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INDENTURE
among
AUTOINFO RECEIVABLES COMPANY
as Issuer
CRESTAR BANK
as Custodian
and
BANKERS TRUST COMPANY
as Indenture Trustee
Dated as of October 1, 1996
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This Indenture, dated as of October 1, 1996, is made by and among
AutoInfo Receivables Company (the "Issuer"), Crestar Bank (the "Custodian") and
Bankers Trust Company, a New York banking corporation, as Indenture Trustee (in
such capacity, the "Indenture Trustee").
PRELIMINARY STATEMENT
The Issuer has duly authorized the execution and delivery of this
Indenture to provide for the issuance of the Issuer's Notes issuable as provided
in this Indenture. All covenants and agreements made by the Issuer and the
Indenture Trustee herein are for the benefit and security of the Holders of the
Notes and MBIA. The Issuer and the Indenture Trustee are entering into this
Indenture, and the Indenture Trustee is accepting the trusts created hereby, for
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged.
All things necessary to make this Indenture a valid agreement of the
Issuer, the Custodian and the Indenture Trustee in accordance with its terms
have been done.
GRANTING CLAUSE
The Issuer does hereby Grant to the Indenture Trustee for the
ratable benefit of the Noteholders and MBIA, as security for the Issuer's
obligations hereunder and under the Notes, without recourse, all of the Issuer's
rights, title and interest now or hereafter acquired in and to the following and
any and all benefits accruing to the Issuer from: (a) the Loan Contracts and all
rights with respect thereto, including all guaranties and other agreements or
arrangements of whatever character from time to time supporting or securing
payment of any such Loan Contract, and all rights with respect to any agreement
or arrangements with the vendors, dealers or manufacturers of the Vehicles to
the extent specifically related to any such Loan Contract; (b) all payments
received on or with respect to the Loan Contracts due on or after the Cut-Off
Date, including, without limitation, all periodic payments due from the Obligors
thereunder, all amounts paid by guarantors under the Loan Contracts, all amounts
received on Defaulted Loan Contracts and with respect to liquidation, and all
late payment charges paid by Obligors and any other incidental charges or fees
received from an Obligor, including, but not limited to, late fees, collection
fees and bounced check charges; (c) a security interest in the Vehicles securing
the Loan Contracts; (d) the Loan Sale Agreement, the Lockbox Agreement and the
Servicing Agreement; (e) all amounts from time to time on deposit in the Trust
Accounts; (f) the original Loan Contracts, the Certificates of Title and
Applications for Certificates of Title related to the Loan Contracts and the
Loan Contract Files; (g) the interest of the Issuer in any Insurance Policy
related to the Loan Contracts and the Vehicles, including, but not limited to,
any vendor's single-interest, fire, damage and credit life insurance policies;
and (h) all proceeds of the foregoing (including, but not by way of limitation,
all cash proceeds, accounts, receivable, notes, drafts, acceptances, chattel
paper, checks, deposit accounts, insurance proceeds, condemnation awards, rights
to payment of any and
every kind, and other forms of obligations and receivables which at any time
constitute all or part or are included in the proceeds of any of the foregoing),
in each case whether now owned or hereafter acquired; (all of the foregoing
being hereinafter referred to as the "Trust Estate"). The foregoing Grant does
not constitute and is not intended to result in a creation or an assumption by
the Indenture Trustee, any Noteholder, the Custodian or MBIA of any obligation
of the Issuer, the Company or any other Person in connection with the Trust
Estate or under any agreement or instrument relating thereto.
The Indenture Trustee acknowledges its acceptance on behalf of the
Noteholders and MBIA of all right, title and interest previously held by the
Issuer in and to the Trust Estate, and declares that it shall maintain such
right, title and interest in accordance with the provisions hereof and agrees to
perform the duties herein required to the best of its ability to the end that
the interests of the Noteholders and MBIA may be adequately and effectively
protected.
In consideration of the mutual agreements herein contained, and of
other good and valuable consideration the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. Except as otherwise expressly provided or
unless the context otherwise requires, the following terms have the respective
meanings set forth below for all purposes of this Indenture, and the definitions
of such terms are equally applicable both to the singular and plural forms of
such terms.
"Act": With respect to any Noteholder, the meaning specified in
Section 13.01.
"Additional Class A Principal Distribution Amount": On any Payment
Date, in the event that an Event of Default which has not been waived by MBIA
has occurred, any remaining Available Funds then on deposit in the Collection
Account with respect to such Payment Date after the payments First through
Eighth of Section 12.02(d) hereof have been made as of such Payment Date, up to
the outstanding Class A Note Balance.
"Affiliate": With respect to any Person, any other person directly
or indirectly controlling, controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by
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contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Aggregate Loan Balance": As of any date of determination, the sum
of all Loan Balances with respect to all outstanding Loan Contracts.
"Aggregate Note Balance": At any time, the sum of the Outstanding
Class A Note Balance and the Outstanding Class B Note Balance.
"Application for Certificate of Title": With regard to each Vehicle
for which a Certificate of Title has not been issued naming the Company, ▇▇▇▇ or
the Indenture Trustee as secured party, evidence that an application for a
Certificate of Title naming the Company or the Indenture Trustee as secured
party has been submitted with the appropriate authority.
"Authenticating Agent": Any entity appointed by the Indenture
Trustee pursuant to Section 7.14 hereof.
"AutoInfo": AutoInfo, Inc., a Delaware corporation.
"Available Funds": With respect to any Payment Date, the sum of (i)
Scheduled Payments, gross Recoveries, Guaranty Amounts, Insurance Proceeds and
Servicing Charges received during the related Collection Period, (ii)
Prepayments received during the related Collection Period, (iii) the Purchase
Price of Loan Contracts repurchased by the Company, the Servicer or the Issuer
during the related Collection Period and (iv) any amounts released from the
Reserve Account on such Payment Date in the event the amount on deposit therein
is in excess of the Required Reserve Account Amount in accordance with Section
12.02 (f)(ii) hereof.
"Back-up Servicer": Initially, Bankers Trust Company, until a
successor Person shall have become the Back-up Servicer pursuant to the
applicable provisions of this Indenture and the Servicing Agreement, and
thereafter "Back-up Servicer" shall mean such successor Person.
"Back-up Servicer Fee": With respect to each Payment Date,
one-twelfth of the product of (i) the Back-up Servicer Fee Rate and (ii) the
Aggregate Loan Balance as of the first day of the related Collection Period;
provided, however, that with respect to the Initial Payment Date, an amount
equal to the product of (i)(A) a fraction, the numerator of which is the actual
number of days in the related Collection Period and the denominator of which is
360, times (B) the Back-up Servicer Fee Rate and (ii) the Initial Aggregate Loan
Balance.
"Back-up Servicer Fee Rate": 0.0435% per annum.
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"Back-up Servicer Officer": Any Responsible Officer of the Indenture
Trustee.
"Benefit Plan Investor": The meaning set forth in 29 Code of Federal
Regulations ss. 2510.3-101.
"Board Resolution": With respect to any Person, a resolution passed
by the board of directors of such Person, in accordance with the required
procedures as proscribed by the law of such Person's state of incorporation or
organization and such Person's by-laws or other similar incorporation or charter
documents.
"Business Day": Any day other than a Saturday, a Sunday or a day on
which banking institutions in the city in which the principal place of business
of the Issuer, the Servicer, MBIA or the Corporate Trust Office of the Indenture
Trustee is located are authorized or obligated by law or executive order to
close.
"Calculation Date": The last day of a Collection Period; provided,
however, that with respect to any calculation of the Loan Balance of a Loan
Contract as of the Closing Date, the Calculation Date shall mean the Cut-Off
Date.
"Certificate of Title": With regard to each Vehicle, either (a) the
original title relating thereto, or (b) in States in which the department of
motor vehicles delivers the original certificate of title to the Obligor, the
"lien card," "notice of recorded lien" or similar document which is delivered to
the secured party in lieu of the original certificate of title, in each case,
which shall name the related Obligor as the owner of the Vehicle and the
Company, ▇▇▇▇ or the Indenture Trustee as secured party.
"Class": Means (i) when used with reference to the "Class A Notes,"
their designation as Class A Notes and (ii) when used with reference to the
"Class B Notes," their designation as Class B Notes.
"Class A Interest Payment Amount": With respect to any Payment Date,
interest accrued from the prior Payment Date to and including the day
immediately preceding such Payment Date, calculated on the basis of a 360-day
year consisting of twelve 30-day months, at the Class A Interest Rate on the
Class A Note Balance as of the close of business on the day preceding such
Payment Date; provided, however, that the Class A Interest Payment Amount for
the first Payment Date shall be interest accrued from the Closing Date to but
excluding the first Payment Date at the Class A Interest Rate on the Class A
Note Balance as of the Closing Date.
"Class A Interest Rate": 6.53% per annum, calculated on the basis of
a 360-day year consisting of twelve 30-day months; provided, however, that so
long as an Event of Default has not occurred, or has been waived by MBIA,
continuing at any time the Outstanding Class A Note Balance of the Class A Notes
is less than 10% of the Initial
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Class A Note Balance, and such Class A Notes are not redeemed in full in
accordance with Section 10.01 hereof, interest on the Class A Notes shall accrue
at an interest rate of 7.03% per annum.
"Class A Interest Shortfall Amount": For any Payment Date, the
amount by which the Class A Interest Payment Amount due on such Payment Date
exceeds the sum of (i) the amount of Available Funds for such Payment Date
remaining following payment of "First" through "Fourth" in Section 12.02(d)
hereof and (ii) the amount on deposit in the Reserve Account.
"Class A Note": Any one of the Notes executed by the Issuer and
authenticated by the Indenture Trustee in substantially the form set forth in
Exhibit A hereto.
"Class A Note Balance": With respect to any date of determination,
the Initial Class A Note Balance less all amounts previously distributed to
Class A Noteholders as Class A Principal Payment Amounts.
"Class A Note Insurance Policy": The note guaranty insurance policy
dated as of the Closing Date issued by MBIA insuring the Class A Notes, the form
of which is attached hereto as Exhibit C.
"Class A Percentage": 85%.
"Class A Principal Payment Amount": With respect to any Payment
Date, the Class A Percentage of the sum of: (i) the principal portion of all
Scheduled Payments received by the Trustee during the related Collection Period,
(ii) all Prepayments of principal received by the Trustee during the related
Collection Period, (iii) the aggregate outstanding Loan Balance as of the
beginning of the related Collection Period of all Loan Contracts repurchased by
the Company pursuant to Section 3.03 of the Loan Sale Agreement or by the Issuer
pursuant to Sections 4.03 or 11.03 hereof or by the Servicer pursuant to Section
3.04 of the Servicing Agreement during the related Collection Period to the
extent actually received by the Trustee (without duplication of amounts referred
to in clauses (i) and (ii) above) and (iv) the aggregate outstanding Loan
Balance as of the beginning of the related Collection Period of all Loan
Contracts that became Defaulted Loan Contracts during the related Collection
Period (without duplication of amounts referred to in clauses (i), (ii) or (iii)
above).
"Class A Principal Shortfall Amount": For any Payment Date, the
amount by which the Class A Principal Payment Amount for such Payment Date
exceeds the sum of (i) the amount of Available Funds for such Payment Date
remaining following payment of "First" through "Seventh" in Section 12.02(d)
hereof; and (ii) the amount on deposit in the Reserve Account.
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"Class B Interest Payment Amount": With respect to any Payment Date,
interest accrued from the prior Payment Date to and including the day
immediately preceding such Payment Date, calculated on the basis of a 360-day
year consisting of twelve 30-day months, at the Class B Interest Rate on the
Class B Note Balance as of the close of business on the day preceding such
Payment Date; provided, however, that the Class B Interest Payment Amount for
the first Payment Date shall be interest accrued from the Closing Date to but
excluding the first Payment Date at the Class B Interest Rate on the Class B
Note Balance as of the Closing Date.
"Class B Interest Rate": 11.31% per annum, calculated on the basis
of a 360-day year consisting of twelve 30-day months.
"Class B Note": Any one of the Notes executed by the Issuer and
authenticated by the Indenture Trustee in substantially the form set forth in
Exhibit B hereto.
"Class B Note Balance": With respect to any date of determination,
the Initial Class B Note Balance less all amounts previously distributed to
Class B Noteholders as Class B Principal Payment Amounts.
"Class B Principal Payment Amount": With respect to any Payment Date
prior to the Senior Liability Termination Date, the product of (i) Available
Funds remaining after all payments and deposits described in clauses First
through Twelfth of Section 12.02(d) hereof have been made, and (ii) 0.5;
provided, however, that in the event that a Class B Trigger Event has occurred
and is continuing, the Class B Principal Payment Amount shall be equal to the
Available Funds remaining after all payments and deposits described in clauses
First through Twelfth of Section 12.02(d) hereof have been made, up to the
Outstanding Class B Note Balance; with respect to the Senior Liability
Termination Date, the sum of (x) all amounts then remaining on deposit in the
Reserve Account and the Class B Reserve Account and (y) all Available Funds
remaining after all payments and deposits described on clauses First through
Twelfth of Section 12.02(d) hereof have been made; with respect to each Payment
Date after the Senior Liability Termination Date, all Available Funds remaining
after all payments and deposits described in clauses First through Twelfth of
Section 12.02(d) hereof have been made.
"Class B Reserve Account": The Trust Account created and maintained
pursuant to Section 12.02(b)(iii) hereof.
"Class B Required Reserve Account Amount": For each Payment Date
prior to the Senior Liability Termination Date, $201,654, and for each Payment
Date thereafter, zero.
"Class B Trigger Event": The occurrence of either of the following:
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(x) as of any of the first nine Determination Dates, the average
Delinquency Rate for the most current three months exceeds
14.00% or the average Delinquency Rate for the most current
three months as of any Determination Date thereafter exceeds
13.50%; or
(y) as of any of the first nine Determination Dates, the average
Monthly Net Default Rate for the most current three months
exceeds 2.50% or the average Monthly Net Default Rate for the
most current three months as of any Determination Date
thereafter exceeds 2.25%.
"Closing Date": October 11, 1996.
"Code": The Internal Revenue Code of 1986, as amended, or any
successor statute thereto.
"Collection Account": The Trust Account established and maintained
pursuant to Section 12.02(a) hereof.
"Collection Period": With respect to a Payment Date or a
Determination Date, the calendar month immediately preceding the month in which
such Payment Date or Determination Date occurs (such calendar month being
referred to as the "related" Collection Period with respect to such Payment Date
or Determination Date). With respect to a Record Date, the calendar month in
which such Record Date occurs is referred to as the Collection Period "related"
to such Record Date.
"Commitment": The Commitment to Issue a Financial Guaranty Insurance
Policy between MBIA and the Issuer dated as of October 3, 1996.
"Company": AutoInfo Finance of Virginia, Inc., a Virginia
corporation.
"Controlling Holders": Holders of Class A Notes representing at
least 50% of the Class A Note Balance, and after the Class A Note Balance has
been reduced to zero, Holders of Class B Notes representing at least 50% of the
Class B Note Balance.
"Corporate Trust Administration Department": The principal corporate
trust office of the Custodian at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other address as the Custodian may designate from
time to time by notice to the Noteholders, the Servicer, MBIA, the Indenture
Trustee and the Issuer, or the principal corporate trust department of any
successor Custodian.
"Corporate Trust Office": The principal corporate trust office of
the Indenture Trustee at Four ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Trust and Agency Group - Structured Finance, or at such
other address as the Indenture Trustee may designate from time to time by notice
to the Noteholders, the
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Servicer, MBIA and the Issuer, or the principal corporate trust office of any
successor Indenture Trustee.
"Credit and Collection Policy": The credit extension policies and
procedures maintained by the Servicer and the administration and collection
practices maintained by the Servicer as in effect on the Closing Date, as set
forth in Exhibit C to the Servicing Agreement.
"Cumulative Net Default Table": The table attached hereto as
Exhibit D.
"Cumulative Net Default Rate": As of any Determination Date, the
ratio of (i) the sum of the Loan Balances of Loan Contracts that have become
Defaulted Loan Contracts for the period from the Closing Date through the end of
the related Collection Period reduced by the amount of all Recoveries received
by the Servicer during the period from the Closing Date through the end of the
related Collection Period to (ii) the Initial Aggregate Loan Balance.
"Custodial Files": The meaning specified in Section 11.01(a) hereof.
"Custodian": Crestar Bank, Richmond, Virginia, and any successor
Custodian acceptable to MBIA appointed in accordance with Section 11.09 hereof.
"Cut-Off Date": The close of business on August 31, 1996.
"Default": The meaning specified thereto in Section 3.02(n) hereof.
"Defaulted Loan Contract": A Loan Contract with respect to which the
earliest of the following has occurred: (i) any portion of the Scheduled
Payments due thereon becomes 90 days or more delinquent; (ii) the Vehicle
securing such Loan Contract is repossessed and sold by the Servicer, (iii) the
Servicer determines in its sole discretion in accordance with its Credit and
Collection Policy that the remaining Scheduled Payments due under such Loan
Contract should be written off as uncollectible or (iv) proceeds have been
received which, in the Servicer's good faith judgment, constitute the final
amounts recoverable in respect of such Loan Contract.
"Delinquency Rate": As of any Determination Date, the ratio of (i)
the aggregate Loan Balance as of the related Calculation Date of Loan Contracts
as of such Calculation Date as to which the Obligors are more than 30 days past
due in making any portion of the Scheduled Payments, to (ii) the Aggregate Loan
Balance as of such Calculation Date.
"Delinquent Loan Contract": As of any Calculation Date, a Loan
Contract (a) with respect to which an Obligor (or an insurance company on its
behalf) has not made
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a Scheduled Payment by the applicable Due Date, and (b) which is not a Defaulted
Loan Contract.
"Determination Date": The third Business Day preceding each Payment
Date.
"Due Date": The date on which a Scheduled Payment is due in
accordance with the terms of the related Loan Contract.
"Eligible Account": (i) A segregated account or accounts maintained
with a depository institution or trust company whose long-term unsecured debt
obligations are rated A+ by Standard & Poor's and Al by Moody's, or (ii) a
segregated trust account or accounts maintained with a Federal or state
chartered depository institution that is acceptable to MBIA subject to
regulation regarding fiduciary funds on deposit substantially similar to 12
C.F.R. Section 9.10(b), or (iii) a trust account at the Indenture Trustee's
Corporate Trust Office, provided that such Indenture Trustee is acceptable to
MBIA.
"Eligible Investments": Any and all of the following:
(i) direct obligations of, and obligations fully guaranteed as to
the full and timely payment by, the United States of America, the Federal
Home Loan Mortgage Corporation, the Federal National Mortgage Association,
the Federal Home Loan Banks or any agency or instrumentality of the United
States of America the obligations of which are backed by the full faith
and credit of the United States of America;
(ii) (A) demand and time deposits in, certificates of deposit of,
banker's acceptances issued by or federal funds sold by any depository
institution or trust company (including the Indenture Trustee or its agent
acting in their respective commercial capacities) incorporated under the
laws of the United States of America or any State thereof and subject to
supervision and examination by federal and/or state authorities, so long
as at the time of such investment or contractual commitment providing for
such investment, such depository institution or trust company has a
short-term unsecured debt rating in one of the two highest available
rating categories of S&P and the highest available rating category of
Moody's and provided that each such investment has an original maturity of
no more than 365 days, and (B) any other demand or time deposit or deposit
which is fully insured by the Federal Deposit Insurance Corporation;
(iii) repurchase obligations with a term not to exceed 30 days with
respect to any security described in clause (i) above and entered into
with a depository institution or trust company (acting as a principal)
rated in the highest short-term rating category by S&P and by Moody's;
provided, however, that collateral transferred pursuant to such repurchase
obligation must be of the type
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described in clause (i) above and must (A) be valued daily at current
market price plus accrued interest, (B) pursuant to such valuation, equal,
at all times, to 105% of the cash transferred by the Indenture Trustee in
exchange for such collateral and (C) be delivered to the Indenture Trustee
or, if the Indenture Trustee is supplying the collateral, an agent for the
Indenture Trustee, in such a manner as to accomplish perfection of a
security interest in the collateral by possession of certificated
securities.
(iv) commercial paper having an original maturity of less than 365
days and issued by an institution having a short-term unsecured debt
rating in the highest available rating category of each of the Rating
Agencies at the time of such investment;
(v) a guaranteed investment contract approved by each of the Rating
Agencies and MBIA and issued by an insurance company or other corporation
having a long-term unsecured debt rating in the highest available rating
category of each of the Rating Agencies at the time of such investment;
(vi) money market funds having ratings in the highest available
rating category of Moody's and one of the two highest available rating
categories of S&P at the time of such investment which invest only in
other Eligible Investments; any such money market funds which provide for
demand withdrawals being conclusively deemed to satisfy any maturity
requirement for Eligible Investments set forth herein (including, in
either case, such funds in which the Indenture Trustee or any Affiliate
thereof is investment manager or advisor); and
(vii) any other investment approved in writing by MBIA and written
evidence that any such investment will not result in a downgrading or
withdrawal of the rating by each Rating Agency on the Class A Notes.
The Indenture Trustee may purchase from or sell to itself or an Affiliate, as
principal or agent, the Eligible Investments listed above. All Eligible
Investments shall be made in the name of the Indenture Trustee for the benefit
of the Noteholders and MBIA.
"Eligible Loan Contract": The meaning set forth in the Loan Sale
Agreement.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended, or any successor statute thereto.
"Event of Default": The meaning set forth in Section 6.01 hereof.
"▇▇▇▇": ▇▇▇▇ Finance Company.
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"FASIT": Financial Asset Securitization Investment Trust.
"Final Due Date": With respect to each Loan Contract, the final Due
Date thereunder.
"Final Payment Date": The actual date on which the last amounts are
distributed with respect to any Notes, whether on the Stated Maturity Date or
earlier pursuant to an optional redemption under Article Ten or otherwise.
"GAAP": Generally accepted accounting principles, as in effect on
June 30, 1996.
"Grant": To grant, bargain, sell, warrant, alienate, remise,
release, convey, assign, transfer, mortgage, pledge, create and grant a security
interest in and right of set-off against, deposit, set over and confirm. A Grant
of the security interest in the Vehicles, the Loan Contracts or of any other
instrument shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including, without limitation,
the immediate and continuing right to claim, collect, receive and provide
receipts for payments in respect of the Loan Contracts, or any other payment due
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 which the Granting party is or may be entitled to do or
receive thereunder or with respect thereto.
"Guaranty Amounts": Any and all amounts paid by the individual
guarantor indicated on the applicable Loan Contract.
"Holder": For any date, the holder of a Note as specified in the
Note Register as of the preceding Record Date.
"Indebtedness": With respect to any Person, all recourse
obligations, which in accordance with GAAP shall be classified upon such
Person's balance sheet as a liability, and in any event shall include all (i)
recourse obligations of such Person for borrowed money or which have been
incurred in connection with the acquisition of property or assets, (ii) recourse
obligations secured by any lien upon property or assets owned by such Person,
even though the Person has not assumed or become liable for the payment of such
obligations, (iii) recourse obligations created or arising under any conditional
sale or other title retention agreement with respect to property acquired by
such Person, notwithstanding the fact that the rights and remedies of the
seller, lender or lessor under such agreement in the event of default are
limited to repossession or sale of property and (iv) recourse guaranties of the
indebtedness of others.
"Indenture": This Indenture, as amended from time to time in
accordance with the terms hereof.
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"Indenture Trustee": Bankers Trust Company, until a successor Person
shall have become the Indenture Trustee pursuant to the applicable provisions of
this Indenture, and thereafter "Indenture Trustee" shall mean such successor
Person.
"Indenture Trustee Fee": With respect to each Payment Date,
one-twelfth of the Indenture Trustee Fee Rate provided, however, that with
respect to the Initial Payment Date, an amount equal to the product of (i) a
fraction, the numerator of which is the actual number of days in the related
Collection Period and the denominator of which is 360, times (ii) the Indenture
Trustee Fee Rate.
"Indenture Trustee Fee Rate": $5,000.00 per annum.
"Independent Accountants": ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co., or any other firm
of independent certified public accountants of recognized national standing, or
otherwise acceptable to MBIA.
"Initial Aggregate Loan Balance": The Aggregate Loan Balance as of
the Cut-Off Date, which is $40,330,728.75.
"Initial Aggregate Note Balance": The sum of the Initial Class A
Note Balance and the Initial Class B Note Balance.
"Initial Class A Note Balance": $34,281,119.44.
"Initial Class B Note Balance": $2,016,536.44.
"Initial Payment Date": October 15, 1996.
"Insolvency Event": With respect to a specified Person, (a) the
commencement of an involuntary case against such Person under the Federal
bankruptcy laws, as now or hereinafter in effect, or another present or future
Federal or state bankruptcy, insolvency or similar law, and such case is not
dismissed within 60 days; or (b) the filing of a decree or entry of an order for
relief by a court having jurisdiction in the premises in respect of such Person
or any substantial part of its property in an involuntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official for such Person or for any substantial
part of its property, or ordering the winding up or liquidation of such Person's
affairs; or (c) the commencement by such Person of a voluntary case under any
applicable Federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or the consent by such Person to the entry of an order for
relief in an involuntary case under any such law, or the consent by such Person
to the appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or the making by such Person of any
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general assignment for the benefit of creditors, or the failure by such Person
generally to pay its debts as such debts become due, or the taking of action by
such Person in furtherance of any of the foregoing.
"Insolvency Laws": The United States Bankruptcy Code or any similar
applicable state law.
"Insurance Agreement": The Insurance and Indemnity Agreement, dated
as of October 1, 1996, by and among MBIA, the Issuer, the Servicer, the Company,
the Lockbox Bank, the Indenture Trustee, the Custodian and the Back-up Servicer.
"Insurance Policy": With respect to a Vehicle and a Loan Contract,
any insurance policy maintained by the Obligor pursuant to the related Loan
Contract, which policy names the Company as loss payee.
"Insurance Proceeds": With respect to a Vehicle and a Loan Contract,
any amount received during the related Collection Period pursuant to an
Insurance Policy issued with respect to such Vehicle and the related Loan
Contract, net of any costs of collecting such amounts not otherwise reimbursed.
"Interest Coverage Ratio": With respect to any Person, the ratio of
(x) earnings from operations before interest, taxes, depreciation and
amortization, divided by (y) interest expense.
"Investment Letter": The meaning specified in Section 2.06(b)
hereof, substantially in the form of Exhibit E attached hereto.
"Issuer": AutoInfo Receivables Company and all successors thereto
acceptable to MBIA.
"Issuer Order": As defined in Section 12.02(c) hereof.
"Issuer State of Incorporation": means the state of incorporation of
the Issuer, which, as of the Closing Date, is the State of Delaware.
"Lien": The meaning specified in the Loan Sale Agreement.
"Loan Assets": The meaning specified in the Loan Sale Agreement.
"Loan Balance": With respect to any Loan Contract, as of any date of
determination, the principal amount of such Loan Contract as of the Cut-Off
Date, minus the sum of (a) the portion of Scheduled Payments and Prepayments
allocable to principal made by or on behalf of the related Obligor and (b) the
portion of the Purchase Price with respect to any repurchased Loan Contract
allocable to principal as of the close of business
13
on the last day of the Collection Period (or, prior to the end of the first
Collection Period, calculated as of the close of business on the day immediately
prior to the Cut-Off Date); provided, however, that the Loan Balance of a
Defaulted Loan Contract shall be zero. The respective principal and interest
portions of each Scheduled Payment shall be determined in accordance with the
"Rule of 78's" method.
