INDENTURE
between
FIRST MERCHANTS AUTO TRUST 1997-1,
as Issuer
and
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
as Indenture Trustee
Dated as of March 1, 1997
TABLE OF CONTENTS
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.01.
Definitions. . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.02.
Rules of Construction. . . . . . . . . . . . . . . . . . 8
SECTION 1.03.
Incorporation by Reference of Trust Indenture Act. . . . 9
ARTICLE II
The Notes
SECTION 2.01.
Form . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.02.
Execution, Authentication and Delivery . . . . . . . . . 10
SECTION 2.03.
Temporary Notes. . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.04.
Registration; Registration of Transfer and Exchange. . . 11
SECTION 2.05.
[Reserved.]. . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.06.
Mutilated, Destroyed, Lost or Stolen Notes . . . . . . . 12
SECTION 2.07.
Persons Deemed Owner . . . . . . . . . . . . . . . . . . 12
SECTION 2.08.
Payment of Principal and Interest; Defaulted Interest. . 13
SECTION 2.09.
Cancellation . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.10.
Book-Entry Notes . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.11.
Notices to Clearing Agency . . . . . . . . . . . . . . . 15
SECTION 2.12.
Definitive Notes . . . . . . . . . . . . . . . . . . . . 15
SECTION 2.13.
Tax Treatment. . . . . . . . . . . . . . . . . . . . . . 15
SECTION 2.14.
Determination of LIBOR . . . . . . . . . . . . . . . . . 15
SECTION 2.15.
Initial Calculation Agent; Replacement of Calculation Agent 16
ARTICLE III
Covenants
SECTION 3.01.
Payment of Principal and Interest. . . . . . . . . . . . 16
SECTION 3.02.
Maintenance of Office or Agency. . . . . . . . . . . . . 16
SECTION 3.03.
Money for Payments To Be Held in Trust . . . . . . . . . 16
SECTION 3.04.
Existence. . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 3.05.
Protection of Trust Estate . . . . . . . . . . . . . . . 18
SECTION 3.06.
Opinions as to Trust Estate. . . . . . . . . . . . . . . 18
SECTION 3.07.
Performance of Obligations; Servicing of Receivables . . 19
SECTION 3.08.
Negative Covenants . . . . . . . . . . . . . . . . . . . 21
SECTION 3.09.
Annual Statement as to Compliance. . . . . . . . . . . . 21
SECTION 3.10.
Issuer May Consolidate, etc., Only on Certain Terms. . . 22
SECTION 3.11.
Successor or Transferee. . . . . . . . . . . . . . . . . 23
SECTION 3.12.
No Other Business. . . . . . . . . . . . . . . . . . . . 23
SECTION 3.13.
No Borrowing . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 3.14.
Servicer's Obligations . . . . . . . . . . . . . . . . . 23
SECTION 3.15.
Guarantees, Loans, Advances and Other Liabilities. . . . 24
SECTION 3.16.
Capital Expenditures . . . . . . . . . . . . . . . . . . 24
SECTION 3.17.
Removal of Administrator . . . . . . . . . . . . . . . . 24
SECTION 3.18.
Restricted Payments. . . . . . . . . . . . . . . . . . . 24
SECTION 3.19.
Notice of Events of Default. . . . . . . . . . . . . . . 24
SECTION 3.20.
Further Instruments and Acts . . . . . . . . . . . . . . 24
ARTICLE IV
Satisfaction and Discharge
SECTION 4.01.
Satisfaction and Discharge of Indenture. . . . . . . . . 24
SECTION 4.02.
Application of Trust Money . . . . . . . . . . . . . . . 26
SECTION 4.03.
Repayment of Moneys Held by Paying Agent . . . . . . . . 26
SECTION 4.04.
Release of Collateral. . . . . . . . . . . . . . . . . . 26
ARTICLE V
Remedies
SECTION 5.01.
Events of Default. . . . . . . . . . . . . . . . . . . . 26
SECTION 5.02.
Acceleration of Maturity; Rescission and Annulment . . . 27
SECTION 5.03.
Collection of Indebtedness and Suits for Enforcement by Indenture
Trustee; . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 5.04.
Remedies; Priorities . . . . . . . . . . . . . . . . . . 31
SECTION 5.05.
Optional Preservation of the Receivables . . . . . . . . 33
SECTION 5.06.
Limitation of Suits. . . . . . . . . . . . . . . . . . . 33
SECTION 5.07.
Unconditional Rights of Noteholders To Receive Principal and
Interest . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.08.
Restoration of Rights and Remedies . . . . . . . . . . . 34
SECTION 5.09.
Rights and Remedies Cumulative . . . . . . . . . . . . . 34
SECTION 5.10.
Delay or Omission Not a Waiver . . . . . . . . . . . . . 34
SECTION 5.11.
Control by Noteholders . . . . . . . . . . . . . . . . . 34
SECTION 5.12.
Waiver of Past Defaults. . . . . . . . . . . . . . . . . 35
SECTION 5.13.
Undertaking for Costs. . . . . . . . . . . . . . . . . . 35
SECTION 5.14.
Waiver of Stay or Extension Laws . . . . . . . . . . . . 36
SECTION 5.15.
Action on Notes. . . . . . . . . . . . . . . . . . . . . 36
SECTION 5.16.
Performance and Enforcement of Certain Obligations . . . 36
ARTICLE VI
The Indenture Trustee
SECTION 6.01.
Duties of Indenture Trustee. . . . . . . . . . . . . . . 37
SECTION 6.02.
Rights of Indenture Trustee. . . . . . . . . . . . . . . 38
SECTION 6.03.
Individual Rights of Indenture Trustee . . . . . . . . . 38
SECTION 6.04.
Indenture Trustee's Disclaimer . . . . . . . . . . . . . 39
SECTION 6.05.
Notice of Defaults . . . . . . . . . . . . . . . . . . . 39
SECTION 6.06.
Reports by Indenture Trustee to Holders. . . . . . . . . 39
SECTION 6.07.
Compensation and Indemnity . . . . . . . . . . . . . . . 39
SECTION 6.08.
Replacement of Indenture Trustee . . . . . . . . . . . . 40
SECTION 6.09.
Successor Indenture Trustee by Merger. . . . . . . . . . 41
SECTION 6.10.
Appointment of Co-Indenture Trustee or Separate Indenture
Trustee. . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 6.11.
Eligibility; Disqualification. . . . . . . . . . . . . . 42
SECTION 6.12.
Pennsylvania Motor Vehicle Sales Finance Act Licenses. . 42
SECTION 6.13.
Preferential Collection of Claims Against Issuer . . . . 42
ARTICLE VII
Noteholders' Lists and Reports
SECTION 7.01.
Issuer To Furnish Indenture Trustee Names and Addresses of
Noteholders. . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 7.02.
Preservation of Information; Communications to Noteholders 43
SECTION 7.03.
Reports by Issuer. . . . . . . . . . . . . . . . . . . . 43
SECTION 7.04.
Reports by Indenture Trustee . . . . . . . . . . . . . . 44
ARTICLE VIII
Accounts, Disbursements and Releases
SECTION 8.01.
Collection of Money. . . . . . . . . . . . . . . . . . . 44
SECTION 8.02.
Trust Accounts . . . . . . . . . . . . . . . . . . . . . 44
SECTION 8.03.
General Provisions Regarding Accounts. . . . . . . . . . 45
SECTION 8.04.
Release of Trust Estate. . . . . . . . . . . . . . . . . 46
SECTION 8.05.
Opinion of Counsel . . . . . . . . . . . . . . . . . . . 46
ARTICLE IX
Supplemental Indentures
SECTION 9.01.
Supplemental Indentures Without Consent of Noteholders . 47
SECTION 9.02.
Supplemental Indentures with Consent of Noteholders. . . 48
SECTION 9.03.
Execution of Supplemental Indentures . . . . . . . . . . 49
SECTION 9.04.
Effect of Supplemental Indenture . . . . . . . . . . . . 49
SECTION 9.05.
Reference in Notes to Supplemental Indentures. . . . . . 49
SECTION 9.06.
Conformity with Trust Indenture Act. . . . . . . . . . . 50
ARTICLE X
Redemption of Notes
SECTION 10.01.
Redemption . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 10.02.
Form of Redemption Notice. . . . . . . . . . . . . . . . 50
SECTION 10.03.
Notes Payable on Redemption Date . . . . . . . . . . . . 51
ARTICLE XI
Miscellaneous
SECTION 11.01.
Compliance Certificates and Opinions, etc. . . . . . . . 51
SECTION 11.02.
Form of Documents Delivered to Indenture Trustee . . . . 53
SECTION 11.03.
Acts of Noteholders. . . . . . . . . . . . . . . . . . . 53
SECTION 11.04.
Notices, etc., to Indenture Trustee, Issuer and Rating Agencies 54
SECTION 11.05.
Notices to Noteholders; Waiver . . . . . . . . . . . . . 55
SECTION 11.06.
Alternate Payment and Notice Provisions. . . . . . . . . 55
SECTION 11.07.
Effect of Headings and Table of Contents . . . . . . . . 55
SECTION 11.08.
Successors and Assigns . . . . . . . . . . . . . . . . . 55
SECTION 11.09.
Separability . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 11.10.
Benefits of Indenture. . . . . . . . . . . . . . . . . . 56
SECTION 11.11.
Legal Holidays . . . . . . . . . . . . . . . . . . . . . 56
SECTION 11.12.
GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . 56
SECTION 11.13.
Counterparts . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 11.14.
Recording of Indenture . . . . . . . . . . . . . . . . . 56
SECTION 11.15.
Trust Obligation . . . . . . . . . . . . . . . . . . . . 56
SECTION 11.16.
No Petition. . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 11.17.
Inspection . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 11.18.
Conflict with Trust Indenture Act. . . . . . . . . . . . 57
SCHEDULE A
Schedule of Receivables
EXHIBIT A-1
Form of Class A-1 Note
EXHIBIT A-2
Form of Class A-2 Note
EXHIBIT B
Form of the Note Depository Agreement INDENTURE dated as of March 1, 1997,
between FIRST MERCHANTS AUTO TRUST 1997-1, a Delaware business trust (the
"Issuer"), and ▇▇▇▇▇▇ TRUST AND SAVINGS BANK, an Illinois banking corporation,
as trustee and not in its individual capacity (the "Indenture Trustee").
Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Holders of the Issuer's Floating Rate Asset
Backed Notes, Class A-1 (the "Class A-1 Notes") and 6.75% Asset Backed Notes,
Class A-2 (the "Class A-2 Notes" and, together with the Class A-1 Notes, the
"Notes"):
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing Date, as
Indenture Trustee for the benefit of the Holders of the Notes, all of the
Issuer's right, title and interest in and to (a) the Receivables and all
moneys received thereon on or after March 1, 1997; (b) the security interests
in the Financed Vehicles and any accessions thereto granted by Obligors
pursuant to the Receivables and any other interest of the Issuer in such
Financed Vehicles; (c) any Liquidation Proceeds and any other proceeds with
respect to the Receivables from claims on any physical damage, credit life or
disability insurance policies covering Financed Vehicles or Obligors,
including any vendor's single interest or other collateral protection
insurance policy; (d) any property that shall have secured a Receivable and
that shall have been acquired by or on behalf of the Seller, the Servicer, or
the Issuer; (e) all documents and other items contained in the Receivables
Files; (f) all funds on deposit from time to time in the Trust Accounts and
in all investments and proceeds thereof (including all income thereon);
(g) the Sale and Servicing Agreement (including the Issuer's right to cause
the Seller to repurchase Receivables from the Issuer under certain
circumstances described therein); and (h) all present and future claims,
demands, causes of action 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 thereof, 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 "Collateral").
