehicles and
vans.
(This Note does not represent an interest in
Bay View
Transaction Corporation nor an interest in or obligation of
any of its affiliates. Neither this Note nor the underlying
Receivables, as defined below, are insured or guaranteed by
any government agency).
NUMBER $__________
CUSIP __________
Bay View 2003-LJ-1 Owner Trust, a Delaware statutory trust, for value
received, hereby promises to pay to the order of [__________] ("the Noteholder")
or its registered assigns, the principal sum of ____________________ dollars
($__________), which amount shall be payable in the amounts and at the times set
forth in the Indenture dated as of August 1, 2003 (the "Indenture"; such term to
include any amendment, restatement, supplement or other modification thereof or
thereto); provided, however, that the entire unpaid amount of this Note shall be
due and payable on or before ____________________. However, principal with
respect to the Notes may be paid earlier or later under certain limited
circumstances under the Indenture. The Issuer
Indenture
will pay interest on this Note at the Class A-2 Interest Rate. Such interest
shall be payable in the manner and at the times set forth in the Indenture. To
the extent not otherwise defined herein, the capitalized terms used herein have
the meanings assigned to them in the Indenture. This Note is issued under and is
subject to the terms, provisions, and conditions of the Indenture, to which the
holder of this Note by virtue of the acceptance hereof assents and by which such
holder is bound.
This Note is secured by the Pledged Assets. The Pledged Assets consist
of (i) the Receivables listed on Schedule A to the Trust Agreement, (ii) the
security interests in the Financed Vehicles or in any other property granted by
Obligors pursuant to the Receivables, (iii) any proceeds from claims and other
amounts relating to Insurance Policies and other items financed under the
Receivables or otherwise covering an Obligor or a Financed Vehicle, (iv) any
Liquidation Proceeds, (v) all property (including the right to receive future
Liquidation Proceeds) that secures a Receivable and that has been or may be
acquired pursuant to the liquidation of the Receivable, (vi) the interest of the
Issuer in any proceeds from recourse to Dealers relating to the Receivables,
(vii) all documents contained in the Receivable Files relating to the
Receivables, (viii) all monies paid on the Receivables, and all monies due
thereon after the Cut-off Date, (ix) the rights of the Transferor pursuant to
the Purchase Agreement and the Trust Agreement and the rights of the Issuer
pursuant to the Trust Agreement, including, without limitation, a direct right
to cause BVAC to purchase Receivables from the Transferor upon the occurrence of
a breach of any of the representations and warranties contained in Section
3.02(b) of the Purchase Agreement or the failure of BVAC to timely comply with
its obligations pursuant to Section 5.06 of the Purchase Agreement and (x) all
proceeds (including, without limitation, "proceeds" as defined in the UCC of the
jurisdiction the law of which governs the perfection of the interest in such
Receivables and such other property so transferred) of any of the foregoing.
Pledged Assets shall also include (a) any and all other right, title and
interest, including any beneficial interest the Issuer may have in the
Collection Account, the Payahead Account, the Reserve Account and the Lock-Box
Account (to the extent such amounts and property in the Lock-Box Account relate
to the Receivables), (b) the funds deposited in and financial assets credited to
and from time to time on deposit in such accounts (to the extent such amounts
and property in the Lock-Box account relate to the Receivables), and all
Eligible Investments and other securities, instruments and other investments
purchased from such funds.
Under the Indenture, the Issuer will pay, on the twenty-fifth calendar
day of each month, or if such day is not a Business Day, on the first Business
Day thereafter (the "Payment Date"), commencing September 25, 2003, to the
person in whose name this Note is registered on the Record Date, the portion of
Monthly Interest and Monthly Principal to which the Noteholder is entitled
pursuant to the Indenture.
Payments on this Note will be made by the Indenture Trustee by wire
transfer through the facilities of the Depository Trust Company if this note is
held by Cede & Co. and otherwise by check mailed to the Person entitled thereto
without the presentation or surrender of this Note or the making of any notation
hereon. Except as otherwise provided in the Indenture and notwithstanding the
above, the final payment on this Note will be made only upon presentation and
surrender of this Note at the office or agency maintained for that purpose by
the Indenture Trustee.
