EXHIBIT 10.31
$125,000,000
Floating Rate Variable Funding Note
_________________________
SECOND AMENDED AND RESTATED INDENTURE
Dated as of April 13, 2005
_________________________
CPS WAREHOUSE TRUST,
Issuer
WESTLB AG,
Controlling Party
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
Trustee
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TABLE OF CONTENTS
PAGE NO.
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE...............................................2
SECTION 1.1. Definitions..................................................................2
SECTION 1.2. [Reserved]...................................................................3
SECTION 1.3. Other Definitional Provisions................................................3
ARTICLE II THE NOTE ...............................................................................3
SECTION 2.1. Form.........................................................................3
SECTION 2.2. Execution, Authentication and Delivery.......................................4
SECTION 2.3. [Reserved]...................................................................4
SECTION 2.4. Registration; Registration of Transfer and Exchange..........................4
SECTION 2.5. Restrictions on Transfer and Exchange........................................5
SECTION 2.6. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, Lost or Stolen Note....................................8
SECTION 2.7. Persons Deemed Owner.........................................................9
SECTION 2.8. Payment of Principal and Interest; Defaulted Interest........................9
SECTION 2.9. Cancellation................................................................10
SECTION 2.10. Release of Collateral......................................................10
SECTION 2.11. Amount Limited; Advances...................................................10
ARTICLE III COVENANTS ............................................................................10
SECTION 3.1. Payment of Principal and Interest...........................................10
SECTION 3.2. Maintenance of Office or Agency.............................................10
SECTION 3.3. Money for Payments to be Held in Trust......................................11
SECTION 3.4. Existence...................................................................12
SECTION 3.5. Protection of Trust Estate..................................................12
SECTION 3.6. Opinions as to Trust Estate.................................................12
SECTION 3.7. Performance of Obligations; Servicing of Receivables........................13
SECTION 3.8. Negative Covenants..........................................................13
SECTION 3.9. Annual Statement as to Compliance...........................................14
SECTION 3.10. Issuer May Consolidate, Etc. Only on Certain Terms.........................14
SECTION 3.11. Successor or Transferee....................................................16
SECTION 3.12. No Other Business..........................................................16
SECTION 3.13. No Borrowing...............................................................16
SECTION 3.14. Servicer's Obligations.....................................................16
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities..........................16
SECTION 3.16. Capital Expenditures.......................................................16
SECTION 3.17. Compliance with Laws.......................................................16
SECTION 3.18. Restricted Payments........................................................16
SECTION 3.19. Notice of Events of Default and Funding Termination Events.................17
SECTION 3.20. Further Instruments and Acts...............................................17
SECTION 3.21. Amendments of Sale and Servicing Agreement.................................17
SECTION 3.22. Income Tax Characterization................................................17
SECTION 3.23. Separate Existence of the Issuer...........................................17
SECTION 3.24. Amendment of Issuer's Organizational Documents.............................17
ARTICLE IV SATISFACTION AND DISCHARGE.............................................................17
SECTION 4.1. Satisfaction and Discharge of Indenture.....................................17
SECTION 4.2. Application of Trust Money..................................................18
SECTION 4.3. Repayment of Moneys Held by Note Paying Agent...............................18
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TABLE OF CONTENTS
(CONTINUED)
PAGE NO.
ARTICLE V REMEDIES ...............................................................................18
SECTION 5.1. Events of Default...........................................................18
SECTION 5.2. Rights Upon Event of Default................................................20
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by Trustee.............20
SECTION 5.4. Remedies....................................................................22
SECTION 5.5. Optional Preservation of the Receivables....................................22
SECTION 5.6. Priorities .................................................................22
SECTION 5.7. Limitation of Suits.........................................................22
SECTION 5.8. Unconditional Rights of the Noteholder to Receive Principal and Interest....23
SECTION 5.9. Restoration of Rights and Remedies..........................................23
SECTION 5.10. Rights and Remedies Cumulative.............................................23
SECTION 5.11. Delay or Omission Not a Waiver.............................................23
SECTION 5.12. [Reserved].................................................................23
SECTION 5.13. Waiver of Past Defaults....................................................23
SECTION 5.14. Undertaking for Costs......................................................24
SECTION 5.15. Waiver of Stay or Extension Laws...........................................24
SECTION 5.16. [Reserved].................................................................24
SECTION 5.17. [Reserved].................................................................24
SECTION 5.18. Consequences of TFC Funding Termination Event..............................24
ARTICLE VI THE TRUSTEE; THE AGENT.................................................................24
SECTION 6.1. Duties of Trustee...........................................................24
SECTION 6.2. Rights of Trustee...........................................................26
SECTION 6.3. Individual Rights of Trustee................................................26
SECTION 6.4. Trustee's Disclaimer........................................................27
SECTION 6.5. Notice of Defaults..........................................................27
SECTION 6.6. Reports by Trustee to the Noteholder........................................27
SECTION 6.7. Compensation and Indemnity..................................................27
SECTION 6.8. Replacement of Trustee......................................................27
SECTION 6.9. Successor Trustee by Merger.................................................28
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee..............................28
SECTION 6.11. Eligibility: Disqualification..............................................29
SECTION 6.12. [Reserved].................................................................29
SECTION 6.13. Appointment and Powers.....................................................29
SECTION 6.14. Performance of Duties......................................................30
SECTION 6.15. Limitation on Liability....................................................30
SECTION 6.16. [Reserved].................................................................30
SECTION 6.17. Successor Trustee..........................................................30
SECTION 6.18. [Reserved].................................................................31
SECTION 6.19. Representations and Warranties of the Trustee..............................31
SECTION 6.20. Waiver of Setoffs..........................................................31
SECTION 6.21. Control by the Agent.......................................................31
SECTION 6.22. Authorization and Action...................................................31
SECTION 6.23. Agent's Reliance, Etc......................................................32
ARTICLE VII [reserved]............................................................................32
ARTICLE VIII COLLECTION OF MONEY AND RELEASES OF TRUST ESTATE.....................................32
SECTION 8.1. Collection of Money.........................................................32
SECTION 8.2. Release of Trust Estate.....................................................32
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TABLE OF CONTENTS
(CONTINUED)
PAGE NO.
ARTICLE IX SUPPLEMENTAL INDENTURE.................................................................33
SECTION 9.1. Supplemental Indentures with Consent of the Agent...........................33
SECTION 9.2. Supplemental Indentures with Consent of the Noteholder......................33
SECTION 9.3. Execution of Supplemental Indentures........................................34
SECTION 9.4. Effect of Supplemental Indenture............................................35
SECTION 9.5. [Reserved]..................................................................35
ARTICLE X REPAYMENT AND PREPAYMENT OF NOTE........................................................35
SECTION 10.1. Repayment of the Note......................................................35
SECTION 10.2. Notice of Prepayment.......................................................35
SECTION 10.3. General Procedures.........................................................35
SECTION 10.4. [Reserved].................................................................35
ARTICLE XI MISCELLANEOUS..........................................................................36
SECTION 11.1. Compliance Certificates and Opinions, etc..................................36
SECTION 11.2. Form of Documents Delivered to Trustee.....................................37
SECTION 11.3. Acts of the Noteholder.....................................................37
SECTION 11.4. Notices, etc., to Trustee, Issuer, Agent and Rating Agencies...............38
SECTION 11.5. Waiver ....................................................................39
SECTION 11.6. Alternate Payment and Notice Provisions....................................39
SECTION 11.7. [Reserved].................................................................39
SECTION 11.8. Effect of Headings and Table of Contents...................................39
SECTION 11.9. Successors and Assigns.....................................................39
SECTION 11.10. Severability..............................................................39
SECTION 11.11. Benefits of Indenture.....................................................39
SECTION 11.12. Legal Holidays............................................................39
SECTION 11.13. Governing Law.............................................................39
SECTION 11.14. Counterparts..............................................................40
SECTION 11.15. Recording of Indenture....................................................40
SECTION 11.16. Issuer Obligation.........................................................40
SECTION 11.17. No Petition...............................................................40
SECTION 11.18. Inspection................................................................40
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SECOND AMENDED AND RESTATED INDENTURE, dated as of April 13, 2005 (as
amended, supplemented or otherwise modified from time to time in accordance with
the terms hereof, this "INDENTURE"), is made among CPS Warehouse Trust, a
Delaware statutory trust (the "ISSUER"), WestLB AG (f/k/a Westdeutsche
Landesbank Girozentrale) ("WESTLB"), as Controlling Party (in such capacity, the
"CONTROLLING PARTY"), and ▇▇▇▇▇ Fargo Bank, National Association ("▇▇▇▇▇
FARGO"), a national banking association, as successor-by-merger to ▇▇▇▇▇ Fargo
Bank Minnesota, National Association, as successor in interest to Bank One Trust
Company, N.A., as trustee (in such capacity, the "TRUSTEE").
The Issuer, WestLB and the Trustee (collectively, the "AMENDING
PARTIES") are party to that certain Indenture, dated as of March 7, 2002 (as
amended and supplemented, the "ORIGINAL INDENTURE"), which Original Indenture
was amended and restated as of November 30, 2004 (the "AMENDED AND RESTATED
INDENTURE"), pursuant to which the Issuer issued its Floating Rate Variable
Funding Note (as amended and restated, the "AMENDED AND RESTATED NOTE").
The Holder of the Amended and Restated Note received the benefit of a
financial guaranty insurance policy (the "NOTE POLICY") issued by XL Capital
Insurance Inc. ("XL") on the Closing Date, pursuant to which XL guaranteed
certain payments with respect to the Amended and Restated Note. As of the date
hereof, XL is being released, and releasing, as applicable, all of its rights,
duties and obligations under the Note Policy, the Amended and Restated Indenture
(including its right to consent to this Indenture) and the other Basic
Documents.
In connection with the above-described transactions, the Amending
Parties desire to amend and restate the Amended and Restated Indenture in its
entirety.
Each party hereto agrees as follows for the benefit of the other
parties and for the benefit of the Holder of the Issuer's Floating Rate Variable
Funding Note (the "NOTE"):
To secure the payment of principal of and interest on, and any other
amounts owing in respect of the Note, and to secure compliance with this
Indenture, the Issuer has agreed to pledge the Collateral (as defined below) as
collateral to the Trustee for the benefit of the Noteholder (as defined below).
GRANTING CLAUSE
The Issuer hereby Grants to the Trustee on each Funding Date, as
Trustee for the benefit of the Noteholder, all right, title and interest of the
Issuer, whether now existing or hereafter arising, in and to the following;
(a) the Receivables listed in the Schedule of Receivables from
time to time;
(b) all monies received under the Receivables after the related
Cutoff Date and all Net Liquidation Proceeds received with respect to
the Receivables after the related Cutoff Date;
(c) the security interests in the Financed Vehicles granted by
Obligors pursuant to the related Contracts and any other interest of
the Issuer in such Financed Vehicles, including, without limitation,
the certificates of title or, with respect to such Financed Vehicles in
the States listed in ANNEX B to the Sale and Servicing Agreement, other
evidence of title issued by the applicable Department of Motor Vehicles
or similar authority in such States, with respect to such Financed
Vehicles;
(d) any proceeds from claims on any Receivables Insurance Policies
or certificates relating to the Financed Vehicles securing the
Receivables or the Obligors thereunder;
(e) all proceeds from recourse against Dealers with respect to the
Receivables;
(f) refunds for the costs of extended service contracts with
respect to Financed Vehicles securing Receivables, refunds of unearned
premiums with respect to credit life and credit accident and health
insurance policies or certificates covering an Obligor or Financed
Vehicle under a Receivable or his or her obligations with respect to a
Financed Vehicle and any recourse to Dealers for any of the foregoing;
(g) the Receivable File related to each Receivable and all other
documents that the Issuer keeps on file in accordance with its
customary procedures relating to the Receivables, for Obligors of the
Financed Vehicles;
(h) all amounts and property from time to time held in or credited
to the Collection Account, the Note Distribution Account, the Principal
Funding Account, the Reserve Account and the Lockbox Accounts;
(i) all property (including the right to receive future Net
Liquidation Proceeds) that secures a Receivable that has been acquired
by or on behalf of the Issuer pursuant to a liquidation of such
Receivable;
(j) the Sale and Servicing Agreement, including a direct right to
cause the Seller to purchase Receivables from the Issuer pursuant to
the Sale and Servicing Agreement under the circumstances specified
therein;
(k) any Hedge Agreements;
(l) the Note Purchase Agreement;
(m) each TFC Assignment; and
(n) all present and future claims, demands, causes and choses in
action in respect of any or all of the foregoing and all payments on or
under and all proceeds of every kind and nature whatsoever in respect
of any or all of the foregoing, including all proceeds of the
conversion, voluntary or involuntary, into cash or other liquid
property, all cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, insurance
proceeds, condemnation awards, rights to payment of any and every kind
and other forms of obligations and receivables, instruments and other
property which at any time constitute all or part of or are included in
the proceeds of any of the foregoing (collectively, the property
described in this Granting Clause, the "COLLATERAL").
The foregoing Grant is made in trust to the Trustee, for the benefit of
the Noteholder to secure the payment of principal of and interest on, and any
other amounts owing in respect of the Note, to secure the Secured Obligations
and to secure compliance with this Indenture. The Trustee hereby acknowledges
such ▇▇▇▇▇, accepts the trusts under this Indenture in accordance with the
provisions of this Indenture and agrees to perform its duties as required in
this Indenture.
The amendment and restatement of this Indenture shall not be deemed to
be a novation or repayment of the outstanding Advances and the security interest
of the Trustee in the Collateral shall remain in full force and effect after
giving effect to the amendment and restatement of this Indenture.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
------------------------------------------
SECTION 1.1. DEFINITIONS. Except as otherwise specified herein, the
following terms have the respective meanings set forth below for all purposes of
this Indenture and the definitions of such terms are equally applicable to both
the singular and plural forms of such terms and to each gender.
2
Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to them in ANNEX A to the Second Amended and Restated
Sale and Servicing Agreement dated as of April 13, 2005 among the Issuer, the
Seller, the Servicer, West LB, as the Controlling Party, and ▇▇▇▇▇ Fargo, as
Backup Servicer and as Trustee, as the same may be amended or supplemented from
time to time (the "SALE AND SERVICING AGREEMENT").
SECTION 1.2. [Reserved].
SECTION 1.3. OTHER DEFINITIONAL PROVISIONS.
(i) All terms defined in this Indenture shall have the defined
meanings when used in any instrument governed hereby and in any
certificate or other document made or delivered pursuant hereto unless
otherwise defined therein.
(ii) Accounting terms used but not defined or partly defined in
this Indenture, in any instrument governed hereby or in any certificate
or other document made or delivered pursuant hereto, to the extent not
defined, shall have the respective meanings given to them under U.S.
generally accepted accounting principles as in effect on the date of
this Indenture or any such instrument, certificate or other document,
as applicable. To the extent that the definitions of accounting terms
in this Indenture or in any such instrument, certificate or other
document are inconsistent with the meanings of such terms under U.S.
generally accepted accounting principles, the definitions contained in
this Indenture or in any such instrument, certificate or other document
shall control.