The foregoing Grant is made in trust to secure the payment of principal of
and interest on, and any other amounts owing in respect of, the Notes,
equally and ratably without prejudice, priority or distinction, and to secure
compliance with the provisions of this Indenture, all as provided in this
Indenture.
The Indenture Trustee, on behalf of the Holders of the Notes, acknowledges
such Grant, accepts the trusts under this Indenture in accordance with the
provisions of this Indenture and agrees to perform its duties required in
this Indenture to the best of its ability to the end that the interests of
the Holders of the Notes may be adequately and effectively protected.
ARTICLE XXVIII
Definitions and Incorporation by Reference
SECTION 1.01.
(a) Definitions. Except as otherwise specified herein or as the context
may otherwise require, the following terms have the respective meanings set
forth below for all purposes of this Indenture.
"Act" has the meaning specified in Section 11.03(a).
"Administration Agreement" means the Administration Agreement dated as of
March 1, 1997, among the Administrator, the Issuer and the Indenture Trustee.
"Administrator" means First Merchants, or any successor Administrator under
the Administration Agreement.
"Affiliate" means, with respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with
respect to any Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Authorized Officer" means, with respect to the Issuer, any officer of the
Owner Trustee who is authorized to act for the Owner Trustee in matters
relating to the Issuer and who is identified on the list of Authorized
Officers delivered by the Owner Trustee to the Indenture Trustee on the
Closing Date (as such list may be modified or supplemented from time to time
thereafter) and, so long as the Administration Agreement is in effect, any
Vice President or more senior officer of the Administrator who is authorized
to act for the Administrator in matters relating to the Issuer and to be
acted upon by the Administrator pursuant to the Administration Agreement and
who is identified on the list of Authorized Officers delivered by the
Administrator to the Indenture Trustee on the Closing Date (as such list may
be modified or supplemented from time to time thereafter).
"Book-Entry Notes" means a beneficial interest in the Notes, ownership and
transfers of which shall be made through book entries by a Clearing Agency as
described in Section 2.10.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions or trust companies in ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ or the city in which the Corporate Trust Office is located are
authorized or obligated by law, regulation or executive order to remain
closed.
"Calculation Agent" means the Indenture Trustee or any other Person
authorized by the Issuer to make the calculations described in Section 2.12
on behalf of the Trust and the Noteholders. The Indenture Trustee shall be
the initial Calculation Agent.
"Certificate of Trust" means the certificate of trust of the Issuer
substantially in the form of Exhibit B to the Trust Agreement.
"Class A-1 Notes" means the Floating Rate Asset Backed Notes, Class A-1,
substantially in the form of Exhibit A-1.
"Class A-1 Rate" means a per annum rate equal to LIBOR plus 0.13% per annum,
subject to a maximum rate with respect to any Floating Rate Interest Accrual
Period of 11% per annum (computed on the basis of the actual number of days
in each Floating Rate Interest Accrual Period divided by 360).
"Class A-2 Notes" means the 6.75% Asset Backed Notes, Class A-2,
substantially in the form of Exhibit A-2.
"Class A-2 Rate" means 6.75% per annum (computed on the basis of a 360-day
year consisting of twelve 30-day months).
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency
effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means March 31, 1997.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
"Collateral" has the meaning specified in the Granting Clause of this
Indenture.
"Corporate Trust Office" means the principal office of the Indenture Trustee
at which at any particular time its corporate trust business is administered,
which office at the date of execution of this Agreement is located at ▇▇▇▇▇▇
Trust and Savings Bank, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ (facsimile number (▇▇▇) ▇▇▇-▇▇▇▇); Attention: Indenture Trust
Administration, or at such other address as the Indenture Trustee may
designate from time to time by notice to the Noteholders, the Security
Insurer and the Issuer, or the principal corporate trust office of any
successor Indenture Trustee at the address designated by such successor
Indenture Trustee by notice to the Noteholders, the Security Insurer and the
Issuer.
"Default" means any occurrence that is, or with notice or the lapse of time
or both would become, an Event of Default.
"Definitive Notes" has the meaning specified in Section 2.10.
"Event of Default" has the meaning specified in Section 5.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Executive Officer" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer,
President, Executive Vice President, any Vice President, the Secretary or the
Treasurer of such corporation; and with respect to any partnership, any
general partner thereof.
"Floating Rate Interest Accrual Period" means, with respect to the Class A-1
Notes and a given Distribution Date, the period from and including the most
recent Distribution Date on which interest has been paid on the Class A-1
Notes (or, in the case of the first Distribution Date, the Closing Date) to
but excluding such given Distribution Date.
"Grant" means mortgage, pledge, bargain, sell, warrant, alienate, remise,
release, convey, assign, transfer, create, and ▇▇▇▇▇ ▇ ▇▇▇▇ upon and a
security interest in and a right of set-off against, deposit, set over and
confirm pursuant to this Indenture. A Grant of the Collateral or of any
other agreement or instrument shall include all rights, powers and options
(but none of the obligations) of the granting party thereunder, including the
immediate and continuing right to claim for, collect, receive and give
receipt for principal and interest payments in respect of the Collateral and
all other moneys payable thereunder, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all rights
and options, to bring Proceedings in the name of the granting party or
otherwise, and generally to do and receive anything that the granting party
is or may be entitled to do or receive thereunder or with respect thereto.
"Holder" or "Noteholder" means (a) a Person in whose name a Note is
registered on the Note Register or (b) if the Security Insurer has made a
payment under the Policy, the Security Insurer to the extent provided in
Section 2.08(c) of this Indenture, Section 5.10 of the Sale and Servicing
Agreement and the proviso to the definition of "Outstanding".
"Indenture Trustee" means ▇▇▇▇▇▇ Trust and Savings Bank, an Illinois banking
corporation, not in its individual capacity, but as Indenture Trustee under
this Indenture, or any successor Indenture Trustee under this Indenture.
"Independent" means, when used with respect to any specified Person, that
the Person (a) is in fact independent of the Issuer, any other obligor on the
Notes, the Seller and any Affiliate of any of the foregoing Persons, (b) does
not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Seller or any Affiliate
of any of the foregoing Persons and (c) is not connected with the Issuer, any
such other obligor, the Seller or any Affiliate of any of the foregoing
Persons as an officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar functions.
"Independent Certificate" means a certificate or opinion to be delivered to
the Indenture Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01, made by an
Independent appraiser or other expert appointed by an Issuer Order and
approved by the Indenture Trustee in the exercise of reasonable care, and
such opinion or certificate shall state that the signer has read the
definition of "Independent" in this Indenture and that the signer is
Independent within the meaning thereof.
"Interest Accrual Period" means, with respect to the Class A-2 Notes and a
given Distribution Date, the period from and including the 15th day of the
month preceding the month of such Distribution Date (or, in the case of the
first Distribution Date, the Closing Date) to, but excluding, the 15th day of
the month of such Distribution Date.
"Interest Rate" means the Class A-1 Rate or the Class A-2 Rate.
"Issuance Date" means the date on which the Notes are first authenticated
and issued.
"Issuer" means First Merchants Auto Trust 1997-1 until a successor replaces
it and, thereafter, means the successor and, for purposes of any provision
contained herein and required by the TIA, each other obligor on the Notes.
"Issuer Order" or "Issuer Request" means a written order or request signed
in the name of the Issuer by any one of its Authorized Officers and delivered to
the Indenture Trustee.
"LIBOR" means, with respect to the applicable Floating Rate Interest Accrual
Period, the London interbank offered rate for U.S. dollar deposits for one
month determined by the Calculation Agent on the related LIBOR Determination
Date pursuant to Section 2.14.
"LIBOR Business Day" means any day that is both a Business Day and a day on
which banking institutions in the City of London, England are not required or
authorized by law to be closed.
"LIBOR Determination Date" means (i) with respect to the first Floating Rate
Interest Accrual Period, the second LIBOR Business Day prior to the Closing
Date and (ii) with respect to each Floating Rate Interest Accrual Period
thereafter, the second LIBOR Business Day prior to the first day of such
Floating Rate Interest Accrual Period for so long as the Class A-1 Notes are
outstanding.
"Note" means a Class A-1 Note or a Class A-2 Note.
"Note Depository Agreement" means the agreement dated March 31, 1997, among
the Issuer, the Administrator, the Indenture Trustee and The Depository Trust
Company, as the initial Clearing Agency, relating to the Class A-1 Notes and
the Class A-2 Notes, substantially in the form of Exhibit B.
"Note Owner" means, with respect to a Book-Entry Note, the Person who is the
beneficial owner of such Book-Entry Note, as reflected on the books of the
Clearing Agency or on the books of a Person maintaining an account with such
Clearing Agency (directly as a Clearing Agency Participant or as an indirect
participant, in each case in accordance with the rules of such Clearing
Agency).
"Note Register" and "Note Registrar" have the respective meanings specified
in Section 2.04.
"Officer's Certificate" means a certificate signed by any Authorized Officer
of the Issuer, under the circumstances described in, and otherwise complying
with, the applicable requirements of Section 11.01, and delivered to the
Indenture Trustee. Unless otherwise specified, any reference in this
Indenture to an Officer's Certificate shall be to an Officer's Certificate of
any Authorized Officer of the Issuer.
"Opinion of Counsel" means one or more written opinions of counsel who may,
except as otherwise expressly provided in this Indenture, be an employee of
or counsel to the Issuer and who shall be satisfactory to the Indenture
Trustee and (if the Security Insurer is an addressee of such Opinion of
Counsel) to the Security Insurer, and which opinion or opinions shall be
addressed to the Indenture Trustee, shall comply with any applicable
requirements of Section 11.01 and shall be in form and substance satisfactory
to the Indenture Trustee and (if the Security Insurer is an addressee of such
Opinion of Counsel) to the Security Insurer.
"Outstanding" means, as of any date of determination, all Notes theretofore
authenticated and delivered under this Indenture except:
(i)
Notes theretofore cancelled by the Note Registrar or delivered to the Note
Registrar for cancellation;
(ii)
Notes or portions thereof the payment for which money in the necessary amount
has been theretofore deposited with the Indenture Trustee or any Paying Agent
in trust for the Holders of such Notes (provided, however, that if such Notes
are to be redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision for such notice has been made, satisfactory to
the Indenture Trustee); and
(iii)
Notes in exchange for or in lieu of which other Notes have been authenticated
and delivered pursuant to this Indenture unless proof satisfactory to the
Indenture Trustee is presented that any such Notes are held by a bona fide
purchaser;
provided, however, that Notes that have been paid with proceeds of the Policy
shall continue to remain Outstanding for purposes of this Indenture until the
Security Insurer has been paid as subrogee hereunder or reimbursed pursuant
to the Insurance Agreement, as evidenced by a written notice from the
Security Insurer delivered to the Indenture Trustee, and the Security Insurer
shall be deemed to be the Holder of such Notes to the extent of any payments
made thereon by the Security Insurer; provided, further that in determining
whether the Holders of the requisite Outstanding Amount of the Notes have
given any request, demand, authorization, direction, notice, consent or
waiver hereunder or under any Basic Document, Notes owned by the Issuer, any
other obligor upon the Notes, the Seller or any Affiliate of any of the
foregoing Persons shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Indenture Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Notes that the Indenture Trustee knows to be so owned
shall be so disregarded. Notes so owned that have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes to the satisfaction
of the Indenture Trustee the pledgee's right so to act with respect to such
Notes and that the pledgee is not the Issuer, any other obligor upon the
Notes, the Seller or any Affiliate of any of the foregoing Persons.