Indenture
Unless the certificate of authentication hereon shall have been
executed by a Responsible Officer of the Indenture Trustee, by manual or
facsimile signature, this Note shall not entitle the holder hereof to any
benefit under the Indenture or be valid for any purpose.
This Note constitutes an obligation of the Issuer. The Note does not
represent an interest in the Issuer nor an interest in or obligation of any
affiliate of the Issuer, including
Bay View Transaction Corporation or Bay View
Acceptance Corporation. The Note is limited in right of payment to certain
collections and recoveries respecting the Receivables, all as more specifically
set forth in the Indenture. In addition to the Class A-2 Notes, the Issuer has
also issued Class A-1 Notes, Class A-3 Notes, Class A-4 Notes and Class I Notes.
The Indenture provides for certain amounts to be deposited into the Spread
Account. In the event amounts available for withdrawal from the Spread Account
are insufficient to make payments relating to this Note and the other notes
issued by the Issuer, the Indenture Trustee will draw on the Policy to pay such
deficiency to the extent provided therein. In furtherance of and in limitation
of the foregoing, the Noteholder, by its acceptance of this Note, specifically
acknowledges that it has no right to or interest in any monies at any time held
pursuant to the Spread Account Agreement prior to the release of such monies
pursuant to the Spread Account Agreement, such monies being held in trust for
the benefit of the Secured Parties (as defined therein).
The Indenture permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholder under the Indenture at any time by the
Issuer and the Indenture Trustee with the consent of the Insurer and the
Noteholder. Any such consent by the holder of this Note shall be conclusive and
binding on the Noteholder.
This Note is transferable solely in accordance with Section 2.04 of the
Indenture.
The obligations and responsibilities to the Noteholder created by the
Indenture shall terminate upon the payment to Noteholder of all amounts required
to be paid to it pursuant to the Indenture. The Servicer may at its option cause
the Indenture Trustee to sell the Pledged Assets at a price not to be less than
the price specified in the Indenture, and such sale of the Receivables and other
property may effect early retirement of the Note.
Although this Note summarizes certain provisions of the Indenture, this
Note does not purport to summarize the Indenture and reference is made to the
Indenture for information with respect to the interests, rights, benefits,
obligations, proceeds and duties evidenced hereby and the rights, duties and
obligations of the Indenture Trustee. In the event of any inconsistency or
conflict between the terms of this Note and the terms of the Indenture, the
terms of the Indenture shall control.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly
executed.
Dated:_______________
Indenture
BAY VIEW 2003-LJ-1 OWNER TRUST
By Wilmington Trust Company, not in its
individual capacity but solely as Owner
Trustee
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Indenture
CERTIFICATE OF AUTHENTICATION
This is the Note referred to in the within-mentioned Indenture.
Deutsche Bank Trust Company Americas, solely in its capacity as Indenture
Trustee,
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Dated:
---------------------
Indenture
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
_______________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints, ____________________ attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: ____________________
Signature Guaranteed:______________________
*
* NOTICE: The signature to this assignment must correspond with the
name of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in 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.
Indenture
EXHIBIT A-3
[FORM OF CLASS A-3 NOTE]
PRINCIPAL IN RESPECT OF THIS CLASS A-3 NOTE IS DISTRIBUTABLE AS SET FORTH
HEREIN. ACCORDINGLY, THE UNPAID PRINCIPAL AMOUNT OF THE FRACTIONAL INTEREST
EVIDENCED HEREBY AT ANY TIME MAY BE LESS THAN THE ORIGINAL PRINCIPAL AMOUNT SET
FORTH HEREIN.
Unless this Note is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the issuer or its agent for
registration of transfer, exchange or payment, and any Note issued is registered
in the name of Cede & Co. or in such other name as requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner thereof, Cede & Co., has an interest
herein.
PRINCIPAL IN RESPECT OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN.