"Loan Contracts": The retail installment contracts, installment sale
contracts, and such other motor vehicle loan contracts (and all rights with
respect thereto, including all guaranties and other agreements or arrangements
of whatever character from time to time supporting or securing payment of any
Loan Contract and all rights with respect to any agreements or arrangements with
the vendors, dealers or manufacturers of the Vehicles to the extent specifically
related to any Loan Contract) which are identified on the Loan Schedule
delivered to the Indenture Trustee and MBIA on the Closing Date; provided that,
except as otherwise provided herein, from and after the date on which a Loan
Contract is purchased or removed from the Trust Estate by the Company, the
Servicer or the Issuer in accordance with the terms hereof or the terms of the
Loan Sale Agreement or of the Servicing Agreement, such repurchased, removed or
replaced Loan Contract shall no longer constitute a Loan Contract for purposes
of the Transaction Documents.
"Loan Contract File": With respect to each Loan Contract, a file
containing the following:
(i) The original of each executed Loan Contract;
(ii) Copies of any evidence of insurance and any other documents
evidencing or related to any Insurance Policy;
(iii) Copies of any evidence that the Obligor took possession of the
Vehicle and that the Vehicle was in good working order and acceptable to
the Obligor at the time of receipt by the Obligor;
(iv) A copy of the original credit application executed by the
Obligor; and
(v) The original Certificate of Title or Application for Certificate
of Title or relevant lien certificate.
"Loan Sale Agreement": The Loan Sale Agreement dated as of October
1, 1996 entered into by and between the Company and the Issuer, as amended from
time to time in accordance with the terms thereof.
"Loan Schedule": The list of Loan Contracts attached hereto as
Schedule 1, each of which shall include with respect to each Loan Contract: (a)
a number
14
identifying the Loan Contract, (b) the Loan Balance as of the Cut-Off Date, (c)
the Obligor, (d) the Obligor's billing address, (e) the original and remaining
months to maturity of the Loan Contract, (f) the Scheduled Payment, (g) the
annual percentage rate, (h) the dates of the first and last Scheduled Payment,
(i) the original amount financed and (j) the vehicle identification numbers of
the related Vehicles.
"Lockbox Account": A Trust Account established by the Servicer and
maintained on behalf of the Indenture Trustee pursuant to the Servicing
Agreement.
"Lockbox Agreement": The Lockbox Agreement dated as of October 1,
1996 by and among the Lockbox Bank and the Servicer, as amended, modified or
supplemented, or any other agreement, in form and substance acceptable to the
Issuer and MBIA.
"Lockbox Bank": Crestar Bank, Richmond, Virginia or any other
depository institution named by the Servicer and, so long as an MBIA Default
shall not have occurred and be continuing, acceptable to the Issuer and MBIA.
"MBIA": MBIA Insurance Corporation, the issuer of the Class A Note
Insurance Policy.
"MBIA Default": The occurrence and continuance of any of the
following events:
(a) the failure by MBIA to make a payment under the Class A Note
Insurance Policy in accordance with its terms that continues unremedied
for a period of five Business Days; or
(b) the occurrence of an "Insurer Insolvency", as that term is
defined in the Insurance Agreement, with respect to MBIA.
"MBIA Premium": The meaning set forth in the Insurance Agreement.
"MBIA Reimbursement Amounts": Any payments made by MBIA under the
Class A Note Insurance Policy, and any unpaid MBIA Premiums due MBIA. MBIA
Reimbursement Amounts shall be payable from the flow of funds in accordance with
Section 12.02(d) hereof. MBIA Reimbursement Amounts shall be repaid with
interest thereon calculated at the Prime Rate of interest set forth in the Wall
Street Journal ("Prime") plus 200 basis points. Interest shall accrue on all
MBIA Reimbursement Amounts on a monthly basis, as of each Payment Date at Prime
plus 200 basis points assuming a 360-day year comprised of 12 months of 30 days
each.
"Monthly Net Default Rate": With respect to each Determination Date,
the ratio of (i) (a) the sum of the Loan Balances of all Loan Contracts that
have become
15
Defaulted Loan Contracts during the related Collection Period minus (b) the
amount of Recoveries received during such Collection Period to (ii) the
Aggregate Loan Balance as of the Calculation Date immediately preceding such
Collection Period.
"Monthly Servicer's Report": The report prepared by the Servicer
pursuant to Section 4.01 of the Servicing Agreement.
"Moody's": ▇▇▇▇▇'▇ Investors Service, Inc., or any successor in
interest thereto.
"Note(s)": Any one of the Class A Notes or Class B Notes.
"Note Interest Rate": The Class A Interest Rate or the Class B
Interest Rate, as applicable.
"Noteholder or Holder": The person in whose name a Note is
registered in the Note Register.
"Note Register": The register maintained pursuant to Section 2.05
hereof.
"Note Register": The meaning set forth in Section 2.05 hereof.
"Obligor": The purchaser of a Vehicle under each related Loan
Contract, including any guarantor of such purchaser and their respective
successors and assigns.
"Officer's Certificate": A certificate signed by the Chairman of the
Board, the Vice-Chairman of the Board, the President, a Vice President, the
Treasurer or the Secretary of the Servicer.
"Opinion of Counsel": A written opinion of counsel, who may be
counsel employed by the Issuer, the Servicer or the Indenture Trustee, or other
counsel, and which opinion shall, in each case, be reasonably acceptable to the
Indenture Trustee and MBIA.
"Outstanding": means, as of the date of determination, all Notes
theretofore authenticated and delivered under this Indenture except:
(i) Notes theretofore cancelled by the Note Registrar or delivered
to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the 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); and
16
(iii) Notes in exchange for or in lieu of other Notes that 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 proceeds of the Class A
Note Insurance Policy shall continue to remain Outstanding for purposes of this
Indenture until MBIA has been paid as subrogee hereunder or reimbursed pursuant
to the Insurance Agreement as evidenced by a written notice from MBIA delivered
to the Indenture Trustee, and MBIA shall be deemed to be the Holder thereof to
the extent of any payments thereon made by MBIA; and provided, further, that in
determining whether the Holders of the requisite Class A or Class B Notes have
given any request, demand, authorization, direction, notice, consent or waiver
hereunder or under any Transaction Document, Notes owned by the Issuer, any
other obligor upon the Notes, the Company or any Affiliate of any of the
foregoing Persons 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 actually
knows to be so owned 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, any other obligor
upon the Notes, the Company or any Affiliate of any of the foregoing Persons.
"Paying Agent": means the Indenture Trustee or any other Person that
meets the eligibility standards for the Indenture Trustee specified in Section
7.08 and, so long as no MBIA Default shall have occurred and be continuing, is
consented to by MBIA and is authorized by the Issuer to make the payments to and
distributions from the Collection Account, including payment of principal of or
interest on the Notes on behalf of the Issuer.
"Payment Date": The fifteenth day of each calendar month (or if such
day is not a Business Day, the next succeeding Business Day) commencing on the
Initial Payment Date.
"Person": Any individual, corporation, partnership, association,
limited liability company, joint-stock company, trust (including any beneficiary
thereof), unincorporated organization or government or any agency or political
subdivision thereof.
"Placement Agents": Black Diamond Securities, LLC and Alex. ▇▇▇▇▇ &
Sons, Inc.
"Pledged Asset Custodian": The meaning ascribed thereto in Section
11.01 hereof.
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"Preference Amount": The meaning ascribed thereto in the Class A
Note Insurance Policy.
"Prepayment": Any full or partial payment of Scheduled Payments not
yet due on a Loan Contract.
"Prospective Holder": The meaning ascribed to such term in Section
2.06(a) hereof.
"Purchase Price": With respect to any Loan Contract repurchased by
the Company pursuant to Sections 2.05 or 3.03 of the Loan Sale Agreement or by
the Issuer pursuant to Sections 4.03 or 11.03 hereof or by the Servicer pursuant
to Section 3.04 of the Servicing Agreement, the sum of (i) the Loan Balance of
the related Loan Contract on the Calculation Date on or immediately preceding
the date when the Loan Contract is repurchased and (ii) any accrued interest at
the interest rate specified in such Loan Contract through the date of
repurchase.
"Rating Agencies": Each of Moody's and Standard & Poor's, so long as
such Persons maintain a rating on the Class A Notes; and if either Moody's or
Standard & Poor's no longer maintains a rating on the Class A Notes, such other
nationally recognized statistical rating organization selected by the Servicer
and a majority in interest of the Noteholders and (so long as an MBIA Default
shall not have occurred and be continuing) acceptable to MBIA.
"Record Date": The close of business on the last day of the month
preceding the applicable Payment Date, whether or not such day is a Business
Day, except with respect to the Initial Payment Date, the Record Date shall be
the Closing Date.
"Recoveries": With respect to a Defaulted Loan Contract and for any
Collection Period occurring after the date on which such Loan Contract becomes a
Defaulted Loan Contract, all payments (including insurance proceeds) that the
Servicer received from or on behalf of an Obligor regarding such Defaulted Loan
Contract or from liquidation of the related Vehicle, net of any reasonably
incurred out-of-pocket expenses incurred by the Servicer in enforcing such
Defaulted Loan Contract.
"Redemption Account": The Trust Account established and maintained
pursuant to the Section 12.02(b)(ii) hereof.
"Redemption Date": The Payment Date specified as such by the
Servicer or MBIA in accordance with the terms of Section 10.02 hereof for the
redemption of the Class A Notes or the Class B Notes after the Class A Note
Balance or the Class B Note Balance, as applicable, is less than 10% of the
Initial Class A Note Balance or the Initial Class B Note Balance, as applicable.
18
"Redemption Price": With respect to any Class of Notes being
redeemed pursuant to Article Ten hereof, and as of the related Redemption Date,
the Outstanding Class A Note Balance or Class B Note Balance as applicable,
together with interest accrued and unpaid thereon to but excluding the related
Redemption Date at the applicable Note Interest Rate (exclusive of installments
of interest and principal maturing on or prior to such date, payment of which
shall have been made or duly provided for to the Holder of such Note on the
applicable date or as otherwise provided in this Indenture) plus any outstanding
MBIA Reimbursement Amount.
"Redemption Record Date": As defined in Section 10.01 hereof.
"Registered Holder": For any date, the holder of a Note as specified
in the Note Register as of the preceding Record Date.
"Re-▇▇▇▇▇▇▇ Trigger": The occurrence of any one of the following
events:
(i) The stockholder's equity of AutoInfo, calculated in
accordance with GAAP, as reflected in AutoInfo's most
recent annual or quarterly consolidated financial
statements is less than $23,750,000;
(ii) An Insolvency Event with respect to the Company or the
Issuer;
(iii) One or more courts of competent jurisdiction have issued
final, non-appealable orders to the effect that the
Indenture Trustee is not the secured party with respect
to Vehicles financed under Loan Contracts with an
aggregate initial principal balance (i.e., as of ----
the date upon which such Loan Contracts were originated
by the Company), equal to 5.0% or more of the Initial
Aggregate Loan Balance; or
(iv) The occurrence of an Event of Default.
"Request for Release of Documents": As defined in the Servicing
Agreement.
"Required Reserve Account Amount" means, as of any Payment Date, the
greater of (a) 18% of the Aggregate Loan Balance as of such Payment Date, and
(b) 3% of the Initial Aggregate Loan Balance; provided, however, that, on and
after the Payment Date on which the Class B Note Balance has been reduced to
zero, and no accrued interest thereon remains unpaid, the Required Reserve
Account Amount shall not exceed the Aggregate Loan Balances; provided, further,
that in the event that a Reserve Account Increase Event has occurred and MBIA
has not waived such Reserve Account
19
Increase Event, the Required Reserve Account Amount shall be the greater of (a)
24% of the Aggregate Loan Balance as of such Payment Date, and (b) 3% of the
Initial Aggregate Loan Balance, with such increase being subject to a reduction
to the previous level upon the cure of certain Reserve Account Increase Events.
Upon the occurrence of an Event of Default, the Required Reserve Account Amount
shall remain at the then current Required Reserve Account Amount until the Class
A Notes and any MBIA Reimbursement Amounts have been repaid in full. The
Required Reserve Account Amount shall in any event be zero after the Senior
Liability Termination Date.
"Responsible Officer": When used with respect to the Indenture
Trustee or the Custodian, any officer assigned to the Corporate Trust Office or
the Corporate Trust Administration Department, as the case may be (or any
successor thereto), including any managing director, vice president, assistant
vice president, assistant treasurer, assistant secretary or any other officer of
the Indenture Trustee or the Custodian, as applicable, customarily performing
functions similar to those performed by any of the above designated officers and
having direct responsibility for the administration of this Indenture, and also,
with respect to a particular matter, any other officer, to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"Reserve Account": The Trust Account created and maintained pursuant
to Section 12.02(b)(i) hereof.
"Reserve Account Increase Event": The occurrence of any one of the
following events:
(i) commencing on the third Determination Date, the average Monthly
Net Default Rate for the most current three months exceeds 3%; provided,
however, that such event shall no longer be deemed a Reserve Account
Increase Event should the average Monthly Net Default Rate for the most
current six months following the months in which the Reserve Account
Income Event shall have occurred falls below 3%;
(ii) commencing on the third Determination Date, the average
Delinquency Rate for the most current three months exceeds 16.5%;
provided, however, that such event shall no longer be deemed a Reserve
Account Increase Event if the average Delinquency Rate for the most
current three months following the months in which the Reserve Account
Increase Event shall have occurred falls below 16.5%; or
(iii) the Cumulative Net Default Rate on any Determination Date
exceeds the level specified for such period in the Cumulative Net Default
Table.
20
"Reserve Account Initial Deposit": 13.50% of the Initial Aggregate
Loan Balance.
"Rule of 78s Method": The method under which a portion of a payment
allocated to earned interest and the portion allocable to principal is
determined according to the sum of the month's digits or any equivalent method
commonly referred to as the "Rule of 78s."
"Scheduled Payments": With respect to a Loan Contract, the periodic
payment set forth in such Loan Contract due from the Obligor on the related Due
Date; the respective principal and interest portions of each such payment shall
be determined in accordance with the "Rule of 78's" method.
"Senior Liability Termination Date": The first Payment Date on which
the Class A Note Balance is zero, no accrued interest on the Class A Notes
remains unpaid, and no MBIA Reimbursement Amounts remain outstanding.
"Servicer": AutoInfo Finance of Virginia, Inc., a Virginia
corporation, and any successor Servicer appointed in accordance with the terms
of the Servicing Agreement and acceptable to MBIA.
"Servicer Default": The meaning given in the Servicing Agreement.
"Servicer Event of Default": The meaning given in the Servicing
Agreement.
"Servicer Fee": An amount equal to the product of (i) one-twelfth of
the Servicer Fee Rate and (ii) the Aggregate Loan Balance as of the first day of
the related Collection Period; provided, however, that with respect to the
Initial Payment Date, an amount equal to the product of (i)(A) a fraction, the
numerator of which is the actual number of days in the related Collection Period
and the denominator of which is 360, times (B) the Servicer Fee Rate and (ii)
the Initial Aggregate Loan Balance.
"Servicer Fee Rate": 3.0% per annum.
"Servicer Termination Notice": The meaning given in the Servicing
Agreement.
"Servicing Agreement": The Servicing Agreement dated as of October
1, 1996 by and among the Indenture Trustee, the Back-up Servicer, the Servicer,
the Custodian and the Issuer, as amended from time to time in accordance with
the terms thereof.
21
"Servicing Charges": The sum of (i) all late payment charges paid by
Obligors on Delinquent Loan Contracts after payment in full of any Scheduled
Payments due in a prior Collection Period and Scheduled Payments for the related
Collection Period and (ii) any other incidental charges or fees received from an
Obligor, including, but not limited to, late fees, collection fees and bounced
check charges.
"Servicing Officer": As defined in the Servicing Agreement.
"Stated Maturity Date": January 15, 2002.
"Standard & Poor's" or "S&P": Standard & Poor's Ratings Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or any successor thereto.
"Sub-Servicer": Any sub-servicer appointed by the Servicer in
accordance with the terms of the Servicing Agreement.
"Transaction Documents": This Indenture, the Loan Sale Agreement,
the Servicing Agreement, the Insurance Agreement and the Lockbox Agreement.
"Trust Accounts": The Collection Account, the Lockbox Account, the
Redemption Account, the Reserve Account and the Class B Reserve Account
established pursuant to the terms of this Indenture; provided, however, that the
Class B Noteholders shall, prior to the Senior Liability Termination Date, have
no interest in the Reserve Account and provided, further, that the Class A
Noteholders and MBIA shall have no interest in the Class B Reserve Account.
"Trust Estate": As defined in the Granting Clause hereof.
"Vehicle": A new or used automobile, light truck or motorcycle, and
all accessories thereto.
"Withdrawn Collateral": As defined in Section 5.01(b) hereof.
22
ARTICLE II
THE NOTES
SECTION 2.01. Form Generally.
The Class A Notes, the Class B Notes and the certificates of
authentication shall be in substantially the form set forth, respectively, in
Exhibits A and B attached hereto, 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.
The definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods on steel engraved
borders or may be produced in any manner acceptable to the Indenture Trustee and
the initial purchaser of the Notes, all as determined by the officers executing
such Notes, as evidenced by their execution of such Notes.
SECTION 2.02. Denomination.
The aggregate principal amount of Class A Notes which may be
authenticated and delivered hereunder is $34,281,119.44, and the aggregate
principal amount of Class B Notes which may be authenticated and delivered
hereunder is $2,016,536.44, except for Notes of such Class authenticated and
delivered upon registration of transfer or in exchange for or in lieu of, other
Notes of such Class pursuant to Sections 2.04, 2.05 or 2.07 hereof. The Notes
shall be issuable only as registered Notes without coupons in denominations of
at least $250,000 and integral multiples of $1,000 in excess thereof (except in
the single case of one Note of each Class); provided, however, that, the
foregoing shall not restrict or prevent the transfer in accordance with Sections
2.05 and 2.06 hereof of any Class A Note with a remaining principal balance of
less than $250,000.
SECTION 2.03. Execution, Authentication, Delivery and Dating.
The Notes shall be executed on behalf of the Issuer by its President
or one of its Vice Presidents. The signature of these officers on the Notes must
be manual.
Notes bearing the manual signatures of individuals who were at any
time the proper 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 or delivery of such Notes or did not hold offices at the date
of authentication or delivery of such Notes.
23
Each Note shall bear on its face the applicable delivery date and be
dated as of the date of its authentication.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee or by any Authenticating Agent by the manual
signature of one of its authorized officers, 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 2.04. Temporary Notes.
Pending the preparation of definitive Notes, the Issuer may execute,
and upon Issuer Order, the Indenture Trustee shall authenticate and deliver,
temporary Notes which are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any denomination, containing the same terms and
representing the same rights as the definitive Notes in lieu of which they are
issued.
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(f) hereof, 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 one or more definitive Notes of any authorized denominations
and of a like initial aggregate principal amount, Class and Stated Maturity
Date. Until so exchanged, the temporary Notes shall in all respects be entitled
to the same benefits under this Indenture as definitive Notes.
SECTION 2.05. Registration, Registration of Transfer and Exchange.
(a) The Issuer shall cause to be kept at an office or agency to be
maintained by the Issuer in accordance with Section 3.02(f) hereof 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 is hereby appointed
"Note Registrar" for the purpose of registering Notes and transfers of Notes as
herein provided. The Indenture Trustee and MBIA shall have the right to examine
the Note Register at all reasonable times and to rely conclusively upon a
certificate of the Note Registrar as to the names and addresses of the Holders
of the Notes and the principal amounts and numbers of such Notes as held.
(b) 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(s)
hereof and subject to
24
the conditions set forth in Section 2.06 hereof, the Issuer shall execute, and
the Indenture Trustee or by any Authenticating Agent shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Notes of any authorized denominations, and of a like aggregate principal
amount, Class and Stated Maturity Date.
(c) At the option of the Holder, Notes may be exchanged for other
Notes of any authorized denominations and of a like aggregate principal amount,
Class and Stated Maturity Date, 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 or by any Authenticating Agent
shall authenticate and deliver, the Notes which the Noteholder making the
exchange is entitled to receive.
(d) All Notes issued upon any registration of transfer or exchange
of Notes pursuant to this Indenture 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 such transfer or
exchange pursuant to this Indenture.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed or be accompanied by a written instrument of
transfer in form satisfactory to the Issuer and the Note Registrar duly
executed, by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Issuer 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 2.04 or 9.05 hereof not involving any registration
of transfer.
Notwithstanding anything else to the contrary contained herein, the
obligation of the Issuer to pay the principal of and interest on the Notes is
not a general obligation of the Issuer, but is limited solely to the Trust
Estate pledged hereunder and, with respect to the Class A Notes, the Class A
Note Insurance Policy subject to the terms thereof.
SECTION 2.06. Limitation on Transfer and Exchange.
(a) Each prospective initial Noteholder acquiring a Note, each
prospective transferee acquiring a Note and each prospective owner of a
beneficial interest in a Note acquiring such beneficial interest (any
prospective initial Noteholder, prospective transferee or prospective owner of a
beneficial interest, a "Prospective Holder") shall either (i) represent and
warrant in a written certification addressed to the Indenture Trustee, the
Issuer and MBIA that it is not (a) an employee benefit plan (as defined in
Section 3(3) of ERISA) that is subject to Title I of ERISA, (b) a plan described
in Section 4975(e)(i) of the Code or (c) any entity whose underlying assets
include plan assets by
25
reason of a plan's investments in the entity, or (ii) provide a representation
and warranty in a written certification addressed to the Indenture Trustee, MBIA
and the Issuer that such acquisition and holding by the Prospective Holder is
subject to a Department of Labor class exemption, provided that the foregoing
shall not apply with respect to the initial sale of the Notes.
(b) The Notes have not been registered or qualified under the
Securities Act of 1933 (the "1933 Act") or the securities laws of any state. No
transfer of any Note shall be made unless such transfer is made in a transaction
which does not require registration under the 1933 Act and pursuant to an
effective registration or qualification under any state securities or "blue sky"
laws, or in a transaction which does not require such registration or
qualification. In the event that a transfer, other than the initial sale of the
Notes, is to be made without registration or qualification, such Holder's
prospective transferee shall either (i) deliver to the Indenture Trustee an
investment letter substantially in the form set forth on Exhibit E hereto, or
other applicable document (the "Investment Letter") or (ii) deliver to the
Indenture Trustee an Opinion of Counsel that the transfer is exempt from the
1933 Act. Neither the Issuer nor the Servicer nor the Indenture Trustee is
obligated to register or qualify the Notes under the 1933 Act or any other
securities law. Any such Holder desiring to effect a transfer other than in
accordance with the foregoing procedures shall be liable to the Indenture
Trustee, the Servicer, MBIA and the Issuer against any liability, cost or
expense (including attorneys' fees) that may result if the transfer is not in
accordance with the foregoing procedures. Neither the Issuer nor the Servicer
nor the Indenture Trustee nor MBIA shall have any liability to any Holder
arising from a transfer of any Note in reliance upon a certification described
in this Section 2.06(b). The Indenture Trustee shall promptly, after receipt of
such information as is set forth in the next succeeding sentence, furnish to any
Holder, or any Prospective Holder designated by a Holder, the information
required to be delivered to Holders and Prospective Holders of Notes in
connection with resales of the Notes to permit compliance with said Rule 144A in
connection with such resales. Such information shall be provided to the
Indenture Trustee by the Servicer. No Note may be subdivided (including any
assignment or transfer of a participation or beneficial interest therein) for
resale or other transfer into a unit smaller than a unit the initial offering
price of which would have been $250,000.
SECTION 2.07. Mutilated, Destroyed, Lost or Stolen Note.
If (i) any mutilated Note is surrendered to the Note Registrar, 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 MBIA such security or indemnity (provided that an agreement of indemnity
shall suffice from the initial Noteholders who maintain a claims paying ability
of investment grade or better as determined by a nationally recognized rating
organization) as may be required by the Indenture Trustee and MBIA to save the
Issuer, the Indenture Trustee and MBIA or any director, officer, employee or
agent of any of them harmless, then, in the absence of notice
26
to the Issuer or the Note Registrar 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 new Note of the same tenor, initial
principal balance, Class and Stated Maturity Date, bearing a number not
contemporaneously outstanding. If after the delivery of such new Note, a bona
fide purchaser of the original Note in lieu of which such new Note was issued
presents for payment such original Note, MBIA, the Issuer and the Indenture
Trustee shall be entitled to recover such new Note from the person to whom it
was delivered or any person taking therefrom, 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 expenses incurred by MBIA, the Issuer or
the Indenture Trustee or any agent of any of them in connection therewith. If
any such mutilated, destroyed, lost or stolen Note shall have become or shall be
about to become due and payable, or shall have become subject to redemption in
full, instead of issuing a new Note, the Issuer may pay such Note without
surrender thereof, except that any mutilated Note shall be surrendered.
Upon the issuance of any new Note under this Section, the Issuer may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Indenture Trustee) connected therewith.
Every new Note issued pursuant to this Section 2.07, in lieu of any
destroyed, lost or stolen Note, shall constitute an original additional
contractual obligation of the Issuer, whether or not the destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and shall be entitled to
all the benefits hereof equally and proportionately with any and all other Notes
duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.08. Payment of Principal and Interest; Principal and
Interest Rights Preserved.
(a) With respect to each Payment Date, interest on the Notes shall
accrue from the prior Payment Date (or from the Closing Date in the case of the
first Payment Date) to and including the day preceding such Payment Date on the
Class A Note Balance or the Class B Note Balance, as applicable, as of the close
of business on the day preceding such Payment Date at the related Note Interest
Rate (calculated on the basis of a 360-day year consisting of 12 months of 30
days each) for such Notes, until the last day preceding the Final Payment Date
and (to the extent that the payment of such interest shall be legally
enforceable) on any overdue installment of interest from the date such interest
became due and payable (giving effect to any applicable grace periods provided
herein)
27
until fully paid. Interest shall be due and payable in arrears on each Payment
Date, with each payment of interest calculated as described above on the
Outstanding Aggregate Note Balance of the Notes immediately following the
preceding Payment Date or on the Closing Date, if there has not been any
preceding Payment Date; provided, that the payment of interest on the Class B
Notes is subordinate to the payment of interest on the Class A Notes and to
certain other payments in accordance with Section 12.02(d). In making any such
interest payment, if the interest calculation with respect to a Note shall
result in a portion of such payment being less than $.01, then such payment
shall be decreased to the nearest whole cent, and no subsequent adjustment shall
be made in respect thereof.