"Outstanding Amount" means, as of any date of determination the aggregate
principal amount of all Notes, or a Class of Notes, as applicable,
Outstanding as of such date of determination.
"Owner Trustee" means Chase Manhattan Bank Delaware, not in its individual
capacity but solely as Owner Trustee under the Trust Agreement, or any
successor Owner Trustee under the Trust Agreement.
"Paying Agent" means the Indenture Trustee or any other Person that meets
the eligibility standards for the Indenture Trustee specified in Section 6.11
and is authorized by the Issuer to make payments to and distributions from the
Collection Account and the Note Distribution Account, including payments of
principal of or interest on the Notes on behalf of the Issuer.
"Payment Date" means a Distribution Date.
"Person" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust (including any beneficiary
thereof), unincorporated organization or government or any agency or
political subdivision thereof.
"Policy" means the Notes Policy.
"Predecessor Note" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.06 in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
"Proceeding" means any suit in equity, action at law or other judicial or
administrative proceeding.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days (or such shorter period as is
acceptable to each Rating Agency) prior notice thereof and that each of the
Rating Agencies shall have notified the Seller, the Servicer, the Issuer and
(if the Security Insurer is the Controlling Party) the Security Insurer in
writing that such action will not result in a reduction or withdrawal of the
then current rating of the Notes and will not result in an increased capital
charge to the Security Insurer.
"Rating Agency" means each of Moody's and Standard & Poor's. If no such
organization or successor is any longer in existence, "Rating Agency" shall
be a nationally recognized statistical rating organization or other
comparable Person designated by the Issuer, notice of which designation shall
be given to the Indenture Trustee, the Owner Trustee and the Servicer.
"Record Date" means, with respect to a Distribution Date or Redemption Date,
the close of business on the day immediately preceding such Distribution Date
or Redemption Date.
"Redemption Date" means, in the case of a redemption of the Notes pursuant
to Section 10.01(a) or a payment to Noteholders pursuant to Section 10.01(b),
the Distribution Date specified by the Servicer or the Issuer pursuant to
Section 10.01(a) or (b), as applicable.
"Redemption Price" means (a) in the case of a redemption of the Notes
pursuant to Section 10.01(a), an amount equal to the unpaid principal amount
of the Notes redeemed plus accrued and unpaid interest thereon at the Class
A-2 Rate for each Note being so redeemed to but excluding the Redemption
Date, or (b) in the case of a payment made to Noteholders pursuant to
Section 10.01(b), the amount on deposit in the Note Distribution Account, but
not in excess of the amount specified in clause (a) above.
"Registered Holder" means the Person in whose name a Note is registered on
the Note Register on the applicable Record Date.
"Responsible Officer" means, with respect to the Indenture Trustee, any
officer within the Corporate Trust Office of the Indenture Trustee, including
any Vice President, Assistant Vice President, Assistant Treasurer, Assistant
Secretary or any other officer of the Indenture Trustee customarily
performing functions similar to those performed by any of the above
designated officers and also, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer's knowledge
of and familiarity with the particular subject.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement dated
as of March 1, 1997, among the Issuer, the Seller, the Servicer and the
Indenture Trustee, as Backup Servicer, Collateral Agent and Indenture
Trustee.
"Schedule of Receivables" means the list of Receivables set forth in
Schedule A (which Schedule may be in the form of microfiche).
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" means FMARC II, in its capacity as seller under the Sale and
Servicing Agreement, and its successors in interest.
"Servicer" means First Merchants, in its capacity as servicer under the Sale
and Servicing Agreement, and any Successor Servicer thereunder.
"State" means any one of the 50 states of the United States of America or
the District of Columbia.
"Successor Servicer" has the meaning specified in Section 3.07(e).
"Telerate Page 3750" means the page so designated on the Dow ▇▇▇▇▇ Telerate
Service or such other page as may replace that page on that service, or such
other service as may be nominated as the information vendor, for the purpose
of displaying London interbank offered rates of major banks.
"Trust Estate" means all money, instruments, rights and other property that
are subject or intended to be subject to the lien and security interest of
this Indenture for the benefit of the Noteholders (including, without
limitation, all property and interests Granted to the Indenture Trustee),
including all proceeds thereof.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as in
force on the date hereof, unless otherwise specifically provided.
"UCC" means, unless the context otherwise requires, the Uniform Commercial
Code, as in effect in the relevant jurisdiction, as amended from time to
time.
(b)
Except as otherwise specified herein or as the context may otherwise
require, capitalized terms used but not otherwise defined herein have the
respective meanings set forth in the Sale and Servicing Agreement for all
purposes of this Indenture.
SECTION 1.02.
Rules of Construction. Unless the context otherwise requires:
(i)
a term has the meaning assigned to it;
(ii)
an accounting term not otherwise defined has the meaning assigned to it in
accordance with generally accepted accounting principles as in effect from
time to time;
(iii)
"or" is not exclusive;
(iv)
"including" means including without limitation;
(v)
definitions are applicable to the singular and plural forms of such terms
and to the masculine, feminine and neuter genders of such terms; and
(vi)
any agreement, instrument or statute defined or referred to herein or in any
instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated therein;
references to a Person are also to its permitted successors and assigns.
SECTION 1.03.
Incorporation by Reference of Trust Indenture Act. Whenever this Indenture
refers to a provision of the TIA, the provision is incorporated by reference
in and made a part of this Indenture. The following TIA terms used in this
Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture Trustee.
"obligor" on the indenture securities means the Issuer and any other obligor
on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule
have the meaning assigned to them by such definitions.
ARTICLE XXIX
The Notes
SECTION 2.01.
Form. The Class A-1 Notes and the Class A-2 Notes, in each case together
with the Indenture Trustee's certificate of authentication, shall be in
substantially the form set forth in Exhibit A-1 and Exhibit A-2,
respectively, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined by
the officers executing such Notes, as evidenced by their execution of the
Notes. Any portion of the text of any Note may be set forth on the reverse
thereof, with an appropriate reference thereto on the face of the Note.
The definitive Notes shall be typewritten, printed, lithographed or engraved
or produced by any combination of these methods (with or without steel
engraved borders), all as determined by the officers executing such Notes, as
evidenced by their execution of such Notes.
Each Note shall be dated the date of its authentication. The terms of the
Notes set forth in Exhibit A-1 and Exhibit A-2 are part of the terms of this
Indenture.
SECTION 2.02.
Execution, Authentication and Delivery. The Notes shall be executed on
behalf of the Issuer by any of its Authorized Officers. The signature of any
such Authorized Officer on the Notes may be manual or facsimile.
Notes bearing the manual or facsimile signature of individuals who were at
any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not
hold such offices at the date of such Notes.
The Indenture Trustee shall upon Issuer Order authenticate and deliver Class
A-1 Notes for original issue in an aggregate principal amount of $68,000,000
and Class A-2 Notes for original issue in an aggregate principal amount of
$29,595,000. The aggregate principal amount of Class A-1 Notes and Class A-2
Notes outstanding at any time may not exceed such respective amounts except
as provided in Section 2.06.
Each Note shall be dated the date of its authentication. The Notes shall be
issuable as registered Notes in the minimum denomination of $1,000 and in
integral multiples of $1,000 in excess thereof.
No Note shall be entitled to any benefit under this Indenture or be valid or
obligatory for any purpose, unless there appears on such Note a certificate
of authentication substantially in the form provided for herein executed by
the Indenture Trustee by the manual signature of one of its authorized
signatories, and such certificate upon any Note shall be conclusive evidence,
and the only evidence, that such Note has been duly authenticated and
delivered hereunder.
SECTION 2.03.
Temporary Notes. Pending the preparation of definitive Notes, the Issuer
may execute, and upon receipt of an Issuer Order the Indenture Trustee shall
authenticate and deliver, temporary Notes that are printed, lithographed,
typewritten, mimeographed or otherwise produced, of the tenor of the
definitive Notes in lieu of which they are issued and with such variations
not inconsistent with the terms of this Indenture as the officers executing
such Notes may determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer shall cause definitive Notes to be
prepared without unreasonable delay. After the preparation of definitive
Notes, the temporary Notes shall be exchangeable for definitive Notes upon
surrender of the temporary Notes at the office or agency of the Issuer to be
maintained as provided in Section 3.02, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Notes, the Issuer
shall execute, and the Indenture Trustee shall authenticate and deliver in
exchange therefor, a like principal amount of definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes shall in all respects
be entitled to the same benefits under this Indenture as definitive Notes.
SECTION 2.04.
Registration; Registration of Transfer and Exchange. The Issuer shall
cause to be kept a register (the "Note Register") in which, subject to such
reasonable regulations as it may prescribe and the restrictions on transfers
of the Notes set forth herein, the Issuer shall provide for the registration
of Notes and the registration of transfers of Notes. The Indenture Trustee
initially shall be the "Note Registrar" for the purpose of registering Notes
and transfers of Notes as herein provided. Upon any resignation of any Note
Registrar, the Issuer shall promptly appoint a successor or, if it elects not
to make such an appointment, assume the duties of Note Registrar.
If a Person other than the Indenture Trustee is appointed by the Issuer as
Note Registrar, the Issuer will give the Indenture Trustee prompt written
notice of the appointment of such Note Registrar and of the location, and any
change in the location, of the Note Register, and the Indenture Trustee shall
have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof, and the Indenture 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 names and addresses of the Holders
of the Notes and the principal amounts and number of such Notes.
Upon surrender for registration of transfer of any Note at the office or
agency of the Issuer to be maintained as provided in Section 3.02, if the
requirements of Section 8-401(1) of the UCC are met the Issuer shall execute,
and the Indenture Trustee shall authenticate and the Noteholder shall obtain
from the Indenture Trustee, in the name of the designated transferee or
transferees, one or more new Notes of the same Class in any authorized
denominations, of a like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes of the
same Class in any authorized denominations, of a like aggregate principal
amount, upon surrender of the Notes to be exchanged at such office or agency.
Whenever any Notes are so surrendered for exchange, if the requirements of
Section 8-401(1) of the UCC are met the Issuer shall execute, and the
Indenture Trustee shall authenticate and the Noteholder shall obtain from the
Indenture Trustee, the Notes which the Noteholder making the exchange is
entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or exchange
shall be duly endorsed by, or be accompanied by a written instrument of
transfer in form satisfactory to the Indenture Trustee duly executed by, the
Holder thereof or such Holder's attorney duly authorized in writing, with
such signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in the Securities Transfer Agent's 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.
No service charge shall be made to a Holder for any registration of transfer
or exchange of Notes, but the Issuer may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 2.03 or 9.05 not involving any transfer.