BAY VIEW 2003-LJ-1 OWNER TRUST
% CLASS A-3 AUTOMOBILE RECEIVABLE BACKED NOTE
Evidencing the indebtedness of the Bay View 2003-LJ-1 Owner
Trust, a Delaware statutory trust, secured by the Pledged
Assets, as defined below, including a pool of simple and
precomputed interest installment loan and security agreements
and installment sales contracts secured by new and used
automobiles, light-duty trucks, sport utility vehicles and
vans.
(This Note does not represent an interest in
Bay View
Transaction Corporation nor an interest in or obligation of
any of its affiliates. Neither this Note nor the underlying
Receivables, as defined below, are insured or guaranteed by
any government agency).
NUMBER $__________
CUSIP __________
Bay View 2003 LJ-1 Owner Trust, a Delaware statutory trust, for value
received, hereby promises to pay to the order of [__________] ("the Noteholder")
or its registered assigns, the principal sum of [____________________ dollars
($__________)], which amount shall be payable in the amounts and at the times
set forth in the Indenture dated as of August 1, 2003 (the "Indenture"; such
term to include any amendment, restatement, supplement or other modification
thereof or thereto); provided, however, that the entire unpaid amount of this
Note shall be due and payable on or before [____________________]. However,
principal with respect to the Notes may be paid earlier or later under certain
limited circumstances under the Indenture. The
Indenture
Issuer will pay interest on this Note at the Class A-3 Interest Rate. Such
interest shall be payable in the manner and at the times set forth in the
Indenture. To the extent not otherwise defined herein, the capitalized terms
used herein have the meanings assigned to them in the Indenture. This Note is
issued under and is subject to the terms, provisions, and conditions of the
Indenture, to which the holder of this Note by virtue of the acceptance hereof
assents and by which such holder is bound.
This Note is secured by the Pledged Assets. The Pledged Assets consist
of (i) the Receivables listed on Schedule A to the Trust Agreement, (ii) the
security interests in the Financed Vehicles or in any other property granted by
Obligors pursuant to the Receivables, (iii) any proceeds from claims and other
amounts relating to Insurance Policies and other items financed under the
Receivables or otherwise covering an Obligor or a Financed Vehicle, (iv) any
Liquidation Proceeds, (v) all property (including the right to receive future
Liquidation Proceeds) that secures a Receivable and that has been or may be
acquired pursuant to the liquidation of the Receivable, (vi) the interest of the
Issuer in any proceeds from recourse to Dealers relating to the Receivables,
(vii) all documents contained in the Receivable Files relating to the
Receivables, (viii) all monies paid on the Receivables, and all monies due
thereon after the Cut-off Date, (ix) the rights of the Transferor pursuant to
the Purchase Agreement and the Trust Agreement and the rights of the Issuer
pursuant to the Trust Agreement, including, without limitation, a direct right
to cause BVAC to purchase Receivables from the Transferor upon the occurrence of
a breach of any of the representations and warranties contained in Section
3.02(b) of the Purchase Agreement or the failure of BVAC to timely comply with
its obligations pursuant to Section 5.06 of the Purchase Agreement and (x) all
proceeds (including, without limitation, "proceeds" as defined in the UCC of the
jurisdiction the law of which governs the perfection of the interest in such
Receivables and such other property so transferred) of any of the foregoing.
Pledged Assets shall also include (a) any and all other right, title and
interest, including any beneficial interest the Issuer may have in the
Collection Account, the Payahead Account, the Reserve Account and the Lock-Box
Account (to the extent such amounts and property in the Lock-Box Account relate
to the Receivables), (b) the funds deposited in and financial assets credited to
and from time to time on deposit in such accounts (to the extent such amounts
and property in the Lock-Box account relate to the Receivables), and all
Eligible Investments and other securities, instruments and other investments
purchased from such funds.
Under the Indenture, the Issuer will pay, on the twenty-fifty calendar
day of each month, or if such day is not a Business Day, on the first Business
Day thereafter (the "Payment Date"), commencing September 25, 2003, to the
person in whose name this Note is registered on the Record Date, the portion of
Monthly Interest and Monthly Principal to which the Noteholder is entitled
pursuant to the Indenture.