(iii) The words "HEREOF," "HEREIN," "HEREUNDER" and words of
similar import when used in this Indenture shall refer to this
Indenture as a whole and not to any particular provision of this
Indenture.
(iv) Section, Schedule and Exhibit references contained in this
Indenture are references to Sections, Schedules and Exhibits in or to
this Indenture unless otherwise specified; and the term "INCLUDING"
shall mean "INCLUDING WITHOUT LIMITATION."
(v) The definitions contained in this Indenture are applicable to
the singular as well as the plural forms of such terms and to the
masculine as well as to the feminine and neuter genders of such terms.
(vi) Any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection
herewith means such agreement, instrument or statute as the same may
from time to time be amended, modified or supplemented and includes (in
the case of agreements or instruments) references to all attachments
and instruments associated therewith; all references to a Person
include its permitted successors and assigns.
ARTICLE II
THE NOTE
--------
SECTION 2.1. FORM.
(a) The Note, together with the Trustee's certificate of
authentication, shall be in substantially the form set forth in EXHIBIT A, with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture and may have such letters, numbers
or other marks of identification and such legends or endorsements placed thereon
as may, consistently herewith, be determined by the officers executing the Note,
as evidenced by their execution of the Note. Any portion of the text of the Note
may be set forth on the reverse thereof, with an appropriate reference thereto
on the face of the Note. Only one Note will be issued on the Closing Date which
Note shall be subject to Advances and prepayments from time to time in
accordance with SECTION 2.11 and ARTICLE X, respectively.
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(b) The Note shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods (with or without steel engraved
borders), all as determined by the officers executing the Note, as evidenced by
their execution of the Note.
(c) The terms of the Note set forth in EXHIBIT A are part of the terms
of this Indenture.
SECTION 2.2. EXECUTION, AUTHENTICATION AND DELIVERY.
(a) The Note shall be executed on behalf of the Issuer by any of its
Authorized Officers. The signature of any such Authorized Officer on the Note
may be manual or facsimile.
(b) A Note bearing the manual or facsimile signature of individuals who
were at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of the Note or did not hold
such offices at the date of the Note.
(c) The Trustee shall upon receipt of an Issuer Order for
authentication and delivery, authenticate and deliver the Note for original
issue in an aggregate principal amount up to, but not in excess of, the Maximum
Invested Amount.
(d) The Note shall be dated the date of its authentication.
(e) The Note shall not be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose, unless there appears attached to the
Note a certificate of authentication substantially in the form provided for
herein, executed by the Trustee by the manual signature of one of its authorized
signatories, and such certificate attached to the Note shall be conclusive
evidence, and the only evidence, that the Note has been duly authenticated and
delivered hereunder.
SECTION 2.3. [Reserved]
SECTION 2.4. REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE.
(a) The Issuer shall cause to be kept a register (the "NOTE REGISTER")
in which, subject to such reasonable regulations as it may prescribe and subject
to the provisions of Section 2.5, the Issuer shall provide for the registration
of the Note, and the registration of transfers and exchanges of the Note. The
Trustee shall be "NOTE REGISTRAR" for the purpose of registering the Note and
transfers of the Note as herein provided. Upon any resignation or removal of any
Note Registrar, the Issuer shall promptly appoint a successor or, if it elects
not to make such an appointment, assume the duties of Note Registrar.
(b) If a Person other than the Trustee is appointed by the Issuer as
Note Registrar, the Issuer will give the Trustee and the Controlling Party
prompt written notice of the appointment of such Note Registrar and of the
location, and any change in the location, of the Note Register, and the Trustee
and the Controlling Party shall have the right to inspect the Note Register at
all reasonable times and to obtain copies thereof. The Trustee shall have the
right to conclusively rely upon a certificate executed on behalf of the Note
Registrar by an Executive Officer thereof as to the name and address of the
Holder of the Note and the principal amounts and number of the Note.
(c) Subject to SECTION 2.5 hereof, upon surrender for registration of
transfer of any Note at the office or agency of the Issuer to be maintained as
provided in SECTION 3.2, if the requirements of Section 8-401(a) of the UCC are
met, the Trustee shall have the Issuer execute and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, a new Note in any authorized denomination and a like aggregate
principal amount.
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(d) At the option of the Holder, the Note may be exchanged for another
Note in any authorized denominations, of the same class and a like aggregate
principal amount, upon surrender of the Note to be exchanged at such office or
agency. Whenever the Note is so surrendered for exchange, subject to SECTION 2.5
hereof, if the requirements of Section 8-401(a) of the UCC are met, the Issuer
shall execute, and upon request by the Issuer the Trustee shall authenticate,
and the Noteholder shall obtain from the Trustee, the Note which the Noteholder
making the exchange is entitled to receive. Every Note presented or surrendered
for registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Issuer, the Trustee and the
Note Registrar duly executed by the Holder thereof or his attorney duly
authorized in writing.
(e) The Note issued upon any registration of transfer or exchange of
the Note shall be the valid obligation of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Note surrendered
upon such registration of transfer or exchange.
(f) Every Note presented or surrendered for registration of transfer or
exchange shall be (i) duly endorsed by, or accompanied by a written instrument
of transfer in the form attached to EXHIBIT B-1 duly executed by, the Holder
thereof or such Holder's attorney, duly authorized in writing, with such
signature guaranteed by an "ELIGIBLE GUARANTOR INSTITUTION" meeting the
requirements of the Note Registrar which requirements include membership or
participation in Securities Transfer Agents Medallion Program ("STAMP") or such
other "SIGNATURE GUARANTEE PROGRAM" as may be determined by the Note Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Exchange Act and (ii) accompanied by such other documents as the Trustee may
require.
(g) No service charge shall be made to a Holder for any registration of
transfer or exchange of the Note, but the Note Registrar may require payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of the Note,
other than exchanges pursuant to SECTION 9.6 not involving any transfer.
(h) The preceding provisions of this SECTION 2.4 notwithstanding, the
Issuer shall not be required to make and the Note Registrar shall not register
transfers or exchanges of the Note selected for redemption or of any Note for a
period of 15 days preceding the due date for any payment with respect to the
Note.
SECTION 2.5. RESTRICTIONS ON TRANSFER AND EXCHANGE.
(a) No transfer of the Note shall be made unless such transfer is made
(i) to the Issuer or an Affiliate of the Issuer, or (ii) to any person the
transferor reasonably believes is a qualified institutional buyer (as defined in
Rule 144A under the Securities Act) in a transaction meeting the requirements of
Rule 144A under the Securities Act, or (iii) (A) in compliance with Section
2.5(c) hereof, to an institutional investor that is an "accredited investor" as
defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D promulgated under the
Securities Act in compliance with Section 2.5(d) hereof, or (B) in a transaction
complying with or exempt from the registration requirements of the Securities
Act and in accordance with any applicable securities laws of any state of the
United States or any other jurisdiction; PROVIDED, that in the case of CLAUSE
(III) (except in the case of the initial transfer to the Noteholder), the
Trustee or the Issuer may require an Opinion of Counsel to the effect that such
transfer may be effected without registration under the Securities Act, which
Opinion of Counsel, if so required, shall be addressed to the Issuer and the
Trustee and shall be secured at the expense of the Holder. Each prospective
purchaser by its acquisition of the Note, acknowledges that the Note will
contain a legend substantially to the effect set forth in SECTION 2.5(D) (unless
the Issuer determines otherwise in accordance with applicable law).
Any transfer or exchange of a Note to a proposed transferee taking such
transfer in the form of a Note shall be conducted in accordance with the
provisions of Section 2.4, and shall be contingent upon receipt by the Note
Registrar of (A) such Note, if applicable, properly endorsed for assignment or
transfer or (B) written instructions from such Transferor directing the Note
Registrar to cause to be credited the beneficial interest in or amount of the
corresponding Note to the account designated by such Transferor in an amount
equal to the amount of such Note or beneficial interest to be transferred (but
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not less than the minimum authorized denomination applicable to the Note) and
(C) such certificates or signatures as may be required under the Note or this
Section 2.5, in each case, in form and substance satisfactory to the Note
Registrar. The Note Registrar shall cause any such transfers and related
cancellations or increases and related reductions, as applicable, to be properly
recorded in its books in accordance with the requirements of Section 2.4.
(b) Transfers to Qualified Institutional Buyers are subject to the
following:
(i) Each purchaser of the Note that is a qualified
institutional buyer will be deemed to have represented and agreed as
follows (terms used in this paragraph that are defined in Rule 144A
under the Securities Act are used herein as defined therein):
(A) The purchaser (1) is a qualified institutional
buyer, (2) is aware that the sale of the Note to it is being
made in reliance on the exemption from registration provided
by Rule 144A under the Securities Act and (3) is acquiring the
Note for its own account or for one or more accounts, each of
which is a qualified institutional buyer, and as to each of
which the purchaser exercises sole investment discretion, for
the purchaser and for each such account. The purchaser has
such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of
its investment in the Note, and the purchaser and any accounts
for which it is acting are each able to bear the economic risk
of the purchaser's or its investment.
(B) The purchaser understands that the Note is being
offered only in a transaction not involving any public
offering in the United States within the meaning of the
Securities Act, the Note has not been and will not be
registered under the Securities Act, and, if in the future the
purchaser decides to offer, resell, pledge or otherwise
transfer the Note, the Note may be offered, resold, pledged or
otherwise transferred only in accordance with the legend on
the Note set forth in Section 2.5(d). The purchaser
acknowledges that no representation is made by the Issuer as
to the availability of any exemption under the Securities Act
or any state securities laws for resale of the Note.
(C) The purchaser is not purchasing the Note with a view
to the resale, distribution or other disposition thereof in
violation of the Securities Act. The purchaser understands
that an investment in the Note involves certain risks,
including the risk of loss of a substantial part of its
investment under certain circumstances. The purchaser has had
access to such financial and other information concerning the
Issuer and the Note as it deemed necessary or appropriate in
order to make an informed investment decision with respect to
its purchase of the Note, including an opportunity to ask
questions of and request information from the Noteholder and
the Issuer.
(D) In connection with the transfer of the Note: (i)
none of the Issuer or the Noteholder is acting as a fiduciary
or financial or investment adviser for the purchaser; (ii) the
purchaser is not relying (for purposes of making any
investment decision or otherwise) upon any advice, counsel or
representations (whether written or oral) of the Issuer or the
Noteholder other than any representations expressly set forth
in a written agreement with such party; (iii) none of the
Issuer or the Noteholder has given to the purchaser (directly
or indirectly through any other person) any assurance,
guarantee, or representation whatsoever as to the expected or
projected success, profitability, return, performance, result,
effect, consequence, or benefit (including legal, regulatory,
tax, financial, accounting, or otherwise) of the Indenture or
documentation for the Note; (iv) the purchaser has consulted
with its own legal, regulatory, tax, business, investment,
financial, and accounting advisers to the extent it has deemed
necessary, and it has made its own investment decisions
(including decisions regarding the suitability of any
transaction pursuant to the Indenture) based upon its own
judgment and upon any advice from such advisers as it has
deemed necessary and not upon any view expressed by the
Issuer; (v) the purchaser has determined that the rates,
prices or amounts and other terms of the purchase and sale of
the Note reflect those in the relevant market for similar
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transactions; (vi) the purchaser is acquiring the Note with a
full understanding of all of the terms, conditions and risks
thereof (economic and otherwise), and it is capable of
assuming and willing to assume (financially and otherwise)
those risks; and (vii) the purchaser is a sophisticated
investor.
(E) The purchaser understands that the Note will bear
the legend set forth in SECTION 2.5(D).
(F) The purchaser will not, at any time, offer to buy or
offer to sell the Note by any form of general solicitation or
advertising, including, but not limited to, any advertisement,
article, notice or other communication published in any
newspaper, magazine or similar medium or broadcast over
television or radio or seminar or meeting whose attendees have
been invited by general solicitations or advertisings.
(G) The purchaser represents that either (1) it is not a
Benefit Plan and is not acting on behalf of or investing plan
assets of a Benefit Plan or (2) the purchaser's purchase and
holding of the Note is entitled to exemptive relief from the
prohibited transaction rules of Section 406 of ERISA and
Section 4975 of the Code pursuant to a U.S. Department of
Labor prohibited transaction class exemption.
(H) The purchaser acknowledges that the Issuer, the
Noteholder and others will rely upon the truth and accuracy of
the foregoing acknowledgments, representations and agreements
and agrees that, if any of the acknowledgments,
representations or warranties deemed to have been made by it
by or in connection with its purchase of the Note are no
longer accurate, it shall promptly notify the Issuer and the
Noteholder. If the purchaser is acquiring the Note as a
fiduciary or agent for one or more investor accounts, it shall
be deemed to have represented that it has sole investment
discretion with respect to each such account and that it has
full power to make the foregoing acknowledgments,
representations and agreements on behalf of each such account.
(I) In connection with a transfer of the Note, the
Issuer shall furnish upon request of a Noteholder to the
Noteholder and any prospective purchaser designated by the
Noteholder the information required to be delivered under
paragraph (d)(4) of Rule 144A of the Securities Act.
(J) Any information the purchaser desires concerning the
Issuer, the Note or any other matter relevant to its decision
to purchase the Note is or has been made available to it.
(c) If the Note is sold in the United States to U.S. Persons under
Section 4(2) of the Securities Act to a limited number of institutional
"ACCREDITED INVESTORS" (as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act), it shall be issued in the form of certificated Note in
definitive, fully registered form without interest coupons with the applicable
legends set forth in the form of the Note registered in the name of the
beneficial owner or a nominee thereof, duly executed by the Issuer and
authenticated by the Trustee as hereinafter provided (a "Definitive Note"). Any
transfer to an institutional "ACCREDITED INVESTOR" is expressly conditioned upon
the requirement that such transferee shall deliver a Transferee's Certificate in
the form of EXHIBIT B-2.
(d) LEGENDING OF THE NOTE. Unless the Issuer determines otherwise in
accordance with applicable law, the Note shall have the following legend:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS OR "BLUE SKY" LAWS. THE HOLDER HEREOF, BY
PURCHASING ANY NOTE, AGREES FOR THE BENEFIT OF THE ISSUER THAT
IT IS AN INSTITUTIONAL INVESTOR THAT IS AN "ACCREDITED
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INVESTOR" AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF
REGULATION D PROMULGATED UNDER THE SECURITIES ACT AND THAT
SUCH NOTE IS BEING ACQUIRED FOR ITS OWN ACCOUNT FOR INVESTMENT
AND NOT WITH A VIEW TO DISTRIBUTION AND MAY BE RESOLD, PLEDGED
OR TRANSFERRED ONLY TO (1) THE ISSUER (UPON REDEMPTION THEREOF
OR OTHERWISE) OR AN AFFILIATE OF THE ISSUER, (2) TO A PERSON
THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A OR (3) IN A TRANSACTION OTHERWISE EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
JURISDICTION, IN EACH SUCH CASE, IN COMPLIANCE WITH THE
INDENTURE AND ALL APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES OR ANY OTHER JURISDICTION; PROVIDED, THAT
THE TRUSTEE OR THE ISSUER MAY REQUIRE AN OPINION OF COUNSEL TO
THE EFFECT THAT SUCH TRANSFER MAY BE EFFECTED WITHOUT
REGISTRATION UNDER THE SECURITIES ACT, WHICH OPINION OF
COUNSEL, IF SO REQUIRED, SHALL BE ADDRESSED TO THE ISSUER AND
THE TRUSTEE AND SHALL BE SECURED AT THE EXPENSE OF THE HOLDER.