The preceding provisions of this Section notwithstanding, the Issuer shall
not be required to make and the Note Registrar need not register transfers or
exchanges of Notes selected for redemption or of any Note for a period of 15
days preceding the due date for any payment with respect to the Note.
SECTION 2.05.
[Reserved.]
SECTION 2.06.
Mutilated, Destroyed, Lost or Stolen Notes. If (i) any mutilated Note is
surrendered to the Indenture Trustee, or the Indenture Trustee receives
evidence to its satisfaction of the destruction, loss or theft of any Note,
and (ii) there is delivered to the Indenture Trustee such security or
indemnity as may be required by it to hold the Issuer and the Indenture
Trustee harmless, then, in the absence of notice to the Issuer, the Note
Registrar or the Indenture Trustee that such Note has been acquired by a bona
fide purchaser, and provided that the requirements of Section 8-405 of the
UCC are met, the Issuer shall execute, and upon its request the Indenture
Trustee shall authenticate and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Note, a replacement Note of the
same Class; provided, however, that if any such destroyed, lost or stolen
Note, but not a mutilated Note, shall have become or within seven days shall
be due and payable, or shall have been called for redemption, instead of
issuing a replacement Note, the Issuer may pay such destroyed, lost or stolen
Note when so due or payable or upon the Redemption Date without surrender
thereof. If, after the delivery of such replacement Note or payment of a
destroyed, lost or stolen Note pursuant to the proviso to the preceding
sentence, a bona fide purchaser of the original Note in lieu of which such
replacement Note was issued presents for payment such original Note, the
Issuer and the Indenture Trustee shall be entitled to recover such
replacement Note (or such payment) from the Person to whom it was delivered
or any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or
indemnity provided therefor to the extent of any loss, damage, cost or
expense incurred by the Issuer or the Indenture Trustee in connection
therewith.
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
Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section in replacement of any
mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.07.
Persons Deemed Owner. Prior to due presentment for registration of
transfer of any Note, the Issuer, the Indenture Trustee, the Security Insurer
and any agent of the Issuer, the Indenture Trustee or the Security Insurer may
treat the Person in whose name any Note is registered (as of the day of
determination) as the owner of such Note for the purpose of receiving
payments of principal of and interest, if any, on such Note and for all other
purposes whatsoever, whether or not such Note be overdue, and none of the
Issuer, the Indenture Trustee, the Security Insurer or any agent of the
Issuer, the Indenture Trustee or the Security Insurer shall be affected by
notice to the contrary.
SECTION 2.08.
Payment of Principal and Interest; Defaulted Interest. (a) The Class A-1
Notes and the Class A-2 Notes shall accrue interest at the Class A-1 Rate and
the Class A-2 Rate, respectively, as set forth in Exhibits A-1 and A-2,
respectively, and such interest shall be payable on each Distribution Date as
specified therein, subject to Section 3.01. Any installment of interest or
principal payable on a Note that is punctually paid or duly provided for by
the Issuer on the applicable Distribution Date shall be paid to the Person in
whose name such Note (or one or more Predecessor Notes) is registered on the
Record Date (i) by check mailed first-class postage prepaid to such Person's
address as it appears on the Note Register on such Record Date, except that,
unless Definitive Notes have been issued pursuant to Section 2.12, with
respect to Notes registered on the Record Date in the name of the nominee of
the Clearing Agency (initially, such nominee to be Cede & Co.), payment will
be made by wire transfer in immediately available funds to the account
designated by such nominee; provided, however, that the final installment of
principal payable with respect to such Note on a Distribution Date or on the
Final Scheduled Distribution Date (including the Redemption Price for any
Note called for redemption pursuant to Section 10.01) shall be payable as
provided in paragraph (b) below. The funds represented by any such checks
returned undelivered shall be held in accordance with Section 3.03.
(b)
The principal of each Note shall be payable in installments on each
Distribution Date as provided in the forms of the Notes set forth in Exhibit
A-1 and A-2. Notwithstanding the foregoing, the entire unpaid principal
amount of the Notes may be declared immediately due and payable, if not
previously paid, in the manner provided in Section 5.02 on the date on which
an Event of Default shall have occurred and be continuing by the Indenture
Trustee or Holders of Notes representing not less than a majority of the
Outstanding Amount; provided, however, that if on the date any such Event of
Default occurs or is continuing the Security Insurer is the Controlling
Party, the Security Insurer, in its sole discretion, may determine whether or
not to accelerate payments on the Notes. All principal payments on each
Class of Notes shall be made pro rata to the Noteholders of each Class
entitled thereto. The Indenture Trustee shall notify the Person in whose
name a Note is registered at the close of business on the Record Date
preceding the Distribution Date on which the Issuer expects the final
installment of principal of and interest on such Note to be paid. Such
notice shall be mailed no later than five days prior to such final
Distribution Date and shall specify that such final installment will be
payable only upon presentation and surrender of such Note and shall specify
the place where such Note may be presented and surrendered for payment of
such installment. Notices in connection with redemptions of Notes shall be
mailed to Noteholders as provided in Section 10.02.
(c)
Promptly following the date on which all principal of and interest on the
Notes have been paid in full and the Notes have been surrendered to the
Indenture Trustee, the Indenture Trustee shall, if the Security Insurer has
paid any amount in respect of the Notes under the Policy that has not been
reimbursed to the Security Insurer, deliver such surrendered Notes to the
Security Insurer.
(d)
If the Issuer defaults in a payment of interest on the Notes, the Issuer
shall pay defaulted interest (plus interest on such defaulted interest to the
extent lawful) at the applicable Interest Rate in any lawful manner on the
next Distribution Date.
SECTION 2.09.
Cancellation. Subject to Section 2.08(c), all Notes surrendered for
payment, registration of transfer, exchange or redemption shall, if
surrendered to any Person other than the Indenture Trustee, be delivered to
the Indenture Trustee and shall be promptly cancelled by the Indenture
Trustee. Subject to Section 2.08(c), the Issuer may at any time deliver to
the Indenture Trustee for cancellation any Notes previously authenticated and
delivered hereunder which the Issuer may have acquired in any manner
whatsoever, and all Notes so delivered shall be promptly cancelled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange
for any Notes cancelled as provided in this Section, except as expressly
permitted by this Indenture. Subject to Section 2.08(c), all cancelled Notes
may be held or disposed of by the Indenture Trustee in accordance with its
standard retention or disposal policy as in effect at the time unless the
Issuer shall direct by an Issuer Order that they be destroyed or returned to
it; provided, that such Issuer Order is timely and the Notes have not been
previously disposed of by the Indenture Trustee.
SECTION 2.10.
Book-Entry Notes. The Notes, upon original issuance, will be issued in the
form of typewritten Notes representing the Book-Entry Notes, to be delivered
to The Depository Trust Company, the initial Clearing Agency, by, or on
behalf of, the Issuer. The Book-Entry Notes shall be registered initially on
the Note Register in the name of Cede & Co., the nominee of the initial
Clearing Agency, and no Owner thereof will receive a definitive Note
representing such Note Owner's interest in such Note, except as provided in
Section 2.12. Unless and until definitive, fully registered Notes (the
"Definitive Notes") have been issued to such Note Owners pursuant to
Section 2.12:
(i)
the provisions of this Section shall be in full force and effect;
(ii)
the Note Registrar and the Indenture Trustee shall be entitled to deal with
the Clearing Agency for all purposes of this Indenture (including the
payment of principal of and interest on the Notes and the giving of
instructions or directions hereunder) as the sole holder of the Notes, and
shall have no obligation to the Note Owners;
(iii)
to the extent that the provisions of this Section conflict with any other
provisions of this Indenture, the provisions of this Section shall control;
(iv)
the rights of Note Owners shall be exercised only through the Clearing
Agency and shall be limited to those established by law and agreements
between such Note Owners and the Clearing Agency and/or the Clearing Agency
Participants pursuant to the Note Depository Agreement. Unless and until
Definitive Notes are issued pursuant to Section 2.12, the initial Clearing
Agency will make book-entry transfers among the Clearing Agency Participants
and receive and transmit payments of principal of and interest on the Notes
to such Clearing Agency Participants; and
(v)
whenever this Indenture requires or permits actions to be taken based upon
instructions or directions of Holders of Notes evidencing a specified
percentage of the Outstanding Amount of the Notes, the Clearing Agency shall
be deemed to represent such percentage only to the extent that it has
received instructions to such effect from Note Owners and/or Clearing Agency
Participants owning or representing, respectively, such required percentage
of the beneficial interest in the Notes and has delivered such instructions
to the Indenture Trustee.
SECTION 2.11.
Notices to Clearing Agency. Whenever a notice or other communication to
the Noteholders is required under this Indenture, unless and until Definitive
Notes shall have been issued to such Note Owners pursuant to Section 2.12,
the Indenture Trustee shall give all such notices and communications
specified herein to be given to Holders of the Notes to the Clearing Agency,
and shall have no obligation to such Note Owners.
SECTION 2.12.
Definitive Notes. If (i) the Administrator advises the Indenture Trustee
in writing that the Clearing Agency is no longer willing or able to properly
discharge its responsibilities with respect to the Book-Entry Notes and the
Administrator is unable to locate a qualified successor, (ii) the
Administrator at its option advises the Indenture Trustee in writing that it
elects to terminate the book-entry system through the Clearing Agency or
(iii) after the occurrence of an Event of Default or a Servicer Default,
Owners of the Book-Entry Notes representing beneficial interests aggregating
at least a majority of the Outstanding Amount of such Notes advise the
Clearing Agency in writing that the continuation of a book-entry system
through the Clearing Agency is no longer in the best interests of such Note
Owners, then the Clearing Agency shall notify all Note Owners and the
Indenture Trustee of the occurrence of any such event and of the availability
of Definitive Notes to Note Owners requesting the same. Upon surrender to
the Indenture Trustee of the typewritten Notes representing the Book-Entry
Notes by the Clearing Agency, accompanied by registration instructions, the
Issuer shall execute and the Indenture Trustee shall authenticate the
Definitive Notes in accordance with the written instructions of the Clearing
Agency. None of the Issuer, the Note Registrar or the Indenture Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Notes, the Indenture Trustee
shall recognize the Holders of the Definitive Notes as Noteholders.
SECTION 2.13.
Tax Treatment. The Issuer has entered into this Indenture, and the Notes
will be issued, with the intention that, for federal, state and local income,
single business and franchise tax purposes, the Notes will qualify as
indebtedness secured by the Trust Estate. The Issuer, by entering into this
Indenture, and each Noteholder, by its acceptance of a Note (and each Note
Owner by its acceptance of an interest in the applicable Book-Entry Note),
agree to treat the Notes for federal, state and local income and franchise
tax purposes as indebtedness.
SECTION 2.14.