(b) The principal of each Note shall be payable in installments
ending no later than the applicable Stated Maturity Date thereof unless such
Note becomes due and payable at an earlier date by call for redemption or
otherwise. All reductions in the principal amount of a Note effected by payments
of installments of principal made on any Payment Date shall be binding upon all
future Holders of such Note and of any Note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof, whether or not such
payment is noted on such Note. Each installment of principal payable on the
Class A Notes shall be in an amount equal to the sum of (i) the Class A
Principal Payment Amount, if any, and (ii) the Additional Class A Principal
Distribution Amount, if any, available to be paid in accordance with the
priorities of Sections 12.02(d) hereof. Each installment of principal payable on
the Class B Notes shall be in an amount equal to the Class B Principal Payment
Amount; provided, that the payment of the Class B Principal Payment Amount shall
be subordinate to the payments of principal of and interest on the Class A Notes
and to certain other payments in accordance with Section 12.02(d) hereof. The
principal payable on the Notes of any Class shall be paid on each Payment Date
beginning on the applicable Initial Payment Date and ending on the applicable
Final Payment Date, and with respect to all of the Notes of any Class, on a pro
rata basis based upon the ratio that the Outstanding Note Balance of a Note
bears to the Outstanding Note Balance of all Notes of such Class; provided,
however, that if as a result of such proration a portion of such principal would
be less than $.01, then such payment shall be increased to the nearest whole
cent, and such portion shall be deducted from the next succeeding principal
payment.
(c) The principal of and interest on the Notes are payable by check
mailed by first-class mail to the Person whose name appears as the Registered
Holder of such Note on the Note Register at the address of such Person as it
appears on the Note Register or by wire transfer in immediately available funds
to the account specified in writing to the Indenture Trustee by such Registered
Holder at least five Business Days prior to the Record Date for the Payment Date
on which wire transfers will commence, in such coin or currency of the United
States of America as at the time of payment is legal tender for the payment of
public and private debts. Except as set forth in the final sentence of this
Section 2.08(c), all payments on the Notes shall be paid without any requirement
of presentment. The Issuer shall notify the Person in whose name a Note is
registered at the close of business on the Record Date next preceding the
Payment Date on which the Issuer
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expects that the final installment of principal of such Note will be paid that
the Issuer expects that such final installment will be paid on such Payment
Date. Such notice shall be mailed no later then the tenth day prior to such
Payment Date and shall specify the place where such Note may be surrendered.
Funds representing any such checks returned undeliverable shall be held in
accordance with Section 7.15 hereof. Each Noteholder shall surrender its Note to
the Indenture Trustee prior to payment of the final installment of principal of
such Note.
(d) Each Noteholder, by acceptance of its Note, agrees that the
Notes shall be limited recourse obligations of the Issuer payable solely from
the Trust Estate. Each Holder of a Note, by acceptance of such Notes, agrees
that during the term of this Indenture and for one year and one day after the
termination hereof, such Holder and any Affiliate thereof will not file any
involuntary petition or otherwise institute any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding or other proceeding under any
federal or state bankruptcy or similar law against the Issuer.
SECTION 2.09. Persons Deemed Owner.
Prior to due presentment for registration of transfer of any Note,
the Issuer, MBIA, the Indenture Trustee and any agent of the Issuer, MBIA or the
Indenture Trustee shall treat the Person in whose name any Note is registered as
the owner of such Note for the purpose of receiving payments of principal of and
interest on such Note and for all other purposes whatsoever, whether or not such
Note be overdue, and neither the Issuer, MBIA, the Indenture Trustee nor any
agent of the Issuer, MBIA or the Indenture Trustee shall be affected by notice
to the contrary.
SECTION 2.10. Cancellation.
All Notes surrendered to the Indenture Trustee for payment,
registration of transfer or exchange (including Notes surrendered to any Person
other than the Indenture Trustee which shall be delivered to the Indenture
Trustee) shall be promptly canceled by the Indenture Trustee. No Notes shall be
authenticated in lieu of or in exchange for any Notes canceled as provided in
this Section 2.10, except as expressly permitted by this Indenture. All canceled
Notes held by the Indenture Trustee shall be disposed of by the Indenture
Trustee as is customary with its standard practice in effect from time to time.
SECTION 2.11. Tax Treatment.
The Issuer has structured this Indenture and the Notes with the
intention that the Notes will qualify under applicable tax law as indebtedness
of the Issuer, and the Issuer and each Noteholder, by acceptance of its Note,
agree to treat the Notes as debt for all purposes unless and until otherwise
required by an applicable taxing authority.
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ARTICLE III
ISSUER REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 3.01. Representations, Warranties and Covenants of the
Issuer. The Issuer hereby makes the following representations and warranties to
the Indenture Trustee and for the benefit of MBIA and the Noteholders. Such
representations and warranties speak as of the Closing Date, but shall survive
any subsequent transfer, assignment, contribution or conveyance of the Loan
Assets.
(a) Organization and Good Standing. The Issuer is a corporation duly
organized, validly existing and in good standing under the law of the Issuer
State of Incorporation and each other State where the nature of its business
requires it to qualify, except to the extent that the failure to so qualify
would not in the aggregate materially adversely affect the ability of the Issuer
to perform its obligations under the Transaction Documents;
(b) Authorization. The Issuer has the power, authority and legal
right to execute, deliver and perform under the terms of the Transaction
Documents and the execution, delivery and performance of the Transaction
Documents have been duly authorized by the Issuer by all necessary corporate
action;
(c) Binding Obligation. Each of (i) this Indenture, assuming due
authorization, execution and delivery by the Indenture Trustee, (ii) the
Insurance Agreement, assuming due authorization, execution and delivery by MBIA,
the Indenture Trustee and the Servicer, (iii) the Servicing Agreement, assuming
due authorization, execution and delivery by the Indenture Trustee, the Back-Up
Servicer, the Custodian and the Servicer and (iv) the Loan Sale Agreement,
assuming due authorization, execution and delivery by the Company, constitutes a
legal, valid and binding obligation of the Issuer, enforceable against the
Issuer in accordance with its terms except that (A) such enforcement may be
subject to bankruptcy, insolvency, reorganization, moratorium or other similar
laws (whether statutory, regulatory or decisional) now or hereafter in effect
relating to creditors' rights generally and (B) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
certain equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought, whether a proceeding at law or in equity;
(d) No Violation. The consummation of the transactions contemplated
by the fulfillment of the terms of the Transaction Documents will not conflict
with, result in any breach of any of the terms and provisions of or constitute
(with or without notice, lapse of time or both) a default under the
organizational documents or bylaws of the Issuer, or any material indenture,
agreement, mortgage, deed of trust or other instrument to which the Issuer is a
party or by which it is bound, or in the creation or imposition of any Lien upon
any of its properties pursuant to the terms of such indenture, agreement,
30
mortgage, deed of trust or other such instrument, other than any Lien created or
imposed pursuant to the terms of the Transaction Documents, or violate any law
or any material order, rule or regulation applicable to the Issuer of any court
or of any Federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Issuer or any of its
properties.
(e) No proceedings. There are no proceedings, or investigations to
which the Issuer, or any of the Issuer's Affiliates, is a party pending, or, to
the knowledge of the Issuer, before any court, regulatory body, administrative
agency or other tribunal or governmental instrumentality (A) asserting the
invalidity of the Transaction Documents, (B) seeking to prevent the issuance of
any of the Notes or the consummation of any of the transactions contemplated by
the Transaction Documents or (C) seeking any determination or ruling that would
materially and adversely affect the performance by the Issuer of its obligations
under, or the validity or enforceability of, the Transaction Documents.
(f) Approvals. All approvals, authorizations, consents, orders or
other actions of any Person, or of any court, governmental agency or body or
official, required in connection with the execution and delivery of the
Transaction Documents and with the valid and proper authorization, issuance and
sale of the Notes pursuant hereto (except approvals of State securities
officials under the Blue Sky Laws), have been or will be taken or obtained on or
prior to the Closing Date.
(g) Place of Business. The Issuer's principal place of business and
chief executive office is located at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
(h) Transfer and Assignment. Upon the delivery to the Custodian, as
agent of the Indenture Trustee, of the Loan Contracts, the related Certificates
of Title and the Applications for Certificates of Title, the Indenture Trustee,
for the benefit of the Noteholders and MBIA, shall have a first priority
perfected security interest in such items, as well as the other items
constituting the Trust Estate, except for Liens permitted under Section 3.02(a)
and limited with respect to proceeds to the extent set forth in Section 9-306 of
the UCC as in effect in the applicable jurisdiction. All filings (including,
without limitation, UCC filings) and other actions as are necessary in any
jurisdiction to perfect the interest of the Indenture Trustee in the Trust
Estate, including the transfer of the Certificates of Title and the Applications
for Certificates of Title, and the Loan Contracts, and the payment of any fees,
have been made.
(i) Parent of the Issuer. As of the Closing Date, the Company is the
registered owner of all of the issued and outstanding common stock of the
Issuer, all of which common stock has been validly issued, is fully paid and
nonassessable.
(j) Loan Sale Agreement. As of the Closing Date, the Issuer has
entered into the Loan Sale Agreement with the Company relating to its
acquisition of the Loan Contracts and its security interest in the Vehicles, and
the representations and warranties
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made by the Company relating to the Loan Contracts and the Vehicles have been
validly assigned to and are for the benefit of the Issuer, the Indenture
Trustee, MBIA and the Noteholders and such representations and warranties are
true and correct in all material respects.
(k) Bulk Transfer Laws. The transfer, assignment and conveyance of
the Loan Contracts and security interest in the Vehicles by the Company to the
Issuer pursuant to the Loan Sale Agreement and by the Issuer pursuant to this
Indenture is not subject to the bulk transfer or any similar statutory
provisions in effect in any applicable jurisdiction.
(l) The Loan Contracts. The Issuer hereby restates and makes each of
the representations and warranties with respect to the Loan Contracts and the
Vehicles that are made by the Company in Section 3.01 of the Loan Sale
Agreement.
SECTION 3.02. Covenants.
The Issuer hereby makes the following covenants for the benefit of
the Indenture Trustee, MBIA and the Noteholders, on which the Indenture Trustee
relies in accepting the Trust Estate in trust and in authenticating the Notes
and MBIA relies in issuing the Class A Note Insurance Policy. Such covenants are
made as of the Closing Date, but shall survive the transfer, grant and
assignment of the Trust Estate to the Indenture Trustee:
(a) No Liens. Except for the conveyances and grant of security
interests hereunder, the Issuer will not sell, pledge, assign or transfer to any
other Person, or grant, create, incur, assume or suffer to exist any Lien on any
part of Trust Estate now existing or hereafter created, or any interest therein
prior to the termination of this Indenture pursuant to Section 5.01 hereof; the
Issuer will notify the Indenture Trustee and MBIA of the existence of any Lien
on any part of Trust Estate immediately upon discovery thereof; and the Issuer
shall defend the right, title and interest of the Indenture Trustee in, to and
under the Trust Estate now existing or hereafter created, against all claims of
third parties claiming through or under the Issuer; provided, however, that
nothing in this Section 3.02(a) shall prevent or be deemed to prohibit the
Issuer from suffering to exist upon any of the Trust Estate any Liens for
municipal or other local taxes and other governmental charges if such taxes or
governmental charges shall not at the time be due and payable or if the Issuer
shall currently be contesting the validity thereof in good faith by appropriate
proceedings and shall have set aside on its books adequate reserves with respect
thereto.
(b) Delivery of Collections. The Issuer agrees to hold in trust and
promptly deposit into the Collection Account all amounts received by the Issuer
in respect of the Trust Estate (other than amounts distributed to or for the
benefit of the Issuer pursuant to Article Twelve hereof).
32
(c) Obligations with Respect to Loan Contracts. The Issuer will duly
fulfill all obligations on its part to be fulfilled under or in connection with
each Loan Contract and will do nothing to impair the rights of the Indenture
Trustee (for the benefit of the Noteholders and MBIA) in the Loan Contracts, the
Vehicles and any other part of the Trust Estate.
(d) Compliance with Law. The Issuer will comply, in all material
respects, with all acts, rules, regulations, orders, decrees and directions of
any governmental authority applicable to the Loan Contracts or any part thereof;
provided, however, that the Issuer may contest any act, regulation, order,
decree or direction in any reasonable manner which shall not materially and
adversely affect the rights of the Indenture Trustee (for the benefit of the
Noteholders and MBIA) in the Loan Contracts and the Vehicles. The Issuer will
comply, in all material respects, with all requirements of law applicable to the
Issuer.
(e) Preservation of Security Interest. The Issuer shall execute and
file such continuation statements and any other documents which may be required
by law to fully preserve and protect the interest of the Indenture Trustee (for
the benefit of the Noteholders and MBIA) in the Trust Estate. If a Re-▇▇▇▇▇▇▇
Trigger occurs, the Issuer shall enforce its rights against the Company under
the Loan Sale Agreement to have the Vehicles retitled noting the security
interest of the Indenture Trustee hereunder.
(f) Maintenance of Office, etc. The Issuer will not, without
providing 30 days' prior written notice to the Indenture Trustee and MBIA and
without filing such amendments to any previously filed financing statements as
the Indenture Trustee or MBIA may require or as may be required in order to
maintain the Indenture Trustee's perfected security interest in the Trust
Estate, (a) change the location of its principal executive office, or (b) change
its name, identity or corporate structure in any manner which would make any
financing statement or continuation statement filed by the Issuer in accordance
with the Servicing Agreement or this Indenture seriously misleading within the
meaning of Article 9-402(7) of any applicable enactment of the UCC.
(g) Further Assurances. The Issuer will make, execute or endorse,
acknowledge, and file or deliver to MBIA, the Rating Agencies and the Indenture
Trustee from time to time such schedules, confirmatory assignments, conveyances,
transfer endorsements, powers of attorney, certificates, reports and other
assurances or instruments and take such further steps relating to the Trust
Estate, as the Indenture Trustee or MBIA may reasonably request and reasonably
require.
(h) Notice of Liens. The Issuer shall notify the Indenture Trustee
and MBIA promptly after becoming aware of any Lien on any part of the Trust
Estate, except for any Liens for municipal or other local taxes if such taxes
shall not at the time be due or payable without penalty or if the Issuer shall
currently be contesting the validity thereof in good faith by appropriate
proceedings and shall have set aside on its books adequate reserves with respect
thereto.
33
(i) Activities of the Issuer. The Issuer shall at all times abide by
the restrictions on its activities as set forth in its certificate of
incorporation and shall not amend such certificate of incorporation unless (x)
the Issuer shall cause, prior to the taking of such action, an Opinion of
Counsel experienced in federal bankruptcy matters, in substance satisfactory to
MBIA and the Rating Agencies, to be delivered to the Indenture Trustee, MBIA and
the Rating Agencies and (y) the Rating Agencies shall indicate in writing that
the taking of such action will not affect the then current rating of any Notes
or the shadow rating of this transaction. So long as the Notes remain
Outstanding, the Issuer shall not amend its certificate of incorporation without
the prior written consent of MBIA.
(j) Directors. The Issuer agrees that at all times, at least two of
the directors of the Issuer will not be a director, officer or employee of any
direct or ultimate parent, or Affiliate of the parent or of the Issuer;
provided, however, that such independent directors and officers may serve in
similar capacities for other "special purpose corporations" formed by the
Company and its Affiliates. The Issuer's Certificate of Incorporation shall at
all times provide that such independent directors shall have a fiduciary duty to
the Holders of the Notes.
(k) Tax Treatment. Unless and to the extent otherwise required by an
applicable taxing authority, the Issuer will treat the Notes as debt of the
Issuer.
(l) Notice of Reserve Account Increase Events; Re-▇▇▇▇▇▇▇ Triggers
and Events of Default. Upon the Issuer's obtaining knowledge of the occurrence
of any Reserve Account Increase Event, Re-▇▇▇▇▇▇▇ Trigger or Event of Default,
the Issuer shall within one Business Day of obtaining such knowledge notify MBIA
and the Indenture Trustee of such occurrence in writing.
(m) Enforcement of this Indenture and Loan Sale Agreement. The
Issuer will take all actions necessary, and diligently pursue all remedies
available to it, to the extent commercially reasonable, to enforce the
obligations of the Servicer under the Servicing Agreement and the Company under
the Loan Sale Agreement and to secure its rights thereunder.
(n) Issuer May Consolidate, etc., Only on Certain Terms. The Issuer
shall not consolidate or merge with or into any other Person or convey or
transfer its properties and assets substantially as an entirety to any Person,
unless:
(i) the Person (if other than the Issuer) formed by or surviving
such consolidation or merger or which acquires by conveyance or transfer
the properties and assets of the Issuer substantially as an entirety shall
be a Person organized and existing as a corporation under the laws of the
United States of America or any State thereof and shall have expressly
assumed, by an agreement supplemental hereto, executed and delivered to
the Indenture Trustee, in form and substance
34
reasonably satisfactory to MBIA, the obligation and covenants of this
Indenture and the Loan Sale Agreement on the part of the Issuer to be
performed or observed; and
(ii) immediately after giving effect to such transaction, no Event
of Default or the occurrence of any circumstances which with notice or
lapse of time would become an Event of Default (such event, occurrence or
circumstance, a "Default") shall have occurred and be continuing; and
(iii) the Issuer shall have delivered to the Indenture Trustee and
MBIA an Officer's Certificate and an Opinion of Counsel each stating that
such consolidation, merger, conveyance or transfer comply with this
Article and that all conditions precedent herein provided for relating to
such transaction have been complied with and an Opinion of Counsel, for
the benefit of MBIA, the Indenture Trustee and the Noteholders confirming
the enforceability of documents in connection with such consolidation,
merger, conveyance or transfer;
(iv) such consolidation, merger, conveyance or transfer shall be on
such terms as shall fully preserve the lien and security of this
Indenture, the perfection and priority thereof and the rights and powers
of the Indenture Trustee, MBIA and the Noteholders;
(v) the surviving corporation shall be a "special purpose
corporation" having an organizational charter substantially similar to the
certificate of incorporation of the Issuer including specific limitations
on its business purposes, and provisions for independent directors; and
(vi) MBIA shall have given its prior written consent, which consent
shall not be unreasonably withheld or delayed.
(o) Successor Substituted. Upon any consolidation or merger, or any
conveyance or transfer of the properties and assets of the Issuer substantially
or in entirety in accordance with this Indenture, the Person formed by or
surviving such consolidation or merger (if other than the Issuer) or the Person
to which such conveyance or transfer is made 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. In the event of any such conveyance or transfer, the Person named
as the "Issuer" in the first paragraph of this Indenture or any successor which
shall theretofore have become such in the manner prescribed in this Article
shall be released from its liabilities and from its obligations under this
Indenture and may be dissolved, wound-up and liquidated at any time thereafter.
(p) Use of Proceeds. The proceeds from the sale of the Notes will be
used by the Issuer (a) to pay the purchase price of the Loan Assets pursuant to
the Loan Sale
35
Agreement and (i) to deposit into the Reserve Account the Reserve Account
Initial Deposit and (ii) to deposit the Class B Reserve Account Deposit into the
Class B Reserve Account, (b) to pay the expenses associated with this
transaction, and (c) for general corporate purposes. None of the transactions
contemplated in this Indenture or the Loan Sale Agreement (including the use of
the proceeds from the sale of the Notes) will result in a violation of Section 7
of the Securities and Exchange Act of 1934, as amended, or any regulations
issued pursuant thereto, including Regulations G, T, U and X of the Board of
Governors of the Federal Reserve System, 12 C.F.R., Chapter 11. The Issuer does
not own or intend to carry or purchase any "margin security" within the meaning
of said Regulation G, including margin securities originally issued by it or any
"margin stock" within the meaning of said Regulation U.
(q) Consolidated Return. The Issuer and the Company are members of
an affiliated group within the meaning of section 1504 of the Code which will
file a consolidated return for federal income tax purposes at all times until
the termination of this Indenture.
(r) Taxable Income from the Loan Contracts. The Issuer shall treat
the Notes issued by it as debt and shall treat the Loan Contracts as owned by it
for Federal, state and local income tax purposes, and the affiliated group of
which the Issuer is a member within the meaning of section 1504 of the Code
shall treat the Notes issued by the Issuer as debt of the Issuer and shall treat
the Loan Contracts as owned by the Issuer for Federal, state and local income
tax purposes, and the Issuer and such affiliated group shall report and include
in the computation of the Issuer's gross income for such tax purposes the income
from the Loan Contracts, and shall deduct the interest paid or accrued with
respect to the Notes in accordance with its applicable method of accounting for
such purposes.
(s) Maintenance of Office or Agency. The Issuer will maintain an
office or agency within the United States of America where its Notes may be
presented or surrendered for payment, where Notes may be surrendered for
registration of transfer or exchange and where notices and demand to or upon the
Issuer in respect of the Notes and this Indenture may be served. The Issuer
hereby initially appoints the Indenture Trustee as the Paying Agent and its
Corporate Trust Office as the office for each of said purposes. The Issuer will
give 30 days' prior written notice to the Indenture Trustee, MBIA and the
Noteholders of any change in the identity of the Paying Agent or 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 presentations, surrenders, notices and demands may be
made or served at the Indenture Trustee, and the Issuer hereby appoints the
Indenture Trustee its agent to receive all such presentations, surrenders,
notices and demands.
(t) Limited Waiver of Recourse to Dealers. With respect to each Loan
Contract acquired from the ▇▇▇▇ Dealer by the Company, sold by the Company to
the
36
Issuer pursuant to the terms of the Loan Sale Agreement and Granted to the
Indenture Trustee by the Issuer pursuant to the terms hereof, the Issuer shall
not have the right to, and shall not, exercise or accept the benefits of any
right of recourse the Issuer may have against the ▇▇▇▇ Dealer that otherwise
would permit the Issuer to cause such Dealer to pay any amount with respect to
such Loan Contract in the event it becomes a Defaulted Loan Contract, except
that, with respect to the CFAW Purchase Agreement, such recourse may be
exercised to the extent that all Recoveries in the aggregate paid by the ▇▇▇▇
Dealer after the Cut-Off Date with respect to the related Loan Contracts as a
result of the exercise of such recourse by the Issuer do not exceed an amount
equal to 10% of the aggregate Loan Balance as of the Cut-Off Date of all Loan
Contracts acquired from such Dealer.
The form of UCC-1 financing statements filed pursuant to Section
4.01(f) hereof shall contain a statement to the effect that recourse to the ▇▇▇▇
Dealer is limited as provided in this paragraph.
The limitation on recourse provided in this paragraph shall be for
the benefit of, and shall be enforceable through specific performance or other
remedies available at law or in equity by, the ▇▇▇▇ Dealer, the Indenture
Trustee or the Noteholders.
SECTION 3.03. Representations and Warranties Regarding the Loan
Assets.
The Issuer hereby restates and makes each of the representations and
warranties with respect to the Loan Contracts and the Vehicles that are made by
the Company in the Loan Sale Agreement. Such representations and warranties
shall survive any subsequent transfer, assignment, contribution, pledge or
conveyance of the Loan Assets.
SECTION 3.04. Limitation on Liability of Directors, Officers, or
Employees of the Issuer.
The directors, officers, or employees of the Issuer shall not be
under any liability to MBIA, the Indenture Trustee, the Custodian, the
Noteholders, the Company, the Servicer, the Back-up Servicer or any other Person
hereunder or pursuant to any document delivered hereunder, it being expressly
understood that all such liability is expressly waived and released as a
condition of, and as consideration for, the execution of this Indenture and the
issuance of the Notes.
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ARTICLE IV
ISSUANCE OF NOTES; REMOVAL OF COLLATERAL
SECTION 4.01. Conditions to Issuance of Notes.
The Notes to be issued on the Closing Date may be executed by the
Issuer and delivered to the Indenture Trustee for authentication, and thereupon,
the same shall be authenticated and delivered by the Indenture Trustee upon
Issuer Order and upon receipt by the Indenture Trustee (or, in the case of the
items listed in clause (b) below, the Custodian) of the following:
(a) the Loan Sale Agreement with the related Loan Schedule attached
thereto and the Servicing Agreement;
(b) the original executed counterpart of each Loan Contract and each
original Certificate of Title or the Application for Certificate of Title;
(c) a Board Resolution of each of the Issuer, the Servicer and the
Company authorizing, as applicable, the execution, delivery and performance of
the Transaction Documents and the transactions contemplated hereby and by the
other Transaction Documents, certified by the Secretary or an Assistant
Secretary of the Issuer, the Servicer or the Company, as applicable;
(d) a copy of an officially certified document, dated not more than
(30) days prior to the Closing Date, evidencing the due organization and good
standing of each of the Issuer, the Servicer and AutoInfo in their respective
states of incorporation;
(e) copies of the certificate of incorporation and By-Laws of each
of the Issuer, the Servicer and AutoInfo, certified by the Secretary or an
Assistant Secretary of the Issuer, the Servicer and AutoInfo, as applicable;
(f) evidence of filing with the Secretary of State of the state (and
with the relevant county, if required by the applicable state law) of the
Company's chief executive office of UCC-1 financing statements executed by the
Company, as debtor, and naming the Issuer as secured party, and the Loan Assets
as collateral and the Indenture Trustee as assignee;
(g) evidence of filing with the Secretary of State of the state (and
with the relevant county, if required by the applicable state law) of the
Issuer's chief executive office of UCC-1 financing statements executed by the
Issuer, as debtor, and naming the Indenture Trustee for the benefit of the
Noteholders and MBIA as secured party, and the Trust Estate as collateral;
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(h) a certificate listing the Servicing Officers of the Servicer as
of the Closing Date;
(i) the Class A Note Insurance Policy for the Class A Notes;
(j) evidence of the deposit by the Issuer into the Collection
Account of any amounts paid on the Loan Contracts since the Cut-Off Date and
evidence of the deposit of the Reserve Account Initial Deposit into the Reserve
Account and the Class B Reserve Account Deposit into the Class B Reserve
Account; and
(k) such other documents as the Indenture Trustee or MBIA may
reasonably require.
SECTION 4.02. Security for Notes.
(a) The Issuer and the Company shall file UCC-1 financing statements
described in Section 4.01(f) and (g) hereof. From time to time, the Servicer
shall, in accordance with the Servicing Agreement, take or cause to be taken
such actions and execute such documents as are necessary to perfect and protect
the Indenture Trustee's and MBIA's respective interests in the Loan Contracts
and the security interest in the related Vehicles against all other Persons,
including, without limitation, the filing of financing statements, amendments
thereto and continuation statements, the execution of transfer instruments and
the making of notations on or taking possession of all records or documents of
title. If the original Certificate of Title is not available on the Closing
Date, the Company shall deliver the Application for Certificate of Title to the
Custodian on behalf of the Indenture Trustee on the Closing Date; provided,
however, that the Company shall deliver to the Custodian on behalf of the
Indenture Trustee the original Certificate of Title relating to each Vehicle
within 120 days of the delivery of the Application for Certificate of Title.
(b) If any change in either the Company's or the Issuer's name,
identity, structure or the location of its principal place of business or chief
executive office occurs, then the Issuer shall, or the Issuer shall cause the
Company, to deliver 30 days' prior written notice of such change or relocation
to the Servicer, MBIA and the Indenture Trustee and no later than the effective
date of such change or relocation, the Servicer shall file such amendments or
statements as may be required to preserve and protect the Indenture Trustee's
and MBIA's respective interests in the Trust Estate in accordance with the
Servicing Agreement.
(c) During the term of this Indenture, the Issuer will maintain its
chief executive office and principal place of business in one of the States of
the United States.
(d) The Servicer agrees to pay all reasonable costs and
disbursements in connection with the perfection and the maintenance of
perfection, as against all third
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parties, of the Indenture Trustee's and MBIA's respective right, title and
interest in and to the Trust Estate.