SECTION 2.6. MUTILATED, DESTROYED, LOST OR STOLEN NOTE.
(a) If (i) any mutilated Note is surrendered to the Trustee, or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, and (ii) there is delivered to the Trustee and the Controlling
Party such security or indemnity as may be required by it to hold the Issuer,
the Trustee and the Controlling Party harmless, then, in the absence of notice
to the Issuer, the Note Registrar or the Trustee that such Note has been
acquired by a bona fide purchaser, and, provided that the requirements of
Section 8-405 and 8-406 of the UCC are met, the Issuer shall execute, and upon
request by the Issuer, the Trustee shall authenticate and deliver in exchange
for or in lieu of any such mutilated, destroyed, lost or stolen Note, a
replacement Note; PROVIDED, HOWEVER, that if any such destroyed, lost or stolen
Note, but not a mutilated Note, shall have become, or within seven days shall
be, due and payable or shall have been called for redemption, instead of issuing
a replacement Note, the Issuer may direct the Trustee, in writing, to pay such
destroyed, lost or stolen Note when so due or payable without surrender thereof.
If, after the delivery of such replacement Note or payment of a destroyed, lost
or stolen Note pursuant to the preceding sentence, a bona fide purchaser of the
original Note in lieu of which such replacement Note was issued, presents for
payment such original Note, the Issuer, the Trustee and the Controlling Party
shall be entitled to recover such replacement Note (or such payment) from the
Person to whom it was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer or the Trustee in connection therewith.
(b) Upon the issuance of any replacement Note under this Section, the
Issuer may require the payment by the Holder of such Note of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Trustee) connected therewith.
(c) Every replacement Note issued pursuant to this Section in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with the Note duly issued hereunder.
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(d) The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of the mutilated, destroyed, lost or stolen Note.
SECTION 2.7. PERSONS DEEMED OWNER. Prior to due presentment for
registration of transfer of any Note, the Issuer and the Trustee and any agent
of the Issuer or the Trustee may treat the Person in whose name any Note is
registered (as of the applicable Record Date) as the owner of such Note for the
purpose of receiving payments of principal of and interest, if any, on such
Note, for all other purposes whatsoever and whether or not such Note be overdue,
and none of the Issuer, the Controlling Party or the Trustee or any agent of the
Issuer, the Controlling Party or the Trustee shall be affected by notice to the
contrary.
SECTION 2.8. PAYMENT OF PRINCIPAL AND INTEREST; DEFAULTED INTEREST. The
Note shall accrue interest as provided in the form of the Note set forth in
EXHIBIT A, and such interest shall be due and payable on each Settlement Date,
as specified therein. Any installment of interest or principal, if any, payable
on the Note which is punctually paid or duly provided for by the Issuer on the
applicable Settlement Date shall be paid to the Person in whose name such Note
is registered on the Record Date, either by wire transfer in immediately
available funds to such Person's account as it appears on the Note Register on
such Record Date if (i) such Noteholder has provided to the Note Registrar
appropriate written instructions at least five Business Days prior to such
Settlement Date and such Holder's Note in the aggregate evidence a denomination
of not less than $1,000,000 or (ii) such Noteholder is the Seller, or an
Affiliate thereof, or if not by check mailed to such Noteholder at the address
of such Noteholder appearing on the Note Register, except that, unless a
Definitive Note has been issued pursuant to SECTION 2.5, with respect to the
Note registered on the Record Date in the name of the nominee of the Clearing
Agency (initially, such nominee to be Cede & Co.), payment will be made by wire
transfer in immediately available funds to the account designated by such
nominee, except for the final installment of principal payable with respect to
such Note on a Settlement Date or on the Final Scheduled Settlement Date, which
shall be payable as provided below.
(b) The principal of the Note shall be due and payable in full on the
last day of the third Interest Period after the Facility Termination Date as
provided in the form of the Note set forth in EXHIBIT A. Notwithstanding the
foregoing, the entire unpaid principal amount of the Note shall be due and
payable, if not previously paid, on the date on which an Event of Default shall
have occurred and be continuing in the manner and under the circumstances
provided in SECTION 5.2. All principal payments on the Note shall be made pro
rata to the Noteholder entitled thereto. Upon written notice from the Issuer,
the Trustee shall notify the Controlling Party and the Person in whose name a
Note is registered at the close of business on the Record Date preceding the
Settlement Date on which the Issuer expects that the final installment of
principal of and interest on such Note will be paid. Such notice shall be mailed
or transmitted by facsimile prior to such final Settlement Date and shall
specify that such final installment will be payable only upon presentation and
surrender of such Note and shall specify the place where such Note may be
presented and surrendered for payment of such installment.
(c) If the Issuer defaults in a payment of interest on the Note, the
Issuer shall pay defaulted interest (plus interest on such defaulted interest to
the extent lawful) at the Note Interest Rate then in effect. The Issuer may pay
such defaulted interest to the Noteholder on the immediately following
Settlement Date, and if such amount is not paid on such following Settlement
Date, then on a subsequent special record date, which date shall be at least
five Business Days prior to the Settlement Date. The Issuer shall fix or cause
to be fixed any such special record date and Settlement Date, and, at least 15
days before any such special record date, the Issuer shall mail to the
Controlling Party, the Noteholder and the Trustee a notice that states the
special record date, the Settlement Date and the amount of defaulted interest to
be paid.
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SECTION 2.9. CANCELLATION. Subject to SECTION 2.8(C), the Note
surrendered for payment, registration of transfer, exchange or redemption shall,
if surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by the Trustee. Subject to SECTION 2.8(C), the
Issuer may at any time deliver to the Trustee for cancellation any Note
previously authenticated and delivered hereunder which the Issuer may have
acquired in any manner whatsoever, and the Note so delivered shall be promptly
canceled by the Trustee. No Note shall be authenticated in lieu of or in
exchange for any Note canceled as provided in this Section, except as expressly
permitted by this Indenture. Subject to SECTION 2.8(C), the canceled Note may be
held or disposed of by the Trustee in accordance with its standard retention or
disposal policy as in effect at the time unless the Issuer shall direct by an
Issuer Order that the Note be destroyed or returned to it; PROVIDED that such
Issuer Order is timely and the Note has not been previously disposed of by the
Trustee.
SECTION 2.10. [RESERVED].
SECTION 2.11. AMOUNT LIMITED; ADVANCES.
The maximum aggregate principal amount of the Note which may be
authenticated and delivered and Outstanding at any time under this Indenture is
limited to the Maximum Invested Amount.
On each Business Day prior to the Facility Termination Date that is a
Funding Date, and upon the satisfaction of all conditions precedent to (a) the
funding of an Advance and (b) the purchase of Receivables, in each case as set
forth in SECTION 2.1(B) of the Sale and Servicing Agreement and SECTION 7.02 and
SECTION 7.03 of the Note Purchase Agreement, the Issuer shall be entitled to
borrow additional funds pursuant to an Advance on such Funding Date in an
aggregate principal amount equal to the Advance Amount with respect to such
Funding Date. Each request by the Issuer for an Advance shall be deemed to be a
certification by the Issuer as to the satisfaction of the conditions specified
in the previous sentence.
The aggregate outstanding principal amount of the Note may be increased
through the funding of the Advances. Each Advance and corresponding Advance
Amount shall be recorded on the grid attached to the Note or in an electronic
file substantially in the same form as such grid. The grid (or such electronic
file) shall show all Advance Amounts and prepayments. The Controlling Party
shall be responsible for maintaining the grid with respect to the Note. Absent
manifest error, all such grid entries (whether manual or in electronic form)
shall be dispositive with respect to the determination of the outstanding
principal amount of the Note. The Note (i) can be funded by Advances on any
Funding Date in a minimum amount of $1,000,000 and any higher amount (subject to
the Maximum Invested Amount), and (ii) subject to subsequent Advances pursuant
to this SECTION 2.11, are subject to prepayment in whole or in part, at the
option of the Issuer as provided in Article X herein.
ARTICLE III
COVENANTS
---------
SECTION 3.1. PAYMENT OF PRINCIPAL AND INTEREST. The Issuer will duly
and punctually pay the principal of and interest on the Note in accordance with
the terms of the Note and this Indenture. Without limiting the foregoing, the
Issuer will cause to be distributed on each Settlement Date all amounts
deposited in the Note Distribution Account pursuant to the Sale and Servicing
Agreement to the Noteholder. Amounts properly withheld under the Code by any
Person from a payment to the Noteholder of interest and/or principal shall be
considered as having been paid by the Issuer to the Noteholder for all purposes
of this Indenture.
SECTION 3.2. MAINTENANCE OF OFFICE OR AGENCY. The Issuer will maintain
in Minneapolis, Minnesota, an office or agency where the Note may be surrendered
for registration of transfer or exchange, and where notices and demands to or
upon the Issuer in respect of the Note and this Indenture may be served. The
Issuer hereby initially appoints the Trustee to serve as its agent for the
foregoing purposes. The Issuer will give prompt written notice to the Trustee
and the Controlling Party of the location, and of any change in the location, of
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any such office or agency. If at any time the Issuer shall fail to maintain any
such office or agency or shall fail to furnish the Trustee and the Controlling
Party with the address thereof, such surrenders, notices and demands may be made
or served at the Corporate Trust Office, and the Issuer hereby appoints the
Trustee as its agent to receive all such surrenders, notices and demands.
SECTION 3.3. MONEY FOR PAYMENTS TO BE HELD IN TRUST.
(a) On or before each Settlement Date, the Issuer shall deposit or
cause to be deposited in the Note Distribution Account from the Collection
Account an aggregate sum sufficient to pay the amounts then becoming due under
the Note, such sum to be held in trust for the benefit of the Persons entitled
thereto and (unless the Note Paying Agent is the Trustee) shall promptly notify
the Trustee of its action or failure so to act.
(b) The Issuer shall cause each Note Paying Agent other than the
Trustee to execute and deliver to the Trustee, the Controlling Party and the
Noteholder an instrument in which such Note Paying Agent shall agree with the
Trustee (and if the Trustee acts as Note Paying Agent, it hereby so agrees),
subject to the provisions of this Section, that such Note Paying Agent shall:
(i) hold all sums held by it for the payment of amounts due with
respect to the Note in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and pay such sums to such Persons as
herein provided;
(ii) give the Trustee and the Controlling Party notice of any
default by the Issuer (or any other obligor upon the Note) of which it
has actual knowledge in the making of any payment required to be made
with respect to the Note;
(iii) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all
sums so held in trust by such Note Paying Agent;
(iv) immediately resign as a Note Paying Agent and forthwith pay
to the Trustee all sums held by it in trust for the payment of the Note
if at any time it ceases to meet the standards required to be met by a
Note Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on the Note of any applicable
withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith.
(c) The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Note Paying Agent to pay to the Trustee all sums held in trust
by such Note Paying Agent, such sums to be held by the Trustee upon the same
trusts as those upon which the sums were held by such Note Paying Agent; and
upon such a payment by any Note Paying Agent to the Trustee, such Note Paying
Agent shall be released from all further liability with respect to such money.
(d) Subject to applicable laws with respect to the escheat of funds,
any money held by the Trustee or any Note Paying Agent in trust for the payment
of any amount due with respect to the Note and remaining unclaimed for two years
after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuer on Issuer Request with the consent of the Controlling
Party and shall be deposited by the Trustee in the Collection Account; and the
Holder of the Note shall thereafter, as an unsecured general creditor, look only
to the Issuer for payment thereof (but only to the extent of the amounts so paid
to the Issuer), and all liability of the Trustee or such Note Paying Agent with
respect to such trust money shall thereupon cease; provided, however, that the
Trustee or such Note Paying Agent, before being required to make any such
repayment, shall at the expense of the Issuer cause to be published once, in a
newspaper published in the English language, customarily published on each
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Business Day and of general circulation in the City of New York, notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Issuer. The Trustee
shall also adopt and employ, at the expense of the Issuer, any other reasonable
means of notification of such repayment (including, but not limited to, mailing
notice of such repayment to the Holder whose Note has been called but has not
been surrendered for redemption or whose right to or interest in moneys due and
payable but not claimed is determinable from the records of the Trustee or of
any Note Paying Agent, at the last address of record for each such Holder).
SECTION 3.4. EXISTENCE. Except as otherwise permitted by the provisions
of SECTION 3.10, the Issuer will keep in full effect its existence, rights and
franchises as a statutory trust under the laws of the State of Delaware (unless
it becomes, or any successor Issuer hereunder is or becomes, organized under the
laws of any other state or of the United States of America, in which case the
Issuer will keep in full effect its existence, rights and franchises under the
laws of such other jurisdiction) and will obtain and preserve its qualification
to do business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Indenture, the
Note, the Collateral and each other instrument or agreement included in the
Trust Estate.
SECTION 3.5. PROTECTION OF TRUST ESTATE. The Issuer intends the
security interest Granted pursuant to this Indenture in favor of the Noteholder
to be prior to all other liens in respect of the Trust Estate, and the Issuer
shall take all actions necessary to obtain and maintain, in favor of the
Trustee, for the benefit of the Noteholder, a first lien on and a first
priority, perfected security interest in the Trust Estate. The Issuer will from
time to time prepare (or shall cause to be prepared), execute and deliver all
such supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance and other instruments,
and will take such other action necessary or advisable to:
(i) Grant more effectively all or any portion of the Trust Estate;
(ii) maintain or preserve the lien and security interest (and the
priority thereof) in favor of the Trustee for the benefit of the
Noteholder created by this Indenture or carry out more effectively the
purposes hereof;
(iii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(iv) enforce any of the Collateral;
(v) preserve and defend title to the Trust Estate and the rights
of the Trustee and the Noteholder in such Trust Estate against the
claims of all persons and parties; and
(vi) pay all taxes or assessments levied or assessed upon the
Trust Estate when due.
The Issuer hereby designates the Trustee its agent and attorney-in-fact to
execute any financing statement, continuation statement or other instrument
required by the Trustee pursuant to this Section.
SECTION 3.6. OPINIONS AS TO TRUST ESTATE.