Payments on this Note will be made by the Indenture Trustee by wire
transfer through the facilities of the Depository Trust Company if this note is
held by Cede & Co. and otherwise by check mailed to the Person entitled thereto
without the presentation or surrender of this Note or the making of any notation
hereon. Except as otherwise provided in the Indenture and notwithstanding the
above, the final payment on this Note will be made only upon presentation and
surrender of this Note at the office or agency maintained for that purpose by
the Indenture Trustee.
Indenture
Unless the certificate of authentication hereon shall have been
executed by a Responsible Officer of the Indenture Trustee, by manual or
facsimile signature, this Note shall not entitle the holder hereof to any
benefit under the Indenture or be valid for any purpose.
This Note constitutes an obligation of the Issuer. The Note does not
represent an interest in the Issuer nor an interest in or obligation of any
affiliate of the Issuer, including
Bay View Transaction Corporation or Bay View
Acceptance Corporation. The Note is limited in right of payment to certain
collections and recoveries respecting the Receivables, all as more specifically
set forth in the Indenture. In addition to the Class A-3 Notes, the Issuer has
also issued Class A-1 Notes, Class A-2 Notes, Class A-4 Notes and Class I Notes.
The Indenture provides for certain amounts to be deposited into the Spread
Account. In the event amounts available for withdrawal from the Spread Account
are insufficient to make payments relating to this Note and the other notes
issued by the Issuer, the Indenture Trustee will draw on the Policy to pay such
deficiency to the extent provided therein. In furtherance of and in limitation
of the foregoing, the Noteholder, by its acceptance of this Note, specifically
acknowledges that it has no right to or interest in any monies at any time held
pursuant to the Spread Account Agreement prior to the release of such monies
pursuant to the Spread Account Agreement, such monies being held in trust for
the benefit of the Secured Parties (as defined therein).
The Indenture permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholder under the Indenture at any time by the
Issuer and the Indenture Trustee with the consent of the Insurer and the
Noteholder. Any such consent by the holder of this Note shall be conclusive and
binding on the Noteholder.
This Note is transferable solely in accordance with Section 2.04 of the
Indenture.
The obligations and responsibilities to the Noteholder created by the
Indenture shall terminate upon the payment to Noteholder of all amounts required
to be paid to it pursuant to the Indenture. The Servicer may at its option cause
the Indenture Trustee to sell the Pledged Assets at a price not to be less than
the price specified in the Indenture, and such sale of the Receivables and other
property may effect early retirement of the Note.
Although this Note summarizes certain provisions of the Indenture, this
Note does not purport to summarize the Indenture and reference is made to the
Indenture for information with respect to the interests, rights, benefits,
obligations, proceeds and duties evidenced hereby and the rights, duties and
obligations of the Indenture Trustee. In the event of any inconsistency or
conflict between the terms of this Note and the terms of the Indenture, the
terms of the Indenture shall control.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly
executed.
Dated:
-----------------
Indenture
BAY VIEW 2003-LJ-1 OWNER TRUST
By Wilmington Trust Company, not in its
individual capacity but solely as Owner
Trustee
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Indenture
CERTIFICATE OF AUTHENTICATION
This is the Note referred to in the within-mentioned Indenture.
Deutsche Bank Trust Company Americas, solely in its capacity as Indenture
Trustee,
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Dated:
--------------------
Indenture
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
_______________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints, ____________________ attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: ____________________
Signature Guaranteed: ____________________________
*
* NOTICE: The signature to this assignment must correspond with the
name of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in 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.
Indenture
EXHIBIT A-4
[FORM OF CLASS A-4 NOTE]
PRINCIPAL IN RESPECT OF THIS CLASS A-4 NOTE IS DISTRIBUTABLE AS SET FORTH
HEREIN. ACCORDINGLY, THE UNPAID PRINCIPAL AMOUNT OF THE FRACTIONAL INTEREST
EVIDENCED HEREBY AT ANY TIME MAY BE LESS THAN THE ORIGINAL PRINCIPAL AMOUNT SET
FORTH HEREIN.