Determination of LIBOR. On each LIBOR Determination Date, the Calculation
Agent shall calculate LIBOR for the related Floating Rate Interest Accrual
Period using the following method. If the offered rate for United States
dollar deposits for one month appears on Telerate Page 3750 as of 11:00 A.M.,
London Time, on such LIBOR Determination Date, LIBOR for the related Floating
Interest Accrual Period shall be such rate as it appears on Telerate Page
3750. If such rate does not appear on Telerate Page 3750 on any LIBOR
Determination Date, the Calculation Agent will request each of the reference
banks (which shall be major banks that are engaged in transactions in the
London interbank market selected by the Calculation Agent) to provide the
Calculation Agent with its offered quotation for United States dollar
deposits for one month to prime banks in the London interbank market as of
11:00 A.M., London time, on such date. If at least two reference banks
provide the Calculation Agent with such offered quotations, LIBOR on such
date will be the arithmetic mean, rounded upwards, if necessary, to the
nearest one-sixteenth (1/16) of 1% of all such quotations. If on such date
fewer than two reference banks provide the Calculation Agent with such
offered quotations, LIBOR on such date will be the arithmetic mean, rounded
upwards, if necessary, to the nearest one-sixteenth (1/16) of 1% of the
offered per annum rates that one or more leading banks in the City of New
York selected by the Calculation Agent are quoting as of 11:00 A.M., New York
City time, on such date to leading European banks for United States dollar
deposits for one month. If such banks in the City of New York are not
quoting as provided above, LIBOR for such date will be LIBOR applicable to
the immediately preceding Distribution Date.
SECTION 2.15.
Initial Calculation Agent; Replacement of Calculation Agent. The Indenture
Trustee shall be the initial Calculation Agent. If the Calculation Agent is
unable to perform its obligations under Section 2.14, the Owner Trustee shall
appoint a successor Calculation Agent, which successor Calculation Agent
shall be acceptable to the Indenture Trustee and shall meet the eligibility
requirements hereunder for the Indenture Trustee.
ARTICLE XXX
Covenants
SECTION 3.01.
Payment of Principal and Interest. The Issuer will duly and punctually pay
the principal, if any, of and the interest, if any, on the Notes in
accordance with the terms of the Notes and this Indenture. Without limiting
the foregoing, subject to Section 8.02(c), on each Distribution Date the
Issuer will cause to be distributed all amounts deposited pursuant to the
Sale and Servicing Agreement into the Note Distribution Account, (i) for the
benefit of the Class A-1 Notes, to the Class A-1 Noteholders and (ii) for the
benefit of the Class A-2 Notes, to the Class A-2 Noteholders. Amounts
properly withheld under the Code by any Person from a payment to any
Noteholder of interest and/or principal shall be considered as having been
paid by the Issuer to such Noteholder for all purposes of this Indenture.
SECTION 3.02.
Maintenance of Office or Agency. The Issuer will maintain in the Borough
of Manhattan, the City of New York, an office or agency where Notes may be
surrendered for registration of transfer or exchange, and where notices and
demands to or upon the Issuer in respect of the Notes and this Indenture may
be served. Such office will initially be located at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ -
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. The Issuer will give prompt written notice
to the Indenture Trustee and the Security Insurer of the location, and of any
change in the location, of any such office or agency. If at any time the
Issuer shall fail to maintain any such office or agency or shall fail to
furnish the Indenture Trustee with the address thereof, such surrenders,
notices and demands may be made or served at the Corporate Trust Office, and
the Issuer hereby appoints the Indenture Trustee as its agent to receive all
such surrenders, notices and demands.
SECTION 3.03.
Money for Payments To Be Held in Trust. All payments of amounts due and
payable with respect to any Notes that are to be made from amounts withdrawn
from the Collection Account and the Note Distribution Account pursuant to
Section 8.02(c) shall be made on behalf of the Issuer by the Indenture
Trustee or by another Paying Agent, and no amounts so withdrawn from the
Collection Account and the Note Distribution Account for payments of Notes
shall be paid over to the Issuer except as provided in this Section.
On or before the Business Day preceding each Distribution Date and
Redemption Date, the Issuer shall deposit or cause to be deposited in the Note
Distribution Account an aggregate sum sufficient to pay the amounts then
becoming due under the Notes, such sum to be held in trust for the benefit of
the Persons entitled thereto, and (unless the Paying Agent is the Indenture
Trustee) shall promptly notify the Indenture Trustee in writing of its action
or failure so to act.
The Issuer will cause each Paying Agent other than the Indenture Trustee to
execute and deliver to the Indenture Trustee an instrument in which such
Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions
of this Section, that such Paying Agent will:
(i)
hold all sums held by it for the payment of amounts due with respect to the
Notes in trust for the benefit of the Persons entitled thereto until such
sums shall be paid to such Persons or otherwise disposed of as herein
provided and pay such sums to such Persons as herein provided;
(ii)
give the Indenture Trustee notice of any default by the Issuer (or any
other obligor upon the Notes) of which it has actual knowledge in the making
of any payment required to be made with respect to the Notes;
(iii)
at any time during the continuance of any such default, upon the written
request of the Indenture Trustee, forthwith pay to the Indenture Trustee all
sums so held in trust by such Paying Agent;
(iv)
immediately resign as a Paying Agent and forthwith pay to the Indenture
Trustee all sums held by it in trust for the payment of Notes if at any time
it ceases to meet the standards required to be met by a Paying Agent at the
time of its appointment; and
(v)
comply with all requirements of the Code with respect to the withholding
from any payments made by it on any Notes of any applicable withholding
taxes imposed thereon and with respect to any applicable reporting
requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, by Issuer Order direct
any Paying Agent to pay to the Indenture Trustee all sums held in trust by
such Paying Agent, such sums to be held by the Indenture Trustee upon the
same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money held
by the Indenture Trustee or any Paying Agent in trust for the payment of any
amount due with respect to any Note and remaining unclaimed for two years
after such amount has become due and payable shall be discharged from such
trust and be paid either (i) upon Issuer Request and with the consent of the
Security Insurer (if the Security Insurer is at any such time the Controlling
Party) to the Issuer or (ii) if such money or any portion thereof was paid by
the Security Insurer to the Indenture Trustee for the payment of principal of
or interest on such Note to the extent of such unreimbursed amounts, to the
Security Insurer in lieu of the Issuer; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the
Issuer), and all liability of the Indenture Trustee or such Paying Agent with
respect to such trust money shall thereupon cease; provided, however, that
the Indenture Trustee or such Paying Agent, before being required to make any
such repayment, shall at the expense and direction of the Issuer cause to be
published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the City of
New York, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will be
repaid to the Issuer or the Security Insurer, as applicable. The Indenture
Trustee shall also adopt and employ, at the expense and direction of the
Issuer, any other reasonable means of notification of such repayment
(including, but not limited to, mailing notice of such repayment to Holders
whose Notes have been called but have not been surrendered for redemption or
whose right to or interest in moneys due and payable but not claimed is
determinable from the records of the Indenture Trustee or of any Paying
Agent, at the last address of record for each such Holder).
SECTION 3.04.
Existence. The Issuer will keep in full effect its existence, rights and
franchises as a business trust under the laws of the State of Delaware
(unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other State or of the United States of
America, in which case the Issuer will keep in full effect its existence,
rights and franchises under the laws of such other jurisdiction) and will
obtain and preserve its qualification to do business in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Trust Estate.
SECTION 3.05.
Protection of Trust Estate. The Issuer will from time to time execute and
deliver all such supplements and amendments hereto and all such financing
statements, continuation statements, instruments of further assurance and
other instruments, and will take such other action necessary or advisable to:
(i)
maintain or preserve the lien and security interest (and the priority
thereof) of this Indenture or carry out more effectively the purposes
hereof;
(ii)
perfect, publish notice of or protect the validity of any Grant made or to
be made by this Indenture;
(iii)
enforce any of the Collateral; or
(iv)
preserve and defend title to the Trust Estate and the rights of the
Indenture Trustee and the Noteholders in such Trust Estate against the
claims of all persons and parties.
The Issuer hereby designates the Indenture Trustee its agent and attorney-in-
fact to execute any financing statement, continuation statement or other
instrument required to be executed pursuant to this Section 3.05.
SECTION 3.06.
Opinions as to Trust Estate. (a) On the Closing Date, the Issuer shall
furnish to the Indenture Trustee and the Security Insurer an Opinion of
Counsel either stating that, in the opinion of such counsel, such action has
been taken with respect to the recording and filing of this Indenture, any
indentures supplemental hereto, and any other requisite documents, and with
respect to the execution and filing of any financing statements and
continuation statements, as are necessary to perfect and make effective the
lien and security interest of this Indenture and reciting the details of such
action, or stating that, in the opinion of such counsel, no such action is
necessary to make such lien and security interest effective.
(b)
On or before March 31, in each calendar year, beginning in 1998, the Issuer
shall furnish to the Indenture Trustee and the Security Insurer an Opinion of
Counsel either stating that, in the opinion of such counsel, such action has
been taken with respect to the recording, filing, re-recording and 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 is necessary to maintain the lien
and security interest created by this Indenture and reciting the details of
such action, or stating that in the opinion of such counsel no such action is
necessary to maintain such lien and security interest. Such Opinion of
Counsel shall also describe the recording, filing, re-recording and refiling
of this Indenture, any indentures supplemental hereto and any other requisite
documents and the execution and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be
required to maintain the lien and security interest of this Indenture until
March 31 in the following calendar year.
SECTION 3.07.
Performance of Obligations; Servicing of Receivables. (a) The Issuer will
not take any action and will use its best efforts not to permit any action to
be taken by others that would release any Person from any of such Person's
material covenants or obligations under any instrument or agreement included
in the 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 expressly
provided in this Indenture, the Sale and Servicing Agreement 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 Indenture Trustee
and the Security Insurer in an Officer's Certificate of the Issuer shall be
deemed to be action taken by the Issuer. Initially, the Issuer has
contracted with the Servicer and the Administrator to assist the Issuer in
performing its duties under this Indenture.
(c)
The Issuer will punctually perform and observe all of its obligations and
agreements contained in this Indenture, the Basic Documents and in the
instruments and agreements included in the Trust Estate, including but not
limited to filing or causing to be filed all UCC financing statements and
continuation statements required to be filed by the terms of this Indenture
and the 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 Security Insurer (so long as no Security Insurer Default shall have
occurred and be continuing) and either the Indenture Trustee or the Holders
of at least a majority of the Outstanding Amount of the Notes.
(d)
If the Issuer shall have knowledge of the occurrence of a Servicer Default
under the Sale and Servicing Agreement, the Issuer shall promptly notify the
Indenture Trustee, the Security Insurer (if the Security Insurer is the
Controlling Party at such time) and the Rating Agencies thereof, and shall
specify in such notice the action, if any, the Issuer is taking with respect
to such default. If a Servicer Default shall arise from the failure of the
Servicer to perform any of its duties or obligations under the Sale and
Servicing Agreement with respect to the Receivables, the Issuer shall take
all reasonable steps available to it to remedy such failure.