(a) On the Closing Date, the Issuer shall furnish to the Trustee and
the Controlling Party an Opinion of Counsel either stating that, in the opinion
of such counsel, such action has been taken with respect to the recording and
filing of this Indenture, any indentures supplemental hereto, and any other
requisite documents, and with respect to the execution and filing of any
financing statements and continuation statements, as are necessary to perfect
and make effective the first priority lien and security interest in favor of the
Trustee, for the benefit of the Noteholder, created by this Indenture in the
Receivables and such other items of Collateral that the Controlling Party or the
Noteholder may reasonably request be the subject of such opinion (the "OPINION
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Collateral") and reciting the details of such action, or stating that, in the
opinion of such counsel, no such action is necessary to make such lien and
security interest effective.
(b) Within 90 days after the beginning of each calendar year, beginning
with the 2006 calendar year, the Issuer shall furnish to the Trustee and the
Controlling Party an Opinion of Counsel either stating that, in the opinion of
such counsel, such action has been taken with respect to the recording, filing,
re-recording and refiling of this Indenture, any indentures supplemental hereto
and any other requisite documents and with respect to the execution and filing
of any financing statements and continuation statements as are necessary to
maintain the lien and security interest created by this Indenture in the
Receivables and Opinion Collateral and reciting the details of such action or
stating that in the opinion of such counsel no such action is necessary to
maintain such lien and security interest. Such Opinion of Counsel shall also
describe any action necessary (as of the date of such opinion) to be taken in
the following year to maintain the lien and security interest of this Indenture
in the Receivables and Opinion Collateral.
SECTION 3.7. PERFORMANCE OF OBLIGATIONS; SERVICING OF RECEIVABLES.
(a) The Issuer will not take any action and will use its best efforts
not to permit any action to be taken by others that would release any Person
from any of such Person's material covenants or obligations under any instrument
or agreement included in the Trust Estate or that would result in the amendment,
hypothecation, subordination, termination or discharge of or impair the validity
or effectiveness of, any such instrument or agreement, except as ordered by any
bankruptcy or other court or as expressly provided in this Indenture, the other
Basic Documents or such other instrument or agreement.
(b) The Issuer may contract with other Persons acceptable to the
Controlling Party to assist it in performing its duties under this Indenture,
and any performance of such duties by a Person identified to the Trustee in an
Officer's Certificate of the Issuer shall be deemed to be action taken by the
Issuer. Initially, the Issuer has contracted with the Servicer and the Backup
Servicer to assist the Issuer in performing its duties under this Indenture.
(c) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the other Basic
Documents and in the instruments and agreements included in the Trust Estate,
including but not limited to preparing (or causing to be prepared) and filing
(or causing to be filed) all UCC financing statements and continuation
statements required to be filed by the terms of this Indenture and the Sale and
Servicing Agreement in accordance with and within the time periods provided for
herein and therein. Except as otherwise expressly provided therein, the Issuer
shall not waive, amend, modify, supplement or terminate any Basic Document or
any provision thereof without the consent of the Controlling Party.
(d) If a responsible officer of the Issuer shall have written notice or
actual knowledge of the occurrence of a Servicer Termination Event or Funding
Termination Event under the Sale and Servicing Agreement, the Issuer shall
promptly notify the Trustee, the Controlling Party and the Rating Agencies
thereof in accordance with SECTION 11.4, and shall specify in such notice the
action, if any, the Issuer is taking in respect of such default. If a Servicer
Termination Event or Funding Termination Event shall arise from the failure of
the Servicer to perform any of its duties or obligations under the Sale and
Servicing Agreement with respect to the Receivables, the Issuer shall take all
reasonable steps available to it to remedy such failure.
(e) The Issuer agrees that it will not waive timely performance or
observance by the Servicer or the Seller of their respective duties under the
Basic Documents without the prior consent of the Controlling Party.
SECTION 3.8. NEGATIVE COVENANTS. Prior to the Termination Date, the
Issuer shall not:
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(i) except as expressly permitted by this Indenture or the other
Basic Documents, sell, transfer, exchange or otherwise dispose of any
of the properties or assets of the Issuer, including those included in
the Trust Estate, unless directed to do so by the Controlling Party or
the Controlling Party has approved such disposition;
(ii) claim any credit on, or make any deduction from the principal
or interest payable in respect of, the Note (other than amounts
properly withheld from such payments under the Code) or assert any
claim against any present or former Noteholder by reason of the payment
of the taxes levied or assessed upon any part of the Trust Estate; or
(iii) (A) permit the validity or effectiveness of this Indenture
to be impaired, or permit the lien in favor of the Trustee created by
this Indenture to be amended, hypothecated, subordinated, terminated or
discharged, or permit any Person to be released from any covenants or
obligations under this Indenture except as may be expressly permitted
hereby, (B) permit any lien, charge, excise, claim, security interest,
mortgage or other encumbrance (other than the lien of this Indenture)
to be created on or extend to or otherwise arise upon or burden the
Trust Estate or any part thereof or any interest therein or the
proceeds thereof (other than tax liens, mechanics' liens and other
liens that arise by operation of law, in each case on a Financed
Vehicle and arising solely as a result of an action or omission of the
related Obligor), (C) permit the lien of this Indenture not to
constitute a valid first priority (other than with respect to any such
tax, mechanics' or other lien) perfected security interest in the Trust
Estate or (D) amend, modify or fail to comply with the provisions of
the Basic Documents without the prior written consent of the
Controlling Party.
SECTION 3.9. ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer will deliver
to the Trustee and the Controlling Party, on or before February 28 of each year,
beginning February 28, 2006 an Officer's Certificate, dated as of December 31 of
the preceding year, stating, as to the Authorized Officer signing such Officer's
Certificate, that
(i) a review of the activities of the Issuer during the preceding
year and of performance under this Indenture has been made under such
Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based on
such review, the Issuer has complied with all conditions and covenants
under this Indenture throughout such year, or, if there has been a
default in the compliance of any such condition or covenant, specifying
each such default known to such Authorized Officer and the nature and
status thereof.
SECTION 3.10. ISSUER MAY CONSOLIDATE, ETC. ONLY ON CERTAIN TERMS.
(a) The Issuer shall not consolidate or merge with or into any other
Person, unless
(i) the Person (if other than the Issuer) formed by or surviving
such consolidation or merger shall be a Delaware statutory trust and
shall expressly assume, by an indenture supplemental hereto, executed
and delivered to the Trustee, in form satisfactory to the Trustee and
the Controlling Party, the due and punctual payment of the principal of
and interest on the Note and the performance or observance of every
agreement and covenant of this Indenture on the part of the Issuer to
be performed or observed, all as provided herein;
(ii) immediately after giving effect to such transaction, no
Default, Event of Default or Funding Termination Event shall have
occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
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(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Trustee and the Controlling
Party) to the effect that such transaction will not have any material
adverse tax consequence to the Noteholder;
(v) any action as is necessary to maintain the lien and first
priority, perfected security interest created by this Indenture shall
have been taken;
(vi) the Issuer shall have delivered to the Trustee and the
Controlling Party an Officer's Certificate and an Opinion of Counsel
each stating that such consolidation or merger and such supplemental
indenture comply with this SECTION 3.10(A) and that all conditions
precedent herein provided for relating to such transaction have been
complied with; and
(vii) the Issuer shall have given the Controlling Party written
notice of such consolidation or merger at least 20 Business Days prior
to the consummation of such action and shall have received the prior
written approval of the Controlling Party to such consolidation or
merger and the Issuer or the Person (if other than the Issuer) formed
by or surviving such consolidation or merger has a net worth,
immediately after such consolidation or merger, that is (a) greater
than zero and (b) not less than the net worth of the Issuer immediately
prior to giving effect to such consolidation or merger.
(b) The Issuer shall not convey or transfer all or substantially all of
its properties or assets, including those included in the Trust Estate, to any
Person, unless
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of which
is hereby restricted shall (A) be a Delaware statutory trust, (B)
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee and the Controlling Party, in form
satisfactory to the Trustee, the Controlling Party and the Noteholder,
the due and punctual payment of the principal of and interest on the
Note and the performance or observance of every agreement and covenant
of this Indenture and each of the other Basic Documents on the part of
the Issuer to be performed or observed, all as provided herein, (C)
expressly agree by means of such supplemental indenture that all right,
title and interest so conveyed or transferred shall be subject and
subordinate to the rights of the Noteholder, and (D) unless otherwise
provided in such supplemental indenture, expressly agree to indemnify,
defend and hold harmless the Issuer against and from any loss,
liability or expense arising under or related to this Indenture and the
Note;
(ii) immediately after giving effect to such transaction, no
Default, Event of Default or Funding Termination Event shall have
occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Trustee and the Controlling
Party) to the effect that such transaction will not have any material
adverse tax consequence to the Noteholder;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken;
(vi) the Issuer shall have delivered to the Trustee and the
Controlling Party an Officers' Certificate and an Opinion of Counsel
each stating that such conveyance or transfer and such supplemental
indenture comply with this SECTION 3.10(B) and that all conditions
precedent herein provided for relating to such transaction have been
complied with; and
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(vii) the Issuer shall have given the Controlling Party written
notice of such conveyance or transfer at least 20 Business Days prior
to the consummation of such action and shall have received the prior
written approval of the Controlling Party to such conveyance or
transfer.
SECTION 3.11. SUCCESSOR OR TRANSFEREE.
(a) Upon any consolidation or merger of the Issuer in accordance with
SECTION 3.10(A), the Person formed by or surviving such consolidation or merger
(if other than the Issuer) shall succeed to, and be substituted for, and may
exercise every right and power of, the Issuer under this Indenture with the same
effect as if such Person had been named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to SECTION 3.10(B), the Issuer will be released from every
covenant and agreement of this Indenture to be observed or performed on the part
of the Issuer with respect to the Note immediately upon the delivery of written
notice to the Trustee and the Controlling Party stating that the Issuer is to be
so released.
SECTION 3.12. NO OTHER BUSINESS. The Issuer shall not engage in any
business other than financing, purchasing, owning, selling and managing the
Receivables in the manner contemplated by this Indenture and the other Basic
Documents and activities incidental thereto. After the Facility Termination
Date, the Issuer shall not purchase any additional Receivables.
SECTION 3.13. NO BORROWING. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
Indebtedness except for (i) the Note and (ii) any other Indebtedness permitted
by or arising under the Basic Documents. The proceeds of the Note shall be used
to fund the Issuer's purchase of the Related Receivables and the other assets
specified in the Sale and Servicing Agreement, to fund the Reserve Account up to
the Required Reserve Account Amount and to pay the Issuer's organizational,
transactional and start-up expenses.
SECTION 3.14. SERVICER'S OBLIGATIONS. The Issuer shall cause the
Servicer to comply with Sections 4.9, 4.10, 4.11 and 5.9 of the Sale and
Servicing Agreement.
SECTION 3.15. GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES. Except
as contemplated by the Sale and Servicing Agreement, this Indenture or the other
Basic Documents, the Issuer shall not make any loan or advance or credit to, or
guarantee (directly or indirectly or by an instrument having the effect of
assuring another's payment or performance on any obligation or capability of so
doing or otherwise), endorse or otherwise become contingently liable, directly
or indirectly, in connection with the obligations, stocks or dividends of, or
own, purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person.
SECTION 3.16. CAPITAL EXPENDITURES. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
SECTION 3.17. COMPLIANCE WITH LAWS. The Issuer shall comply with the
requirements of all applicable laws, the non-compliance with which would,
individually or in the aggregate, materially and adversely affect the ability of
the Issuer to perform its obligations under the Note, this Indenture or any
Basic Document.
SECTION 3.18. RESTRICTED PAYMENTS. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to any owner of a beneficial interest in the Issuer or otherwise with
respect to any ownership or equity interest or security in or of the Issuer,
(ii) redeem, purchase, retire or otherwise acquire for value any such ownership
or equity interest or security or (iii) set aside or otherwise segregate any
amounts for any such purpose; provided, however, that the Issuer may make, or
cause to be made, distributions to the Trustee and to any owner of a beneficial
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interest in the Issuer as permitted by, and to the extent funds are available
for such purpose from distributions under the Sale and Servicing Agreement. The
Issuer will not, directly or indirectly, make payments to or distributions from
the Collection Account and the other Pledged Accounts except in accordance with
this Indenture and the Basic Documents.
SECTION 3.19. NOTICE OF EVENTS OF DEFAULT AND FUNDING TERMINATION
EVENTS. Upon a responsible officer of the Issuer having notice or actual
knowledge thereof, the Issuer agrees to give the Trustee, the Noteholder, the
Controlling Party and the Rating Agencies prompt written notice of each Event of
Default hereunder and each Funding Termination Event, Servicer Termination Event
or other Default on the part of the Servicer or the Seller of its obligations
under the Sale and Servicing Agreement.
SECTION 3.20. FURTHER INSTRUMENTS AND ACTS. Upon request of the Trustee
or the Controlling Party, the Issuer will execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper to
carry out more effectively the purpose of this Indenture.
SECTION 3.21. AMENDMENTS OF SALE AND SERVICING AGREEMENT. The Issuer
shall not agree to any amendment to Section 11.1 of the Sale and Servicing
Agreement to eliminate the requirements thereunder that the Trustee, the
Controlling Party or the Noteholder consent to amendments thereto as provided
therein.
SECTION 3.22. INCOME TAX CHARACTERIZATION. For purposes of federal
income tax, state and local income tax, franchise tax and any other income
taxes, the Issuer and the Noteholder will treat the Note as indebtedness and
hereby instruct the Trustee to treat the Note as indebtedness for all such tax
reporting purposes.
SECTION 3.23. SEPARATE EXISTENCE OF THE ISSUER. During the term of this
Indenture, the Issuer shall observe the applicable legal requirements for the
recognition of the Issuer as a legal entity separate and apart from its
Affiliates, including as follows:
(i) the Issuer shall maintain business records and books of
account separate from those of its Affiliates;
(ii) except as otherwise provided in the Basic Documents, the
Issuer shall not commingle its assets and funds with those of its
Affiliates;
(iii) the Issuer shall at all times hold itself out to the public
under the Issuer's own name as a legal entity separate and distinct
from its Affiliates;
(iv) all transactions and dealings between the Issuer and its
Affiliates will be conducted on an arm's-length basis; and
(v) the requirements set forth in the legal opinion delivered by
▇▇▇▇▇▇▇ ▇▇▇▇▇ LLP dated April 13, 2005, with respect to
nonconsolidation of the Issuer and its Affiliates.
SECTION 3.24. AMENDMENT OF ISSUER'S ORGANIZATIONAL DOCUMENTS. The
Issuer shall not amend its organizational documents without the prior written
consent of the Controlling Party and except in accordance with the provisions
thereof.