Unless this Note is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the issuer or its agent for
registration of transfer, exchange or payment, and any Note issued is registered
in the name of Cede & Co. or in such other name as requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner thereof, Cede & Co., has an interest
herein.
PRINCIPAL IN RESPECT OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN.
BAY VIEW 2003-LJ-1 OWNER TRUST
% CLASS A-4 AUTOMOBILE RECEIVABLE BACKED NOTE
Evidencing the indebtedness of the Bay View 2003-LJ-1 Owner
Trust, a Delaware statutory trust, secured by the Pledged
Assets, as defined below, including a pool of simple and
precomputed interest installment loan and security agreements
and installment sales contracts secured by new and used
automobiles, light-duty trucks, sport utility vehicles and
vans.
(This Note does not represent an interest in
Bay View
Transaction Corporation nor an interest in or obligation of
any of its affiliates. Neither this Note nor the underlying
Receivables, as defined below, are insured or guaranteed by
any government agency).
NUMBER $__________
CUSIP __________
Bay View 2003-LJ-1 Owner Trust, a Delaware statutory trust, for value
received, hereby promises to pay to the order of [__________] ("the Noteholder")
or its registered assigns, the principal sum of [____________________] dollars
($__________), which amount shall be payable in the amounts and at the times set
forth in the Indenture dated as of August 1, 2003 (the "Indenture"; such term to
include any amendment, restatement, supplement or other modification thereof or
thereto); provided, however, that the entire unpaid amount of this Note shall be
due and payable on or before [____________________]. However, principal with
respect to the Notes may be paid earlier or later under certain limited
circumstances under the Indenture. The
Indenture
Issuer will pay interest on this Note at the Class A-4 Interest Rate. Such
interest shall be payable in the manner and at the times set forth in the
Indenture. To the extent not otherwise defined herein, the capitalized terms
used herein have the meanings assigned to them in the Indenture. This Note is
issued under and is subject to the terms, provisions, and conditions of the
Indenture, to which the holder of this Note by virtue of the acceptance hereof
assents and by which such holder is bound.
This Note is secured by the Pledged Assets. The Pledged Assets consist
of (i) the Receivables listed on Schedule A to the Trust Agreement, (ii) the
security interests in the Financed Vehicles or in any other property granted by
Obligors pursuant to the Receivables, (iii) any proceeds from claims and other
amounts relating to Insurance Policies and other items financed under the
Receivables or otherwise covering an Obligor or a Financed Vehicle, (iv) any
Liquidation Proceeds, (v) all property (including the right to receive future
Liquidation Proceeds) that secures a Receivable and that has been or may be
acquired pursuant to the liquidation of the Receivable, (vi) the interest of the
Issuer in any proceeds from recourse to Dealers relating to the Receivables,
(vii) all documents contained in the Receivable Files relating to the
Receivables, (viii) all monies paid on the Receivables, and all monies due
thereon after the Cut-off Date, (ix) the rights of the Transferor pursuant to
the Purchase Agreement and the Trust Agreement and the rights of the Issuer
pursuant to the Trust Agreement, including, without limitation, a direct right
to cause BVAC to purchase Receivables from the Transferor upon the occurrence of
a breach of any of the representations and warranties contained in Section
3.02(b) of the Purchase Agreement or the failure of BVAC to timely comply with
its obligations pursuant to Section 5.06 of the Purchase Agreement and (x) all
proceeds (including, without limitation, "proceeds" as defined in the UCC of the
jurisdiction the law of which governs the perfection of the interest in such
Receivables and such other property so transferred) of any of the foregoing.
Pledged Assets shall also include (a) any and all other right, title and
interest, including any beneficial interest the Issuer may have in the
Collection Account, the Payahead Account, the Reserve Account and the Lock-Box
Account (to the extent such amounts and property in the Lock-Box Account relate
to the Receivables), (b) the funds deposited in and financial assets credited to
and from time to time on deposit in such accounts (to the extent such amounts
and property in the Lock-Box account relate to the Receivables), and all
Eligible Investments and other securities, instruments and other investments
purchased from such funds.