(e) So long as an MBIA Default shall not have occurred and be
continuing, upon the occurrence of a Re-▇▇▇▇▇▇▇ Trigger, MBIA may instruct the
Indenture Trustee, the Issuer and the Servicer to take or cause to be taken such
action as may, in the opinion of counsel to MBIA, be necessary or desirable to
perfect or reperfect the security interests in the Vehicles securing the Trust
Estate in the name of the Indenture Trustee by amending the title documents of
such Vehicles or by such other reasonable means as may, in the opinion of
counsel to the MBIA, be necessary or prudent. The Issuer hereby grants to the
Indenture Trustee a power of attorney to effect such re-perfection. The Issuer
hereby agrees to pay all expenses related to such perfection or re-perfection
(and to reimburse the Indenture Trustee for all costs and expenses related
therewith) and to take all action necessary therefor.
SECTION 4.03. Removals of Loan Contracts.
(a) If at any time the Issuer, the Custodian, MBIA or the Indenture
Trustee obtains knowledge (within the meaning of 7.01(e) hereof), discovers or
is notified by the Servicer or MBIA that any of the representations and
warranties of the Company in the Loan Sale Agreement were incorrect at the time
as of which such representations and warranties were made, then the Person
discovering such defect, omission, or circumstance shall promptly notify MBIA
and the other parties to this Indenture.
(b) In the event that the Issuer receives notice that any
representation or warranty of the Company in the Loan Sale Agreement is
incorrect and materially and adversely affects the interests of MBIA or the
Holders of the Notes, or of any breach of any of the representations and
warranties set forth in Sections 3.01(a)(ii), 3.01(a)(v), 3.01(a)(vii),
3.01(a)(xiv) or 3.01(a)(xvi) of the Loan Sale Agreement or if the Custodian
discovers that any Loan Contract File is defective as provided in Section
11.03(b) hereof and in Section 3.09(b) of the Servicing Agreement, the Issuer
shall require the Company pursuant to the Loan Sale Agreement to eliminate or
otherwise cure the circumstance or condition which has caused such
representation or warranty to be incorrect or such defect, as the case may be,
within 30 days of discovery or notice thereof. If the Company fails or the
Company or the Back-up Servicer is unable to cure such circumstance or condition
in accordance with the Loan Sale Agreement, then the Issuer shall require the
Company to purchase pursuant to the Loan Sale Agreement any Loan Asset as to
which such representation or warranty is incorrect within the time specified in
Section 3.03 of the Loan Sale Agreement. The proceeds of such purchase shall be
promptly remitted by the Issuer to the Servicer for deposit by the Servicer in
the Collection Account pursuant to Section 3.03 of the Servicing Agreement.
(c) If the Issuer fails to enforce the purchase obligation of the
Company under the Loan Sale Agreement or of the Servicer under the Servicing
Agreement, the
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Indenture Trustee is hereby appointed attorney-in-fact to act on behalf of and
in the name of the Issuer to require such purchase.
SECTION 4.04. Releases.
(a) The Issuer shall be entitled to obtain a release from the
Indenture Trustee for any Loan Contract and the related Vehicle at any time
(x)(i) after a payment by the Company, the Servicer or the Issuer of the
Purchase Price of the Loan Contract, (ii) after liquidation of the Loan Contract
in accordance with Section 3.01(b) of the Servicing Agreement and the deposit of
all gross Recoveries thereon in the Collection Account or (iii) upon the
termination of a Loan Contract (due to among other causes, prepayment in full of
the Loan Contract and sale or other disposition of the related Vehicle), or
(y)(i) on the Redemption Date, provided that all of the Notes have been redeemed
or (ii) upon the termination of this Indenture, if the Issuer delivers to the
Indenture Trustee, the Custodian and MBIA an Officer's Certificate (A)
identifying the Loan Contract and Vehicle to be released, (B) requesting the
release thereof, (C) setting forth the amount deposited in the Collection
Account with respect thereto and (D) certifying that the amount deposited in the
Collection Account (x) equals the Purchase Price of the Loan Contract, in the
event a Loan Contract and the related Vehicle are being removed from the Trust
Estate pursuant to (i) or (ii) above or (y) equals the entire amount of gross
Recoveries received with respect to such Loan Contract and related Vehicle in
the event of a release pursuant to (iii) above.
(b) Upon satisfaction of the conditions specified in subsection (a)
hereof, the Indenture Trustee shall release from this Indenture and the
Custodian shall deliver to or upon the order of the Issuer (or to or upon the
order of the Company if it has satisfied its obligations under Section 4.03
hereof and 3.04 of the Loan Sale Agreement with respect to a Loan Contract or to
or upon the order of the Servicer if it has satisfied its obligations under
Section 3.04(a)(ii) of the Loan Sale Agreement), the Loan Contract, the
Certificate of Title and/or the Application for Certificate of Title and all
interests in the Vehicle described in the Issuer's request for release.
SECTION 4.05. Trust Estate.
The Indenture Trustee may, and when required by the provisions of
Articles Four, Five, Six and Twelve hereof 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 which are not
inconsistent with the provisions hereof. No party relying upon an instrument
executed by the Indenture Trustee as provided in this Article Four 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.
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ARTICLE V
SATISFACTION AND DISCHARGE
SECTION 5.01. Satisfaction and Discharge of Indenture.
(a) Following payment in full of (i) all of the Notes, (ii) the fees
and charges of the Indenture Trustee, (iii) all other obligations of the Issuer
under this Indenture and (iv) all amounts owing to MBIA under the Insurance
Agreement, and the release by the Indenture Trustee of the Trust Estate in
accordance with Section 5.01(b) hereof, the Indenture shall be discharged and
the Indenture Trustee shall notify the Rating Agencies thereof.
(b) Upon payment in full of the amounts referred to in clauses (i)
through (iv) of Section 5.01(a) hereof, the Issuer may submit to the Indenture
Trustee an Officer's Certificate requesting the release to the Issuer or its
designee some or all of the Trust Estate (the "Withdrawn Collateral"), together
with a written consent executed by MBIA authorizing such release. Promptly after
receipt of such Officer's Certificate and authorization to release from MBIA,
the Indenture Trustee shall release the Withdrawn Collateral from the lien of
this Indenture, and deliver the Withdrawn Collateral to the Issuer or its
designee. The Issuer shall be entitled to deliver more than one such Officer's
Certificate and MBIA consent, until the entire Trust Estate is released and
delivered to the Issuer or its designee. Notwithstanding the foregoing, MBIA may
waive the requirement that the Issuer deliver such Officer's Certificate and
authorize the Indenture Trustee by written direction to release all or a portion
of the Trust Estate from the lien of this Indenture upon payment in full of the
amounts referred to in clauses (i) through (iv) of Section 5.01(a) hereof.
Notwithstanding termination of this Indenture, the Indenture Trustee shall
remain obligated to make claims under the Class A Note Insurance Policy with
respect to any Preference Amount.
(c) In connection with the discharge of this Indenture and the
release of the Trust Estate, the Indenture Trustee shall release from the lien
hereof and deliver to or upon the order of the Issuer all property remaining in
the Trust Estate and shall execute and file, at the expense of the Issuer, UCC
financing statements provided to it evidencing such discharge and release.
SECTION 5.02. Application of Trust Money.
Subject to the last paragraph of Section 7.15 hereof, all monies
deposited with the Indenture Trustee pursuant to Section 5.01 hereof shall be
held in trust and if invested, shall be invested in Eligible Investments of the
type described in clause (i) of the definition thereof, and applied by the
Indenture Trustee, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying
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Agent as the Indenture Trustee may determine, to the Persons entitled thereto,
of the principal and interest for whose payment such money has been deposited
with the Indenture Trustee; but such money need not be segregated from other
funds except to the extent required herein or to the extent required by law.
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ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default.
"Event of Default" wherever used herein means the occurrence of any
one of the following events:
(a) An Insolvency Event with respect to the Servicer, the Company or
the Issuer.
(b) The occurrence of a Default or a breach of a representation,
warranty, or covenant under any of the Transaction Documents by any of the
Servicer, the Company or the Issuer which continues unremedied for a period of
30 days after the Servicer, the Company or the Issuer, as the case may be,
becomes aware of such Default or breach or other written notice of such Default
or breach shall have been given to the Servicer, the Company or the Issuer, as
the case may be;
(c) the occurrence of a Servicer Event of Default pursuant to the
Servicing Agreement;
(d) a payment under the Class A Note Insurance Policy is made by
MBIA;
(e) the cessation of a valid perfected first priority security
interest in the Trust Estate (other than the Vehicles) in favor of the Indenture
Trustee on behalf of the Noteholders and MBIA;
(f) the average Delinquency Rate for the most current three months
exceeds 20% as of each Determination Date;
(g) the average Monthly Net Default Rate for the most current three
months exceeds 4%;
(h) the Cumulative Net Default Rate as of each Determination Date
exceeds the level specified for such period in the Cumulative Net Default Table;
(i) on and after the third Payment Date, the amount on deposit in
the Reserve Account is less than 12% of the Aggregate Loan Balance as of such
Payment Date;
(j) the weighted average coupon on the outstanding portfolio of Loan
Contracts falls below 23%;
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(k) ▇▇▇▇▇ ▇▇▇▇▇▇ shall (i) become deceased, (ii) become unable to
work, or (iii) cease to be employed by AutoInfo on a full-time basis, and a
replacement for ▇▇▇▇▇ ▇▇▇▇▇▇, reasonably acceptable to MBIA, has not commenced
employment within 90 days of the occurrence of any of the events in this clause
(k);
(l) the stockholder's equity of AutoInfo, calculated in accordance
with GAAP, as reflected in AutoInfo's most recent annual or quarterly
consolidated financial statements is less than $23,750,000;
(m) AutoInfo's Interest Coverage Ratio is less than 1.25:1 in any
two consecutive quarters;
(n) AutoInfo or any of its Affiliates is in payment default under
any indebtedness having an outstanding principal amount of $500,000 or more;
(o) AutoInfo realizes a net loss from operations in any two
consecutive quarters;
(p) a final, non-appealable judgment shall be entered against, or
settlements by, the Servicer, the Company or the Issuer by a court of competent
jurisdiction assessing monetary damages in excess of $500,000 and, in the case
of a judgment, such judgment shall not have been discharged or stayed within 60
days;
(q) except as permitted by the Transaction Documents, any assignment
by the Servicer of its rights and obligations under the Transaction Documents or
any attempt to make such an assignment without the express written consent of
MBIA; or
(r) the occurrence of a Re-▇▇▇▇▇▇▇ Trigger.
SECTION 6.02. Indenture Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relating to the Issuer or any other obligor upon any
of the Notes or the property of the Issuer or of such other obligor or their
creditors, the Indenture Trustee (irrespective of whether the principal of any
of the Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand on the Issuer for the payment of overdue principal or
interest) shall be entitled and empowered, to intervene in such proceeding or
otherwise,
(a) to file and prove a claim for the whole amount of principal and
interest owing and unpaid in respect of the Notes issued hereunder 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 the reasonable
compensation, expenses, disbursements
45
and advances of the Indenture Trustee, its agents and counsel and any other
amounts due the Indenture Trustee under Section 7.07 hereof and any other
amounts due and owing to the Noteholders) and of MBIA and the Noteholders
allowed in such judicial proceeding, and
(b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same, and any receiver,
assignee, trustee, liquidator, or sequestrator (or other similar official) in
any such judicial proceeding is hereby authorized by MBIA and each Noteholder to
make such payments to the Indenture Trustee, and in the event that the Indenture
Trustee shall consent to the making of such payments directly to MBIA or the
Noteholders, to pay to the Indenture Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee, its agents and counsel, and any other amounts due the Indenture Trustee
under Section 7.07 hereof.
Nothing contained in this Indenture shall be deemed to authorize the
Indenture Trustee to authorize or consent to or accept or adopt on behalf of
MBIA or any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting MBIA or any of the Notes or the rights of any Holder
thereof, or to authorize the Indenture Trustee to vote in respect of the claim
of MBIA or any Noteholder in any such proceeding.
SECTION 6.03. Indenture Trustee May Enforce Claims Without
Possession of Notes.
(a) In all proceedings brought by the Indenture Trustee (and also
any proceedings involving the interpretation of any provision of this Indenture
to which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all of the Noteholders, and it shall not be necessary to make
any Noteholder a party to any such proceedings.
(b) All rights of actions and claims under this Indenture or any of
the Notes may be prosecuted and enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any proceeding
relating thereto, and any such proceedings instituted by the Indenture Trustee
shall be brought in its own name as Indenture Trustee of an express trust, and
any recovery whether by judgment, settlement or otherwise shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee, its agents and counsel, be for the ratable
benefit of the Holders of the Notes and MBIA.
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SECTION 6.04. Limitation on Suits.
No Holder of any Note shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder unless
(a) an MBIA Default has occurred and is continuing,
(b) such Holder has previously given written notice to the Indenture
Trustee of a continuing Event of Default;
(c) the Controlling Holders shall have made written request to the
Indenture Trustee to institute proceedings in respect of such Event of Default
in its own name as Indenture Trustee hereunder;
(d) such Holder or Holders have offered to the Indenture Trustee
reasonable indemnity satisfactory to it against the costs, expenses and
liabilities to be incurred in compliance with such request;
(e) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of security or indemnity has failed to institute any
such proceedings; and
(f) no direction inconsistent with such written request has been
given to the Indenture Trustee during such 60 day period by the Controlling
Holders; it being understood and intended that no one or more Holders of Notes
shall have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Notes, or to obtain or to seek to obtain priority or preference
over any other Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all the
Holders of Notes.
SECTION 6.05. Unconditional Right of Noteholders to Receive
Principal and Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
payment of the principal and interest on such Note as such principal and
interest becomes due and payable and to institute any proceeding for the
enforcement of any such payment against the Issuer on or after one year and one
day after the Stated Maturity Date, and such right shall not be impaired without
the consent of such Holder.
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SECTION 6.06. Restoration of Rights and Remedies.
If the Indenture Trustee, MBIA or any Noteholder has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Indenture Trustee, MBIA or to such Noteholder, then,
and in every case, the Issuer, the Indenture Trustee, MBIA 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, MBIA and the Noteholders shall continue
as though no such proceeding had been instituted.
SECTION 6.07. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes in the last paragraph of
Section 2.07 hereof, no right or remedy herein conferred upon or reserved to the
Indenture Trustee, MBIA or the Noteholders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent permitted
by law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
SECTION 6.08. Control by MBIA or Noteholders.
MBIA or, if an MBIA Default has occurred and is continuing, the
Controlling Holders shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Indenture Trustee or
exercising any trust or power conferred on the Indenture Trustee; provided that,
in the case of direction by the Noteholders:
(a) such direction shall not be in conflict with any rule of law or
with this Indenture, including, without limitation, any provision hereof which
expressly provides fair approval by a greater percentage of Outstanding
Principal Amount of all the Notes;
(b) the Indenture Trustee may take any other action deemed proper by
the Indenture Trustee which is not inconsistent with such direction; provided,
however, that, subject to Section 7.01 hereof, the Indenture Trustee need not
take any action which a Responsible Officer or Officers of the Indenture Trustee
in good faith determines might involve it in personal liability or be unjustly
prejudicial to the Controlling Holders; and
48
(c) the Indenture Trustee has been furnished reasonable indemnity
satisfactory to it against costs, expenses and liabilities which it might incur
in connection therewith as provided in Section 7.01(f) hereof.
SECTION 6.09. Waiver of Certain Events by Less than All.
MBIA or, if an MBIA Default has occurred and is continuing, the
Controlling Holders may on behalf of the Holders of all the Notes waive any past
Event of Default, Re-▇▇▇▇▇▇▇ Trigger or Reserve Account Increase Event hereunder
and its consequences, except:
(a) the occurrence of the Event of Default described in 6.01(a)
hereof, or
(b) in respect of a covenant or provision hereof which under Article
Nine hereof cannot be modified or amended without the consent of the Holder of
each Outstanding Note affected.
Upon any such waiver, such Default, Re-▇▇▇▇▇▇▇ Trigger, Event of Default or
Reserve Account Increase Event shall cease to exist, and any Event of Default,
Re-▇▇▇▇▇▇▇ Trigger or Reserve Account Increase Event or other consequence
arising therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Event of
Default, Re-▇▇▇▇▇▇▇ Trigger, Event of Default or Reserve Account Increase Event
or impair any right consequent thereon.
SECTION 6.10. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Note by
his 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 reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 6.10 shall not apply to any suit instituted
by the Indenture Trustee or MBIA, or to any suit instituted by the Controlling
Holders, or to any suit instituted by any Noteholder for the enforcement of the
payment of the principal of or interest on any Note on or after one year and one
day after the Stated Maturity Date expressed in such Note.
SECTION 6.11. Waiver of Stay or Extension Laws.
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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, which may affect the covenants
or the performance of this Indenture; and the Issuer (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power 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 6.12. 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 or MBIA 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 Trust Estate or upon any of the assets of
the Issuer.
SECTION 6.13. Delay or Omission; Not Waiver.
No delay or omission of the Indenture Trustee, MBIA or of any Holder
of any Note to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or any acquiescence therein. Every right and remedy given by this
Article Six or by law to the Indenture Trustee, MBIA or to the Noteholders may
be exercised from time to time, and as soon as may be deemed expedient, by the
Indenture Trustee, MBIA or by the Noteholders, as the case may be, subject in
each case, however, to the right of MBIA to control any such right and remedy
except as provided in Section 13.13 hereof.
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ARTICLE VII
THE INDENTURE TRUSTEE
SECTION 7.01. Certain Duties and Responsibilities of the Indenture
Trustee.
(a) Except during the continuance of an Event of Default known to
the Indenture Trustee as provided in subsection (e) below:
(i) the Indenture Trustee undertakes to perform such duties and only
such duties as are specifically set forth in the Transaction Documents,
and no implied covenants or obligations shall be read into this Indenture
against the Indenture Trustee; and
(ii) in the absence of bad faith or negligence 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 hereof; but in the case of any such certificates or opinions,
which by any provision hereof are specifically required to be furnished to
the Indenture Trustee, the Indenture Trustee shall be under a duty to
examine the same and to determine whether or not they conform to the
requirements hereof.
(b) In case an Event of Default known to the Indenture Trustee, as
provided in subsection (e) below, has occurred and is continuing, the Indenture
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and shall use the same degree of care and skill in its exercise, as a
reasonable person would exercise or use under the circumstances in the conduct
of his or her own affairs.
(c) No provision hereof shall be construed to relieve the Indenture
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct or bad faith, except that:
(i) this subsection (c) shall not be construed to limit the effect
of subsection (a) of this Section;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Indenture
Trustee, unless it shall be proved that the Indenture Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Indenture Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of
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MBIA or the Controlling Holders relating to the time, method and place of
conducting any proceeding for any remedy available to the Indenture
Trustee, or exercising any trust or power conferred upon the Indenture
Trustee, under this Indenture, the Loan Sale Agreement or the Servicing
Agreement in accordance with the terms of this Indenture, the Loan Sale
Agreement and the Servicing Agreement; and
(iv) no provision hereof shall require the Indenture Trustee to
expend or risk its own funds or otherwise incur any 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 for believing
that repayment of such funds or reasonable indemnity satisfactory to it
against such risk or liability is not reasonably assured to it, provided
that nothing contained herein shall excuse the Indenture Trustee for
failure to perform its duties as Indenture Trustee hereunder.
(d) Whether or not therein expressly so provided, 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 Article VII.
(e) For all purposes under this Indenture, the Indenture Trustee
shall not be deemed to have notice of any Event of Default, Default, Reserve
Account Increase Event, MBIA Default or Re-▇▇▇▇▇▇▇ Trigger unless a Responsible
Officer assigned to and working in the Corporate Trust Office has actual
knowledge thereof, or unless written notice of any event which is in fact such
an Event of Default, Default, Reserve Account Increase Event, Re-▇▇▇▇▇▇▇ Trigger
or MBIA Default is received by the Indenture Trustee at the Corporate Trust
Office, and such notice references any of the Notes generally, the Issuer, the
Trust Estate or this Indenture.
(f) The Indenture Trustee shall be under no obligation to institute
any suit, or to take any remedial proceeding under this Indenture, or to enter
any appearance or in any way defend in any suit in which it may be made
defendant, or to take any steps in the execution of the trusts hereby created or
in the enforcement of any rights and powers hereunder until it shall be
indemnified to its satisfaction against any and all costs and expenses, outlays
and counsel fees and other reasonable disbursements and against all liability,
except liability that is adjudicated, in connection with any action so taken.
(g) Notwithstanding anything to the contrary contained herein, the
provisions of subsections (e) through (h), inclusive, of this Section 7.01 shall
be subject to the provisions of subsections (a) through (c), inclusive, of this
Section 7.01.
(h) The Indenture Trustee shall provide the reports and accountings
as required pursuant to Section 12.03 hereof.
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(i) If any Loan Contract becomes a Defaulted Loan Contract, the
Indenture Trustee shall, subject to the terms of the Servicing Agreement,
cooperate with the Issuer or Servicer, or at the request of MBIA, to take such
action as may be necessary to assist the Issuer or Servicer in enforcing such
payment or performance, including cooperation and/or assistance in the
institution and prosecution of appropriate proceedings. Any such action shall be
without prejudice to any right to claim a Default or Event of Default under this
Indenture and to proceed thereafter as provided in Article Six hereof.
SECTION 7.02. Notice of Default and Reserve Account Increase Events.
Promptly after the occurrence of any Event of Default, Default,
Re-▇▇▇▇▇▇▇ Trigger, Reserve Account Increase Event or MBIA Default known to the
Indenture Trustee (within the meaning of Section 7.01(e) hereof) which is
continuing, within one Business Day of obtaining such knowledge, the Indenture
Trustee shall transmit by telephonic or telegraphic communication confirmed by
mail to MBIA and by mail to the Rating Agencies and, within three Business Days,
to all Holders of Notes, as their names and addresses appear on the Note
Register, notice of such Event of Default, Default, Reserve Account Increase
Event, Re-▇▇▇▇▇▇▇ Trigger or MBIA Default hereunder known to the Indenture
Trustee.
SECTION 7.03. Certain Rights of Indenture Trustee.
Except as otherwise provided in Section 7.01,
(a) the Indenture Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
note or other obligation, paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties;
(b) any request or direction of the Issuer mentioned herein shall be
sufficiently evidenced in writing and any resolution of the Board of Directors
may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture or any
Transaction Document the Indenture Trustee shall deem it desirable that a matter
be proved or established prior to taking, suffering or omitting any action
hereunder, the Indenture Trustee (unless other evidence be herein specifically
prescribed) shall be entitled to receive and may, in the absence of bad faith on
its part, rely upon an Officer's Certificate;
(d) the Indenture Trustee may consult with counsel and the written
advice of such counsel selected by the Indenture Trustee with due care or any
Opinion of Counsel
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shall be full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon;
(e) the Indenture Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the request or
direction of any of the Noteholders pursuant to this Indenture, unless such
Noteholders shall have offered to the Indenture Trustee reasonable security or
indemnity satisfactory to it against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction;
(f) 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, direction, consent,
order, bond, note or other paper or document, but the Indenture Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Indenture Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Issuer at the sole cost and expense of the
Issuer, upon reasonable notice and at reasonable times personally or by agent or
attorney; and
(g) the Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, attorneys, custodians or nominees and shall not be liable for the
negligence or the misconduct of, or the supervision of such agents, attorneys,
custodians and nominees selected by it with due care.
SECTION 7.04. Not Responsible for Recitals or Issuance of Notes.
(a) The recitals contained in this Indenture and in the Notes,
except the certificates of authentication on the Notes, shall be taken as the
statements of the Issuer, and the Indenture Trustee assumes no responsibility
for their correctness. The Indenture Trustee makes no representations as to the
validity or condition of the Trust Estate or any part thereof, or as to the
title of the Issuer thereto or as to the security afforded thereby or hereby, or
as to the validity or genuineness of any securities at any time pledged and
deposited with the Indenture Trustee hereunder or as to the validity or
sufficiency of this Indenture or any of the Notes. The Indenture Trustee shall
not be accountable for the use or application by the Issuer of any of the Notes
or the proceeds thereof or of any money paid to the Issuer or upon Issuer Order
under any provisions hereof.
(b) Except as otherwise expressly provided herein and without
limiting the generality of the foregoing, the Indenture Trustee shall bear no
responsibility or liability for or with respect to the existence or validity of
any Vehicle or Loan Contract, the perfection of any security interest (whether
as of the date hereof or at any future time), the maintenance of or the taking
of any action to maintain such perfection, the validity of the assignment of any
portion of the Trust Estate to the Indenture Trustee or of any
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intervening assignment, the review of any Loan Contract (it being understood
that the Indenture Trustee has not reviewed and does not intend to review the
substance or form of any such Loan Contract), the performance or enforcement of
any Loan Contract, the validity and sufficiency of the Class A Note Insurance
Policy, the compliance by the Issuer or the Servicer with any covenant or the
breach by the Issuer or the Servicer of any warranty or representation made
hereunder or in any related document or the accuracy of any such warranty or
representation, any investment of monies in the Trust Accounts or any loss
resulting therefrom (other than as obligor under any Eligible Investment)
provided that such monies have been invested in accordance with Section 12.02(c)
hereof in Eligible Investments, the acts or omissions of the Issuer, the
Servicer, MBIA or any Obligor, any action of the Servicer taken in the name of
the Indenture Trustee, or the validity of the Servicing Agreement or the Loan
Sale Agreement.
(c) The Indenture Trustee shall not have any obligation or liability
under any Loan Contract by reason of, or arising out of, this Indenture or the
granting of a security interest in such Loan Contract hereunder or the receipt
by the Indenture Trustee of any payment relating to any Loan Contract pursuant
hereto, nor shall the Indenture Trustee be required or obligated in any manner
to perform or fulfill any of the obligations of the Issuer under or pursuant to
any Loan Contract, or to make any payment, or to make any inquiry as to the
nature or the sufficiency of any payment received by it, or the sufficiency of
any performance by any party, under any Loan Contract.
SECTION 7.05. May Hold Notes.
The Indenture Trustee, the Servicer, any Paying Agent, the Note
Registrar, any Authenticating Agent or any other agent of the Issuer, in its
individual or any other capacity, may become the owner or pledgee of Notes, and
if operative, may otherwise deal with the Issuer with the same rights it would
have if it were not Indenture Trustee, Servicer, Paying Agent, Note Registrar,
Authenticating Agent or such other agent.
SECTION 7.06. Money Held in Trust.
Money and investments held in trust by the Indenture Trustee or any
Paying Agent hereunder shall be held in one or more trust accounts hereunder but
need not be segregated from other funds, except to the extent required herein or
required by law. The Indenture Trustee or any Paying Agent shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Issuer or otherwise specifically provided herein.
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SECTION 7.07. Compensation and Reimbursement.