ARTICLE IV
SATISFACTION AND DISCHARGE
--------------------------
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SECTION 4.1. SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture
shall cease to be of further effect with respect to the Note except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Note, (iii) rights of the Noteholder to receive
payments of principal thereof and interest thereon, (iv) SECTIONS 3.3, 3.4, 3.5,
3.6, 3.8, 3.10, 3.11, 3.18, 3.19, 3.20, 3.21, 3.23, 3.24 and 11.17, (v) the
rights, obligations and immunities of the Trustee hereunder (including the
rights of the Trustee under SECTION 6.7 and the obligations of the Trustee under
SECTION 4.2) and (vi) the rights of the Noteholder as beneficiary hereof with
respect to the property so deposited with the Trustee payable to all or any of
them, and the Trustee, on demand of and at the expense of the Issuer, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture with respect to the Note, when:
(a) the Note theretofore authenticated and delivered (other than (i) a
Note that has been destroyed, lost or stolen and that has been replaced or paid
as provided in SECTION 2.6 and (ii) a Note for whose payment money has
theretofore been deposited in trust or segregated and held in trust by the
Issuer and thereafter repaid to the Issuer or discharged from such trust, as
provided in SECTION 3.3) have been delivered to the Trustee for cancellation;
(b) the Issuer has paid or caused to be paid all Secured Obligations;
and
(c) the Issuer has delivered to the Trustee and the Controlling Party
an Officer's Certificate meeting the applicable requirements of SECTION 11.1(A)
and stating that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with.
SECTION 4.2. APPLICATION OF TRUST MONEY. All moneys deposited with the
Trustee pursuant to SECTION 4.1 or SECTION 4.3 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Note and this Indenture,
to the payment, either directly or through the Note Paying Agent, as the Trustee
may determine, to the Noteholder for the payment or redemption of which such
moneys have been deposited with the Trustee, of all sums due and to become due
thereon for principal and interest; but such moneys need not be segregated from
other funds except to the extent required herein, in the Sale and Servicing
Agreement or in the other Basic Documents or required by law. Any funds
remaining with the Trustee or on deposit in the Pledged Accounts shall be
remitted to the Issuer upon satisfaction by the Issuer of its obligations
hereunder and under the Basic Documents, including without limitation, those
under SECTION 4.1(C).
SECTION 4.3. REPAYMENT OF MONEYS HELD BY NOTE PAYING AGENT. In
connection with the satisfaction and discharge of this Indenture with respect to
the Note, all moneys then held by the Note Paying Agent other than the Trustee
under the provisions of this Indenture with respect to the Note shall, upon
demand of the Issuer, be remitted to the Trustee to be held and applied
according to SECTION 4.2 and thereupon the Note Paying Agent shall be released
from all further liability with respect to such moneys.
ARTICLE V
REMEDIES
--------
SECTION 5.1. EVENTS OF DEFAULT.
(a) "EVENT OF DEFAULT", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(i) default in the payment of any interest on the Note when the
same becomes due and payable and such default shall continue for a
period of three days (solely for purposes of this clause, a payment on
the Note funded from amounts on deposit in the Reserve Account shall be
deemed to be a payment made by the Issuer);
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(ii) default in the payment of the principal of or any installment
of the principal of the Note when the same becomes due and payable and
such default shall continue for a period of three days (solely for
purposes of this clause, a payment on the Note funded from amounts on
deposit in the Reserve Account shall be deemed to be a payment made by
the Issuer);
(iii) default in the observance or performance of any covenant or
agreement of the Issuer made in this Indenture (other than a covenant
or agreement, a default in the observance or performance of which is
elsewhere in this Section specifically dealt with), or any
representation or warranty of the Issuer made in this Indenture or in
any certificate or other writing delivered pursuant hereto or in
connection herewith proving to have been incorrect in any material
respect as of the time when the same shall have been made, and such
default shall continue or not be cured, or the circumstance or
condition in respect of which such misrepresentation or warranty was
incorrect shall not have been eliminated or otherwise cured, for a
period of 10 days (or for such longer period, not in excess of 30 days,
as may be reasonably necessary to remedy such default; provided that
such default is capable of remedy within 30 days or less and the
Servicer on behalf of the Issuer delivers an Officer's Certificate to
the Trustee and the Controlling Party to the effect that the Issuer has
commenced, or will promptly commence and diligently pursue, all
reasonable efforts to remedy such default) after there shall have been
given, by registered or certified mail, to the Issuer by the Trustee or
to the Issuer and the Trustee by the Controlling Party, a written
notice specifying such default or incorrect representation or warranty
and requiring it to be remedied and stating that such notice is a
"NOTICE OF DEFAULT" hereunder;
(iv) an Insolvency Event with respect to the Issuer shall have
occurred;
(v) the failure of the Invested Amount to be reduced to zero on or
prior to the last day of the third Interest Period after the Facility
Termination Date;
(vi) the Invested Amount exceeds the Maximum Invested Amount at
any time and such condition continues for two Business Days;
(vii) a CPS Trigger Event II shall have occurred and be
continuing;
(viii) the Seller fails to maintain (a) minimum Consolidated Total
Adjusted Equity of $63,000,000, (b) maximum leverage (total liabilities
less all non-recourse debt/Consolidated Total Adjusted Equity) of 3.5
times, and (c) minimum unrestricted cash at any month end of $8.5
million;
(ix) CPS's annual audited financial statements are qualified in
any manner;
(x) the notional balances applicable to all Hedge Agreements are
less than the Invested Amount as of the related Settlement Date;
(xi) any litigation, claim, counterclaim or proceeding is brought
against the Issuer or the Seller which causes a Material Adverse Change
with respect to the Issuer, the Seller or the Transaction;
(xii) a Change in Control of the Servicer without the prior
written consent of the Controlling Party;
(xiii) the Issuer becomes taxable as an association (or publicly
traded partnership) or taxable as a corporation for federal or state
income tax purposes; or
(xiv) the occurrence or existence of a default, event of default
or other similar condition or event (howsoever described) in respect of
CPS or any Affiliate of CPS (excluding defaults with respect to any
securitization transaction or warehouse trust or special purpose entity
established by CPS or any Affiliate of CPS) under one or more
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agreements or instruments relating to Indebtedness in an aggregate
amount of not less than $1,000,000 which has resulted in such
Indebtedness becoming, or becoming capable at such time of being
declared, due and payable under such agreements or instruments, before
it would otherwise have been due and payable but excluding any such
default, event of default or other similar condition or event that has
been waived in accordance with the terms of any applicable agreement.
(b) The Issuer shall deliver to the Trustee and the Controlling Party,
within two days after the occurrence thereof, written notice in the form of an
Officer's Certificate of any event which with the giving of notice and the lapse
of time would become an Event of Default under CLAUSE (III), its status and what
action the Issuer is taking or proposes to take with respect thereto.
SECTION 5.2. RIGHTS UPON EVENT OF DEFAULT.
(a) If an Event of Default shall have occurred and be continuing, the
Controlling Party may, and with respect to an Event of Default pursuant to
Section 5.1(a)(iv) hereof, the Controlling Party shall, declare the Note to be
immediately due and payable at par, together with accrued interest thereon. In
addition, if an Event of Default shall have occurred and be continuing, the
Controlling Party may exercise any of the remedies specified in SECTION 5.4.
(b) At any time after such declaration of acceleration of maturity has
been made and before a judgment or decree for payment of the money due has been
obtained by the Trustee as hereinafter in this Article V provided, the
Controlling Party, by written notice to the Issuer and the Trustee, may rescind
and annul such declaration and its consequences if the Issuer has paid or
deposited with the Trustee a sum sufficient to pay:
(i) all payments of principal of and interest on the Note and all
other amounts that would then be due hereunder or upon the Note if the
Event of Default giving rise to such acceleration had not occurred; and
(ii) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee and its agents and counsel; and
(iii) all Events of Default, other than the nonpayment of the
principal of the Note that has become due solely by such acceleration,
have been cured or waived as provided in Section 5.13.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
SECTION 5.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
(a) The Issuer covenants that if default is made in the payment of any
interest on, or principal of, the Note when the same becomes due and payable,
the Issuer will, upon demand of the Trustee (acting at the direction of the
Controlling Party or the Controlling Party's designee), pay to it, for the
benefit of the Noteholder, the whole amount then due and payable on the Note for
principal and interest, with interest upon the overdue principal, and, to the
extent payment at such rate of interest shall be legally enforceable, upon
overdue installments of interest, at the Note Interest Rate and in addition
thereto such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee and its agents and counsel.
(b) [RESERVED].
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(c) If an Event of Default occurs and is continuing, the Trustee may in
its discretion subject to the consent of the Controlling Party and shall, at the
direction of the Controlling Party, proceed to protect and enforce its rights
and the rights of the Noteholder by such appropriate Proceedings as the Trustee
or the Controlling Party shall deem most effective to protect and enforce any
such rights, whether for the specific enforcement of any covenant or agreement
in this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy or legal or equitable right vested in the
Trustee by this Indenture or by law.
(d) [RESERVED].
(e) In case there shall be pending, relative to the Issuer or any other
obligor upon the Note or any Person having or claiming an ownership interest in
the Trust Estate, proceedings under Title 11 of the United States Code or any
other applicable Federal or state bankruptcy, insolvency or other similar law,
or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial proceedings relative to the Issuer
or other obligor upon the Note, or to the creditors or property of the Issuer or
such other obligor, the Trustee may, with the consent of the Controlling Party,
and shall, at the direction of the Controlling Party, irrespective of whether
the principal of the Note shall then be due and payable as therein expressed or
by declaration or otherwise and irrespective of whether the Trustee shall have
made any demand pursuant to the provisions of this Section, shall be entitled
and empowered, by intervention in such proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Note and to
file such other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for
reasonable compensation to the Trustee and each predecessor Trustee,
and their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee, except as a
result of negligence, bad faith or willful misconduct) and of the
Noteholder allowed in such proceedings;
(ii) unless prohibited by applicable law and regulations, to vote
on behalf of the Noteholder in any election of a trustee, a standby
trustee or person performing similar functions in any such proceedings;
(iii) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute all amounts
received with respect to the claims of the Noteholder and of the
Trustee on their behalf; and
(f) to file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee or the
Noteholder allowed in any judicial proceedings relative to the Issuer, its
creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such proceeding is hereby authorized by the Noteholder to make payments to
the Trustee, and, in the event that the Trustee shall consent to the making of
payments directly to the Noteholder, to pay to the Trustee such amounts as shall
be sufficient to cover reasonable compensation to the Trustee, each predecessor
Trustee and their respective agents, attorneys and counsel, and all other
expenses and liabilities incurred, and all advances made, by the Trustee and
each predecessor Trustee except as a result of negligence or bad faith.
(g) Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or vote for or accept or adopt on behalf of the
Noteholder any plan of reorganization, arrangement, adjustment or composition
affecting the Note or the rights of the Noteholder or to authorize the Trustee
to vote in respect of the claim of the Noteholder in any such proceeding except,
as aforesaid, to vote for the election of a trustee in bankruptcy or similar
person.
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(h) All rights of action and of asserting claims under this Indenture
or under the Note, may be enforced by the Trustee without the possession of the
Note or the production thereof in any trial or other proceedings relative
thereto, and any such action or proceedings instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment, subject to the payment of the expenses, disbursements and compensation
of the Trustee, each predecessor Trustee and their respective agents and
attorneys, shall be for the benefit of the Noteholder.
(i) In any proceedings brought by the Trustee (and also any
proceedings involving the interpretation of any provision of this
Indenture), the Trustee shall be held to represent the Noteholder, and
it shall not be necessary to make the Noteholder a party to any such
proceedings.
SECTION 5.4. REMEDIES. If an Event of Default shall have occurred and
be continuing, the Controlling Party or its designee may do one or more of the
following:
(i) institute or direct the Trustee to institute Proceedings in
its own name and as trustee of an express trust for the collection of
all amounts then payable on the Note or under this Indenture with
respect thereto, whether by declaration or otherwise, enforce any
judgment obtained, and collect from the Issuer and any other obligor
upon the Note moneys adjudged due;
(ii) institute or direct the Trustee to institute Proceedings from
time to time for the complete or partial foreclosure of this Indenture
with respect to the Trust Estate;
(iii) exercise or direct the Trustee to exercise any remedies of a
secured party under the UCC and take any other appropriate action to
protect and enforce the rights and remedies of the Trustee and the
Noteholder; and
(iv) sell or direct the Trustee to sell the Trust Estate or any
portion thereof or rights or interest therein, at one or more public or
private sales (including, without limitation, the sale of the
Collateral in connection with a securitization thereof) called and
conducted in any manner permitted by law.
SECTION 5.5. OPTIONAL PRESERVATION OF THE RECEIVABLES. If the Note has
been declared to be due and payable under SECTION 5.2 following an Event of
Default and such declaration and its consequences have not been rescinded and
annulled, the Trustee may, but need not, elect to maintain possession of the
Trust Estate, if not otherwise directed by the Controlling Party pursuant to
SECTION 5.4. It is the desire of the parties hereto and the Noteholder that
there be at all times sufficient funds for the payment of principal of and
interest on the Note, and the Trustee shall take such desire into account when
determining whether or not to maintain possession of the Trust Estate. In
determining whether to maintain possession of the Trust Estate, the Trustee may,
but need not, obtain and rely upon an opinion of an Independent investment
banking or accounting firm of national reputation as to the feasibility of such
proposed action and as to the sufficiency of the Trust Estate for such purpose.
SECTION 5.6. PRIORITIES.
(a) Following the acceleration of the Note pursuant to SECTION 5.2, the
Available Funds, together with any other amounts on deposit in the Pledged
Accounts, including any money or property collected pursuant to SECTION 5.4 of
this Indenture shall be applied by the Trustee on the related Settlement Date in
the order of priority specified in Section 5.7 of the Sale and Servicing
Agreement.
(b) The Trustee may fix a record date and Settlement Date for any
payment to Noteholder pursuant to this Section. At least 15 days before such
record date the Issuer shall mail to the Noteholder and the Trustee a notice
that states such record date, the Settlement Date and the amount to be paid.
SECTION 5.7. LIMITATION OF SUITS. No Holder of the Note shall have any
right to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
22
(i) the Holder has previously given written notice to the Trustee
of a continuing Event of Default;
(ii) the Holder of the Note has made a written request to the
Trustee to institute such proceeding in respect of such Event of
Default in its own name as Trustee hereunder;
(iii) the Holder has offered to the Trustee indemnity reasonably
satisfactory to it against the costs, expenses and liabilities to be
incurred in complying with such request; and
(iv) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute such
proceedings.
it being understood and intended that no Holder of the Note shall have any right
in any manner whatever by virtue of, or by availing of, any provision of this
Indenture to affect, disturb or prejudice the rights of any Holder of the Note
or to obtain or to seek to obtain priority or preference over any Holder or to
enforce any right under this Indenture, except in the manner herein provided.
SECTION 5.8. UNCONDITIONAL RIGHTS OF THE NOTEHOLDER TO RECEIVE
PRINCIPAL AND INTEREST. Notwithstanding any other provisions of this Indenture,
the Noteholder shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest, if any, on the Note on or
after the respective due dates thereof expressed in the Note or in this
Indenture and to institute suit for the enforcement of any such payment, and
such right shall not be impaired without the consent of the Noteholder.