(e)
As promptly as possible after the giving of notice of termination to the
Servicer of the Servicer's rights and powers pursuant to Section 8.01 of the
Sale and Servicing Agreement, the Issuer or, if the Security Insurer is the
Controlling Party, the Security Insurer shall appoint the Backup Servicer as
the successor servicer (the "Successor Servicer"), and such Successor
Servicer shall accept its appointment by a written assumption in a form
acceptable to the Indenture Trustee and, if the Security Insurer is the
Controlling Party, the Security Insurer. In the event that a Successor
Servicer has not been appointed and accepted its appointment at the time when
the Servicer ceases to act as Servicer, the Indenture Trustee without further
action shall automatically be appointed the Successor Servicer. The
Indenture Trustee may resign as the Successor Servicer by giving written
notice of such resignation to the Security Insurer (if the Security Insurer
is the Controlling Party) and the Issuer and in such event will be released
from such duties and obligations, such release not to be effective until the
date a new servicer enters into a servicing agreement with the Security
Insurer or the Issuer, as applicable, as provided below. Upon delivery of
any such notice to the Security Insurer or the Issuer, the Security Insurer
or the Issuer shall obtain a new servicer as the Successor Servicer under the
Sale and Servicing Agreement. Any Successor Servicer other than the
Indenture Trustee or the Backup Servicer shall (i) be an established
financial institution having a net worth of not less than $100,000,000 and
whose regular business includes the servicing of Contracts and (ii) enter
into a servicing agreement with the Security Insurer or the Issuer having
substantially the same provisions as the provisions of the Sale and Servicing
Agreement applicable to the Servicer. If within 30 days after the delivery
of the notice referred to above, the Security Insurer or the Issuer shall not
have obtained such a new servicer, the Indenture Trustee may appoint, or may
petition a court of competent jurisdiction to appoint, a Successor Servicer.
In connection with any such appointment, the Indenture Trustee may make such
arrangements for the compensation of such successor as it and such successor
shall agree, subject to the limitations set forth below and in the Sale and
Servicing Agreement, and in accordance with Section 8.02 of the Sale and
Servicing Agreement, the Security Insurer or the Issuer, as applicable,
shall enter into an agreement with such successor for the servicing of the
Receivables (such agreement to be in form and substance satisfactory to the
Indenture Trustee). If the Indenture Trustee shall succeed to the Servicer's
duties as servicer of the Receivables as provided herein, it shall do so in
its individual capacity and not in its capacity as Indenture Trustee and,
accordingly, the provisions of Article VI hereof shall be inapplicable to the
Indenture Trustee in its duties as the successor to the Servicer and the
servicing of the Receivables. In case the Indenture Trustee shall become
successor to the Servicer under the Sale and Servicing Agreement, the
Indenture Trustee shall be entitled to appoint as Servicer any one of its
affiliates, provided that it shall be fully liable for the actions and
omissions of such affiliate in such capacity as Successor Servicer.
(f)
Upon any termination of the Servicer's rights and powers pursuant to the Sale
and Servicing Agreement, the Issuer shall promptly notify the Indenture
Trustee and, if the Security Insurer is the Controlling Party, the Security
Insurer. As soon as a Successor Servicer is appointed, the Issuer shall
notify the Indenture Trustee in writing and, if the Security Insurer is the
Controlling Party, the Security Insurer of such appointment, specifying in
such notice the name and address of such Successor Servicer.
(g)
Without derogating from the absolute nature of the assignment granted to the
Indenture Trustee under this Indenture or the rights of the Indenture Trustee
hereunder, the Issuer agrees (i) that it will not, without the prior written
consent of the Security Insurer (if the Security Insurer is the Controlling
Party) and either the Indenture Trustee or the Holders of at least a majority
in Outstanding Amount of the Notes, amend, modify, waive, supplement,
terminate or surrender, or agree to any amendment, modification, supplement,
termination, waiver or surrender of, the terms of any Collateral (except to
the extent otherwise provided in the Sale and Servicing Agreement) or the
Basic Documents, or waive timely performance or observance by the Servicer or
the Seller under the Sale and Servicing Agreement; and (ii) that any such
amendment shall not (A) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, distributions that are required to be made
for the benefit of the Noteholders or (B) reduce the aforesaid percentage of
the Notes that is required to consent to any such amendment, without the
consent of the Holders of all the Outstanding Notes. If the Security Insurer
and the Indenture Trustee or such Holders, as applicable, agree to any such
amendment, modification, supplement or waiver, the Issuer agrees, promptly
following a request by the Indenture Trustee or the Security Insurer to do
so, to execute and deliver, in its own name and at its own expense, such
agreements, instruments, consents and other documents as the Indenture
Trustee or the Security Insurer may deem necessary or appropriate in the
circumstances.
SECTION 3.08.
Negative Covenants. So long as any Notes are Outstanding, the Issuer shall
not:
(i)
except as expressly permitted by this Indenture, the Receivables Purchase
Agreement or the Sale and Servicing Agreement, 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;
(ii)
claim any credit on, or make any deduction from the principal or interest
payable in respect of, the Notes (other than amounts properly withheld from
such payments under the Code) or assert any claim against any present or
former Noteholder by reason of the payment of the taxes levied or assessed
upon any part of the Trust Estate; or
(iii)
(A) permit the validity or effectiveness of this Indenture to be impaired,
or permit the lien of this Indenture to be amended, hypothecated,
subordinated, terminated or discharged, or permit any Person to be released
from any covenants or obligations with respect to the Notes under this
Indenture except as may be expressly permitted hereby, (B) permit any lien,
charge, excise, claim, security interest, mortgage or other encumbrance
(other than the lien of this Indenture) to be created on or extend to or
otherwise arise upon or burden the 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 any of
the Financed Vehicles and arising solely as a result of an action or
omission of the related Obligor) or (C) permit the lien of this Indenture
not to constitute a valid first priority (other than with respect to any
such tax, mechanics' or other lien) security interest in the Trust Estate.
SECTION 3.09.
Annual Statement as to Compliance. The Issuer will deliver to the
Indenture Trustee and the Security Insurer (if the Security Insurer is the
Controlling Party), within 120 days after the end of each fiscal year of the
Issuer (commencing with the fiscal year 1997), an Officer's Certificate stating,
as to the Authorized Officer signing such Officer's Certificate, that:
(i)
a review of the activities of the Issuer during such year and of its
performance under this Indenture has been made under such Authorized
Officer's supervision; and
(ii)
to the best of such Authorized Officer's knowledge, based on such review,
the Issuer has complied with all conditions and covenants under this
Indenture throughout such year or, if there has been a default in its
compliance with 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 Person organized and existing under the
laws of the United States of America or any State and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Indenture Trustee, in form satisfactory to the Indenture Trustee, the due
and punctual payment of the principal of and interest on all Notes and the
performance or observance of every agreement and covenant of this Indenture
on the part of the Issuer to be performed or observed, all as provided
herein;
(ii)
immediately after giving effect to such transaction, no Default or Event of
Default shall have occurred and be continuing;
(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 Indenture Trustee) to the effect that such
transaction will not have any material adverse tax consequence to the
Issuer, any Noteholder or any Certificateholder;
(v)
any action that is necessary to maintain the lien and security interest
created by this Indenture shall have been taken; and
(vi)
the Issuer shall have delivered to the Indenture Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such consolidation
or merger and such supplemental indenture comply with this Article III and
that all conditions precedent herein provided for relating to such
transaction have been complied with (including any filing required by the
Exchange Act).
(b)
The Issuer shall not convey or transfer any 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 (A) shall be a United States citizen or a Person organized and
existing under the laws of the United States of America or any State, (B)
expressly assumes, by an indenture supplemental hereto, executed and
delivered to the Indenture Trustee, in form satisfactory to the Indenture
Trustee, the due and punctual payment of the principal of and interest on
all Notes and the performance or observance of every agreement and covenant
of this Indenture on the part of the Issuer to be performed or observed, all
as provided herein, (C) expressly agrees by means of such supplemental
indenture that all right, title and interest so conveyed or transferred
shall be subject and subordinate to the rights of Holders of the Notes, (D)
unless otherwise provided in such supplemental indenture, expressly agrees
to indemnify, defend and hold harmless the Issuer against and from any loss,
liability or expense arising under or related to this Indenture and the
Notes and (E) expressly agrees by means of such supplemental indenture that
such Person (or if a group of Persons, then one specified Person) shall make
all filings with the Commission (and any other appropriate Person) required
by the Exchange Act in connection with the Notes;
(ii)
immediately after giving effect to such transaction, no Default or Event of
Default shall have occurred and be continuing;
(iii)
the Rating Agency Condition shall have been satisfied with respect to such
transaction;
(iv)
the Issuer shall have received an Opinion of Counsel (and shall have
delivered copies thereof to the Indenture Trustee) to the effect that such
transaction will not have any material adverse tax consequence to the
Issuer, any Noteholder or any Certificateholder;
(v)
any action that is necessary to maintain the lien and security interest
created by this Indenture shall have been taken; and
(vi)
the Issuer shall have delivered to the Indenture Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such conveyance or
transfer and such supplemental indenture comply with this Article III and
that all conditions precedent herein provided for relating to such
transaction have been complied with (including any filing required by the
Exchange Act).
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), First Merchants Auto Trust 1997-1 will be
released from every covenant and agreement of this Indenture to be observed
or performed on the part of the Issuer with respect to the Notes immediately
upon the delivery of written notice to the Indenture Trustee stating that
First Merchants Auto Trust 1997-1 is to be so released.
SECTION 3.12.
No Other Business. The Issuer shall not engage in any business other than
financing, purchasing, owning, selling and managing the Receivables in the
manner contemplated by this Indenture and the Basic Documents and activities
incidental thereto.
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 the Notes.
SECTION 3.14.
Servicer's Obligations. The Issuer shall cause the Servicer to comply with
Sections 4.09, 4.10, 4.11 and Article IX of the Sale and Servicing Agreement.
SECTION 3.15.
Guarantees, Loans, Advances and Other Liabilities. Except as contemplated
by the Trust Agreement, Sale and Servicing Agreement or this Indenture, the
Issuer shall not make any loan or advance or credit to, or guarantee
(directly or indirectly or by an instrument having the effect of assuring
another's payment or performance on any obligation or capability of so doing
or otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or
own, purchase, repurchase or acquire (or agree contingently to do so) any
stock, obligations, assets or securities of, or any other interest in, or
make any capital contribution to, any 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.
Removal of Administrator. So long as any Notes are Outstanding, the Issuer
shall not remove the Administrator without cause unless the Rating Agency
Condition shall have been satisfied in connection with such removal.
SECTION 3.18.
Restricted Payments. Except with respect to the proceeds from issuance of
the Notes, the Issuer shall not, directly or indirectly, (i) pay any dividend
or make any distribution (by reduction of capital or otherwise), whether in
cash, property, securities or a combination thereof, to the Owner Trustee or
any owner of a beneficial interest in the Issuer or otherwise with respect to
any ownership or equity interest or security in or of the Issuer or to the
Servicer, (ii) redeem, purchase, retire or otherwise acquire for value any
such ownership or equity interest or security or (iii) set aside or otherwise
segregate any amounts for any such purpose; provided, however, that the
Issuer may make, or cause to be made, (x) distributions as contemplated by,
and to the extent funds are available for such purpose under, the Sale and
Servicing Agreement or the Trust Agreement and (y) payments to the Indenture
Trustee pursuant to Section 1(a)(ii) of the Administration Agreement. The
Issuer will not, directly or indirectly, make payments to or distributions
from the Collection Account except in accordance with this Indenture and the
Basic Documents.
SECTION 3.19.
Notice of Events of Default. The Issuer shall give the Indenture Trustee,
the Security Insurer (if the Security Insurer is at such time the Controlling
Party) and the Rating Agencies prompt written notice of each Event of Default
hereunder, and of each 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 Indenture Trustee, or
the Security Insurer (if the Security Insurer is at such time 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.