(a) The Issuer agrees:
(i) to pay the Indenture Trustee its fee for all services rendered
by it hereunder as Indenture Trustee, in the amount of the Trustee Fee
(which compensation shall not otherwise be limited by any provision of law
in regard to the compensation of a trustee of an express trust), and to
pay to the Back-up Servicer its fee for all services rendered hereunder
and under the Servicing Agreement as Back-up Servicer, in the amount of
the Back-up Servicer Fee;
(ii) except as otherwise expressly provided herein, to reimburse the
Indenture Trustee or the Back-up Servicer, as the case may be, upon its
request for all reasonable out-of-pocket costs and expenses, disbursements
and advances incurred or made by the Indenture Trustee or the Back-up
Servicer in accordance with any provision of this Indenture or the
Servicing Agreement (including the reasonable compensation and the
expenses and disbursements of the Indenture Trustee's and Back-up
Servicer's agents and counsel), except any such expense, disbursement or
advance as may be attributable to its negligence or willful misconduct;
and
(iii) to indemnify and hold harmless the Trust Estate and the
Indenture Trustee and the Back-Up Servicer and their respective directors,
officers and employees from and against any loss, liability, expense,
damage or injury (other than those attributable to a Noteholder in its
capacity as an investor in any of the Notes) sustained or suffered
pursuant to this Indenture in connection with the transactions
contemplated hereby or by reason of any acts, omissions or alleged acts or
omissions arising out of activities of the Indenture Trustee (including,
without limitation, any violation of any applicable laws by the Issuer as
a result of the transactions contemplated by this Indenture), including,
but not limited to, any judgment, award, settlement, reasonable attorneys'
fees and other expenses incurred in connection with the defense of any
actual or threatened action, proceeding or claim; provided, that the
Issuer shall not indemnify the Indenture Trustee if such loss, liability,
expense, damage or injury is due to the Indenture Trustee's gross
negligence or willful misconduct, willful misfeasance or bad faith in the
performance of duties. Any indemnification pursuant to this Section shall
only be payable from the assets of the Issuer and shall not be payable
from the assets of the Trust Estate. The provisions of this indemnity
shall run directly to and be enforceable by an injured person subject to
the limitations hereof including Section 13.14 and this indemnification
agreement shall survive the termination of this Indenture and the earlier
resignation or removal of the Indenture Trustee or the Back-Up Servicer,
as the case may be.
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SECTION 7.08. Corporate Trustee Required; Eligibility.
There shall at all times be a trustee hereunder which shall be a
corporation or association organized and doing business under the laws of the
United States of America or of any state, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$100,000,000, acceptable to MBIA, subject to supervision or examination by
Federal or state authority and having an office within the United States of
America, and which shall have a commercial paper or other short-term rating of
the highest short-term rating categories by each of the Rating Agencies, or
otherwise acceptable to each of the Rating Agencies. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the Indenture Trustee
shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article.
SECTION 7.09. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Indenture Trustee and no
appointment of a successor Indenture Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor Indenture
Trustee acceptable to MBIA under Section 7.10 hereof.
(b) The Indenture Trustee may resign at any time by giving 30 days'
written notice thereof to the Issuer, MBIA and to each Noteholder. If an
instrument of acceptance by a successor Indenture Trustee shall not have been
delivered to the Indenture Trustee within 30 days after the giving of such
notice of resignation, the resigning Indenture Trustee may petition any court of
competent jurisdiction for the appointment of a successor Indenture Trustee.
Such court may thereupon, after such notice, if any, as it may deem proper and
may prescribe, appoint a successor Indenture Trustee in compliance with Section
7.08 hereof.
(c) The Indenture Trustee may be removed by MBIA or, if an MBIA
Default has occurred and is continuing, by the Controlling Holders, at any time
if one of the following events have occurred:
(i) the Indenture Trustee shall cease to be eligible under Section
7.08 hereof and shall fail to resign after written request therefor by the
Issuer, MBIA or by any Noteholder, or
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(ii) the Indenture Trustee shall become incapable of acting or shall
be adjudged a bankrupt or insolvent, or a receiver of the Indenture
Trustee or of its property shall be appointed, or any public officer shall
take charge or control of the Indenture Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or
(iii) the Indenture Trustee has failed to perform its duties
hereunder or has breached any representation or warranty made herein.
(d) If the Indenture Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of the Indenture
Trustee for any cause with respect to any of the Notes, the Issuer by a Board
Resolution shall with the prior consent of MBIA promptly appoint a successor
Indenture Trustee reasonably satisfactory to MBIA. If no successor Indenture
Trustee shall have been so appointed by the Issuer within 30 days of notice of
removal or resignation and shall have accepted appointment in the manner
hereinafter provided, then MBIA may appoint a successor Indenture Trustee. If
MBIA shall fail to appoint a successor Indenture Trustee within 90 days or an
MBIA Default shall have occurred and is continuing, then the Controlling Holders
or the Indenture Trustee may petition any court of competent jurisdiction for
the appointment of a successor Indenture Trustee with respect to the Notes.
(e) The Issuer shall give notice in the manner provided in Sections
13.02 and 13.03 hereof of each resignation and each removal of the Indenture
Trustee and each appointment of a successor Indenture Trustee with respect to
the Notes to the Noteholders, MBIA and the Rating Agencies. Each notice shall
include the name of the successor Indenture Trustee and the address of its
Corporate Trust Office.
SECTION 7.10. Acceptance of Appointment by Successor.
Every successor Indenture Trustee appointed hereunder shall execute,
acknowledge and deliver to the Issuer and the retiring Indenture Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Indenture Trustee shall become effective and such successor
Indenture Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Indenture
Trustee but, on request of the Issuer or the successor Indenture Trustee, such
retiring Indenture Trustee shall, upon payment of its reasonable out-of-pocket
costs and expenses, execute and deliver an instrument transferring to such
successor Indenture Trustee all the rights, powers and trusts of the retiring
Indenture Trustee, and shall duly assign, transfer and deliver to such successor
Indenture Trustee all property and money held by such retiring Indenture Trustee
hereunder. Upon request of any such successor Indenture Trustee, the Issuer
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Indenture Trustee all such rights, powers and
trusts.
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No successor Indenture Trustee shall accept its appointment unless
at the time of such acceptance such successor Indenture Trustee shall be
eligible under this Article. No Indenture Trustee hereunder shall be liable for
the acts or omissions of any successor Indenture Trustee hereunder.
SECTION 7.11. Merger, Conversion, Consolidation or Succession to
Business of Indenture Trustee.
Any Person into which the Indenture Trustee may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which the Indenture Trustee shall be a
party, or any corporation succeeding to all or substantially all of the
corporate trust business of the Indenture Trustee, shall be the successor of the
Indenture Trustee hereunder, provided such Person shall be otherwise qualified
and eligible under this Article, without the execution or filing of any paper or
any further act on the part of any of the parties hereto, and notice thereof
shall be provided by the Indenture Trustee to the Noteholders, MBIA and the
Rating Agencies. In case any Notes have been authenticated, but not delivered,
by the Indenture Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Indenture Trustee may adopt such
authentication and deliver the Notes so authenticated with the same effect as if
such successor Indenture Trustee had itself authenticated such Notes.
SECTION 7.12. Co-Indenture Trustees and Separate Indenture Trustees.
At any time or times, for the purpose of meeting the legal
requirements of any jurisdiction in which any of the Trust Estate may at the
time be located, the Issuer, MBIA and the Indenture Trustee shall have power to
appoint, and, upon the written request of the Indenture Trustee, MBIA or of the
Holders representing at least 25% in Outstanding Principal Balance of all Notes,
the Issuer shall for such purpose join with the Indenture Trustee in the
execution, delivery and performance of all instruments and agreements necessary
or proper to appoint, one or more Persons approved by the Indenture Trustee and
meeting the requirements of Section 7.08 hereof, either to act as co-Indenture
Trustee, jointly with the Indenture Trustee of all or any part of such Trust
Estate, or to act as separate Indenture Trustee of any such property, in either
case with such powers as may be provided in the instrument of appointment, and
to vest in such Person or persons in the capacity aforesaid, any property,
title, right or power deemed necessary or desirable, subject to the other
provisions of this Section. If the Issuer does not join in such appointment
within 15 days after the receipt by it of a request so to do, or in case an
Event of Default has occurred and is continuing, the Indenture Trustee alone
shall have power to make such appointment. Any co-Indenture Trustee or separate
Indenture Trustee shall be acceptable to MBIA.
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Should any written instrument from the Issuer be reasonably required
by any co-Indenture Trustee or separate Indenture Trustee so appointed for more
fully confirming to such co-Indenture Trustee or separate Indenture Trustee such
property, title, right or power, any and all such instruments shall, on request,
be executed, acknowledged and delivered by the Issuer.
Every co-Indenture Trustee or separate Indenture Trustee shall, to
the extent permitted by law, but to such extent only, be appointed subject to
the following terms:
(i) the Notes shall be authenticated and delivered by, and all
rights, powers, duties and obligations under this Indenture in respect of
the custody of securities, cash and other personal property held by, or
required to be deposited or pledged with, the Indenture Trustee under this
Indenture, shall be exercised solely by the Indenture Trustee;
(ii) the rights, powers, duties and obligations conferred or imposed
upon the Indenture Trustee by this Indenture in respect of any property
covered by such appointment shall be conferred or imposed upon and
exercised or performed by the Indenture Trustee or by the Indenture
Trustee and such co-Indenture Trustee or separate Indenture Trustee
jointly, as shall be provided in the instrument appointing such
co-Indenture Trustee or separate Indenture Trustee, except to the extent
that under any law of any jurisdiction in which any particular act is to
be performed, the Indenture Trustee shall be incompetent or unqualified to
perform such act, in which event such rights, powers, duties and
obligations shall be exercised and performed by such co-Indenture Trustee
or separate Indenture Trustee;
(iii) the Indenture Trustee at any time, by an instrument in writing
executed by it, with the concurrence of the Issuer evidenced by a Board
Resolution, may accept the resignation of or remove any co-Indenture
Trustee or separate Indenture Trustee, appointed under this Section, and,
in case an Event of Default has occurred and is continuing, the Indenture
Trustee shall have power to accept the resignation of, or remove, any such
co-Indenture Trustee or separate Indenture Trustee without the concurrence
of the Issuer. Upon the written request of the Indenture Trustee, the
Issuer shall join with the Indenture Trustee in the execution, delivery
and performance of all instruments and agreements necessary or proper to
effectuate such resignation or removal. A successor to any co-Indenture
Trustee or separate Indenture Trustee that has so resigned or been removed
may be appointed in the manner provided in this Section 7.12;
(iv) no co-Indenture Trustee or separate Indenture Trustee
hereunder shall be personally liable by reason of any act or omission of
the Indenture Trustee or any other such Indenture Trustee hereunder nor
shall the Indenture Trustee be liable by reason of any act or omission of
any co-Indenture Trustee or separate
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Indenture Trustee selected by the Indenture Trustee with due care or
appointed in accordance with directions to the Indenture Trustee pursuant
to Section 6.08 hereof; and
(v) any Act of Noteholders delivered to the Indenture Trustee shall
be deemed to have been delivered to each such co-Indenture Trustee and
separate Indenture Trustee.
SECTION 7.13. Rights with Respect to the Servicer.
The Indenture Trustee's rights and obligations with respect to the
Servicer and the Back-up Servicer shall be governed by the Servicing Agreement.
SECTION 7.14. Appointment of Authenticating Agent.
The Indenture Trustee may appoint an Authenticating Agent or Agents
with respect to the Notes which shall be authorized to act on behalf of the
Indenture Trustee to authenticate Notes issued upon original issue or upon
exchange, registration of transfer or pursuant to Section 2.05 hereof, and Notes
so authenticated shall be entitled to the benefits of this Indenture and shall
be valid and obligatory for all purposes as if authenticated by the Indenture
Trustee hereunder. Wherever reference is made herein to the authentication and
delivery of Notes by the Indenture Trustee or the Indenture Trustee's
certificate of authentication or the delivery of Notes to the Indenture Trustee
for authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Indenture Trustee by an Authenticating Agent and a
certificate of authentication executed on behalf of the Indenture Trustee by an
Authenticating Agent and delivery of the Notes to the Authenticating Agent on
behalf of the Indenture Trustee. Each Authenticating Agent shall be acceptable
to the Issuer, MBIA and the Noteholders and shall at all times be a corporation
having a combined capital and surplus of not less than the equivalent of
$50,000,000 and subject to supervision or examination by Federal or state
authority or the equivalent foreign authority, in the case of an Authenticating
Agent who is not organized and doing business under the laws of the United
States of America, any state thereof or the District of Columbia. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any
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merger, conversion or consolidation to which such Authenticating Agent shall be
a party, or any corporation succeeding to the corporate agency or corporate
trust business of such Authenticating Agent, shall continue to be an
Authenticating Agent without the execution or filing of any paper or any further
act on the part of the Indenture Trustee or such Authenticating Agent; provided,
such corporation shall be otherwise eligible under this Section.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Indenture Trustee, MBIA and to the Issuer. The Indenture
Trustee may at any time terminate the agency of an Authenticating Agent by
giving written notice thereof to such Authenticating Agent, MBIA and to the
Issuer. Upon receiving such a notice of resignation or upon such a termination,
or in case at any time such Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, the Indenture Trustee may
appoint a successor Authenticating Agent which shall be acceptable to the Issuer
and MBIA and shall mail written notice of such appointment by first-class mail,
postage prepaid, to all Holders of Notes, if any, with respect to which such
Authenticating Agent will serve, as their names end addresses appear in the Note
Register. Any successor Authenticating Agent upon acceptance of its appointment
hereunder shall become vested with all the rights, powers and duties of its
predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
The Indenture Trustee agrees to pay to each Authenticating Agent
from time to time reasonable compensation for its services under this Section,
and the Indenture Trustee shall be entitled to be reimbursed for such payments,
subject to the provisions of Section 7.07 hereof.
If an appointment is made pursuant to this Section, the Notes may
have endorsed thereon, in addition to the Indenture Trustee's certificate of
authentication, an alternate certificate of authentication in the following
form:
This is one of the Notes described in the within-mentioned
Indenture.
BANKERS TRUST COMPANY
As Indenture Trustee
By: ___________________________
As Authenticating Agent
By: ___________________________
Authorized Officer
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SECTION 7.15. Money for Note Payments to Be Held in Trust.
The Indenture Trustee shall execute and deliver, and if there is any
Paying Agent other than the Indenture Trustee, the Issuer will cause each Paying
Agent other than the Indenture Trustee to execute and deliver to the Indenture
Trustee, the Rating Agencies and MBIA an instrument in which such Paying Agent
shall agree with the Indenture Trustee that, subject to the provisions of this
Section, such Paying Agent will:
(i) hold all sums held by it for the payment of principal or
interest on Notes in trust for the benefit of the Noteholders entitled
thereto and MBIA until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(ii) give the Indenture Trustee, MBIA, the Rating Agencies and the
Noteholders notice of any Default by the Issuer (or any other obligor upon
the Notes) in the making of any payment of principal or interest; and
(iii) at any time during the continuance of any such Default, upon
the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
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 such 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 money.
Any money deposited with the Indenture Trustee or any Paying Agent
in trust for the payment of the principal or interest on any Note and remaining
unclaimed for three years after such principal or interest has become due and
payable shall be paid to the Issuer upon written request or to MBIA (upon its
written request) if such money represents payments made by MBIA; and the Holder
of such Note shall thereafter, as an unsecured general creditor, and subject to
any applicable statute of limitations, look only to the Issuer for payment
thereof, and all liability of the Indenture Trustee, such Paying Agent or MBIA
with respect to such trust money or the related Note, shall thereupon cease;
provided, however, that the Indenture Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Issuer cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the city in which
the Corporate Trust Office is located, notice
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that such money remains unclaimed and that, after a date specified therein,
which shall be not less than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be repaid to the Issuer or
MBIA, as applicable; and provided, further, that any amounts held that are
proceeds of a claim made under the Class A Note Insurance Policy shall be
returned to MBIA, and the Noteholders shall look only to MBIA for such payments.
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 Noteholders whose right to or
interest in monies due and payable but not claimed is determinable from the
records of any Paying Agent, at the last address as shown on the Note Register
for each such Noteholder).
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ARTICLE VIII
THE CLASS A NOTE INSURANCE POLICY
SECTION 8.01. Payments under the Class A Note Insurance Policy.
If, on the close of business on the third Business Day immediately
prior to any Payment Date with respect to the Class A Notes, the sum of amounts
on deposit in (i) the Collection Account and (ii) the Reserve Account are not
sufficient to pay the Class A Interest Payment Amount on such Payment Date in
accordance with Section 12.02(d)(v) hereof, the Indenture Trustee shall, no
later than 10:00 a.m. New York time, on the second Business Day immediately
preceding such Payment Date make a claim under the Class A Note Insurance Policy
in an amount equal to such insufficiency. In addition, if on the close of
business on the third Business Day immediately prior to any Payment Date for the
Class A Notes, the sum of amounts on deposit in (i) the Collection Account and
(ii) the Reserve Account are not sufficient to pay the Class A Principal Payment
Amount in accordance with Section 12.02(d)(viii) hereof, the Indenture Trustee
shall, no later than 10:00 a.m. New York time, on the second Business Day
immediately preceding such Payment Date, make a claim under the Class A Note
Insurance Policy in an amount equal to such insufficiency. Proceeds of claims on
the Class A Note Insurance Policy shall be deposited in the Collection Account,
shall remain uninvested and shall be used solely to pay amounts due in respect
of interest and principal on the Class A Notes on each Payment Date.
In addition, on any day that the Indenture Trustee has actual
knowledge or receives written notice that any amount previously paid to a Class
A Noteholder has been subsequently recovered from such Noteholder pursuant to a
final order of a court of competent jurisdiction that such payment constitutes
an avoidable preference within the meaning of any applicable bankruptcy law to
such Noteholder (a "Preference Amount"), the Indenture Trustee shall make a
claim within one Business Day upon the Class A Note Insurance Policy for the
full amount of such Preference Amount in accordance with the terms of the Class
A Note Insurance Policy. Any proceeds of any such Preference Amount received by
the Indenture Trustee shall be paid to the related Class A Noteholders.
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ARTICLE IX
AMENDMENTS TO INDENTURE
SECTION 9.01. Amendments without Consent of Noteholders.
The Issuer and the Indenture Trustee, with the consent of MBIA but
without the consent of the Holders of any Notes, at any time and from time to
time, may amend this Indenture for any of the following purposes:
(a) 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 of this Indenture, or to subject to the lien of this
Indenture additional property; or
(b) to evidence the succession of another Person to the Issuer, and
the assumption by such successor of the covenants of the Issuer herein and in
the Notes contained, in accordance with Section 3.02(o) hereof; or
(c) to add to the covenants of the Issuer, for the benefit of MBIA
and the Holders of all Notes, or to surrender any right or power herein
conferred upon the Issuer; or
(d) to convey, transfer, assign, mortgage or pledge any property to
or with the Indenture Trustee; or
(e) to cure any ambiguity with respect to any provision herein which
may be defective or inconsistent with any other provisions with respect to
matters or questions arising hereunder, which shall not be inconsistent with the
provisions hereof, provided that such action shall not adversely affect the
interests of the Holders of the Notes; or
(f) to evidence the succession of the Indenture Trustee pursuant to
Article Seven hereof; or
(g) to add events to the list of Events of Default, Reserve Account
Increase Events, or Re-▇▇▇▇▇▇▇ Triggers.
The Indenture Trustee is hereby authorized to join in the execution
of any such amendment and to make any further appropriate agreements and
stipulations that may be therein contained, but the Indenture Trustee shall not
be obligated to enter into any such amendment that affects the Indenture
Trustee's own rights, duties, liabilities, indemnities or immunities under this
Indenture or otherwise.
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Promptly after the execution by the Issuer and the Indenture Trustee
of any amendment pursuant to this Section, the Issuer shall mail to the Rating
Agencies, the Custodian, MBIA and each Noteholder a copy of such amendment.
SECTION 9.02. Amendments with Consent of Noteholders.
(a) With the consent of MBIA and the Controlling Holders, by Act of
said Holders delivered to the Issuer and the Indenture Trustee, the Issuer and
the Indenture Trustee may enter into amendments hereto for the purpose of adding
any provisions or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of the
Notes hereunder other than as described in paragraphs (a) through (g) of Section
9.01; provided, however, that no such amendment shall, without the consent of
the Holders of each outstanding Note affected thereby:
(i) change the Stated Maturity Date of any Note or the due date of
any installment of principal of, or any installment of interest on, any
Note, or reduce the principal amount thereof or the Note Interest Rate or
change any place of payment where, or the coin or currency in which, any
Note or the interest thereon is payable, or impair the right to institute
suit for the enforcement of any such payment; or
(ii) reduce the percentage in the Class A Note Balance or the Class
B Note Balance, the consent of the Holders of which is required for any
such amendment, or the consent of the Holders of which is required for any
waiver of compliance with certain provisions of this Indenture or Events
of Default or their consequences; or
(iii) impair or adversely affect the Trust Estate; or
(iv) modify or alter the provisions of the proviso to the definition
of the term "Outstanding"; or
(v) modify any of the provisions of this Section 9.02, except to
increase the percentage of Holders required for any modification or waiver
or to provide that certain other provisions of this Indenture cannot be
modified or waived without the consent of each Holder of each Outstanding
Note affected thereby; or
(vi) permit the creation of any lien ranking prior to or on parity
with the lien of this Indenture with respect to any part of the Trust
Estate or terminate the lien of this Indenture on any property at any time
subject hereto or deprive the Holder of any Note of the security afforded
by the lien of this Indenture; or
(vii) modify any of Section 12.02(d) hereof.
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(b) The Indenture Trustee is hereby authorized to join in the
execution of any amendment pursuant to clause (a) above and to make any further
appropriate agreements and stipulations that may be therein contained, but the
Indenture Trustee shall not be obligated to enter into any such amendment that
affects the Indenture Trustee's own rights, duties, liabilities, indemnities or
immunities hereunder. It shall not be necessary for any Act of Noteholders under
this Section to approve the particular form of any amendment, but it shall be
sufficient if such Act shall approve the substance thereof. Promptly after the
execution by the Issuer and the Indenture Trustee of any amendment pursuant to
this Section, the Issuer shall mail to the Holders of the Notes, MBIA, the
Custodian and the Rating Agencies a copy of such amendment.
SECTION 9.03. Execution of Amendments.
In executing any amendments permitted by this Article or the
modifications thereby of the trusts created by this Indenture, the Indenture
Trustee and MBIA shall be entitled to receive upon request to the Issuer, and
(subject to Section 7.01 hereof) shall be fully protected in relying in good
faith upon, an Opinion of Counsel reasonably acceptable to the Indenture Trustee
and MBIA, and an Officer's Certificate, stating that the execution of such
amendments is authorized or permitted by this Indenture. The Indenture Trustee
may, but shall not be obligated to, enter into any such amendments which affects
the Indenture Trustee's own rights, duties, indemnities or immunities hereunder
or otherwise.
SECTION 9.04. Effect of Amendments.
Upon the execution of any amendment under this Article, this
Indenture shall be modified in accordance therewith, and such amendment shall
form a part of this Indenture for all purposes; and every Holder of Notes
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.
SECTION 9.05. Reference in Notes to Amendments.
Notes authenticated and delivered after the execution of any
amendment 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 amendment. If the Issuer shall so determine, new
Notes so modified as to conform, in the opinion of the Indenture Trustee and the
Issuer, to any such amendment may be prepared and executed by the Issuer and
authenticated and delivered by the Indenture Trustee in exchange for Outstanding
Notes.
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ARTICLE X
REDEMPTION OF NOTES
SECTION 10.01. Redemption at the Option of the Servicer; Election to
Redeem.
The Servicer shall have the option to redeem all of the Outstanding
Notes of any Class at any time the Outstanding Class A Note Balance or
Outstanding Class B Note Balance of the Notes of such Class is less than 10% of
the Initial Class A Note Balance or Initial Class B Note Balance, in each case
at the applicable Redemption Price plus any fees due hereunder and all amounts
due to MBIA under the Insurance Agreement; provided, however, that the Class B
Notes may not be redeemed before the Class A Notes. MBIA shall have the same
option to redeem any Class A Notes in the absence of the exercise thereof by the
Servicer.
The Servicer or MBIA, as applicable, shall set the Redemption Date
and the Redemption Record Date for the Notes and give written notice thereof to
the Indenture Trustee pursuant to Section 10.02 hereof.
Installments of interest and principal that are due regarding the
Notes on or prior to the related Redemption Date shall continue to be payable to
the Holders of such Notes called for redemption as of the relevant Record Dates
according to their terms and the provisions of Section 2.08 hereof. The election
of the Servicer or MBIA to redeem any Notes pursuant to this Section shall be
evidenced by a Board Resolution or written notice from MBIA, respectively,
directing the Indenture Trustee to make the payment of the Redemption Price on
all of the Notes to be redeemed from monies deposited with the Indenture Trustee
pursuant to Section 10.04 hereof.
SECTION 10.02. Notice to Indenture Trustee; Deposit of Redemption
Price.
In the case of any redemption pursuant to Section 10.01 hereof, the
Servicer or MBIA, as applicable, shall, at least 15 days prior to the related
Redemption Date, notify the Indenture Trustee, MBIA and the Noteholders in
writing of such Redemption Date and shall deposit into the Redemption Account on
such notification date an amount equal to the Redemption Price of all Notes to
be redeemed on such Redemption Date plus any fees and interest due under Section
12.02(d)(i) through (vi) (and, with respect to the Class B Notes, (vii)) and all
amounts due to MBIA under the Insurance Agreement. Any notice given to the
Indenture Trustee hereunder shall include all information required by Section
10.03 hereof.
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SECTION 10.03. Notice of Redemption by the Indenture Trustee.
Upon receipt of such notice and such deposit set forth in Section
10.02 above, the Indenture Trustee shall provide notice of redemption pursuant
to Section 10.01 hereof by first-class mail, postage prepaid, mailed no later
than the Business Day following the date on which such deposit was made, to MBIA
and each Holder of Notes whose Notes are to be redeemed, at the address
specified in the Note Register.
All notices of redemption shall state:
(1) the applicable Redemption Date;
(2) the applicable Redemption Price; and
(3) that on such Redemption Date, the Redemption Price will become due and
payable upon each such Note, and that interest thereon shall cease to accrue on
such date.
Notice of redemption of Notes shall be given by the Indenture
Trustee in the name and at the expense of the Servicer or MBIA, as applicable.
Failure to give notice of redemption, or any defect therein, to any Holder of
any Note selected for redemption shall not impair or affect the validity of the
redemption of any other Note.
SECTION 10.04. Notes Payable on Redemption Date.
Notice of redemption having been given as provided in Section 10.03
hereof, the Notes to be redeemed shall, on the applicable Redemption Date,
become due and payable at the Redemption Price and on such Redemption Date
(unless the Issuer or MBIA, as applicable, shall default in the payment of the
Redemption Price) such Notes shall cease to bear interest. On the applicable
Redemption Date, the Indenture Trustee shall withdraw the applicable Redemption
Price from the Redemption Account and the Holders of such Notes shall be paid
the Redemption Price by the Paying Agent on behalf of the Servicer; provided,
however, that installments of principal and interest that are due regarding such
Notes on or prior to such Redemption Date shall be payable to the Holders of
such Notes registered as such on the relevant Record Dates according to their
terms and the provisions of Section 2.08 hereof.
If the Holders of any Note called for redemption shall not be so
paid, the principal shall, until paid, bear interest from the applicable
Redemption Date at the related Note Interest Rate.