SECTION 5.9. RESTORATION OF RIGHTS AND REMEDIES. If the Controlling
Party or the Noteholder has instituted any proceeding to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Controlling
Party or to the Noteholder, then and in every such case the Issuer, the
Controlling Party and the Noteholder shall, subject to any determination in such
Proceeding, be restored severally and respectively to their former positions
hereunder, and thereafter all rights and remedies of the Controlling Party and
the Noteholder shall continue as though no such proceeding had been instituted.
SECTION 5.10. RIGHTS AND REMEDIES CUMULATIVE. No right or remedy herein
conferred upon or reserved to the Controlling Party or to the Noteholder is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.11. DELAY OR OMISSION NOT A WAIVER. No delay or omission of
the Controlling Party or the Noteholder to exercise any right or remedy accruing
upon any Default or Event of Default shall impair any such right or remedy or
constitute a waiver of any such Default or Event of Default or an acquiescence
therein. Every right and remedy given by this Article V or by law to the
Controlling Party or to the Noteholder may be exercised from time to time, and
as often as may be deemed expedient, by the Controlling Party or by the
Noteholder, as the case may be.
SECTION 5.12. [Reserved].
SECTION 5.13. WAIVER OF PAST DEFAULTS. Prior to the declaration of the
acceleration of the maturity of the Note as provided in SECTION 5.2, the
Controlling Party may waive any past Default or Event of Default and its
consequences except a Default or Event of Default (i) in payment of principal of
or interest on the Note or (ii) in respect of a covenant or provision hereof
which cannot be modified or amended without the consent of the Noteholder. In
the case of any such waiver, the Issuer, the Trustee, the Controlling Party and
the Noteholder shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other Default
or Event of Default or impair any right consequent thereto.
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Upon any such waiver, such Default or Event of Default shall cease to
exist and be deemed to have been cured and not to have occurred, and any Event
of Default arising therefrom shall be deemed to have been cured and not to have
occurred, for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other Default or Event of Default or impair any right
consequent thereto.
SECTION 5.14. UNDERTAKING FOR COSTS. All parties to this Indenture
agree, and the Noteholder by its acceptance thereof shall be deemed to have
agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken, suffered or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to (a)
any suit instituted by the Trustee, (b) any suit instituted by the Noteholder
holding in the aggregate more than 10% of the Invested Amount of the Note or (c)
any suit instituted by the Noteholder for the enforcement of the payment of
principal of or interest on the Note on or after the respective due dates
expressed in the Note and in this Indenture.
SECTION 5.15. WAIVER OF STAY OR EXTENSION LAWS. The Issuer covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead or in any manner whatsoever, claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power and any right of the
Issuer to take such action shall be suspended.
SECTION 5.16. [RESERVED].
SECTION 5.17. [RESERVED].
SECTION 5.18. CONSEQUENCES OF TFC FUNDING TERMINATION EVENT. Upon a
responsible officer of the Issuer having notice or actual knowledge thereof, the
Issuer agrees to give the Trustee, the Noteholder, the Controlling Party and the
Rating Agencies prompt written notice of any TFC Funding Termination Event. Upon
the occurrence and continuation of a TFC Funding Termination Event, the
Controlling Party may terminate CPS and TFC as the Servicer and subservicer,
respectively, of the TFC Receivables, and direct the Trustee to sell the TFC
Receivables or any portion thereof or rights or interest therein, at one or more
public or private sales (including, without limitation, the sale of the TFC
Receivables in connection with a securitization thereof) called and conducted in
any manner permitted by applicable law. The proceeds of any such sale shall be
applied first, to cure any Borrowing Base Deficiency, second, to reimburse the
Trustee for any amounts to which it is entitled under this Indenture, and,
third, any remaining amounts shall be distributed to CPS.
ARTICLE VI
THE TRUSTEE; THE AGENT
----------------------
SECTION 6.1. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture and the
other Basic Documents and use the same degree of care and skill in their
exercise as a prudent person would exercise or use under the circumstances in
the conduct of such person's own affairs.
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(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; however, the Trustee shall examine the certificates and
opinions to determine whether or not they conform on their face to the
requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it from the Controlling Party in accordance with this
Indenture.
(d) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Issuer.
(e) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law or the terms of this Indenture
or the Sale and Servicing Agreement.
(f) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or
powers, if it shall have reasonable grounds to believe that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
(g) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
(h) The Trustee shall permit any representative of the Controlling
Party (or its designee) or the Noteholder (or its designee), during the
Trustee's normal business hours, to examine all books of account, records,
reports and other papers of the Trustee relating to the Note, to make copies and
extracts therefrom and to discuss the Trustee's affairs and actions, as such
affairs and actions relate to the Trustee's duties with respect to the Note,
with the Trustee's officers and employees responsible for carrying out the
Trustee's duties with respect to the Note.
(i) The Trustee shall, and hereby agrees that it will, perform all of
the obligations and duties required of it under the Sale and Servicing
Agreement.
(j) [Reserved].
(k) Except for actions expressly authorized by this Indenture, the
Trustee shall take no action reasonably likely to impair the security interests
created or existing under any Receivable or Financed Vehicle or to impair the
value of any Receivable or Financed Vehicle.
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(l) All information obtained by the Trustee regarding the Obligors and
the Receivables, whether upon the exercise of its rights under this Indenture or
otherwise, shall be maintained by the Trustee in confidence and shall not be
disclosed to any other Person, other than the Trustee's attorneys, accountants
and agents unless such disclosure is required by this Indenture or any
applicable law or regulation.
SECTION 6.2. RIGHTS OF TRUSTEE. Subject to Section 6.1 and this Section
6.2, the Trustee shall be protected and shall incur no liability to the Issuer,
the Controlling Party or the Noteholder in relying upon the accuracy, acting in
reliance upon the contents, and assuming the genuineness of any notice, demand,
certificate, signature, instrument or other document reasonably believed by the
Trustee to be genuine and to have been duly executed by the appropriate
signatory, and, except to the extent the Trustee has actual knowledge to the
contrary or as required pursuant to Section 6.1 the Trustee shall not be
required to make any independent investigation with respect thereto.
(a) Before the Trustee acts or refrains from acting, it may require an
Officer's Certificate. Subject to Section 6.1(c), the Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on the
Officer's Certificate.
(b) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian or nominee, and the Trustee shall not be responsible
for any misconduct or negligence on the part of, or for the supervision of the
Servicer, the Backup Servicer or any other such agent, attorney, custodian or
nominee appointed with due care by it hereunder.
(c) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute
willful misconduct, negligence or bad faith.
(d) The Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the Note
shall be full and complete authorization and protection from liability in
respect to any action taken, omitted or suffered by it hereunder in good faith
and in accordance with the advice or opinion of such counsel.
(e) The Trustee shall be under no obligation to institute, conduct or
defend any litigation under this Indenture or in relation to this Indenture, at
the request, order or direction of any of the Holder of the Note or the
Controlling Party, pursuant to the provisions of this Indenture, unless the
Holder of the Note or the Controlling Party shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that may be incurred therein or thereby; provided, however, that the Trustee
shall, upon the occurrence of an Event of Default (that has not been cured),
exercise the rights and powers vested in it by this Indenture in accordance with
Section 6.1.
(f) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other paper
or document, unless requested in writing to do so by the Controlling Party;
provided, however, that if the payment within a reasonable time to the Trustee
of the costs, expenses or liabilities likely to be incurred by it in the making
of such investigation is, in the opinion of the Trustee, not reasonably assured
to the Trustee by the security afforded to it by the terms of this Indenture or
the Sale and Servicing Agreement, the Trustee may require reasonable indemnity
against such cost, expense or liability as a condition to so proceeding; the
reasonable expense of every such examination shall be paid by the Person making
such request, or, if paid by the Trustee, shall be reimbursed by the Person
making such request upon demand.
SECTION 6.3. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its
individual or any other capacity may become the owner or pledgee of the Note and
may otherwise deal with the Issuer or its Affiliates with the same rights it
would have if it were not the Trustee. Any Note Paying Agent, Note Registrar,
co-registrar or co-paying agent may do the same with like rights.
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SECTION 6.4. TRUSTEE'S DISCLAIMER. The Trustee shall not be responsible
for and makes no representation as to the validity or adequacy of this
Indenture, the Trust Estate, the Collateral or the Note, it shall not be
accountable for the Issuer's use of the proceeds from the Note, and it shall not
be responsible for any statement of the Issuer in this Indenture or in any
document issued in connection with the sale of the Note or in the Note other
than the Trustee's certificate of authentication.
SECTION 6.5. NOTICE OF DEFAULTS. If an Event of Default occurs and is
continuing and if it is either known by, or written notice of the existence
thereof has been delivered to, a Responsible Officer of the Trustee, the Trustee
shall mail to the Controlling Party notice of the Default promptly after such
knowledge or notice occurs.
SECTION 6.6. REPORTS BY TRUSTEE TO THE NOTEHOLDER. The Trustee shall on
behalf of the Issuer deliver to the Noteholder such information as may be
reasonably required to enable such Holder to prepare its Federal and state
income tax returns.
SECTION 6.7. COMPENSATION AND INDEMNITY.
(a) Pursuant to Section 5.7 of the Sale and Servicing Agreement, the
Issuer shall pay to the Trustee from time to time compensation for its services.
The Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Issuer shall reimburse the Trustee, pursuant to
Section 5.7 of the Sale and Servicing Agreement, for all reasonable
out-of-pocket expenses incurred or made by it, including costs of collection, in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation and expenses, disbursements and advances of the
Trustee's agents, counsel, accountants and experts. The Issuer shall or shall
cause the Servicer to indemnify the Trustee against any and all loss, liability
or expense incurred by the Trustee without willful misfeasance, negligence or
bad faith on its part arising out of or in connection with the acceptance or the
administration of this trust and the performance of its duties hereunder,
including the costs and expenses of defending itself against any claim or
liability in connection therewith. The Trustee shall notify the Issuer and the
Servicer promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Issuer and the Servicer shall not relieve the Issuer of
its obligations hereunder or the Servicer of its obligations under the Sale and
Servicing Agreement. The Trustee may have separate counsel and the Issuer shall
or shall cause the Servicer to pay the reasonable fees and expenses of such
counsel. Neither the Issuer nor the Servicer need reimburse any expense or
indemnify against any loss, liability or expense incurred by the Trustee through
the Trustee's own willful misconduct, negligence or bad faith.
(b) The Issuer's payment obligations to the Trustee pursuant to this
Section shall survive the discharge of this Indenture. When the Trustee incurs
expenses after the occurrence of an Event of Default specified in Section
5.1(a)(iv) with respect to the Issuer, the expenses are intended to constitute
expenses of administration under Title 11 of the United States Code or any other
applicable Federal or state bankruptcy, insolvency or similar law.
Notwithstanding anything else set forth in this Indenture or the other Basic
Documents, the recourse of the Trustee hereunder and under the other Basic
Documents shall be to the Trust Estate only and specifically shall not be
recourse to the other assets of the Issuer or the assets of the Noteholder.
SECTION 6.8. REPLACEMENT OF TRUSTEE. The Issuer may, with the consent
of the Controlling Party, and at the request of the Controlling Party, shall
remove the Trustee if:
(i) the Trustee fails to comply with Section 6.11 or the Trustee
fails to perform any other material covenant or agreement of the
Trustee set forth in the Basic Documents to which the Trustee is a
party and such failure continues for 45 days after written notice of
such failure from the Controlling Party;
(ii) an Insolvency Event with respect to the Trustee occurs; or
(iii) the Trustee otherwise becomes incapable of acting.
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If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Issuer shall promptly appoint a successor
Trustee acceptable to the Controlling Party. If the Issuer fails to appoint such
a successor Trustee, the Controlling Party may appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee, the Controlling Party and the Issuer,
whereupon, the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have all the rights, powers and
duties of the retiring Trustee under this Indenture, subject to satisfaction of
the Rating Agency Condition. The successor Trustee shall mail a notice of its
succession to the Controlling Party. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee.
If a successor ▇▇▇▇▇▇▇ does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuer or the
Controlling Party may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor Trustee
pursuant to this SECTION 6.8.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Issuer's and the Servicer's obligations under SECTION 6.7 shall
continue for the benefit of the retiring Trustee.
SECTION 6.9. SUCCESSOR TRUSTEE BY MERGER If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee. The Trustee shall provide the Rating
Agencies and the Controlling Party prior written notice of any such transaction.
(b) In case at the time such successor or successors to the Trustee by
merger, conversion or consolidation shall succeed to the trusts created by this
Indenture the Note shall have been authenticated but not delivered, any such
successor to the Trustee may adopt the certificate of authentication of any
predecessor trustee, and deliver the Note so authenticated; and in case at that
time the Note shall not have been authenticated, any successor to the Trustee
may authenticate the Note either in the name of any predecessor hereunder or in
the name of the successor to the Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Note or in
this Indenture provided that the certificate of the Trustee shall have.
SECTION 6.10. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
(a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust Estate may at the time be located, the Trustee with
the consent of the Controlling Party shall have the power and may execute and
deliver all instruments to appoint one or more Persons to act as a co-trustee or
co-trustees, or separate trustee or separate trustees, of all or any part of the
Trust Estate, and to vest in such Person or Persons, in such capacity and for
the benefit of the Noteholder, such title to the Trust Estate, or any part
thereof, and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and trusts as the Trustee may consider necessary or
desirable. No co-trustee or separate trustee hereunder shall be required to meet
the terms of eligibility as a successor trustee under Section 6.11.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
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(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
the Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust or any portion thereof in
any such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the
Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder, including acts or
omissions of predecessor or successor trustees; and
(iii) the Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Indenture and the conditions
of this Article VI. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Indenture,
specifically including every provision of this Indenture relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Indenture on its behalf and in its name. If any separate trustee or co-trustee
shall die, dissolve, become insolvent, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall vest
in and be exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 6.11. ELIGIBILITY: DISQUALIFICATION. The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition and subject to supervision or
examination by federal or state authorities; and having a rating, both with
respect to long-term and short-term unsecured obligations, of not less than
investment grade by the Rating Agencies. The Trustee shall provide copies of
such reports to the Controlling Party upon request.
SECTION 6.12. [RESERVED].
SECTION 6.13. APPOINTMENT AND POWERS. Subject to the terms and
conditions hereof, the Controlling Party hereby appoints ▇▇▇▇▇ Fargo Bank,
National Association as the Trustee with respect to the Collateral, and ▇▇▇▇▇
Fargo Bank, National Association hereby accepts such appointment and agrees to
act as Trustee with respect to the Collateral for the Noteholder, to maintain
custody and possession of such Collateral (except as otherwise provided
hereunder) and to perform the other duties of the Trustee in accordance with the
provisions of this Indenture and the other Basic Documents. The Controlling
Party hereby authorizes the Trustee to take such action on its behalf, and to
exercise such rights, remedies, powers and privileges hereunder, as the
Controlling Party may direct and as are specifically authorized to be exercised
by the Trustee by the terms hereof, together with such actions, rights,
remedies, powers and privileges as are reasonably incidental thereto. The
Trustee shall act upon and in compliance with the written instructions of the
Controlling Party delivered pursuant to this Indenture promptly following
receipt of such written instructions; provided that the Trustee shall not act in
accordance with any instructions (i) which are not authorized by, or in
violation of the provisions of, this Indenture, (ii) which are in violation of
any applicable law, rule or regulation or (iii) for which the Trustee has not
received reasonable indemnity. Receipt of such instructions shall not be a
condition to the exercise by the Trustee of its express duties hereunder, except
where this Indenture provides that the Trustee is permitted to act only
following and in accordance with such instructions.