Under the Indenture, the Issuer will pay, on the twenty-fifth calendar
day of each month, or if such day is not a Business Day, on the first Business
Day thereafter (the "Payment Date"), commencing September 25, 2003, to the
person in whose name this Note is registered on the Record Date, the portion of
Monthly Interest and Monthly Principal to which the Noteholder is entitled
pursuant to the Indenture.
Payments on this Note will be made by the Indenture Trustee by wire
transfer through the facilities of the Depository Trust Company if this note is
held by Cede & Co. and otherwise by check mailed to the Person entitled thereto
without the presentation or surrender of this Note or the making of any notation
hereon. Except as otherwise provided in the Indenture and notwithstanding the
above, the final payment on this Note will be made only upon presentation and
surrender of this Note at the office or agency maintained for that purpose by
the Indenture Trustee.
Indenture
Unless the certificate of authentication hereon shall have been
executed by a Responsible Officer of the Indenture Trustee, by manual or
facsimile signature, this Note shall not entitle the holder hereof to any
benefit under the Indenture or be valid for any purpose.
This Note constitutes an obligation of the Issuer. The Note does not
represent an interest in the Issuer nor an interest in or obligation of any
affiliate of the Issuer, including
Bay View Transaction Corporation or Bay View
Acceptance Corporation. The Note is limited in right of payment to certain
collections and recoveries respecting the Receivables, all as more specifically
set forth in the Indenture. In addition to the Class A-4 Notes, the Issuer has
also issued Class A-1 Notes, Class A-2 Notes, Class A-3 Notes and Class I Notes.
The Indenture provides for certain amounts to be deposited into the Spread
Account. In the event amounts available for withdrawal from the Spread Account
are insufficient to make payments relating to this Note and the other notes
issued by the Issuer, the Indenture Trustee will draw on the Policy to pay such
deficiency to the extent provided therein. In furtherance of and in limitation
of the foregoing, the Noteholder, by its acceptance of this Note, specifically
acknowledges that it has no right to or interest in any monies at any time held
pursuant to the Spread Account Agreement prior to the release of such monies
pursuant to the Spread Account Agreement, such monies being held in trust for
the benefit of the Secured Parties (as defined therein).
The Indenture permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholder under the Indenture at any time by the
Issuer and the Indenture Trustee with the consent of the Insurer and the
Noteholder. Any such consent by the holder of this Note shall be conclusive and
binding on the Noteholder.
This Note is transferable solely in accordance with Section 2.04 of the
Indenture.
The obligations and responsibilities to the Noteholder created by the
Indenture shall terminate upon the payment to Noteholder of all amounts required
to be paid to it pursuant to the Indenture. The Servicer may at its option cause
the Indenture Trustee to sell the Pledged Assets at a price not to be less than
the price specified in the Indenture, and such sale of the Receivables and other
property may effect early retirement of the Note.
Although this Note summarizes certain provisions of the Indenture, this
Note does not purport to summarize the Indenture and reference is made to the
Indenture for information with respect to the interests, rights, benefits,
obligations, proceeds and duties evidenced hereby and the rights, duties and
obligations of the Indenture Trustee. In the event of any inconsistency or
conflict between the terms of this Note and the terms of the Indenture, the
terms of the Indenture shall control.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly
executed.
Dated:
---------------
Indenture
BAY VIEW 2003-LJ-1 OWNER TRUST
By Wilmington Trust Company, not in its
individual capacity but solely as Owner
Trustee
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Indenture
CERTIFICATE OF AUTHENTICATION
This is the Note referred to in the within-mentioned Indenture.
Deutsche Bank Trust Company Americas, solely in its capacity as Indenture
Trustee,
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Dated: , 2003
--------
Indenture
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
_______________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints, ____________________ attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: ____________________
Signature Guaranteed: ________________________
*
* NOTICE: The signature to this assignment must correspond with the
name of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in 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.
Indenture
EXHIBIT A-5
[FORM OF CLASS I NOTE]
THIS NOTE DOES NOT ENTITLE THE HOLDER TO RECEIVE ANY PRINCIPAL BUT ONLY INTEREST
ON THE NOTIONAL PRINCIPAL AMOUNT PAYABLE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE NOTIONAL PRINCIPAL AMOUNT EVIDENCED HEREBY AT ANY TIME MAY BE
LESS THAN THE INITIAL NOTIONAL PRINCIPAL AMOUNT SET FORTH BELOW.