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SECTION 10.05. Release of Loan Contracts to the Servicer.
In connection with any redemption by the Servicer permitted under
this Article Ten, the Servicer shall be permitted to obtain a release of all or
a portion of the related Loan Contracts as provided in Section 4.04 hereof to
the extent that (a) after giving effect to such release, the product of (i) the
Aggregate Loan Balance and (ii) the sum of the Class A Percentage and the Class
B Percentage equals or exceeds the Outstanding Aggregate Note Balance of all
Notes (after giving effect to such redemption) and (b) provided that, the
applicable Redemption Price shall have been deposited into the Redemption
Account as required by Section 10.02.
SECTION 10.06. Release of Loan Contracts to MBIA.
In connection with any redemption by MBIA permitted under this
Article Ten, MBIA shall be permitted to obtain a release of all or a portion of
the related Loan Contracts as provided in Section 4.04 hereof to the extent that
(a) after giving effect to such release, the product of (i) the Aggregate Loan
Balance and (ii) the Class A Percentage equals or exceeds the Class A Note
Balance of the Class A Notes (after giving effect to such redemption) and (b)
provided that, the applicable Redemption Price shall have been deposited into
the Redemption Account as required by Section 10.02.
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ARTICLE XI
THE CUSTODIAN
SECTION 11.01. Acceptance by Indenture Trustee and Appointment of
the Custodian.
(a) The Indenture Trustee hereby acknowledges the conveyance of the
Loan Assets and declares that the Indenture Trustee, through the Custodian
and/or through one or more other custodians acceptable to MBIA, which other
custodians may, with MBIA's prior written consent, include the Servicer (the
Custodian and each such other custodian a "Pledged Asset Custodian"), will hold
such Loan Assets conveyed by the Issuer, for the use and benefit of the
Noteholders and MBIA subject to the terms and provisions hereof; provided, that
in respect of the items described in clauses (i) and (v) of the definition of
"Loan Contract Files" (such items, the "Custodial File"), the Custodian shall be
the custodian. The Custodian may, upon receipt of a Request for Release of
Documents from the Servicer, release any Custodial File to the Servicer, for the
limited purpose, if necessary, of temporarily assisting the Servicer to conduct
collection and other servicing activities; provided, however, that prior to
being released to the Servicer all documents to be released in such Custodial
File shall be conspicuously stamped to reflect the sale to the Issuer and the
security interest of the Indenture Trustee in the related Loan Assets; provided,
further, that if either an Event of Default or Re-▇▇▇▇▇▇▇ Trigger shall have
occurred and be continuing, no part of any Custodial File shall be released by
the Custodian to the Servicer without MBIA's prior written consent, which shall
be evidenced by MBIA's execution of the Request for Release of Documents. Except
as noted above, no part of the Custodial File shall be delivered by the
Custodian to the Company or the Servicer or otherwise released from the
possession of the Custodian. Neither the Indenture Trustee nor any Pledged Asset
Custodian shall be under any duty or obligation to inspect, review or examine
any document, instrument, certificate, agreement or other papers to determine
that they are genuine, enforceable, or appropriate for the represented purpose
or that they are other than what they purport to be on their face.
The Indenture Trustee shall not appoint a Pledged Asset Custodian
other than itself, the Custodian or the Servicer in respect of any Loan Contract
File or Loan Asset unless such Person shall be acceptable to MBIA and shall have
entered into an agreement with the Indenture Trustee, for the benefit of the
Noteholders and MBIA, the Indenture Trustee, the Issuer, and the Servicer,
containing provisions substantially similar to Sections 11.01(b)-(e) inclusive.
(b) The Custodian shall hold and hereby acknowledges that it is
holding the Custodial File documents (except for those noted on an exception
report given to the Indenture Trustee on the Closing Date) as the agent of the
Indenture Trustee for the use and benefit of the Noteholders and MBIA with
respect thereto. The Indenture Trustee shall not have any responsibility, duty,
obligation or liability with respect to any Pledged
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Asset Custodian acting as a custodian hereunder or with respect to any document,
agreement, certificate or instrument held or purported to be held by any Pledged
Asset Custodian. Neither the Custodian nor the Indenture Trustee shall have any
responsibility or liability with respect to any Loan Asset or Loan Contract
Files not conveyed by the Issuer hereunder.
(c) The Custodian shall perform its duties as a Pledged Asset
Custodian in accordance with the terms of this Indenture, the Servicing
Agreement and applicable law and, to the extent consistent with such terms, in
the same manner in which, and with the same care, skill, prudence and diligence
with which, it administers files for other portfolios, if any, giving due
consideration to customary and usual standards of practice of prudent
custodians. The Custodian shall promptly report to the Indenture Trustee and to
MBIA, any failure by it to hold the complete set of Custodial Files as herein
provided and shall promptly take appropriate action to remedy any such failure.
The Custodian as a Pledged Asset Custodian, shall have and perform
the following powers and duties:
(i) hold the Custodial Files on behalf of the Indenture Trustee for
the benefit of the Noteholders and MBIA, maintain accurate records
pertaining to each Loan Contract to enable it to comply with the terms and
conditions of this Indenture, and maintain a current inventory thereof;
(ii) implement policies and procedures in accordance with the
Custodian's normal business practices with respect to the handling and
custody of the Custodial Files so that the integrity and physical
possession of the Custodial Files will be maintained; and
(iii) attend to all details in connection with maintaining custody
of the Custodial Files on behalf of the Indenture Trustee on behalf of the
Noteholders and MBIA.
(d) In acting as a Pledged Asset Custodian, the Custodian agrees
further that it does not and will not have or assert any beneficial ownership
interest in the Loan Contracts or the Custodial Files or any other Loan Asset.
The Custodian shall ensure that each original or copy of a contractual document
with an Obligor, and its master data processing records evidencing each Loan
Contract that has been released to the Servicer has been marked with a legend,
evidencing that each Loan Contract has been pledged to the Indenture Trustee for
the benefit of the Noteholders and MBIA, together with all right and title
thereto and interest therein as provided herein.
(e) The Custodian agrees to maintain any Custodial Files in its
possession at its office located in Richmond, Virginia, or at such other offices
as shall from time to time be identified by prior written notice to the
Indenture Trustee.
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SECTION 11.02. Obligations of the Custodian.
(a) With respect to the documents constituting each Custodial File
which is delivered to the Custodian or which come into the possession of the
Custodian, the Custodian is the custodian for the Indenture Trustee exclusively.
The Custodian shall hold all documents received by it constituting the Custodial
Files for the exclusive use and benefit of the Indenture Trustee on behalf of
the Noteholders and MBIA, and shall make disposition thereof only in accordance
with this Indenture, the Servicing Agreement or the instructions furnished by
the Indenture Trustee provided such instructions are consistent with this
Indenture and the Servicing Agreement unless otherwise directed in writing by
MBIA. The Custodian shall segregate and maintain continuous custody of all
documents constituting the Loan Contract Files in secure and fireproof
facilities in accordance with customary standards for such custody. The
Custodian makes no representations as to and shall not be responsible to verify
(i) the validity, legality, enforceability, sufficiency, due authorization,
recordability or genuineness of any document in the Loan Contract Files or of
any of the Loan Contracts or (ii) the collectability, insurability,
effectiveness or suitability of any Loan Contract.
(b) Upon the payment in full of any Loan Contract or redemption of
the Notes by the Issuer or MBIA, which shall be evidenced by the delivery to the
Custodian of the Request for Release of Documents, the Custodian shall promptly
release the related Custodial File to the Servicer or MBIA unless otherwise
instructed by such party.
SECTION 11.03. Certification.
(a) Within 45 days after the Closing Date, the Custodian shall
ascertain that all documents referred to in Schedule 1 hereto with respect to
Loan Contracts are in its possession, and shall deliver to the Indenture Trustee
and MBIA a certification in the form of Exhibit F to the effect that, as to each
Custodial File listed in the Loan Schedule (other than any Loan Contract paid in
full or any Loan Contract specifically identified in such certification as not
covered by such certification): (i) all documents required to be in the
Custodial Files are in its possession and (ii) such documents have been reviewed
by it and appear regular on their face and relate to such Loan Contract. In
making this certification, the Custodian shall separately list those Loan
Contracts for which an original Certificate of Title was not found in the
relevant Custodial File, subject to Section 2.03 of the Loan Sale Agreement, and
shall, within 120 days after the Closing Date deliver to the Indenture Trustee
and MBIA a certification in the form of Exhibit F to the effect that, as to each
such Custodial File (other than any Loan Contract paid in full or any Loan
Contract specifically identified in such certification as not covered by such
certification): (i) all documents required to be in the Custodial File are in
its possession and (ii) such documents have been reviewed by it and appear
regular on their face and relate to such Loan Contract.
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(b) If the Custodian during the process of reviewing the Custodial
Files, whether pursuant to clause (a) above or Section 11.04 hereof, finds any
document constituting a part of a Custodial File which is not executed, has not
been received, is unrelated to the Loan Contract identified in the Loan
Schedule, or does not conform to the requirements of clause (a) above or the
description thereof as set forth in the Loan Schedule, then the Custodian shall
promptly so notify the Issuer, the Company, MBIA and the Indenture Trustee.
The Issuer will use reasonable efforts to remedy a material defect
in a document constituting part of a Custodial File of which it is so notified
by the Custodian. If, however, within 60 days after the Custodian's notice to it
respecting such defect the Issuer has not remedied or caused the Company to
remedy the defect and the defect materially and adversely affects the interest
of the Indenture Trustee or of the Noteholders or MBIA in the related Loan
Contract, the Issuer will, on the Determination Date next succeeding the end of
such 60 day period to purchase such Loan Contract, which Purchase Price shall be
deposited in the Collection Account.
SECTION 11.04. Future Defects.
During the term of this Indenture, if the Custodian discovers any
defect with respect to the Custodial Files, the Custodian shall give written
specification of such defect to the Indenture Trustee, the Issuer, the Company
and MBIA.
SECTION 11.05. Fees of Custodian.
The Custodian shall charge such fees for its services under this
Indenture as are set forth in a separate agreement between the Custodian and the
Servicer, the payment of which fees, together with the Custodian's expenses in
connection herewith, shall be solely the obligation of the Servicer. The
Custodian shall perform its obligations under the Transaction Documents
notwithstanding nonpayment of the fees and expenses of the Custodian.
SECTION 11.06. Liability of Custodian.
Neither the Custodian nor any of its directors, officers, agents or
employees, shall be liable for any action taken or omitted to be taken by it or
them hereunder or in connection herewith in good faith and believed by it or
them to be within the purview of this Agreement, except for its or their own
negligence, lack of good faith or willful misconduct.
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SECTION 11.07. Reliance of Custodian.
In the absence of bad faith on the part of the Custodian, the
Custodian may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any request, instructions,
certificate, opinion or other document furnished to the Custodian, reasonably
believed by the Custodian to be genuine and to have been signed or presented by
the proper party or parties and conforming to the requirements of this
Indenture; but in the case of any loan document or other request, instruction,
document or certificate which by any provision hereof is specifically required
to be furnished to the Custodian, the Custodian shall be under a duty to examine
the same to determine whether or not it conforms to the requirements of this
Indenture.
SECTION 11.08. Transmission of Custodial Files.
Written instructions as to the method of shipment and shipper(s) the
Custodian is directed to utilize in connection with the transmission of files
and loan documents in the performance of the Custodian's duties hereunder shall
be delivered by the Servicer to the Custodian prior to any shipment of any files
and loan documents hereunder. Pursuant to the Servicing Agreement, the Servicer
will arrange for the provision of such services at its sole cost and expense
(or, at the Custodian's option, reimburse the Custodian for all costs and
expenses incurred by the Custodian consistent with such instructions) and will
maintain such insurance in connection with shipment of the Custodial Files
against loss or damage to files and loan documents as the Servicer deems
appropriate. Without limiting the generality of the provisions of Section 11.06
hereof, it is expressly agreed that in no event shall the Custodian have any
liability for any losses or damages to any person, including without limitation,
the Indenture Trustee, arising out of actions of the Custodian consistent with
instructions of the Servicer unless such instructions are inconsistent with the
Transaction Documents.
SECTION 11.09. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Custodian and no appointment of
a successor Custodian pursuant to this Article Eleven shall become effective
until the acceptance of appointment by the successor Custodian under Section
11.10 hereof.
(b) The Custodian may resign at any time by giving 30 days' prior
written notice thereof to the Issuer, MBIA and the Indenture Trustee. If an
instrument of acceptance by a successor Custodian shall not have been delivered
to the Custodian within 30 days after the giving of such notice of resignation,
the resigning Custodian may petition any court of competent jurisdiction for the
appointment of a successor Custodian. Such court may thereupon, after such
notice, if any, as it may deem proper and may prescribe, appoint a successor
Custodian.
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(c) The Custodian may be removed by MBIA or, if an MBIA Default has
occurred and is continuing, by the Controlling Holders, at any time if one of
the following events have occurred:
(i) the Custodian shall become incapable of acting or shall be
adjudged a bankrupt or insolvent, or a receiver of the Custodian or of its
property shall be appointed, or any public officer shall take charge or
control of the Custodian or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, or
(ii) the Custodian has failed to perform its duties under any
Transaction Document or any side agreements with the Servicer or has
breached any representation or warranty made herein or therein.
(d) If the Custodian shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of the Custodian for any cause
with respect to any of the Notes, the Issuer, by a Board Resolution shall, with
the prior consent of MBIA, promptly appoint a successor Custodian reasonably
satisfactory to MBIA. If no successor Custodian shall have been so appointed by
the Issuer within 30 days of notice of removal or resignation and shall not have
accepted appointment in the manner hereinafter provided, then MBIA may appoint a
successor Custodian. If MBIA shall fail to appoint a successor Custodian within
90 days or if an MBIA Default shall have occurred and is continuing, then the
Controlling Holders may petition any court of competent jurisdiction for the
appointment of a successor Custodian with respect to the Notes.
(e) The Issuer shall give notice in the manner provided in Sections
13.02 and 13.03 hereof of each resignation and each removal of the Custodian and
each appointment of a successor Custodian to the Indenture Trustee, MBIA and the
Rating Agencies. Each notice shall include the name of the successor Custodian
and the address of its chief executive office.
SECTION 11.10. Acceptance of Appointment by Successor.
Every successor Custodian appointed hereunder shall be acceptable to
MBIA and shall execute, acknowledge and deliver to the Issuer, the Indenture
Trustee, MBIA and the retiring Custodian an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Custodian
shall become effective and such successor Custodian, without any further act,
deed or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Custodian but, on request of the Issuer, the Indenture
Trustee, MBIA or the successor Custodian, such retiring Custodian shall execute
and deliver an instrument transferring to such successor Custodian all the
rights, powers and trusts of the retiring Custodian, and shall duly assign,
transfer and deliver to such successor Custodian all property and money held by
such retiring Custodian hereunder. Upon request of any such successor Custodian,
the Issuer or the
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Indenture Trustee on behalf of the Issuer shall execute any and all instruments
for more fully and certainly vesting in and confirming to such successor
Custodian all such rights, powers and trusts.
No successor Custodian shall accept its appointment unless at the
time of such acceptance such successor Custodian shall be acceptable to MBIA and
shall be eligible under this Article Eleven.
SECTION 11.11. Merger, Conversion, Consolidation or Succession to
Business of Custodian.
Any Person into which the Custodian may be merged or converted or
with which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Custodian shall be a party, or any
corporation succeeding to all or substantially all of the business of the
Custodian, shall be the successor of the Custodian hereunder, provided such
Person shall be acceptable to MBIA and shall be otherwise qualified and
eligible, without the execution or filing of any paper or any further act on the
part of any of the parties hereto, and notice thereof shall be provided by the
Custodian to the Indenture Trustee, MBIA and the Rating Agencies.
SECTION 11.12. Representations and Warranties of the Custodian. The
Custodian represents and warrants to, and agrees with the Indenture Trustee,
MBIA and the Issuer, as of the Closing Date that:
(a) The Custodian is duly organized as a state banking association
under the laws of the Commonwealth of Virginia, is validly existing, in good
standing and has the corporate power and authority under the laws of the United
States of America to conduct its business as now conducted.
(b) The Custodian has full corporate power and authority under the
laws of the United States of America to enter into and perform all transactions
contemplated herein and no consent, approval, authorization or order of any
federal court or governmental agency or body governing or having jurisdiction
with respect to the Custodian's custodial powers is required for the Custodian
to enter into this Indenture and to perform its obligations hereunder.
(c) The execution, delivery and performance by it of this Indenture
(a) do not violate any provision of any law or regulation governing the banking
or the custodial powers of the Custodian or any order, writ, judgment, or decree
of any court, arbitrator, or governmental authority applicable to the Custodian
or any of its assets, (b) do not violate any provision of its corporate charter
or by-laws, or (c) do not violate any provision of, or constitute, with or
without notice or lapse of time, a default under, or result in the creation or
imposition of any lien on any of the property acquired by
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the Issuer pursuant to the provisions of any mortgage, indenture, contract,
agreement or other undertaking other than this Indenture to which it is a party.
(d) This Indenture has been duly executed and delivered by the
Custodian and constitutes the legal, valid and binding agreement of the
Custodian, enforceable in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by equitable
limitations on the availability of specific remedies, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
(e) Nothing has come to the Custodian's attention indicating that,
with respect to the Loan Contracts and the Vehicles (i) there exist any adverse
claims, lien, or encumbrances against any of the same; (ii) any Loan Contract
was overdue or had been dishonored or subject to the circumstances described in
ss. 3.304 of the Uniform Commercial Code as in effect in the State of New York,
or (iii) there exists any other defense against or claim to the Loan Contracts
by any other person or entity. For purposes of this subsection (e), the
Custodian shall not be deemed to have notice or knowledge of the foregoing
matters unless a Responsible Officer assigned to and working in the Custodian's
Corporate Trust Administration Department shall have actual knowledge thereof or
written notice thereof is received by the Custodian in accordance herewith.
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ARTICLE XII
ACCOUNTS AND ACCOUNTING
SECTION 12.01. Collection of Money; Class B Reserve Account Deposit.
(a) Except as otherwise expressly provided herein, the Indenture
Trustee may demand payment or delivery of, and shall receive and collect,
directly and without intervention or assistance of any fiscal agent or other
intermediary, all money and other property payable to or receivable by the
Indenture Trustee pursuant hereto. The Indenture Trustee shall, upon request
from the Servicer, provide the Servicer with sufficient information regarding
the amount of collections deposited by the Indenture Trustee in the accounts
established pursuant to this Article Twelve, in order to permit the Servicer to
perform its duties under the Servicing Agreement. The Indenture Trustee shall
hold all such money and property so received by it as part of the Trust Estate
and shall apply it as provided herein. As of the Closing Date, the Servicer
shall cause all payments theretofore made with respect to the Loan Contracts
that were due on and after the Cut-Off Date and received by the Servicer to be
deposited into the Collection Account for the benefit of the Noteholders and
MBIA in accordance with the Servicing Agreement.
(b) On the Closing Date, the Issuer shall cause an amount equal to
the Class B Reserve Account Deposit to be deposited into the Class B Reserve
Account. Such amount shall be drawn from the proceeds received from the sale of
the Notes.
SECTION 12.02. Collection Account; Reserve Account; Redemption
Account; Class B Reserve Account Payments.
(a) On or prior to the Closing Date, the Indenture Trustee shall
open and maintain an Eligible Account at its Corporate Trust Office in its name
for the benefit of MBIA and the Noteholders (the "Collection Account") for
receipt of (i) payments deposited into the Collection Account in accordance with
Section 3.03 and 3.05 of the Servicing Agreement, (ii) amounts transferred from
the Reserve Account in accordance with Section 12.02(f), (iii) with respect to
the Class A Notes, proceeds of claims made under the Class A Note Insurance
Policy, in accordance with Article Eight hereof, (iv) the Purchase Price of any
Loan Contracts repurchased by the Company, the Issuer or the Servicer and (v)
any income and gain from investments in Eligible Investments. Funds in the
Collection Account shall not be commingled with any other monies. All payments
to be made from time to time to the Noteholders out of funds in the Collection
Account pursuant to this Indenture shall be made by the Indenture Trustee. All
monies deposited from time to time in the Collection Account pursuant to this
Indenture shall be held by the Indenture Trustee as part of the Trust Estate as
herein provided.
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(b) (i) On or prior to the Closing Date, the Indenture Trustee, for
the benefit of the Noteholders and MBIA, shall establish and maintain an
Eligible Account (the "Reserve Account") in its name for the benefit of MBIA and
the Noteholders for receipt of (i) the Reserve Account Initial Deposit, (ii)
deposits pursuant to Section 12.02(d)(x) and (iii) any income and gain from
investments in Eligible Investments. On the Closing Date, the Issuer will cause
to be deposited from the proceeds of the sale of the Notes the Reserve Account
Initial Deposit into the Reserve Account.
(ii) On or prior to the Closing Date, the Indenture Trustee, for the
benefit of the Noteholders, shall establish and maintain an Eligible Account
(the "Redemption Account") in its name for the benefit of the Noteholders for
receipt of funds and in anticipation of the application of such funds to a
redemption of the Notes pursuant to Section 10.02 hereof. Any monies deposited
into the Redemption Account for the purposes of redeeming Notes pursuant to
Article Ten hereof shall remain in the Redemption Account until used to redeem
the related Notes.
(iii) On or prior to the Closing Date, the Indenture Trustee, for
the benefit of the Class B Noteholders, shall establish and maintain an Eligible
Account (the "Class B Reserve Account") in its name for the benefit of the Class
B Noteholders for receipt of the Class B Reserve Account Deposit and in
anticipation of the application of such funds pursuant to Section 12.02(g)
hereof. On the Closing Date, the Issuer will cause to be deposited from the
proceeds of the sale of the Notes, an amount equal to the Class B Required
Reserve Account Amount into the Class B Reserve Account.
(c) Upon the written order of the Issuer (the "Issuer Order"), the
Indenture Trustee shall invest the funds in the Trust Accounts in Eligible
Investments; provided, however, that proceeds of claims on the Class A Note
Insurance Policy and amounts on deposit in the Redemption Account shall remain
uninvested. The Issuer Order shall specify the Eligible Investments in which the
Indenture Trustee shall invest, shall state that the same are Eligible
Investments and shall further specify the percentage of funds to be invested in
each Eligible Investment. No such Eligible Investment shall mature later than
the second Business Day preceding the next following Payment Date or relevant
Redemption Date, as applicable, or be sold or disposed of prior to its maturity.
In the absence of an Issuer Order, the Indenture Trustee shall invest funds in
the Collection Account in Eligible Investments described in clause (vi) of the
definition thereof. Eligible Investments shall be made in the name of the
Indenture Trustee for the benefit of the Noteholders and MBIA. The Indenture
Trustee shall provide to the Servicer and MBIA monthly written confirmation of
such investments, describing the Eligible Investments in which such amounts have
been invested. Any funds not so invested must be insured by the Federal Deposit
Insurance Corporation. The Indenture Trustee shall not be liable for the
selection of, or any investment loss resulting from investment of money in the
Trust Accounts in any Eligible Investment in accordance with the terms hereof
(other than in its capacity as obligor under any Eligible Investment). The
Servicer shall deposit into the relevant Trust Account the amount of any
investment losses immediately as realized.
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(d) On each Payment Date, after making all transfers and deposits to
the Collection Account pursuant to Section 12.02(a) hereof, the Indenture
Trustee shall withdraw all Available Funds on deposit in the Collection Account,
including the reinvestment income therein, and shall make the disbursements in
the following order in accordance with the provisions of and instructions on the
Monthly Servicer's Report; provided, however, that (x) the proceeds of claims
under the Class A Note Insurance Policy shall be used solely to pay the amounts
due under paragraphs (v) and (viii) of this Section 12.02(d) in accordance with
the terms of the Class A Note Insurance Policy; and (y) the Indenture Trustee
shall withdraw Available Funds from the Collection Account and make interest
payments to Class A Noteholders based on the Class A Note Balance even if it
shall not have received the Monthly Servicer's Report:
(i) first, to the Servicer, (A) the Servicer Fee then due and any
Servicing Charges and (B) from amounts received as Recoveries (prior to
reduction for out-of-pocket expenses) from any Defaulted Loan Contracts,
the amounts necessary to reimburse the Servicer for reasonable
out-of-pocket costs and expenses incurred by the Servicer (including
reasonable attorney's fees) in connection with the realization, attempted
realization or enforcement of rights and remedies upon the related
Defaulted Loan Contracts; provided, however, so long as the Company is the
Servicer, payment of one-third of the Servicer Fee shall be subordinate in
priority of payment and shall be made in the priority as set forth in the
clause (xi) below;
(ii) second, to the Back-up Servicer, (A) the Back-up Servicer Fee
then due and (B) in the event that the Back-up Servicer becomes the
Servicer, an amount equal to the costs and expenses incurred by the
Back-up Servicer in assuming the servicing role, such amount not to exceed
$50,000, to the extent such amounts have not been paid by the Servicer;
provided, however, that payment of such costs and expenses shall not cause
a draw of the Reserve Account pursuant to Section 12.02(f) hereof;
(iii) third, to the Indenture Trustee, the Indenture Trustee Fee
then due;
(iv) fourth, to MBIA, the MBIA Premium then due;
(v) fifth, to the Class A Noteholders, the Class A Interest Payment
Amount for such Payment Date, to be applied as provided in Section 2.08(a)
hereof;
(vi) sixth, to MBIA, the MBIA Reimbursement Amount for such Payment
Date, if any;
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(vii) seventh, to the Class B Noteholders, the Class B Interest
Payment Amount for such Payment Date, to be applied as provided in Section
2.08(a) hereof;
(viii) eighth, to the Class A Noteholders, the Class A Principal
Payment Amount for such Payment Date, to be applied as provided in Section
2.08(b) hereof;
(ix) ninth, in the event that an Event of Default has occurred and
has not been waived by MBIA, to the Class A Noteholders, the Additional
Class A Principal Distribution Amount for such Payment Date, up to the
Class A Note Balance on such Payment Date, to be applied as provided in
Section 2.08(b) hereof;
(x) tenth, to the Reserve Account, amounts required to fund the
Reserve Account up to the Required Reserve Account Amount;
(xi) eleventh, so long as the Company is the Servicer, to the
Servicer, the remaining one-third of the Servicer Fee then due;
(xii) twelfth, to the Indenture Trustee and the Back-up Servicer,
any other amounts due and owing the Indenture Trustee or the Back-up
Servicer as expressly provided herein;
(xiii) thirteenth, to the Class B Reserve Account amounts required
to fund the Class B Reserve Account up to the Class B Required Reserve
Account Amount;
(xiv) fourteenth, to the Class B Noteholders, the Class B Principal
Payment Amount, for such Payment Date, to be applied as provided in
Section 2.08(b) hereof;
(xv) fifteenth, the cost of re-▇▇▇▇▇▇▇ if the Back-up Servicer is
acting as the Servicer or if the Servicer fails to perform its duties upon
the occurrence of a Re-▇▇▇▇▇▇▇ Trigger;
(xvi) sixteenth, in the event that the Back-up Servicer becomes the
Servicer, an amount equal to the costs and expenses incurred by the
Back-up Servicer in assuming the Servicer's role, to the extent such
amounts have not been paid by the Servicer or paid pursuant to clause (ii)
above; and
(xvii) seventeenth, to the Issuer, any remaining Available Funds.