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SECTION 6.14. PERFORMANCE OF DUTIES. The Trustee shall have no duties
or responsibilities except those expressly set forth in this Indenture and the
other Basic Documents to which the Trustee is a party or as directed by the
Controlling Party in accordance with this Indenture. The Trustee shall not be
required to take any discretionary actions hereunder except at the written
direction of the Controlling Party. The Trustee shall, and hereby agrees that it
will, perform all of the duties and obligations required of it under the Sale
and Servicing Agreement.
SECTION 6.15. LIMITATION ON LIABILITY. Neither the Trustee nor any of
its directors, officers or employees shall be liable for any action taken or
omitted to be taken by it or them in good faith hereunder, or in connection
herewith, except that the Trustee shall be liable for its negligence, bad faith
or willful misconduct. Notwithstanding any term or provision of this Indenture,
the Trustee shall incur no liability to the Issuer, the Controlling Party or the
Noteholder for any action taken or omitted by the Trustee in connection with the
Collateral, except for the negligence, bad faith or willful misconduct on the
part of the Trustee, and, further, shall incur no liability to the Controlling
Party or the Noteholder except for negligence, bad faith or willful misconduct
in carrying out its duties to the Controlling Party and the Noteholder. The
Trustee shall at all times be free independently to establish to its reasonable
satisfaction, but shall have no duty to independently verify, the existence or
nonexistence of facts that are a condition to the exercise or enforcement of any
right or remedy hereunder or under any of the Basic Documents. The Trustee may
consult with counsel, and shall not be liable for any action taken or omitted to
be taken by it hereunder in good faith and in accordance with the written advice
of such counsel. The Trustee shall not be under any obligation to exercise any
of the remedial rights or powers vested in it by this Indenture or to follow any
direction from the Controlling Party unless it shall have received reasonable
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities which might be incurred by it.
SECTION 6.16. [RESERVED].
SECTION 6.17. SUCCESSOR TRUSTEE.
(a) MERGER. Any Person into which the Trustee may be converted or
merged, or with which it may be consolidated, or to which it may sell or
transfer its trust business and assets as a whole or substantially as a whole,
or any Person resulting from any such conversion, merger, consolidation, sale or
transfer to which the Trustee is a party, shall (provided it is otherwise
qualified to serve as the Trustee hereunder) be and become a successor Trustee
hereunder and be vested with all of the title to and interest in the Collateral
and all of the trusts, powers, descriptions, immunities, privileges and other
matters as was its predecessor without the execution or filing of any instrument
or any further act, deed or conveyance on the part of any of the parties hereto,
anything herein to the contrary notwithstanding, except to the extent, if any,
that any such action is necessary to perfect, or continue the perfection of, the
security interest in the Collateral granted hereunder; provided that any such
successor shall also be the successor Trustee under Section 6.9.
(b) REMOVAL. The Trustee may be removed by the Controlling Party at any
time, with or without cause, by an instrument or concurrent instruments in
writing delivered to the Trustee, the Noteholder and the Issuer. A temporary
successor may be removed at any time to allow a successor Trustee to be
appointed pursuant to subsection (c) below. Any removal pursuant to the
provisions of this subsection (b) shall take effect only upon the effective date
of the appointment of a successor Trustee and the acceptance in writing by such
successor Trustee of such appointment and of its obligation to perform its
duties hereunder in accordance with the provisions hereof.
(c) ACCEPTANCE BY SUCCESSOR. The Controlling Party shall have the sole
right to appoint each successor Trustee. Every temporary or permanent successor
Trustee appointed hereunder shall execute, acknowledge and deliver to its
predecessor and to the Controlling Party, the Noteholder and the Issuer an
instrument in writing accepting such appointment hereunder and the relevant
predecessor shall execute, acknowledge and deliver such other documents and
instruments as will effectuate the delivery of all Collateral to the successor
Trustee, whereupon such successor, without any further act, deed or conveyance,
shall become fully vested with all the estates, properties, rights, powers,
duties and obligations of its predecessor. Such predecessor shall, nevertheless,
on the written request of the Controlling Party or the Issuer, execute and
deliver an instrument transferring to such successor all the estates,
properties, rights and powers of such predecessor hereunder. In the event that
any instrument in writing from the Issuer, the Controlling Party or the
Noteholder is reasonably required by a successor Trustee to more fully and
certainly vest in such successor the estates, properties, rights, powers, duties
and obligations vested or intended to be vested hereunder in the Trustee, any
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and all such written instruments shall at the request of the temporary or
permanent successor Trustee, be forthwith executed, acknowledged and delivered
by the Trustee or the Issuer, as the case may be. The designation of any
successor Trustee and the instrument or instruments removing any Trustee and
appointing a successor hereunder, together with all other instruments provided
for herein, shall be maintained with the records relating to the Collateral and,
to the extent required by applicable law, filed or recorded by the successor
Trustee in each place where such filing or recording is necessary to effect the
transfer of the Collateral to the successor Trustee or to protect or continue
the perfection of the security interests granted hereunder.
SECTION 6.18. [RESERVED].
SECTION 6.19. REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE. The
Trustee represents and warrants to the Issuer and to each Issuer Secured Party
as follows:
(a) Due Organization. The Trustee is a national banking association,
duly organized, validly existing and in good standing under the laws of the
United States and is duly authorized and licensed under applicable law to
conduct its business as presently conducted.
(b) Corporate Power. The Trustee has all requisite right, power and
authority to execute and deliver this Indenture and to perform all of its duties
as Trustee hereunder.
(c) Due Authorization. The execution and delivery by the Trustee of
this Indenture and the other Basic Documents to which it is a party, and the
performance by the Trustee of its duties hereunder and thereunder, have been
duly authorized by all necessary corporate proceedings and no further approvals
or filings, including any governmental approvals, are required for the valid
execution and delivery by the Trustee, or the performance by the Trustee, of
this Indenture and such other Basic Documents.
(d) ▇▇▇▇▇ and Binding Indenture. The Trustee has duly executed and
delivered this Indenture and each other Basic Document to which it is a party,
and each of this Indenture and each such other Basic Document constitutes the
legal, valid and binding obligation of the Trustee, enforceable against the
Trustee in accordance with its terms, except as (i) such enforceability may be
limited by bankruptcy, insolvency, reorganization and similar laws relating to
or affecting the enforcement of creditors' rights generally and (ii) the
availability of equitable remedies may be limited by equitable principles of
general applicability.
SECTION 6.20. WAIVER OF SETOFFS. The Trustee hereby expressly waives
any and all rights of setoff that the Trustee may otherwise at any time have
under applicable law with respect to any Pledged Account and agrees that amounts
in the Pledged Accounts shall at all times be held and applied solely in
accordance with the provisions hereof.
SECTION 6.21. CONTROL BY THE CONTROLLING PARTY. The Trustee shall
comply with notices and instructions given by the Issuer only if accompanied by
the written consent of the Controlling Party, except that if any Event of
Default shall have occurred and be continuing, the Trustee shall act upon and
comply with notices and instructions given by the Controlling Party alone in the
place and stead of the Issuer.
SECTION 6.22. AUTHORIZATION AND ACTION. For so long as Paradigm Funding
LLC or any of its Affiliates is a Note Purchaser Party, the Controlling Party
(or its designee) has been appointed and authorized to take such action as agent
on the Noteholder's behalf and to exercise such powers under this Indenture as
are delegated to the Noteholder by the terms hereof, together with such powers
as are reasonably incidental thereto. The Controlling Party shall also act on
behalf of the Majority Program Support Providers.
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SECTION 6.23. CONTROLLING PARTY'S RELIANCE, ETC. The Controlling Party
and its directors, officers, agents or employees shall not be liable for any
action taken or omitted to be taken by it or them under or in connection with
the Basic Documents except for its or their own negligence, bad faith or willful
misconduct. Without limiting the generality of the foregoing, the Controlling
Party: (a) may consult with legal counsel (including counsel for the Trustee),
independent certified public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (b)
makes no warranty or representation to the Noteholder or any other holder of any
interest in the Collateral and shall not be responsible to the Noteholder or any
such other holder for any statements, warranties or representations made in or
in connection with any Basic Document; (c) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of the terms, covenants
or conditions of any Basic Document on the part of the Issuer, the Seller or the
Servicer or to inspect the property (including the books and records) of the
Issuer, the Seller or the Servicer; (d) shall not be responsible to the
Noteholder or any other holder of any interest in the Collateral for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of any Basic Document; and (e) shall incur no liability under or in respect of
this Indenture by acting upon any notice (including notice by telephone if
confirmed in writing within two (2) Business Days), consent, certificate or
other instrument or writing (which may be by facsimile or telex) believed by it
to be genuine and signed or sent by the proper party or parties.
ARTICLE VII
[RESERVED]
----------
ARTICLE VIII
COLLECTION OF MONEY AND RELEASES OF TRUST ESTATE
------------------------------------------------
SECTION 8.1. COLLECTION OF MONEY. Except as otherwise expressly
provided herein, the Trustee may demand payment or delivery of, and shall
receive and collect, directly and without intervention or assistance of any
fiscal agent or other intermediary, all money and other property payable to or
receivable by the Trustee pursuant to this Indenture and the Sale and Servicing
Agreement. The Trustee shall apply all such money received by it as provided in
this Indenture and the Sale and Servicing Agreement. Except as otherwise
expressly provided in this Indenture or in the Sale and Servicing Agreement, if
any default occurs in the making of any payment or performance under any
agreement or instrument that is part of the Trust Estate, the Trustee may take
such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate proceedings. Any such
action shall be without prejudice to any right to claim a Default or Event of
Default under this Indenture and any right to proceed thereafter as provided in
Article V.
SECTION 8.2. RELEASE OF TRUST ESTATE Subject to the payment of its fees
and expenses pursuant to Section 6.7, the Trustee may, and when required by the
provisions of this Indenture shall, execute instruments to release property from
the lien of this Indenture, in a manner and under circumstances that are not
inconsistent with the provisions of this Indenture. No party relying upon an
instrument executed by the Trustee as provided in this Article VIII shall be
bound to ascertain the Trustee's authority, inquire into the satisfaction of any
conditions precedent or see to the application of any moneys.
(b) The Trustee shall on or after the Termination Date, release any
remaining portion of the Trust Estate that secured the Note from the lien of
this Indenture and release to the Issuer or any other Person entitled thereto
any funds then on deposit in the Pledged Accounts. The Trustee shall release
property from the lien of this Indenture pursuant to this Section 8.2 only upon
receipt of an Issuer Request accompanied by an Officer's Certificate meeting the
applicable requirements of SECTION 11.1.
(c) The Trustee shall release Ineligible Receivables from the lien
created by this Indenture upon any dividend of such Ineligible Receivables
pursuant to Section 5.10 of the Sale and Servicing Agreement.
32
ARTICLE IX
SUPPLEMENTAL INDENTURE
----------------------
SECTION 9.1. SUPPLEMENTAL INDENTURES WITH CONSENT OF THE CONTROLLING
PARTY.
(a) With the prior written consent of the Controlling Party and with
prior notice to the Rating Agencies by the Issuer, as evidenced to the Trustee,
the Issuer and the Trustee, when authorized by an Issuer Order, at any time and
from time to time, may enter into one or more indentures supplemental hereto, in
form satisfactory to the Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at any
time subject to the lien of this Indenture, or better to assure, convey
and confirm unto the Trustee any property subject or required to be
subjected to the lien of this Indenture, or to subject to the lien of
this Indenture additional property;
(ii) to evidence the succession, in compliance with the applicable
provisions hereof, of another person to the Issuer, and the assumption
by any such successor of the covenants of the Issuer herein and in the
Note;
(iii) to add to the covenants of the Issuer, for the benefit of
the Holder of the Note, or to surrender any right or power herein
conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property
to or with the Trustee;
(v) to cure any ambiguity, to correct or supplement any provision
herein or in any supplemental indenture which may be inconsistent with
any other provision herein or in any supplemental indenture or to make
any other provisions with respect to matters or questions arising under
this Indenture or in any supplemental indenture; provided that such
action shall not adversely affect the interests of the Noteholder; or
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Note and to add to
or change any of the provisions of this Indenture as shall be necessary
to facilitate the administration of the trusts hereunder by more than
one trustee, pursuant to the requirements of Article VI.
The Trustee is hereby authorized to join in the execution of any such
supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained.
(b) The Issuer and the Trustee, when authorized by an Issuer Order,
may, also with the consent of the Controlling Party, and with prior notice to
the Rating Agencies by the Issuer, as evidenced to the Trustee, enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Holder of the
Note under this Indenture; provided, however, that such action shall not, as
evidenced by an Opinion of Counsel, adversely affect in any material respect the
interests of the Noteholder.
SECTION 9.2. SUPPLEMENTAL INDENTURES WITH CONSENT OF THE NOTEHOLDER.
(a) The Issuer and the Trustee, when authorized by an Issuer Order,
also may, with prior written notice to the Rating Agencies and with the consent
of the Controlling Party, enter into an indenture or indentures supplemental
hereto for any purpose; provided, however, that, no such supplemental indenture
shall, without the consent of the Noteholder:
33
(i) change the date of payment of any installment of principal of
or interest on the Note, or reduce the principal amount thereof, the
interest rate thereon, change the provision of this Indenture relating
to the application of collections on, or the proceeds of the sale of,
the Trust Estate to payment of principal of or interest on the Note, or
change any place of payment where, or the coin or currency in which,
the Note or the interest thereon is payable;
(ii) impair the right to institute suit for the enforcement of the
provisions of this Indenture requiring the application of funds
available therefor, as provided in Article V, to the payment of any
such amount due on the Note on or after the respective due dates
thereof;
(iii) reduce the percentage of the Invested Amount of the Note,
the consent of the Holder of which is required for any such
supplemental indenture, or the consent of the Holder of which is
required for any waiver of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences provided
for in this Indenture;
(iv) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(v) modify any provision of this Section except to increase any
percentage specified herein or to provide that certain additional
provisions of this Indenture or the other Basic Documents cannot be
modified or waived without the consent of the Holder of each
Outstanding Note;
(vi) modify any of the provisions of this Indenture in such manner
as to affect the calculation of the amount of any payment of interest
or principal due on the Note on any Settlement Date (including the
calculation of any of the individual components of such calculation) or
to affect the rights of the Noteholder to the benefit of any provisions
for the mandatory redemption of the Note contained herein; or
(vii) permit the creation of any lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the
Trust Estate or, except as otherwise permitted or contemplated herein
or in any of the Basic Documents, terminate the lien of this Indenture
on any property at any time subject hereto or deprive the Holder of the
Note of the security provided by the lien of this Indenture.