ARTICLE XXXI
Satisfaction and Discharge
SECTION 4.01.
Satisfaction and Discharge of Indenture. This Indenture shall cease to be
of further effect with respect to the Notes except as to (i) rights of
registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive
payments of principal thereof and interest thereon (including any such right
of the Security Insurer pursuant to Section 2.08(c), Section 5.10 of the Sale
and Servicing Agreement and the proviso to the definition of "Outstanding"),
(iv) Sections 3.03, 3.04, 3.05, 3.08, 3.10, 3.12 and 3.13, (v) the rights,
obligations and immunities of the Indenture Trustee hereunder (including the
rights of the Indenture Trustee under Section 6.07 and the obligations of the
Indenture Trustee under Section 4.02) and (vi) the rights of Noteholders as
beneficiaries hereof with respect to the property so deposited with the
Indenture Trustee payable to all or any of them, and the Indenture Trustee,
on demand of and at the expense of the Issuer, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture with
respect to the Notes, when
(A)
either
(1)
all Notes theretofore authenticated and delivered (other than (i) Notes that
have been destroyed, lost or stolen and that have been replaced or paid as
provided in Section 2.06 and (ii) Notes for whose payment money has
theretofore been deposited in trust or segregated and held in trust by the
Issuer and thereafter repaid to the Issuer or discharged from such trust, as
provided in Section 3.03) have been delivered to the Indenture Trustee for
cancellation and the Policy has expired and been returned to the Security
Insurer for cancellation; or
(2)
all Notes not theretofore delivered to the Indenture Trustee for
cancellation
a.
have become due and payable,
b.
will become due and payable at the Class A-2 Final Scheduled
Distribution Date within one year, or
c.
are to be called for redemption within one year under arrangements
satisfactory to the Indenture Trustee for the giving of notice of
redemption by the Indenture Trustee in the name, and at the expense, of
the Issuer,
and the Issuer, in the case of a., b. or c. above, has irrevocably deposited
or caused to be irrevocably deposited with the Indenture Trustee cash or
direct obligations of or obligations guaranteed by the United States of
America (which will mature prior to the date such amounts are payable), in
trust for such purpose, in an amount sufficient to pay and discharge the
entire indebtedness on (a) such Notes not theretofore delivered to the
Indenture Trustee for cancellation when due to the applicable final
scheduled Distribution Date or Redemption Date (if Notes shall have been
called for redemption pursuant to Section 10.01(a)), as the case may be, and
(b) all amounts due to the Security Insurer pursuant to Section 5.06(b) of
the Sale and Servicing Agreement and as subrogee to the rights of Holders of
the Notes pursuant to Section 5.10 of the Sale and Servicing Agreement;
(B)
the Issuer has paid or caused to be paid all other sums payable hereunder by
the Issuer; and
(C)
the Issuer has delivered to the Indenture Trustee an Officer's Certificate
and, an Opinion of Counsel and (if required by the TIA or the Indenture
Trustee) an Independent Certificate from a firm of certified public
accountants, each meeting the applicable requirements of Section 11.01(a)
and, subject to Section 11.02, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
SECTION 4.02.
Application of Trust Money. All moneys deposited with the Indenture
Trustee pursuant to Section 4.01 hereof shall be held in trust and applied by
it, in accordance with the provisions of the Notes and this Indenture, to the
payment, either directly or through any Paying Agent, as the Indenture
Trustee may determine, to the Holders of the particular Notes for the payment
or redemption of which such moneys have been deposited with the Indenture
Trustee, of all sums due and to become due thereon for principal and
interest; but such moneys need not be segregated from other funds except to
the extent required herein or in the Sale and Servicing Agreement or required
by law.
SECTION 4.03.
Repayment of Moneys Held by Paying Agent. In connection with the
satisfaction and discharge of this Indenture with respect to the Notes, all
moneys then held by any Paying Agent other than the Indenture Trustee under
the provisions of this Indenture with respect to such Notes shall, upon
demand of the Issuer, be paid to the Indenture Trustee to be held and applied
according to Section 3.03 and thereupon such Paying Agent shall be released
from all further liability with respect to such moneys.
SECTION 4.04.
Release of Collateral. Subject to Section 11.01 and the terms of the Basic
Documents, the Indenture Trustee shall release property from the lien of this
Indenture only upon receipt of an Issuer Request accompanied by an Officer's
Certificate and an Opinion of Counsel and Independent Certificates in
accordance with TIA && 314(c) and 314(d)(1) or an Opinion of Counsel in lieu
of such Independent Certificates to the effect that the TIA does not require
any such Independent Certificates. The Trustee shall surrender the Policy to
the Security Insurer upon the expiration of the term of the Policy (as
defined in Section 1 of the Policy).
ARTICLE XXXII
Remedies
SECTION 5.01.
Events of Default. "Event of Default", wherever used herein, means any one
of the following events (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of
law or pursuant to any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body):
(i)
default in the payment of any interest on any Note when the same becomes
due and payable, and such default shall continue for a period of five days
(solely for purposes of this clause, a payment on the Notes funded by the
Security Insurer shall be deemed to be a payment made by the Issuer); or
(ii)
default in the payment of the principal of or any installment of the
principal of any Note when the same becomes due and payable (solely for
purposes of this clause, a payment on the Notes funded by the Security
Insurer shall be deemed to be a payment made by the Issuer); or
(iii)
an Insurance Agreement Event of Default shall have occurred at any time
while the Security Insurer is the Controlling Party; provided, however, that
the occurrence of an Insurance Agreement Event of Default may not form the
basis of an Event of Default unless the Security Insurer shall have
delivered to the Issuer and the Trustee a written notice specifying that
such Insurance Agreement Event of Default constitutes an Event of Default
under this Indenture;
(iv)
default in the observance or performance of any covenant or agreement of
the Issuer made in this Indenture (other than a covenant or agreement, a
default in the observance or performance of which is elsewhere in this
Section specifically dealt with), or any representation or warranty of the
Issuer made in this Indenture or in any certificate or other writing
delivered pursuant hereto or in connection herewith proving to have been
incorrect in any material respect as of the time when the same shall have
been made, and such default shall continue or not be cured, or the
circumstance or condition in respect of which such misrepresentation or
warranty was incorrect shall not have been eliminated or otherwise cured,
for a period of 30 days after there shall have been given, by registered or
certified mail, to the Issuer by the Indenture Trustee or the Security
Insurer (so long as no Security Insurer Default shall have occurred and be
continuing) or to the Issuer and the Indenture Trustee by the Holders of at
least 25% of the Outstanding Amount of the Notes, a written notice
specifying such default or incorrect representation or warranty and
requiring it to be remedied and stating that such notice is a notice of
Default hereunder; or
(v)
the filing of a decree or order for relief by a court having jurisdiction
in the premises in respect of the Issuer or any substantial part of the
Trust Estate in an involuntary case under any applicable federal or state
bankruptcy, insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Issuer or for any substantial part
of the Trust Estate, or ordering the winding-up or liquidation of the
Issuer's affairs, and such decree or order shall remain unstayed and in
effect for a period of 60 consecutive days; or
(vi)
the commencement by the Issuer of a voluntary case under any applicable
federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or the consent by the Issuer to the entry of an order
for relief in an involuntary case under any such law, or the consent by the
Issuer to the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the Issuer
or for any substantial part of the Trust Estate, or the making by the Issuer
of any general assignment for the benefit of creditors, or the failure by
the Issuer generally to pay its debts as such debts become due, or the
taking of any action by the Issuer in furtherance of any of the foregoing.
The Issuer shall deliver to the Indenture Trustee and, if the Security
Insurer is the Controlling Party, the Security Insurer, within five days
after the occurrence thereof, written notice in the form of an Officer's
Certificate of any event which with the giving of notice and the lapse of
time would become an Event of Default under clause (iii), its status and what
action the Issuer is taking or proposes to take with respect thereto.
SECTION 5.02.
Acceleration of Maturity; Rescission and Annulment. (a) If an Event of
Default should occur and be continuing, then and in every such case the
Indenture Trustee or the Holders of Notes representing not less than a
majority of the Outstanding Amount of the Notes may declare all the Notes to
be immediately due and payable, by a notice in writing to the Issuer (and to
the Indenture Trustee if given by Noteholders), and upon any such declaration
the unpaid principal amount of such Notes, together with accrued and unpaid
interest thereon through the date of acceleration, shall become immediately
due and payable; provided, however, that, if on the date any such Event of
Default occurs or is continuing, the Security Insurer is the Controlling
Party, then the Security Insurer, in its sole discretion, may determine
whether or not to accelerate payment on the Notes. In the event of any
acceleration of the Notes by operation of this Section 5.02, the Indenture
Trustee shall continue to be entitled to make claims under the Policy
pursuant to Section 5.07 of the Sale and Servicing Agreement for Scheduled
Payments on the Notes. Payments under the Policy following acceleration of
the Notes shall be applied by the Indenture Trustee:
FIRST: to the payment of amounts due and unpaid on the Notes for interest,
ratably, without preference or priority of any kind,
SECOND: to the payment of amounts due and unpaid on the Class A-1 Notes
for principal, ratably, without preference or priority of any kind until the
Class A-1 Notes are paid in full, and
THIRD: to the payment of amounts due and unpaid on the Class A-2 Notes for
principal, ratably, without preference or priority of any kind until the
Class A-2 Notes are paid in full.
(b)
If an Event of Default occurs at any time when the Security Insurer is the
Controlling Party, the Security Insurer shall have the right, but not the
obligation, to make one or more accelerated payments on the Notes and to
prepay the Notes, in whole or in part, on any date or dates following the
occurrence of such Event of Default if the Security Insurer, in its sole
discretion, shall so elect. This right of the Security Insurer to make
accelerated payments on the Notes is in addition to its obligation to pay
Scheduled Payments on the Notes under the Policy, and in no event shall the
Security Insurer make a Scheduled Payment to the Indenture Trustee for
distribution to the Noteholders later than the date on which such amount is
due under the terms of the Notes and the Policy.
(c)
If an Event of Default under this Indenture shall have occurred and be
continuing at any time when the Indenture Trustee is the Controlling Party,
the Indenture Trustee in its discretion may or, if so requested in writing by
Holders of Notes representing at least a majority of the Outstanding Amount
of the Notes, shall declare by written notice to the Issuer all the Notes
immediately due and payable, and upon any such declaration, the unpaid
principal amount of the Notes, together with accrued interest thereon through
the date of acceleration, shall become immediately due and payable.
Notwithstanding anything to the contrary in this paragraph (c), if an Event
of Default specified in clauses (v) and (vi) of Section 5.01 shall have
occurred and be continuing at any time when the Indenture Trustee is the
Controlling Party, the Notes shall become immediately due and payable at par,
together with accrued interest thereon.