(e) Payments on the Notes will be made by the Indenture Trustee by
check mailed by first-class mail to the Person whose name appears as the
Registered Holder of
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the Note on the Note Register at the address of such Person as it appears on the
Note Register, or by wire transfer in immediately available funds to the account
specified in writing to the Indenture Trustee by the Person whose name appears
as the Registered Holder of the Note on the Note Register received at least five
Business Days prior to the Record Date for the Payment Date on which wire
transfers will commence, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. For this purpose, wire instructions delivered to the Indenture
Trustee by a Holder will apply to all subsequent Payment Dates until restated by
the Holder. Funds represented by checks returned undelivered will be held for
payment to the Person entitled thereto, subject to the terms hereof, at the
office or agency in the United States of America designated as such by the
Issuer for such purpose pursuant hereto.
(f) Disbursements from the Reserve Account shall be made, to the
extent funds therefor are available, only as follows, all in accordance with the
provisions and instructions contained in the Monthly Servicer Report:
(i) in the event that the Available Funds in the Collection
Account at 10:00 a.m. New York time on the Determination Date
immediately preceding any Payment Date are less than the amounts
required to be paid from the Collection Account on such Payment Date
pursuant to (A), clauses (i) through (viii) except for clauses
(ii)(B) and (vii) of Section 12.02(d) with respect to any
Determination Date on which the Class A Note Balance is greater than
zero and (B), clauses (i) through (viii) and clauses (xi) through
(xiii) of Section 12.02(d) with respect to any Determination Date on
which the Class A Note Balance is equal to zero, the Indenture
Trustee shall withdraw funds from the Reserve Account on or prior to
4:00 p.m. New York time on such Determination Date to the extent
necessary to make such payments on such Payment Date and deposit
such funds into the Collection Account;
(ii) in the event that on any Determination Date the balance
in the Reserve Account equals an amount greater than the Required
Reserve Account Amount (after giving effect to the distributions
listed in clause (i) of this Section 12.02(f) and (A), clauses (i)
through (viii) except for clause (vii) of Section 12.02(d) with
respect to any Payment Date on which the Class A Note Balance is
greater than zero, and (B), clauses (i) through (viii) and clauses
(xi) through (xiii) of Section 12.02(d) with respect to any Payment
Date on which the Class A Note Balance is equal to zero on such
Payment Date and all MBIA Reimbursement Amounts have been paid in
full), the Indenture Trustee shall withdraw funds in the Reserve
Account in such amount so that the remaining amount in the Reserve
Account after such withdrawal will equal the Required Reserve
Account Amount, and deposit such amounts in the Collection Account
as Available Funds for
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distribution on such Payment Date in accordance with the priorities
set forth in Section 12.02(d); and
(iii) on the Senior Liability Termination Date the amount then
remaining on deposit in the Reserve Account shall be applied as a
portion of the Class B Principal Payment Amount due on such date,
and the Reserve Account shall be closed.
(g) Disbursements from the Class B Reserve Account shall be made, to
the extent funds therefore are available, only as follows, all in accordance
with the provisions and instructions contained in the Monthly Servicer Report:
(i) in the event that the Available Funds in the Collection
Account at 10:00 a.m. New York time on the Determination Date
immediately preceding any Payment Date is less than the amounts
required to be paid from the Collection Account on such Payment Date
pursuant to clause (vii) of Section 12.02(d) (after giving effect to
distributions pursuant to clauses (i) through (vi) of such Section,
the Indenture Trustee shall withdraw funds from the Class B Reserve
Account (to the extent that funds are available therein) on or prior
to 4:00 p.m. New York time on such Determination Date to the extent
necessary to make such payments on such Payment Date and deposit
such funds into the Collection Account for payment in accordance
with clause (vii) of Section 12.02(d);
(ii) in the event that on any Determination Date the balance
in the Class B Reserve Account equals an amount greater than the
Class B Required Reserve Account Amount (after giving effect to any
withdrawal therefrom pursuant to clause (i) above), the Indenture
Trustee shall withdraw funds in the Class B Reserve Account in such
amount so that the remaining amount in the Class B Reserve Account
after such withdrawal will equal the Class B Required Reserve
Account Amount, and deposit such amounts in the Collection Account
as Available Funds for distribution on such Payment Date in
accordance with the priorities set forth in Section 12.02(d); and
(iii) on the Senior Liability Termination Date the amount then
remaining on deposit in the Class B Reserve Account shall be applied
as a portion of the Class B Principal Payment Amount due on such
date, and the Class B Reserve Account shall be closed.
SECTION 12.03. Reports by the Indenture Trustee.
(a) On each Payment Date the Indenture Trustee shall account to each
Holder of Notes on which payments of principal and interest are then being made
the
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amount which represents principal and the amount which represents interest, and
shall contemporaneously advise the Issuer and MBIA of all such payments. The
Indenture Trustee may satisfy its obligations under this Section 12.03 by
delivering the Monthly Servicer's Report to each such Holder of the Notes, MBIA,
the Issuer, the Rating Agencies and the Placement Agents.
(b) Upon receipt of an Issuer Order or upon an investment pursuant
to clause (vi) of the definition of Eligible Investments due to the failure of
the Issuer to provide an Issuer Order, the Indenture Trustee shall confirm the
credit rating or, if more than one credit rating has been assigned, each such
credit rating of each institution in which funds are invested pursuant to clause
(ii), (iii), (iv), (v) or (vi) of the definition of Eligible Investments.
(c) At least annually, or as otherwise required by law, the
Indenture Trustee shall distribute to Noteholders any information returns, or
other tax information as is required by applicable tax law to be distributed to
Noteholders. Such information shall be compiled by the Indenture Trustee from
information that has been provided to the Indenture Trustee by the Servicer. The
Indenture Trustee, upon written request, will furnish the Servicer with all
information known to the Indenture Trustee as may be reasonably required in
connection with the preparation by the Servicer of tax returns. In no event
shall the Indenture Trustee be liable for any liabilities, costs or expenses of
the Trust Estate or the Noteholders arising under any tax law, including,
without limitation, Federal, state, or local income or franchise taxes or any
other tax imposed on or measured by income.
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ARTICLE XIII
PROVISIONS OF GENERAL APPLICATION
SECTION 13.01. 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 an agent
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 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 7.01 hereof)
conclusive in favor of the Indenture Trustee and the Issuer, if made in the
manner provided in this Section 13.01.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Registrar.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Note shall bind the Holder of every
Note issued upon the registration of transfer 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 13.02. Notices, etc., to Indenture Trustee, MBIA, Issuer and
Servicer.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Noteholders or other document provided or permitted hereby to
be made upon, given or furnished to, or filed with any party hereto shall be
sufficient for every purpose hereunder if in writing and telecopied or mailed,
first-class postage prepaid and addressed to the appropriate address below:
(a) to the Indenture Trustee at Four ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ Attention: Corporate Trust and Agency Group - Structured Finance; Fax
No: (212)
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250-6439, or at any other address previously furnished in writing to the Issuer,
MBIA, the Noteholders and the Custodian; or
(b) to MBIA at MBIA Insurance Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Insured Portfolio Management - Structured Finance;
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇, or at any other address previously furnished in writing
by MBIA to Indenture Trustee, the Noteholders, the Custodian and the Issuer; or
(c) to the Issuer at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇; Fax
No.:(▇▇▇) ▇▇▇-▇▇▇▇, or at any other address previously furnished in writing to
the Indenture Trustee, MBIA, the Noteholders and the Custodian by the Issuer; or
(d) to the Custodian at Crestar Bank, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: J. ▇▇▇ ▇▇▇▇; Fax No.: (804)
▇▇▇-▇▇▇▇, or at any other address previously furnished in writing to the
Indenture Trustee, MBIA, the Noteholders, the Servicer and the Issuer; or
(e) to each of (i) Standard & Poors, Attention: Asset Backed
Surveillance Group, ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇; and (ii) ▇▇▇▇▇'▇ Investor
Service, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇.
SECTION 13.03. Notices to Noteholders; Waiver.
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 in which notice to
Noteholders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Noteholder shall affect the
sufficiency of such notice with respect to other Noteholders, and any notice
which is mailed in the manner herein provided shall conclusively be presumed to
have been duly given.
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 waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage, or similar activity, it shall be impractical
to mail notice of any event to 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.
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SECTION 13.04. 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 13.05. Successor and Assigns.
All covenants and agreements in this Indenture by the Issuer shall
bind its successors and assigns, whether so expressed or not. There shall be no
assignment by the Issuer hereof, except in accordance with the provisions of
Section 3.02(n) hereof.
SECTION 13.06. 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 13.07. Benefits of Indenture.
Nothing in this Indenture or in the Notes, express or implied, shall
give to any Person, other than the parties hereto, the Noteholders and any
Paying Agent which may be appointed pursuant to the provisions hereof, and any
of their successors hereunder, any benefit or any legal or equitable right,
remedy, or claim under this Indenture or under the Notes, except that MBIA is an
express third party beneficiary to this Indenture and is entitled to enforce the
provisions hereof as if it were a party hereto.
SECTION 13.08. Legal Holidays.
In any case in which the date of any Payment Date or the Stated
Maturity Date of any Note shall not be a Business Day, then (notwithstanding any
other provision of a Note or this Indenture) payment of principal or interest
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 nominal date of any such
Stated Maturity Date or Payment Date and, assuming such payment is actually made
on such subsequent Business Day, no additional interest shall accrue on the
amount so paid for the period from and after any such nominal date.
SECTION 13.09. Governing Law.
This Indenture and each Note shall be construed in accordance with
and governed by the internal laws of the State of New York applicable to
agreements made and to be performed therein, without regard to the conflict of
laws provisions of any State.
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SECTION 13.10. Counterparts.
This Indenture may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
SECTION 13.11. Corporate Obligation.
No recourse may be taken, directly or indirectly, against any
incorporator, subscriber to the capital stock, stockholder, employee, officer or
director of the Issuer or of any predecessor or successor of the Issuer with
respect to the Issuer's obligations on the Notes or under this Indenture or any
certificate or other writing delivered in connection herewith.
SECTION 13.12. Compliance Certificates and Opinions.
Upon any application, order or request by the Issuer or the Servicer
to the Indenture Trustee to take any action under any provision of this
Indenture for which a specific request is required hereunder, the Issuer or the
Servicer, as applicable, shall furnish to the Indenture Trustee an Officer's
Certificate of the Issuer or the Servicer, as applicable, stating that all
conditions precedent, if any, provided for herein relating to the proposed
action have been complied with, except that in the case of any such application
or request as to which the furnishing of a different certificate is specifically
required by any provision of this Indenture relating to such particular
application or request, no additional certificate need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for herein shall include:
(a) a statement that each individual signing such certificate or
opinion has read or has caused to be read such covenant or condition and
the definitions herein relating thereto;
(b) 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;
(c) a statement that, in the opinion of each such individual, such
individual has made such examination or investigation as is necessary to
enable such individual to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
90
(d) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 13.13. MBIA Default.
If an MBIA Default occurs and continues unremedied, MBIA's right to
consent hereunder and under any other Transaction Document and to direct the
Indenture Trustee shall be suspended until remedied and, in such event, in all
provisions of this Agreement wherein MBIA's consent or direction is required or
permitted, the consent or direction of the Controlling Holders shall be required
or permitted during such period of suspension.
SECTION 13.14. Parties not to Institute Insolvency Proceedings.
So long as this Indenture is in effect, for 366 days after the Final
Payment Date, the Indenture Trustee and the Custodian each agree that it shall
not file an involuntary petition or otherwise institute any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding or other
proceeding under any Federal or state bankruptcy or similar law against the
Issuer. Nothing hereunder shall prohibit the Indenture Trustee from filing
proofs of claim or otherwise participating in any such proceedings instituted by
any other Person.
91
IN WITNESS WHEREOF, the Issuer, the Custodian and the Indenture
Trustee have caused this Indenture to be duly executed by their respective
officers thereunto duly authorized as of the date and year first above written.
BANKERS TRUST COMPANY, as Indenture
Trustee
By: _______________________________
Name:
Title:
AUTOINFO RECEIVABLES COMPANY, as
Issuer
By: _______________________________
Name:
Title:
CRESTAR BANK,
as Custodian
By: _______________________________
Name:
Title:
[Indenture]
EXHIBIT A
to Indenture
FORM OF CLASS A NOTE
REGISTERED $__________
No. A-_________
PPN: 052780 AA 1
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING NOTE BALANCE OF THIS NOTE AT ANY TIME MAY
BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES OR "BLUE SKY" LAWS.
THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES THAT THIS NOTE MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) SO LONG AS THIS NOTE IS ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR
OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (2) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (3) IN RELIANCE ON
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
SUBJECT TO THE RECEIPT BY THE INDENTURE TRUSTEE OF A CERTIFICATION OF THE
TRANSFEREE OR AN OPINION OF COUNSEL (SATISFACTORY TO THE INDENTURE TRUSTEE AND
THE ISSUER) TO THE EFFECT THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES.
SECTION 2.06 OF THE INDENTURE DATED AS OF OCTOBER 1, 1996 (THE
"INDENTURE") BETWEEN AUTOINFO RECEIVABLES COMPANY, AS ISSUER, CRESTAR BANK, AS
CUSTODIAN AND BANKERS TRUST COMPANY, AS INDENTURE TRUSTEE, CONTAINS FURTHER
RESTRICTIONS ON THE TRANSFER AND RESALE OF THIS NOTE. EACH TRANSFEREE OF THIS
NOTE, BY ACCEPTANCE HEREOF, IS DEEMED TO HAVE ACCEPTED THIS NOTE,
A-1
SUBJECT TO THE FOREGOING RESTRICTIONS ON TRANSFERABILITY. IN ADDITION, EACH
TRANSFEREE OF THIS NOTE, BY ACCEPTANCE HEREOF, IS DEEMED TO HAVE MADE THE
REPRESENTATIONS AND AGREEMENTS SET FORTH IN SECTION 2.08(d) OF THE INDENTURE. (A
COPY OF WHICH IS AVAILABLE FROM THE INDENTURE TRUSTEE UPON REQUEST.)
AUTOINFO RECEIVABLES COMPANY
6.53% AUTO LOAN BACKED NOTES, CLASS A
AutoInfo Receivables Company, a Delaware corporation (including any
successor, the "Issuer"), for value received, hereby promises to pay to
_____________, or registered assigns, the principal sum of ______ DOLLARS
($_____), partially payable on each Payment Date in an amount equal to the
aggregate amount, if any, payable from the Collection Account in respect of
principal on the Class A Notes pursuant to Section 2.08 of the Indenture;
provided, however, that the entire unpaid principal amount of this Note shall be
due and payable on the earlier of the Stated Maturity Date and the Redemption
Date, if any, pursuant to Section 10.01 of the Indenture. The Issuer will pay
interest on this Note at the rate per annum shown above or as is stated in the
Indenture, on each Payment Date until the principal of this Note is paid or made
available for payment, on the principal amount of this Note outstanding on the
close of business on the day preceding such Payment Date, subject to certain
limitations contained in Section 2.08 of the Indenture. Interest on this Note
will accrue for each Payment Date from the most recent Payment Date (or in the
case of the first Payment Date, from the Closing Date) on which interest has
been paid to but excluding the then current Payment Date. Interest will be
computed on the basis of a 360-day year of twelve 30-day months. Such principal
of and interest on this Note shall be paid in the manner specified in the
Indenture.
The principal of and interest on this Note are payable in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
The Notes are entitled to the benefits of a financial guaranty
insurance policy (the "Policy") issued by MBIA Insurance Corporation ("MBIA"),
pursuant to which MBIA has unconditionally guaranteed payments of the Class A
Interest Shortfall Amount and the Class A Principal Shortfall Amount on each
Payment Date, all as more fully set forth in the Indenture. See also "Statement
of Insurance" attached hereto.
Reference is made to the further provisions of this Note set forth
on the reverse hereof, which shall have the same effect as though fully set
forth on the face of this Note.
A-2
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee by manual signature, this Note shall not be entitled to
any benefit under the Indenture referred to on the reverse hereof, or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Dated: October 11, 1996
AUTOINFO RECEIVABLES COMPANY
By: _____________________________________
Name: ___________________________________
Title: __________________________________
A-3
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Dated: October 11, 1996
BANKERS TRUST COMPANY, not in its individual capacity
but solely as Indenture Trustee
By: __________________________________________________
Authorized Signatory
A-4
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its 6.53% Auto Loan Backed Notes, Class A (herein called the
"Class A Notes" or the "Notes"), all issued under an Indenture dated as of
October 1, 1996 (such Indenture, as supplemented or amended, is herein called
the "Indenture"), between the Issuer, Crestar Bank and Bankers Trust Company,
not in its individual capacity but solely as trustee (the "Indenture Trustee",
which term includes any successor Indenture Trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights and obligations thereunder of the
Issuer, the Indenture Trustee and the Holders of the Notes. The Notes are
subject to all terms of the Indenture. All terms used in this Note that are not
otherwise defined herein and that are defined in the Indenture shall have the
meanings assigned to them in or pursuant to the Indenture.
The Issuer shall pay interest on overdue installments of interest at
the Class A Interest Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed pursuant to
Section 10.01 of the Indenture, in whole, but not in part, at the option of the
Servicer or MBIA on any Payment Date on or after the date on which the Class A
Note Balance is less than or equal to 10% of the Initial Class A Note Balance on
the Closing Date.
Each Noteholder, by acceptance of a Note, covenants and agrees that
no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer or the Indenture Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Indenture Trustee in its individual capacity, (ii) any owner of
a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director or employee of (a) the Indenture Trustee in its
individual capacity, (b) any holder of a beneficial interest in the Issuer, the
Indenture Trustee or of (c) any successor or assign of the Trustee in its
individual capacity, except as any such Person may have expressly agreed 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.
It is the intent of the Issuer and the Noteholders that, for
purposes of Federal and State income tax and any other tax measured in whole or
in part by income, the Notes will qualify as indebtedness of the Issuer. The
Noteholders, by acceptance of a Note, agree to treat, and to take no action
inconsistent with the treatment of, the Notes for such tax purposes as
indebtedness of the Issuer.
Each Noteholder, by acceptance of a Note, covenants and agrees that
by accepting the benefits of the Indenture that such Noteholder will not at any
time institute against the Issuer, or join in any institution against the Issuer
of, any bankruptcy,
A-5
reorganization or arrangement, insolvency or liquidation proceedings under any
United States Federal or State bankruptcy or similar law in connection with any
obligations relating to the Notes, the Indenture or the Transaction Documents.
This Note and the Indenture shall be construed in accordance with
the laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note,
but solely from the Trust Estate pledged to the Indenture Trustee under the
Indenture and from the Class A Note Insurance Policy at the times, place and
rate, and in the coin or currency, herein prescribed. Notwithstanding anything
else to the contrary contained in this Note or the Indenture, the obligation of
the Issuer to pay the principal of and interest on this Note is not a general
obligation of the Issuer, nor its officers or directors, but is limited solely
to the Trust Estate pledged under the Indenture or as proscribed in the Class A
Note Insurance Policy.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Transaction Documents, neither Bankers Trust Company, in its
individual capacity, any owner of a beneficial interest in the Issuer, nor any
of their respective partners, beneficiaries, agents, officers, directors,
employees, successors or assigns shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest on,
or performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture, it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Indenture Trustee for the sole purposes of binding the interests of the
Trustee in the assets of the Issuer. The Holder of this Note by the acceptance
hereof agrees that, except as expressly provided in the Transaction Documents,
in the case of an Event of Default under the Indenture, the Holder shall have no
claim against any of the foregoing for any deficiency, loss or claim therefrom;
[Attach Statement of Insurance]
A-6
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.
ALEX. ▇▇▇▇▇ & SONS INCORPORATED
By:_____________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Dated: October 11, 1996
A-7
EXHIBIT B
to Indenture
FORM OF CLASS B NOTES
REGISTERED
$__________________________________________________________________________
NO. B-_________
PPN: 052780 AB 9
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING NOTE BALANCE OF THIS NOTE AT ANY TIME MAY
BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES OR "BLUE SKY" LAWS.
THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES THAT THIS NOTE MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) SO LONG AS THIS NOTE IS ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR
OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (2) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (3) IN RELIANCE ON
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
SUBJECT TO THE RECEIPT BY THE TRUSTEE OF A CERTIFICATION OF THE TRANSFEREE OR AN
OPINION OF COUNSEL (SATISFACTORY TO THE TRUSTEE AND THE ISSUER) TO THE EFFECT
THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES.
SECTION 2.06 OF THE INDENTURE DATED AS OF OCTOBER 1, 1996 (THE
"INDENTURE") BETWEEN AUTOINFO RECEIVABLES COMPANY, AS ISSUER, CRESTAR BANK, AS
CUSTODIAN AND BANKERS TRUST COMPANY, AS INDENTURE TRUSTEE, CONTAINS FURTHER
RESTRICTIONS ON THE
B-1
TRANSFER AND RESALE OF THIS NOTE. EACH TRANSFEREE OF THIS NOTE, BY ACCEPTANCE
HEREOF, IS DEEMED TO HAVE ACCEPTED THIS NOTE, SUBJECT TO THE FOREGOING
RESTRICTIONS ON TRANSFERABILITY. IN ADDITION, EACH TRANSFEREE OF THIS NOTE, BY
ACCEPTANCE HEREOF, IS DEEMED TO HAVE MADE THE REPRESENTATIONS AND AGREEMENTS SET
FORTH IN SECTION 2.08(d) OF THE INDENTURE. (A COPY OF WHICH IS AVAILABLE FROM
THE INDENTURE TRUSTEE UPON REQUEST.)
11.31% AUTO LOAN BACKED NOTES, CLASS B
AutoInfo Receivables Company, a Delaware corporation (including any
successor, the "Issuer"), for value received, hereby promises to pay to
__________, or registered assigns, the principal sum of ________ DOLLARS
($_____), partially payable on each Payment Date in an amount equal to the
aggregate amount, if any, payable from the Collection Account in respect of
principal on the Class B Notes pursuant to Section 2.08 of the Indenture;
provided, however, that the entire unpaid principal amount of this Note shall be
due and payable on the earlier of the Stated Maturity Date and the Redemption
Date, if any, pursuant to Section 10.01 of the Indenture. No payments of
interest on the Class B Notes will be made on any Payment Date until the
interest due on the Class A Notes on such Payment Date is paid in full. No
payments of principal on the Class B Notes will be made on any Payment Date
until the interest and principal due on the Class A Notes on such Payment Date
has been paid in full and certain payments are made to the Reserve Account for
the benefit of the Class A Notes. The Issuer will pay interest on this Note at
the rate per annum shown above, on each Payment Date until the principal of this
Note is paid or made available for payment, on the principal amount of this Note
outstanding on the close of business on the day preceding such Payment Date
(after giving effect to all payments of principal made on the preceding Payment
Date), subject to certain limitations contained in Section 2.08 of the
Indenture. Interest on this Note will accrue for each Payment Date from the most
recent Payment Date (or in the case of the first Payment Date, from the Closing
Date) on which interest has been paid to but excluding the then current Payment
Date. Interest will be computed on the basis of a 360-day year of twelve 30-day
months. Such principal of and interest on this Note shall be paid in the manner
specified in the Indenture.
The principal of and interest on this Note are payable in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth
on the reverse hereof, which shall have the same effect as though fully set
forth on the face of this Note.
B-2
Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture referred to on the reverse hereof, or be valid or obligatory
for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Dated: October 11, 1996
AUTOINFO RECEIVABLES COMPANY
By: ____________________________________
Name: _______________________________
Title: ______________________________
B-3
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Dated: October 11, 1996
BANKERS TRUST COMPANY, not in its
individual capacity but
solely as Indenture Trustee
By: __________________________________
Authorized Signatory
B-4
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its ___% Auto Loan Backed Notes, Class B (herein called the "Class
B Notes" or the "Notes"), all issued under an Indenture dated as of October 1,
1996 (such Indenture, as supplemented or amended, is herein called the
"Indenture"), between the Issuer, Crestar Bank and Bankers Trust Company, not in
its individual capacity but solely as trustee (the "Indenture Trustee," which
term includes any successor Indenture Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights and obligations thereunder of the Issuer, the
Indenture Trustee and the Holders of the Notes. The Notes are subject to all
terms of the Indenture. All terms used in this Note that are not otherwise
defined herein and that are defined in the Indenture shall have the meanings
assigned to them in or pursuant to the Indenture.
The Issuer shall pay interest on overdue installments of interest at
the Class B Interest Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed pursuant to
Section 10.01 of the Indenture, in whole, but not in part, at the option of the
Servicer, on any Payment Date on or after the date on which the Class B Note
Balance is less than or equal to 10% of the Initial Class B Note Balance on the
Closing Date.
Each Noteholder, by acceptance of a Note, covenants and agrees that
no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer or the Indenture Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Indenture Trustee in its individual capacity, (ii) any owner of
a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director or employee of (a) the Indenture Trustee in its
individual capacity, (b) any holder of a beneficial interest in the Issuer, the
Indenture Trustee or of (c) any successor or assign of the Indenture Trustee in
its individual capacity, except as any such Person may have expressly agreed 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.
It is the intent of the Issuer, and the Noteholders that, for
purposes of Federal and State income tax and any other tax measured in whole or
in part by income, the Notes will qualify as indebtedness of the Issuer. The
Noteholders, by acceptance of a Note, agree to treat, and to take no action
inconsistent with the treatment of, the Notes for such tax purposes as
indebtedness of the Issuer.
Each Noteholder, by acceptance of a Note, covenants and agrees that
by accepting the benefits of the Indenture that such Noteholder will not at any
time institute
B-5
against the Issuer, or join in any institution against the Issuer of, any
bankruptcy, reorganization or arrangement, insolvency or liquidation proceedings
under any United States Federal or State bankruptcy or similar law.
This Note and the Indenture shall be construed in accordance with
the laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note,
but solely from the Trust Estate pledged to the Indenture Trustee under the
Indenture, at the times, place and rate, and in the coin or currency, herein
prescribed. Notwithstanding anything else to the contrary contained in this Note
or the Indenture, the obligation of the Issuer to pay the principal of and
interest on this Note is not a general obligation of the Issuer, nor its
officers or directors, but is limited solely to the Trust Estate pledged under
the Indenture.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Transaction Documents, neither Bankers Trust Company, in its
individual capacity, any owner of a beneficial interest in the Issuer, nor any
of their respective partners, beneficiaries, agents, officers, directors,
employees, successors or assigns shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest on,
or performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture, it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Indenture Trustee for the sole purposes of binding the interests of the
Indenture Trustee in the assets of the Issuer. The Holder of this Note by the
acceptance hereof agrees that, except as expressly provided in the Transaction
Documents, in the case of an Event of Default under the Indenture, the Holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom.
B-6
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:
_______________________________________________________________________________
Signatures 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.
----------
*/ NOTE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in every
particular without alteration, enlargement or any change whatsoever.