(b) The Trustee may determine whether or not the Note would be affected
by any supplemental indenture and any such determination shall be conclusive
upon the Holder of the Note, whether theretofore or thereafter authenticated and
delivered hereunder. The Trustee shall not be liable for any such determination
made in good faith.
(c) It shall not be necessary for any Act of the Noteholder under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
(d) Promptly after the execution by the Issuer, the Controlling Party
and the Trustee of any supplemental indenture pursuant to this Section, the
Trustee shall mail to the Holder of the Note to which such amendment or
supplemental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Trustee to mail
such notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any such supplemental indenture.
SECTION 9.3. EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts created
by this Indenture, the Trustee shall be entitled to receive, and subject to
Sections 6.1 and 6.2, shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture that affects the Trustee's own
rights, duties, liabilities or immunities under this Indenture or otherwise.
34
SECTION 9.4. EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith with
respect to the Note affected thereby, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under this Indenture of
the Trustee, the Issuer, the Controlling Party and the Holder of the Note shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
SECTION 9.5. [RESERVED].
ARTICLE X
REPAYMENT AND PREPAYMENT OF NOTE
--------------------------------
SECTION 10.1. REPAYMENT OF THE NOTE. The Issuer shall repay the
Invested Amount of the Note (i) following the Facility Termination Date, in full
on or prior to the last day of the third Interest Period after such Facility
Termination Date or (ii) in full, or in part, by a prepayment made on any
Business Day (such day the "Prepayment Date") in accordance with Section 10.2.
Simultaneous with any prepayment, the Issuer shall pay all accrued and unpaid
interest on the Invested Amount to be prepaid.
SECTION 10.2. NOTICE OF PREPAYMENT.
(a) Notice of the prepayment of the Note shall be given, upon the
direction of the Issuer, by the Trustee by facsimile transmission, courier or
first class mail, postage prepaid, mailed, faxed or couriered not less than 10
days prior to the related Prepayment Date, to the Noteholder and the Controlling
Party. All notices of prepayment shall state (i) the Prepayment Date, (ii) the
Invested Amount to be prepaid; and (iii) the prepayment price.
(b) Failure to give notice of prepayment, or any defect therein, to any
Holder of any Note shall not impair or affect the validity of such prepayment.
Any prepayment pursuant to Section 10.1(ii) shall be subject to the payment of
any amounts required by the Controlling Party resulting from a prepayment or
repayment of the Invested Amount of the Note on a date other than a Settlement
Date.
SECTION 10.3. GENERAL PROCEDURES. The Invested Amount of the Note shall
not be considered reduced by any allocation, setting aside or distribution of
any portion of the Available Funds unless such Available Funds shall have been
actually delivered to the Controlling Party for the purpose of paying such
principal. The Invested Amount of the Note shall not be considered repaid by any
distribution of any portion of the Available Funds if at any time such
distribution is rescinded or must otherwise be returned for any reason, in which
event, if such amount has been returned by the Noteholder or the Controlling
Party, such principal and/or interest shall be reinstated in an amount equal to
the amount returned by the Controlling Party or Noteholder, as the case may be.
No provision of this Indenture shall require the payment or permit the
collection of interest in excess of the maximum permitted by applicable law.
SECTION 10.4. [RESERVED]
35
ARTICLE XI
MISCELLANEOUS
-------------
SECTION 11.1. COMPLIANCE CERTIFICATES AND OPINIONS, ETC.
(a) Except as set forth herein, upon any application or request by the
Issuer to the Trustee to take any action under any provision of this Indenture
(other than any request hereunder by the Issuer for an Advance), the Issuer
shall furnish to the Trustee and the Controlling Party (i) an Officer's
Certificate stating that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with, and (ii) an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that, in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or opinion
has read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory,
such signatory has made such examination or investigation as is
necessary to enable such signatory to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
signatory such condition or covenant has been complied with.
(b) Other than with respect to Dollars, prior to the deposit of any
Collateral or other property or securities with the Trustee that is to be made
the basis for the release of any property or securities subject to the lien of
this Indenture, the Issuer shall, in addition to any obligation imposed in
Section 11.1(a) or elsewhere in this Indenture, furnish to the Trustee and the
Controlling Party an Officer's Certificate certifying or stating the opinion of
each person signing such certificate as to the fair value (on the date of such
deposit) to the Issuer of the Collateral or other property or securities to be
so deposited.
(c) Whenever the Issuer is required to furnish to the Trustee or the
Controlling Party an Officer's Certificate certifying or stating the opinion of
any signer thereof as to the matters described in clause (b) above, the Issuer
shall also deliver to the Trustee or the Controlling Party, as applicable, an
Independent Certificate as to the same matters, if the fair value to the Issuer
of the securities to be so deposited and of all other such securities made the
basis of any such withdrawal or release since the commencement of the
then-current fiscal year of the Issuer, as set forth in the certificates
delivered pursuant to clause (b) above and this clause (c) is 10% or more of the
Invested Amount of the Note, but such a certificate need not be furnished with
respect to any securities so deposited, if the fair value thereof to the Issuer
as set forth in the related Officer's Certificate is less than $25,000 or less
than 1% of the Invested Amount of the Note.
(d) Other than with respect to the release of any Purchased Receivables
or Liquidated Receivables or the release of any Receivables upon a mandatory or
partial prepayment of the Note pursuant to Section 10.1, whenever any property
or securities are to be released from the lien of this Indenture, the Issuer
shall also furnish to the Trustee and the Controlling Party an Officer's
Certificate certifying or stating the opinion of each person signing such
certificate as to the fair value (within 90 days of such release) of the
property or securities proposed to be released and stating that in the opinion
of such person the proposed release will not impair the security under this
Indenture in contravention of the provisions hereof.
36
(e) Whenever the Issuer is required to furnish to the Trustee or the
Controlling Party an Officer's Certificate certifying or stating the opinion of
any signer thereof as to the matters described in clause (d) above, the Issuer
shall also furnish to the Trustee an Independent Certificate as to the same
matters if the fair value of the property or securities and of all other
property other than Purchased Receivables and Liquidated Receivables, securities
or Receivables released from the lien of this Indenture since the commencement
of the then current calendar year, as set forth in the certificates required by
clause (d) above and this clause (e), equals 10% or more of the Invested Amount
of the Note, but such certificate need not be furnished in the case of any
release of property or securities if the fair value thereof as set forth in the
related Officer's Certificate is less than $25,000 or less than 1 % of the then
Invested Amount of the Note.
(f) Notwithstanding Section 2.10 or any provision of this Section, the
Issuer may (A) collect, liquidate, sell or otherwise dispose of Receivables as
and to the extent permitted or required by the Basic Documents and (B) make cash
payments out of the Pledged Accounts as and to the extent permitted or required
by the Basic Documents.
SECTION 11.2. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
(a) In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
(b) Any certificate or opinion of an Authorized Officer of the Issuer
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his or her certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Servicer, the Seller or the Issuer, stating that the information with
respect to such factual matters is in the possession of the Servicer, the Seller
or the Issuer, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
(c) Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
(d) Whenever in this Indenture, in connection with any application or
certificate or report to the Trustee, it is provided that the Issuer shall
deliver any document as a condition of the granting of such application, or as
evidence of the Issuer's compliance with any term hereof, it is intended that
the truth and accuracy, at the time of the granting of such application or at
the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Trustee's right to rely upon the truth and accuracy of
any statement or opinion contained in any such document as provided in Article
VI.
SECTION 11.3. ACTS OF THE NOTEHOLDER. Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholder may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
the Noteholder in person or by agents duly appointed in writing; and except as
herein otherwise expressly provided such action shall become effective when such
instrument or instruments
37
are delivered to the Trustee, and, where it is hereby expressly required, to the
Issuer. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Noteholder signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 6.1) conclusive in
favor of the Trustee and the Issuer, if made in the manner provided in this
Section.
(a) The fact and date of the execution by any person of any such
instrument or writing may be proved in any customary manner of the Trustee.
(b) The ownership of the Note shall be proved by the Note Register.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of the Note shall bind the Holder of the
Note issued upon the registration thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to be done by the
Trustee or the Issuer in reliance thereon, whether or not notation of such
action is made upon the Note.
SECTION 11.4. NOTICES, ETC., TO TRUSTEE, ISSUER, CONTROLLING PARTY AND
RATING AGENCIES.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or Act of the Noteholder or other documents provided or permitted by this
Indenture to be made upon, given or furnished to or filed with:
(i) the Trustee shall be sufficient for every purpose hereunder if
personally delivered, delivered by overnight courier or mailed
certified mail, return receipt requested and shall be deemed to have
been duly given upon receipt to the Trustee at its Corporate Trust
Office;
(ii) the Issuer shall be sufficient for every purpose hereunder if
personally delivered, delivered by overnight courier or mailed
certified mail, return receipt requested and shall deemed to have been
duly given upon receipt to the Issuer at the Corporate Trust Office of
the Owner Trustee, with a copy to: Consumer Portfolio Services, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇
▇▇▇▇▇▇▇▇, Esq. Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇, Telecopy No. (949)
753-6897 or at such other address previously furnished in writing to
the Trustee by the Issuer. The Issuer shall promptly transmit any
notice received by it from the Noteholder to the Trustee; or
(iii) the Controlling Party shall be sufficient for any purpose
hereunder if in writing and mailed by registered mail or personally
delivered or telexed or telecopied to the recipient as follows:
To the Controlling Party:
WestLB AG, New York Branch
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(b) Notices required to be given to the Rating Agencies shall be in
writing, personally delivered, delivered by overnight courier or mailed
certified mail, return receipt requested to (i) in the case of Moody's, at the
following address: ▇▇▇▇▇'▇ Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and (ii) in the case of S&P, at the following address: Standard &
Poor's Ratings Services, a Division of The McGraw Hill Companies, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Asset-Backed Surveillance
Department; or as to each of the foregoing, at such other address as shall be
designated by written notice to the other parties.
38
SECTION 11.5. WAIVER. Where this Indenture provides for notice in any
manner, such notice may be waived in writing by any Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Noteholder shall be filed with
the Trustee but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such a waiver.
(a) In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholder when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice.
(b) Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute a Default or
Event of Default.
SECTION 11.6. ALTERNATE PAYMENT AND NOTICE PROVISIONS. Notwithstanding
any provision of this Indenture or the Note to the contrary, the Issuer may
enter into any agreement with the Holder of the Note providing for a method of
payment, or notice by the Trustee or the Note Paying Agent to such Holder, that
is different from the methods provided for in this Indenture for such payments
or notices, provided that such methods are reasonable and consented to by the
Trustee (which consent shall not be unreasonably withheld). The Issuer will
furnish to the Trustee a copy of each such agreement and the Trustee will cause
payments to be made and notices to be given in accordance with such agreements.
SECTION 11.7. [Reserved]
SECTION 11.8. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 11.9. SUCCESSORS AND ASSIGNS. All covenants and agreements in
this Indenture and the Note by the Issuer shall bind its successors and assigns,
whether so expressed or not. All agreements of the Trustee in this Indenture
shall bind its successors.
SECTION 11.10. SEVERABILITY. In case any provision in this Indenture or
in the Note shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 11.11. BENEFITS OF INDENTURE. Nothing in this Indenture or in
the Note, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the Noteholder, and any other person
with an ownership interest in any part of the Trust Estate, any benefit or any
legal or equitable right, remedy or claim under this Indenture.
SECTION 11.12. LEGAL HOLIDAYS. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Note or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
SECTION 11.13. GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS
LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
39
SECTION 11.14. COUNTERPARTS. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 11.15. RECORDING OF INDENTURE. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the Trustee or any other counsel reasonably acceptable
to the Trustee and the Controlling Party) to the effect that such recording is
necessary either for the protection of the Noteholder or any other person
secured hereunder or for the enforcement of any right or remedy granted to the
Trustee under this Indenture.
SECTION 11.16. ISSUER OBLIGATION. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Seller, the
Servicer, the Owner Trustee or the Trustee on the Note or under this Indenture
or any certificate or other writing delivered in connection herewith or
therewith, against (i) the Seller, the Servicer, the Owner Trustee or the
Trustee in its individual capacity (ii) any owner of a beneficial interest in
the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director,
employee or agent of the Seller, the Servicer, the Owner Trustee or the Trustee
in its individual capacity, any holder of a beneficial interest in the Issuer,
the Seller, the Servicer, the Owner Trustee or the Trustee or of any successor
or assign of the Seller, the Servicer, the Owner Trustee or the Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that neither the Trustee nor the Owner Trustee have such
obligations in its individual capacity) and except that any such partner, owner
or beneficiary shall be fully liable, to the extent provided by applicable law,
for any unpaid consideration for stock, unpaid capital contribution or failure
to pay any installment or call owing to such entity. For all purposes of this
Indenture, in the performance of its duties or obligations hereunder or in the
performance of any duties or obligations of the Issuer hereunder, the Owner
Trustee shall be subject to, and entitled to the benefits of, the terms and
provisions of Articles VI, VII and VIII of the Trust Agreement.
SECTION 11.17. NO PETITION. The Trustee and the Controlling Party, by
entering into this Indenture hereby covenant and agree that they will not at any
time institute against the Issuer, or join in any institution against the Issuer
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to the
Note, this Indenture or any of the Basic Documents.
SECTION 11.18. INSPECTION. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Controlling Party (or its
designee), the Noteholder (or its designee) or the Trustee, during the Issuer's
normal business hours, to examine all the books of account, records, reports,
and other papers of the Issuer, to make copies and extracts therefrom, to cause
such books to be audited by independent certified public accountants, and to
discuss the Issuer's affairs, finances and accounts with the Issuer's officers,
employees, and independent certified public accountants, all at such reasonable
times and as often as may be reasonably requested. The Trustee, the Controlling
Party, and the Noteholder shall and shall cause its representatives to hold in
confidence all such information except to the extent disclosure may be required
by law (and all reasonable applications for confidential treatment are
unavailing) and except to the extent that the Trustee may reasonably determine
that such disclosure is consistent with its obligations hereunder.
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IN WITNESS WHEREOF, the Issuer, the Controlling Party and the Trustee
have caused this Indenture to be duly executed by their respective officers,
hereunto duly authorized, all as of the day and year first above written.
CPS WAREHOUSE TRUST
By: Wilmington Trust Company, not in its
individual capacity but solely as
Owner Trustee
By:
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Name:
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Title:
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▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
By:
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Name:
------------------------------------
Title:
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WESTLB AG, as Controlling Party
By:
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Name:
------------------------------------
Title:
-----------------------------------
By:
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Name:
------------------------------------
Title:
-----------------------------------
CONSENTED TO BY:
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WESTLB AG, as Noteholder
By:
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Name:
------------------------------------
Title:
-----------------------------------
By:
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Name:
------------------------------------
Title:
-----------------------------------
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