Unless this Note is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the issuer or its agent for
registration of transfer, exchange or payment, and any Note issued is registered
in the name of Cede & Co. or in such other name as requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner thereof, Cede & Co., has an interest
herein.
BAY VIEW 2003-LJ-1 OWNER TRUST
% CLASS I AUTOMOBILE RECEIVABLE BACKED NOTE
Evidencing the indebtedness of the Bay View 2003-LJ-1 Owner
Trust, a Delaware statutory trust, secured by the Pledged
Assets, as defined below, including a pool of simple and
precomputed interest installment loan and security agreements
and installment sales contracts secured by new and used
automobiles, light-duty trucks, sport utility vehicles and
vans.
(This Note does not represent an interest in
Bay View
Transaction Corporation nor an interest in or obligation of
any of its affiliates. Neither this Note nor the underlying
Receivables, as defined below, are insured or guaranteed by
any government agency).
NUMBER $__________
CUSIP __________
Bay View 2003-LJ-1 Owner Trust, a Delaware statutory trust, for value
received, hereby promises to pay to the order of [__________] ("the Noteholder")
or its registered assigns, the initial Notional principal amount of
[____________________ dollars ($__________)], which amount shall be payable in
the amounts and at the times set forth in the Indenture dated as of August 1,
2003 (the "Indenture"; such term to include any amendment, restatement,
supplement or other modification thereof or thereto); provided, however, that
the entire unpaid Notional principal amount of this Note shall be due and
payable on or before [____________________]. However, notional principal with
respect to the Notes may be paid earlier or later under certain limited
circumstances under the Indenture. The Issuer will pay interest on this Note at
the Class I Interest Rate. Such interest shall be payable in the manner and at
the times set forth in
Indenture
the Indenture. To the extent not otherwise defined herein, the capitalized terms
used herein have the meanings assigned to them in the Indenture. This Note is
issued under and is subject to the terms, provisions, and conditions of the
Indenture, to which the holder of this Note by virtue of the acceptance hereof
assents and by which such holder is bound.
This Note is secured by the Pledged Assets. The Pledged Assets consist
of (i) the Receivables listed on Schedule A to the Trust Agreement, (ii) the
security interests in the Financed Vehicles or in any other property granted by
Obligors pursuant to the Receivables, (iii) any proceeds from claims and other
amounts relating to Insurance Policies and other items financed under the
Receivables or otherwise covering an Obligor or a Financed Vehicle, (iv) any
Liquidation Proceeds, (v) all property (including the right to receive future
Liquidation Proceeds) that secures a Receivable and that has been or may be
acquired pursuant to the liquidation of the Receivable, (vi) the interest of the
Issuer in any proceeds from recourse to Dealers relating to the Receivables,
(vii) all documents contained in the Receivable Files relating to the
Receivables, (viii) all monies paid on the Receivables, and all monies due
thereon after the Cut-off Date, (ix) the rights of the Transferor pursuant to
the Purchase Agreement and the Trust Agreement and the rights of the Issuer
pursuant to the Trust Agreement, including, without limitation, a direct right
to cause BVAC to purchase Receivables from the Transferor upon the occurrence of
a breach of any of the representations and warranties contained in Section
3.02(b) of the Purchase Agreement or the failure of BVAC to timely comply with
its obligations pursuant to Section 5.06 of the Purchase Agreement and (x) all
proceeds (including, without limitation, "proceeds" as defined in the UCC of the
jurisdiction the law of which governs the perfection of the interest in such
Receivables and such other property so transferred) of any of the foregoing.
Pledged Assets shall also include (a) any and all other right, title and
interest, including any beneficial interest the Issuer may have in the
Collection Account, the Payahead Account, the Reserve Account and the Lock-Box
Account (to the extent such amounts and property in the Lock-Box Account relate
to the Receivables), (b) the funds deposited in and financial assets credited to
and from time to time on deposit in such accounts (to the extent such amounts
and property in the Lock-Box account relate to the Receivables), and all
Eligible Investments and other securities, instruments and other investments
purchased from such funds.