B-7
Exhibit C
to Indenture
Form of Class A Note Insurance Policy
See Tab 8
Exhibit D
to Indenture
Cumulative Net Default Table
================================================================================
Months After Closing Reserve Account Increase
Event Event of Default
--------------------------------------------------------------------------------
Three 6.50% 7.50%
--------------------------------------------------------------------------------
Six 9.00% 12.00%
--------------------------------------------------------------------------------
Nine 13.50% 19.00%
--------------------------------------------------------------------------------
Twelve 16.50% 23.00%
--------------------------------------------------------------------------------
Fifteen 19.25% 28.75%
--------------------------------------------------------------------------------
Eighteen 21.50% 31.25%
--------------------------------------------------------------------------------
Twenty-One 23.50% 33.75%
--------------------------------------------------------------------------------
Twenty-Four 25.75% 36.75%
--------------------------------------------------------------------------------
Twenty-Seven 27.75% 39.50%
--------------------------------------------------------------------------------
Thirty and Thereafter 30.00% 42.00%
================================================================================
Exhibit E-1
to Indenture
Form of Investment Letter
(Non-Rule 144A)
Bankers Trust Company
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
AutoInfo Receivables Company
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Black Diamond Securities, LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Alex, ▇▇▇▇▇ & Sons Incorporated
▇ ▇▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: AutoInfo Receivables Company
___% Auto Loan Backed, Class [A/B]
----------------------------------
The undersigned purchaser ("Purchaser") understands that the purchase of
the above referenced notes described on the Schedule attached hereto (the
"Notes") may be made only by institutions which are "Accredited Investors" under
Regulation D, as promulgated under the Securities Act of 1933, as amended (the
"1933 Act"), which includes banks, savings and loan associations, registered
brokers and dealers, insurance companies, investment companies, and
organizations described in Section 501(c)(3) of the Internal Revenue Code,
corporations, business trusts and partnerships, not formed for the specific
purpose of acquiring the Notes offered, with total assets in excess of
$5,000,000. The undersigned represents on behalf of the Purchaser that the
Purchaser is an "Accredited Investor" within the meaning of such definition.
Purchaser is urged to review carefully the responses, representations and
warranties it is making herein.
E-1-1
Representations and Warranties
Purchaser makes the following representations and warranties in order to
permit the Trustee, AutoInfo Receivables Company ("AutoInfo"), and Black Diamond
Securities, LLC to determine its suitability as a purchaser of Notes and to
determine that the exemption from registration relied upon by AutoInfo under
Section 4(2) of the 1933
Act is available to it.
1. The execution and delivery of this Representation Letter has been duly
authorized by the Purchaser by all necessary corporate action on its part,
including due authorization and approval by the Board of Directors or other
governing body of the Purchaser.
2. The Purchaser understands that the Notes have not been and will not be
registered under the 1933 Act in reliance upon the exemption provided in Section
4(2) of the 1933 Act or any other applicable exemption, that the Notes have not
and will not be registered or qualified under the securities or "blue sky" laws
of any jurisdiction, that the Notes may be resold (which resale is not currently
contemplated) or otherwise transferred only if so registered or qualified or if
an exemption from registration or qualification is available, that AutoInfo is
not required to register the Notes and that any transfer must comply with
Section 2.06 of the Indenture relating to the Notes.
3. The Purchaser will comply with all applicable federal and state
securities laws in connection with any subsequent resale of the Notes.
4. The Purchaser is a sophisticated institutional investor and has
knowledge and experience in financial and business matters and is capable of
evaluating the merits and risks of its investment in the Notes and is able to
bear the economic risk of such investment. The Purchaser has been given such
information concerning the Notes, the underlying retail installment contracts
and AutoInfo as it has requested.
5. The Purchaser is acquiring the Notes as principal for its own account
(or for the account of one or more other institutional investors for which it is
acting as duly authorized fiduciary or agent) for the purpose of investment and
not with a view to or for sale in connection with any distribution thereof,
subject nevertheless to any requirement of law that the disposition of the
Purchaser's property will at all times be and remain within its control.
6. The Purchaser represents that either (a) it is not (i) an employee
benefit plan (as defined in section 3(3) of the Employee Retirement Security Act
of 1974, as amended ("ERISA")) subject to the provisions of Title I of ERISA,
(ii) a plan described in section 4975(e)(1) of the Internal Revenue Code of
1986, as amended (the "Code") or (iii) an entity whose underlying assets are
deemed to be assets of a plan described in (i) or (ii) above by reason of such
plan's investment in the entity (any such entity described in
E-1-2
clauses (i) through (iii), a "Benefit Plan Entity") or (b) the Purchaser's
purchase and holding of the Notes with the assets of a Benefit Plan Entity will
be covered by a Department of Labor Class Exemption.
7. The Purchaser understands that such Note will bear a legend as set
forth in the form of Note included in the Indenture.
8. The Purchaser agrees that it will obtain from any purchaser of the
Notes from it substantially the same representations, warranties and agreements
contained in the foregoing paragraphs 1 through 7 and in this paragraph 8.
E-1-3
The representations and warranties contained herein will be binding upon
the heirs, executors, administrators and other successors of the undersigned. If
there is more than one signatory hereto, the obligations, representations,
warranties and agreements of the undersigned are made jointly and severally.
Executed at _________________________, this ________ day of _____________,
199_.
_________________________
Purchaser's Name (Print)
By_______________________
Signature
Its______________________
_________________________
Address of Purchaser
_________________________
Purchaser's Taxpayer
Identification Number
E-1-4
Bankers Trust Company
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AutoInfo Receivables Company
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Black Diamond Securities, LLC
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Alex. ▇▇▇▇▇ & Sons Incorporated
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Re: AutoInfo Receivables Company
11.31% Auto Loan Backed Notes, Class B
--------------------------------------
Dear Sirs:
SunAmerica Life Insurance Company (the "Purchaser") is today purchasing in
a private resale from AutoInfo Receivables Company (the "Issuer") the above
captioned notes (the "Notes"), issued pursuant to the Indenture dated as of
October 1, 1996 between AutoInfo Receivables Company as issuer (the "Company"),
AutoInfo Finance of Virginia, Inc., Crestar Bank and Bankers Trust Company, as
trustee (the "Trustee").
In connection with the purchase of the Notes, the Purchaser hereby
represents and warrants to you as follows:
1. The execution and delivery of this Representation Letter has been duly
authorized by the Purchaser by all necessary corporate action on its part.
E-2-1
2. The Purchaser understands that the Notes have not been and will not be
registered under the Securities Act of 1933, as amended (the "1933 Act"), in
reliance upon the exemption provided in Section 4(2) of the 1933 Act or any
other applicable exemption, that the Notes have not and will not be registered
or qualified under the securities or "blue sky" laws of any jurisdiction, that
the Notes may be resold (which resale is not currently contemplated) or
otherwise transferred only if so registered or qualified or if an exemption from
registration or qualification is available, that AutoInfo Receivables Company is
not required to register the Notes and that any transfer must comply with
Section 2.06 of the Indenture relating to the Notes.
3. The Purchaser is not acquiring the Notes with a view to, or for resale
in connection with, a distribution that would constitute a public offering
within the meaning of the 1933 Act or a violation of the 1933 Act or any state
securities law (subject to the understanding that disposition of the Purchaser's
property will remain at all times within its control). The Purchaser is not an
affiliate of the Trustee, any custodian of the Notes or the Company or any
affiliate thereof.
4. The Purchaser agrees that if at some time it wishes to dispose of or
exchange any of the Notes, it will not transfer or exchange any of the Notes
unless such transfer or exchange is in accordance with the provisions of Section
2.06 of the Indenture.
5. The Purchaser is a qualified institutional buyer as defined in Rule
144A of the 1933 Act and has completed either of the forms of certification to
that effect attached hereto as Annex 1 or Annex 2; it is aware that the sale to
it is being made in reliance on Rule 144A; it is acquiring the Notes for its own
account or for the account of a qualified institutional buyer, it understands
that such Notes may be resold, pledged or transferred only (i) to a person who
the Purchaser reasonably believes is a qualified institutional buyer that
purchases for its own account or for the account of a qualified institutional
buyer to whom notice is given that the resale, pledge or transfer is being made
in reliance on Rule 144A; or (ii) pursuant to another exemption from
registration under the 1933 Act.
6. Neither the Purchaser nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of any Note, any interest in
any Note to, or solicited any offer to buy or accept a transfer, pledge or other
disposition of any Note any interest in any Note with, any person in any manner,
or made any general solicitation by means of general advertising or in any other
manner, or taken any other action, which would constitute a distribution of the
Notes under the 1933 Act or which would render the disposition of any Note a
violation of Section 5 of the 1933 Act or any state securities law, require
registration or qualification pursuant thereto, nor has it authorized or will it
authorize any person to act, in such manner with respect to the Notes.
7. The Purchaser represents that either (a) it is not (i) an employee
benefit plan (as defined in section 3(3) of the Employee Retirement Security Act
of 1974, as amended
E-2-2
("ERISA") subject to the provisions of Title I of ERISA, (ii) a plan described
in section 4975(e)(1) of the Internal Revenue Code of 1986, as amended (the
"Code"), or (iii) an entity whose underlying assets are deemed to be assets of a
plan described in (i) or (ii) above by reason of such plan's investment in the
entity (any such entity described in clauses (i) through (iii), a "Benefit Plan
Entity") or (b) the Purchaser's purchase and holding of the Notes with the
assets of a Benefit Plan Entity will be covered by an ERISA statutory exemption
Department of Labor Administrative Exemption.
8. The Purchaser understands that there is no market, nor is there any
assurance that a market will develop, for the Notes and that the Issuer does not
have any obligation to make or facilitate any such market (or to otherwise
repurchase the Notes from the Purchaser) under any circumstances.
9. The Purchaser has consulted with its own legal counsel, independent
accountants and financial advisors to the extent it deems necessary regarding
the tax consequences to it of ownership of the Notes, is aware that its taxable
income with respect to the Notes in any accounting period may not correspond to
the cash flow (if any) from the Notes for such period, and is not purchasing the
Notes in reliance on any representations of the Issuer or its counsel with
respect to tax matters.
10. The Purchaser has reviewed the Private Placement Memorandum (the
"Placement Memorandum") dated October 11, 1996, with respect to the Notes, and
the agreements and other materials referred to therein, and has had the
opportunity to ask questions and receive answers concerning the terms and
conditions of the transactions contemplated by the Placement Memorandum and to
obtain additional information necessary to verify the accuracy and completeness
of any information furnished to the Purchaser or to which the Purchaser had
access.
11. The Purchaser hereby further agrees to be bound by all the terms and
conditions of the Notes as provided in the Indenture.
E-2-3
12. If the Purchaser sells any of the Notes, the Purchaser will obtain
from any subsequent purchaser the same representations contained in this
Representation Letter.
Very truly yours,
SUNAMERICA LIFE INSURANCE COMPANY
Dated: October 11, 1996
By: ____________________________________________________________
Name:
Title:
E-2-4
Qualified Institutional Buyer Status Under SEC Rule 144A
(Buyers other than investment companies)
Bankers Trust Company
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AutoInfo Receivables Company
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Black Diamond Securities, LLC
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Alex. ▇▇▇▇▇ & Sons Incorporated
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Name of Buyer: SunAmerica Life Insurance Company ("Buyer")
I hereby certify that as indicated below, I am the _______________ officer
of Buyer.
In connection with purchases by Buyer from time to time, I hereby certify
to you and, if you act as broker for one or more customers, to such customers,
that Buyer is a "qualified institutional buyer" as defined in Rule 144A under
the Securities Act of 1933 ("Rule 144A") because (i) Buyer owned and/or invested
on a discretionary basis $__________(1) in securities (except for the excluded
securities referred to below) as of the end of Buyer's most recent fiscal year
(such amount being calculated in accordance with Rule 144A) and (ii) Buyer
satisfies the criteria in the category marked below.
----------
(1) Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $10,000,000 in securities.
E-2-5
Corporation, etc. Buyer is a corporation (other than a bank, savings and
loan association or similar institution), Massachusetts or similar
business trust, partnership, or charitable organization described in
Section 501(c)(3) of the Internal Revenue Code.
Bank. Buyer (a) is a national bank or banking institution organized under
the laws of any State, territory or the District of Columbia, the business
of which is substantially confined to banking and is supervised by the
State or territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited net worth
of at least $25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
Savings and Loan. Buyer (a) is a savings and loan association, building
and loan association, cooperative bank, homestead association or similar
institution, which is supervised and examined by a State or Federal
authority having supervision over any such institution or is a foreign
savings and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in its latest
annual financial statements, a copy of which is attached hereto.
Broker-dealer. Buyer is a dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934.
Insurance Company. Buyer is an insurance company whose primary and
predominant business activity is the writing of insurance or the
reinsuring of risks underwritten by insurance companies and which is
subject to supervision by the insurance commissioner or a similar official
or agency of a State, territory or the District of Columbia.
State or Local Plan. Buyer is a plan established and maintained by a
State, its political subdivisions, or any agency or instrumentality of a
State or its political subdivisions, for the benefit of its employees.
ERISA Plan. Buyer is an employee benefit plan within the meaning of Title
I of the Employee Retirement Income Security Act of 1974.
Investment Advisor. Buyer is an investment advisor registered under the
Investment Advisers Act of 1940.
The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with Buyer, (ii) securities that are part of an
unsold allotment to or subscription by Buyer (if Buyer is a dealer), (iii)
securities issued or guaranteed by the U.S. or any instrumentality thereof, (iv)
bank deposit notes and certificates of deposit, (v)
E-2-6
loan participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
For purposes of determining the aggregate of securities owned and/or
invested on a discretionary basis by Buyer, Buyer used the cost of such
securities to Buyer and did not include any of the securities referred to in the
preceding paragraph.
Further, in determining such aggregate amount, Buyer may have included
securities owned by subsidiaries of Buyer, but only if such subsidiaries are
consolidated with Buyer in its financial statements prepared in accordance with
generally accepted accounting principles and if the investments of such
subsidiaries are managed under Buyer's direction. However, such securities were
not included if Buyer is a majority-owned, consolidated subsidiary of another
enterprise and Buyer is not itself a reporting company under the Securities
Exchange Act of 1934.
Buyer acknowledges that it is familiar with Rule 144A and understands that
you and your customers (if you act as a broker for one or more customers) are
and will continue to rely on the statements made herein because one or more
sales by you for your own account or your customer's account to Buyer may be in
reliance on Rule 144A.
___ ___ Will Buyer be purchasing Rule 144A
Yes No securities only for Buyer's own account?
If the answer to this question is "no", Buyer agrees that, in connection
with any purchase of securities sold to Buyer for the account of a third party
(including any separate account) in reliance on Rule 144A, Buyer will only
purchase for the account of a third party that at the time is a "qualified
institutional buyer" within the meaning of Rule 144A. In addition, Buyer agrees
that Buyer will not purchase securities for a third party unless Buyer has
obtained a current representation letter from such third party or taken other
appropriate steps contemplated by Rule 144A to conclude that such third party
independently meets the definition of "qualified institutional buyer" set forth
in Rule 144A.
Buyer agrees to notify you of any changes in the information and
conclusions herein. Until such notice is given to you, Buyer's purchase of
securities from you, or through you from your customers, will constitute a
reaffirmation of the foregoing certifications and acknowledgments as of the date
of such purchase.
E-2-7
Further, if Buyer is a bank or savings and loan as provided above, Buyer
agrees that it will furnish you with updated annual financial statements
promptly after they become available.
Date: October 11, 1996 Very truly yours,
SUNAMERICA LIFE INSURANCE
COMPANY
By __________________________________
Name:
Title:
E-2-8
Annex 2 to Exhibit E-2
Bankers Trust Company
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AutoInfo Receivables Company
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Black Diamond Securities, LLC
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Alex, ▇▇▇▇▇ & Sons Incorporated
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Name of Buyer: ("Buyer")
Name of Investment Adviser: ("Adviser")
I hereby certify that, as indicated below, I am the President, Chief
Financial Officer or Senior Vice President of Buyer or, if Buyer is a "qualified
institutional buyer" as defined in Rule 144A under the Securities Act of 1933
("Rule 144A") because Buyer is part of a Family of Investment Companies (as
defined below), of Adviser.
In connection with purchases by Buyer from time to time, I hereby certify
to you and, if you act as broker for one or more customers, to such customers,
that Buyer is a "qualified institutional buyer" as defined in Rule 144A under
the Securities Act of 1933 ("Rule 144A") because (i) Buyer is an investment
company registered under the Investment Company Act of 1940 and (ii) as marked
below, Buyer alone, or Buyer's Family of Investment Companies, owned at least
$100,000,000 in securities (other than the excluded securities referred to
below) as of the end of Buyer's most recent fiscal year.
Buyer owned $__________ in securities (other than the excluded
securities referred to below) as of the end of Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule
144A).
Buyer is part of a Family of Investment Companies which owned in the
aggregate $__________ in securities (other than the excluded
securities
E-2-1
referred to below) as of the end of Buyer's most recent fiscal year
(such amount being calculated in accordance with Rule 144A).
For purposes of determining the amount of securities owned by Buyer or Buyer's
Family of Investment Companies, I used the cost of such securities.
The term "Family of Investment Companies" as used herein means two or more
registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with Buyer or are part of Buyer's Family of
Investment Companies, (ii) securities issued or guaranteed by the U.S., or any
instrumentality thereof, (iii) bank deposit notes and certificates of deposit,
(iv) loan participations, (v) repurchase agreements, (vi) securities owned but
subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.
On behalf of Buyer, I acknowledge that Buyer is familiar with Rule 144A
and understands that you and your customers (if you act as a broker for one or
more customers) are and will continue to rely on the statements made herein
because one or more sales to Buyer by you for your own account or your
customer's account will be in reliance on Rule 144A. In addition, on behalf of
Buyer, I agree that, in connection with any purchase of securities sold by or
through you in reliance on Rule 144A, Buyer will only purchase for Buyer's own
account.
E-2-2
Finally, on behalf of Buyer or Adviser (as appropriate), I also agree to
notify you of any changes in the information and conclusions herein. Until such
notice is given to you, Buyer's purchase from time to time of securities from
you, or through you from your customers, will constitute a reaffirmation of the
foregoing certifications and acknowledgements by me as of the date of such
purchase.
Date: __________________ Very truly yours,
_______________________________________
Name:
Title:
On behalf of:
_______________________________________
Name of Buyer:
or
_______________________________________
Name of Adviser:
E-2-3
EXHIBIT F
to Indenture
FORM OF CERTIFICATION
[To be addressed to the Indenture Trustee and MBIA]
Re: The Indenture dated as of October 1, 1996 (the "Indenture"), by and among
AutoInfo Receivables Company, as Issuer, Bankers Trust Company, as
Indenture Trustee and Crestar Bank, as Custodian.
Ladies and Gentlemen:
In accordance with the provisions of Section 11.03 of the
above-referenced Indenture, the undersigned, as the Custodian, hereby certifies
that as to each Custodial File (other than any Loan Contract paid in full or any
Loan Contract listed on the attachment hereto) it has reviewed the documents in
such Custodial File and has determined that (i) all documents required to be
delivered to it pursuant to Section 11.03 of the Indenture are in its possession
and (ii) such documents have been reviewed by it and appear regular on their
face and related to such Loan Contracts. The Custodian makes no representations
as to and shall not be responsible to verify (i) the validity, legality,
enforceability, sufficiency, due authorization, recordability or genuineness of
any of the documents in the Custodial File or of any of the Loan Contracts or
(ii) the collectability, insurability, effectiveness or suitability of any such
Loan Contracts.
CRESTAR BANK, Custodian
By: ___________________________
Name:
Title:
F-1
Schedule 1
List of Loan Contracts
See Tab 12
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS.................................................................. 2
SECTION 1.01. Definitions............................................ 2
ARTICLE II
THE NOTES.................................................................... 23
SECTION 2.01. Form Generally......................................... 23
SECTION 2.02. Denomination........................................... 23
SECTION 2.03. Execution, Authentication, Delivery and Dating......... 23
SECTION 2.04. Temporary Notes........................................ 24
SECTION 2.05. Registration, Registration of Transfer and Exchange.... 24
SECTION 2.06. Limitation on Transfer and Exchange.................... 25
SECTION 2.07. Mutilated, Destroyed, Lost or Stolen Note.............. 26
SECTION 2.08. Payment of Principal and Interest; Principal and
Interest Rights Preserved...................................... 27
SECTION 2.09. Persons Deemed Owner................................... 29
SECTION 2.10. Cancellation........................................... 29
SECTION 2.11. Tax Treatment.......................................... 29
ARTICLE III
ISSUER REPRESENTATIONS, WARRANTIES AND COVENANTS............................. 30
SECTION 3.01. Representations, Warranties and Covenants of the
Issuer......................................................... 30
SECTION 3.02. Covenants.............................................. 32
SECTION 3.03. Representations and Warranties Regarding the Loan
Assets......................................................... 37
SECTION 3.04. Limitation on Liability of Directors, Officers, or
Employees of the Issuer........................................ 37
ARTICLE IV
ISSUANCE OF NOTES; REMOVAL OF COLLATERAL..................................... 38
SECTION 4.01. Conditions to Issuance of Notes........................ 38
SECTION 4.02. Security for Notes..................................... 39
SECTION 4.03. Removals of Loan Contracts............................. 40
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SECTION 4.04. Releases............................................... 41
SECTION 4.05. Trust Estate........................................... 41
ARTICLE V
SATISFACTION AND DISCHARGE................................................... 42
SECTION 5.01. Satisfaction and Discharge of Indenture................ 42
SECTION 5.02. Application of Trust Money............................. 42
ARTICLE VI
DEFAULTS..................................................................... 44
SECTION 6.01. Events of Default...................................... 44
SECTION 6.02. Indenture Trustee May File Proofs of Claim............. 45
SECTION 6.03. Indenture Trustee May Enforce Claims Without
Possession of Notes............................................ 46
SECTION 6.04. Limitation on Suits.................................... 47
SECTION 6.05. Unconditional Right of Noteholders to Receive
Principal and Interest......................................... 47
SECTION 6.06. Restoration of Rights and Remedies..................... 48
SECTION 6.07. Rights and Remedies Cumulative......................... 48
SECTION 6.08. Control by MBIA or Noteholders......................... 48
SECTION 6.09. Waiver of Certain Events by Less than All.............. 49
SECTION 6.10. Undertaking for Costs.................................. 49
SECTION 6.11. Waiver of Stay or Extension Laws....................... 49
SECTION 6.12. Action on Notes........................................ 50
SECTION 6.13. Delay or Omission; Not Waiver.......................... 50
ARTICLE VII
THE INDENTURE TRUSTEE........................................................ 51
SECTION 7.01. Certain Duties and Responsibilities of the Indenture
Trustee........................................................ 51
SECTION 7.02. Notice of Default and Reserve Account Increase
Events......................................................... 53
SECTION 7.03. Certain Rights of Indenture Trustee.................... 53
SECTION 7.04. Not Responsible for Recitals or Issuance of Notes...... 54
SECTION 7.05. May Hold Notes......................................... 55
SECTION 7.06. Money Held in Trust.................................... 55
SECTION 7.07. Compensation and Reimbursement......................... 55
SECTION 7.08. Corporate Trustee Required; Eligibility................ 56
SECTION 7.09. Resignation and Removal; Appointment of Successor...... 57
SECTION 7.10. Acceptance of Appointment by Successor................. 58
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SECTION 7.11. Merger, Conversion, Consolidation or Succession to
Business of Indenture Trustee.................................. 58
SECTION 7.12. Co-Indenture Trustees and Separate Indenture
Trustees....................................................... 59
SECTION 7.13. Rights with Respect to the Servicer.................... 60
SECTION 7.14. Appointment of Authenticating Agent.................... 61
SECTION 7.15. Money for Note Payments to Be Held in Trust............ 62
ARTICLE VIII
THE CLASS A NOTE INSURANCE POLICY............................................ 64
SECTION 8.01. Payments under the Class A Note Insurance Policy....... 64
ARTICLE IX
AMENDMENTS TO INDENTURE...................................................... 65
SECTION 9.01. Amendments without Consent of Noteholders.............. 65
SECTION 9.02. Amendments with Consent of Noteholders................. 66
SECTION 9.03. Execution of Amendments................................ 67
SECTION 9.04. Effect of Amendments................................... 67
SECTION 9.05. Reference in Notes to Amendments....................... 67
ARTICLE X
REDEMPTION OF NOTES.......................................................... 68
SECTION 10.01. Redemption at the Option of the Servicer; Election to
Redeem........................................................ 68
SECTION 10.02. Notice to Indenture Trustee; Deposit of Redemption
Price......................................................... 68
SECTION 10.03. Notice of Redemption by the Indenture Trustee........ 69
SECTION 10.04. Notes Payable on Redemption Date..................... 69
SECTION 10.05. Release of Loan Contracts to the Servicer............ 70
SECTION 10.06. Release of Loan Contracts to MBIA.................... 70
ARTICLE XI
THE CUSTODIAN................................................................ 71
SECTION 11.01. Acceptance by Indenture Trustee and Appointment of
the Custodian................................................. 71
SECTION 11.02. Obligations of the Custodian......................... 73
SECTION 11.03. Certification........................................ 73
SECTION 11.04. Future Defects....................................... 74
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SECTION 11.05. Fees of Custodian.................................... 74
SECTION 11.06. Liability of Custodian............................... 74
SECTION 11.07. Reliance of Custodian................................ 74
SECTION 11.08. Transmission of Custodial Files...................... 75
SECTION 11.09. Resignation and Removal; Appointment of Successor.... 75
SECTION 11.10. Acceptance of Appointment by Successor............... 76
SECTION 11.11. Merger, Conversion, Consolidation or Succession to
Business of Custodian.......................................... 76
SECTION 11.12. Representations and Warranties of the Custodian...... 77
ARTICLE XII
ACCOUNTS AND ACCOUNTING...................................................... 79
SECTION 12.01. Collection of Money; Class B Reserve Account
Deposit........................................................ 79
SECTION 12.02. Collection Account; Reserve Account; Redemption
Account; Class B Reserve Account Payments...................... 79
SECTION 12.03. Reports by the Indenture Trustee..................... 84
ARTICLE XIII
PROVISIONS OF GENERAL APPLICATION............................................ 86
SECTION 13.01. Acts of Noteholders.................................. 86
SECTION 13.02. Notices, etc., to Indenture Trustee, MBIA, Issuer and
Servicer....................................................... 86
SECTION 13.03. Notices to Noteholders; Waiver....................... 87
SECTION 13.04. Effect of Headings and Table of Contents............. 88
SECTION 13.05. Successor and Assigns................................ 88
SECTION 13.06. Separability......................................... 88
SECTION 13.07. Benefits of Indenture................................ 88
SECTION 13.08. Legal Holidays....................................... 88
SECTION 13.09. Governing Law........................................ 88
SECTION 13.10. Counterparts......................................... 89
SECTION 13.11. Corporate Obligation................................. 89
SECTION 13.12. Compliance Certificates and Opinions................. 89
SECTION 13.13. MBIA Default......................................... 90
SECTION 13.14. Parties not to Institute Insolvency Proceedings...... 90
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EXHIBITS
Exhibit A Form of Class A Note
Exhibit B Form of Class B Note
Exhibit C Form of Class A Note Insurance Policy
Exhibit D Cumulative Net Default Table
Exhibit E Form of Investment Letter
Exhibit F Form of Custodian Certification
Schedule 1 List of Loan Contracts
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