Under the Indenture, the Issuer will pay, on the twenty-fifth calendar
day of each month, or if such day is not a Business Day, on the first Business
Day thereafter (the "Payment Date"), commencing September 25, 2003, to the
person in whose name this Note is registered on the Record Date, the portion of
Monthly Interest to which the Noteholder is entitled pursuant to the Indenture.
Payments on this Note will be made by the Indenture Trustee by wire
transfer through the facilities of the Depository Trust Company if this note is
held by Cede & Co. and otherwise by check mailed to the Person entitled thereto
without the presentation or surrender of this Note or the making of any notation
hereon. Except as otherwise provided in the Indenture and notwithstanding the
above, the final payment on this Note will be made only upon presentation and
surrender of this Note at the office or agency maintained for that purpose by
the Indenture Trustee.
Indenture
Unless the certificate of authentication hereon shall have been
executed by a Responsible Officer of the Indenture Trustee, by manual or
facsimile signature, this Note shall not entitle the holder hereof to any
benefit under the Indenture or be valid for any purpose.
This Note constitutes an obligation of the Issuer. The Note does not
represent an interest in the Issuer nor an interest in or obligation of any
affiliate of the Issuer, including Bay View Transaction Corporation or Bay View
Acceptance Corporation. The Note is limited in right of payment to certain
collections and recoveries respecting the Receivables, all as more specifically
set forth in the Indenture. In addition to the Class I Notes, the Issuer has
also issued Class A-1 Notes, Class A-2 Notes, Class A-3 Notes and Class A-4
Notes. The Indenture provides for certain amounts to be deposited into the
Spread Account. In the event amounts available for withdrawal from the Spread
Account are insufficient to make payments relating to this Note and the other
notes issued by the Issuer, the Indenture Trustee will draw on the Policy to pay
such deficiency to the extent provided therein. In furtherance of and in
limitation of the foregoing, the Noteholder, by its acceptance of this Note,
specifically acknowledges that it has no right to or interest in any monies at
any time held pursuant to the Spread Account Agreement prior to the release of
such monies pursuant to the Spread Account Agreement, such monies being held in
trust for the benefit of the Secured Parties (as defined therein).
The Indenture permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholder under the Indenture at any time by the
Issuer and the Indenture Trustee with the consent of the Insurer and the
Noteholder. Any such consent by the holder of this Note shall be conclusive and
binding on the Noteholder.
This Note is transferable solely in accordance with Section 2.04 of the
Indenture.
The obligations and responsibilities to the Noteholder created by the
Indenture shall terminate upon the payment to Noteholder of all amounts required
to be paid to it pursuant to the Indenture. The Servicer may at its option cause
the Indenture Trustee to sell the Pledged Assets at a price not to be less than
the price specified in the Indenture, and such sale of the Receivables and other
property may effect early retirement of the Note.
Although this Note summarizes certain provisions of the Indenture, this
Note does not purport to summarize the Indenture and reference is made to the
Indenture for information with respect to the interests, rights, benefits,
obligations, proceeds and duties evidenced hereby and the rights, duties and
obligations of the Indenture Trustee. In the event of any inconsistency or
conflict between the terms of this Note and the terms of the Indenture, the
terms of the Indenture shall control.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly
executed.
Dated: , 2003
--------
Indenture
BAY VIEW 2003-LJ-1 OWNER TRUST
By Wilmington Trust Company, not in its
individual capacity but solely as Owner
Trustee
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Indenture
CERTIFICATE OF AUTHENTICATION
This is the Note referred to in the within-mentioned Indenture.
Deutsche Bank Trust Company Americas, solely in its capacity as Indenture
Trustee,
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Dated: , 2003
--------
Indenture
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
_______________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints, ____________________ attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: ____________________
Signature Guaranteed:
*
* NOTICE: The signature to this assignment must correspond with the
name of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in 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.
Indenture