(d)
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 Indenture Trustee as hereinafter in this Article V provided,
either the Security Insurer (so long as a Security Insurer Default has not
occurred and is continuing) or the Holders of Notes representing a majority
of the Outstanding Amount of the Notes (if a Security Insurer Default has
occurred and is continuing), by written notice to the Issuer and the
Indenture Trustee, may rescind and annul such declaration and its
consequences if:
(i)
the Issuer has paid or deposited with the Indenture Trustee a sum
sufficient to pay:
(A)
all payments of principal of and interest on all Notes and all other amounts
that would then be due hereunder or upon such Notes if the Event of Default
giving rise to such acceleration had not occurred; and
(B)
all sums paid or advanced by the Indenture Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Indenture Trustee and its agents and counsel; and
(ii)
all Events of Default, other than the nonpayment of the principal of the
Notes that has become due solely by such acceleration, have been cured or
waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
(e)
In the event of a sale of the assets of the Trust pursuant to Section 9.01 of
the Trust Agreement
(i)
if, based on offers to purchase the Receivables accepted by the Indenture
Trustee, the Security Insurer would not be reimbursed in full for all
amounts due to it under the Insurance Agreement following the distribution
of the proceeds of such sale pursuant to Section 5.06(b) of the Sale and
Servicing Agreement and (ii) the Certificateholders have been given prior
written notice and five business days to bid thereon, the Security Insurer
shall be permitted to request an assignment of Receivables and all other
assets of the Trust Estate in lieu of such a distribution of such sale
proceeds. In the event that the Security Insurer elects to request such an
assignment, promptly following receipt by the Indenture Trustee of notice of
such request, the Indenture Trustee shall file with the Security Insurer a
Notice of Claim in accordance with the Policy in respect of the principal
amount, if any, of the Notes that are unpaid on the Distribution Date
immediately preceding the date of the receipt by the Indenture Trustee of
such notice plus accrued interest thereon. All amounts received by the
Indenture Trustee from the Security Insurer pursuant to this Section 5.02
shall be distributed to the Noteholders. Immediately upon payment by the
Security Insurer of all amounts required to be paid by the Security Insurer
pursuant to this Section 5.02, the Indenture Trustee shall be deemed to have
assigned the Receivables and all other assets of the Trust Estate to the
Security Insurer or its designee. To effect such deemed assignment, the
Indenture Trustee shall do and perform any reasonable acts and execute any
further instruments resonably requested by the Security Insurer.
SECTION 5.03.
Collection of Indebtedness and Suits for Enforcement by Indenture Trustee;
Authority of the Controlling Party. (a) The Issuer covenants that if (i)
default is made in the payment of any interest on any Note when the same
becomes due and payable, and such default continues for a period of five
days, or (ii) default is made in the payment of the principal of or any
installment of the principal of any Note when the same becomes due and
payable, the Issuer will, upon demand of the Indenture Trustee, pay to it,
for the benefit of the Holders of the Notes, the whole amount then due and
payable on such Notes for principal and interest, with interest on the
overdue principal and, to the extent payment at such rate of interest shall
be legally enforceable, on overdue installments of interest at the rate borne
by the Notes 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
Indenture Trustee and its agents and counsel.
(b)
In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Indenture Trustee, in its own name and as trustee of an express
trust, may (with the consent of the Security Insurer (so long as no Security
Insurer Default shall have occurred and be continuing)) institute a Proceeding
for the collection of the sums so due and unpaid, and may prosecute such
Proceeding to judgment or final decree, and may enforce the same against the
Issuer or other obligor upon such Notes and collect in the manner provided by
law out of the property of the Issuer or other obligor upon such Notes,
wherever situated, the moneys adjudged or decreed to be payable. At any time
when (i) the Security Insurer is the Controlling Party or (ii) (A) the
Security Insurer is the Holder of Notes pursuant to Section 2.08(c) or
Section 5.10 of the Sale and Servicing Agreement and (B) all amounts due to
all other Holders of the Notes pursuant to the Notes and this Indenture have
been paid in full, the Security Insurer may, in its own name, institute any
Proceeding or take any other action permitted under this section to collect
amounts due hereunder from the Issuer or any other obligor on the Notes.
(c)
If an Event of Default occurs and is continuing, the Indenture Trustee may,
as more particularly provided in Section 5.04, in its discretion, proceed to
protect and enforce its rights and the rights of the Noteholders, by such
appropriate Proceedings as the Indenture Trustee shall deem most effective to
protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy or legal or
equitable right vested in the Indenture Trustee by this Indenture or by law.
(d)
In case there shall be pending, relative to the Issuer or any other obligor
upon the Notes or any Person having or claiming an ownership interest in the
Trust Estate, Proceedings under Title 11 of the United States Code or any
other applicable federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, or liquidator, sequestrator or similar official shall have
been appointed for or taken possession of the Issuer or its property or such
other obligor or Person, or in case of any other comparable judicial
Proceedings relative to the Issuer or other obligor upon the Notes, or to the
creditors or property of the Issuer or such other obligor, the Indenture
Trustee, irrespective of whether the principal of any Notes shall then be due
and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Indenture Trustee shall have made any demand
pursuant to the provisions of this Section, shall be entitled and empowered
but only at the written direction of the Security Insurer if the Security
Insurer is the Controlling Party, by intervention in such Proceedings or
otherwise:
(i)
to file and prove a claim or claims for the whole amount of principal and
interest owing and unpaid in respect of the Notes and to file such other
papers or documents as may be necessary or advisable in order to have the
claims of the Indenture Trustee (including any claim for reasonable
compensation to the Indenture Trustee and each predecessor Indenture
Trustee, and their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all advances
made, by the Indenture Trustee and each predecessor Indenture Trustee,
except as a result of negligence or bad faith) and of the Noteholders
allowed in such Proceedings;
(ii)
unless prohibited by applicable law and regulations, to vote on behalf of
the Holders of Notes in any election of a trustee, a standby trustee or
Person performing similar functions in any such Proceedings;
(iii)
to collect and receive any moneys or other property payable or deliverable
on any such claims and to distribute all amounts received with respect to
the claims of the Noteholders and of the Indenture Trustee on their behalf;
and
(iv)
to file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Indenture Trustee
or the Holders of Notes allowed in any Proceedings relative to the Issuer,
its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee and, in the event that the Indenture
Trustee shall consent to the making of payments directly to such Noteholders,
to pay to the Indenture Trustee such amounts as shall be sufficient to cover
reasonable compensation to the Indenture Trustee, each predecessor Indenture
Trustee and their respective agents, attorneys and counsel, and all other
expenses and liabilities incurred, and all advances made, by the Indenture
Trustee and each predecessor Indenture Trustee except as a result of
negligence or bad faith.
(e)
Nothing herein contained shall be deemed to authorize the Indenture Trustee
to authorize or consent to or vote for or accept or adopt on behalf of any
Noteholder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof or to authorize the
Indenture Trustee to vote in respect of the claim of any Noteholder in any
such proceeding except, as aforesaid, to vote for the election of a trustee
in bankruptcy or similar Person.
(f)
All rights of action and of asserting claims under this Indenture, or under
any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any Proceedings
relative thereto, and any such Proceedings instituted by the Indenture
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 Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the Notes.
(g)
In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Holders of the Notes, and it shall not be necessary to
make any Noteholder a party to any such Proceedings.
SECTION 5.04.
Remedies; Priorities. (a) If an Event of Default shall have occurred and
be continuing and either (i) a Security Insurer Default shall also have
occurred or (ii) if the Security Insurer is the Controlling Party and the
Security Insurer so directs the Indenture Trustee in writing, the Indenture
Trustee may do one or more of the following (subject to Section 5.05):
(i)
institute Proceedings in its own name and as trustee of an express trust
for the collection of all amounts then payable on the Notes or under this
Indenture with respect thereto, whether by declaration or otherwise, enforce
any judgment obtained and collect from the Issuer and any other obligor upon
such Notes moneys adjudged due;
(ii)
institute Proceedings from time to time for the complete or partial
foreclosure of this Indenture with respect to the Trust Estate;
(iii)
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
Indenture Trustee and the Holders of the Notes; and
(iv)
sell the Trust Estate or any portion thereof or rights or interest therein,
at one or more public or private sales called and conducted in any manner
permitted by law;
provided, however, that (x) if a Security Insurer Default shall have
occurred, the Indenture Trustee may not sell or otherwise liquidate the Trust
Estate following an Event of Default, other than an Event of Default
described in Section 5.01(i) or (ii), unless (A) the Holders of 100% of the
Outstanding Amount of the Notes consent thereto, (B) the proceeds of such
sale or liquidation distributable to the Noteholders are sufficient to
discharge in full all amounts then due and unpaid upon such Notes for
principal and interest or (C) the Indenture Trustee determines that the Trust
Estate will not continue to provide sufficient funds for the payment of
principal of and interest on the Notes as they would have become due if the
Notes had not been declared due and payable, and the Indenture Trustee
obtains the consent of Holders of a majority of the Outstanding Amount of the
Notes, (y) if the Security Insurer is the Controlling Party, the Security
Insurer may not direct the Indenture Trustee, and the Indenture Trustee shall
not comply with any such direction, to sell or otherwise liquidate the
Collateral following an Event of Default unless (1) the conditions set forth
in clause (x) are met or (2) the Security Insurer has paid the Notes in full
under the Policy. In determining such sufficiency or insufficiency with
respect to clause (B) and (C), the Indenture Trustee may, but need not,
obtain and conclusively 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.
(b)
If the Indenture Trustee collects any money or property pursuant to this
Article V, it shall pay out the money or property in the following order:
FIRST:
to the Indenture Trustee for amounts due under Section 6.07;
SECOND:
to Noteholders for amounts due and unpaid on the Notes for interest
(including any premium), ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for interest
(including any premium);
THIRD:
to Holders of the Class A-1 Notes for amounts due and unpaid on the Class
A-1 Notes for principal, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Class A-1 Notes for
principal, until the Outstanding Amount of the Class A-1 Notes is reduced to
zero;
FOURTH:
to Holders of the Class A-2 Notes for amounts due and unpaid on the Class
A-2 Notes for principal, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Class A-2 Notes for
principal, until the Outstanding Amount of the Class A-2 Notes is reduced to
zero;
FIFTH:
to the Security Insurer pursuant to Section 5.06(b) of the Sale and
Servicing Agreement and Section 5.10 of the Sale and Servicing Agreement;
and
SIXTH:
pursuant to Section 5.06 of the Sale and Servicing Agreement.
The Indenture Trustee may fix a record date and payment date for any payment
to Noteholders pursuant to this Section. At least 15 days before such record
date, the Issuer shall mail to each Noteholder and the Indenture Trustee a
notice that states the record date, the payment date and the amount to be
paid.
SECTION 5.05.
Optional Preservation of the Receivables. If the Indenture Trustee is the
Controlling Party and the Notes have been declared to be due and payable
under Section 5.02 following an Event of Default and such declaration and its
consequences have not been rescinded and annulled, the Indenture Trustee may,
but need not, elect to maintain possession of the Trust Estate. It is the
desire of the parties hereto and the Noteholders that there be at all times
sufficient funds for the payment of principal of and interest on the Notes,
and the Indenture 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 Indenture
Trustee may, but need not, obtain and conclusively 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 5.06.
Limitation of Suits. No Holder of any Note shall have any right to
institute any Proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(i)
such Holder has previously given written notice to the Indenture Trustee of
a continuing Event of Default;
(ii)
the Holders of not less than 25% of the Outstanding Amount of the Notes
have made written request to the Indenture Trustee to institute such
Proceeding in respect of such Event of Default in its own name as Indenture
Trustee hereunder;
(iii)
such Holder or Holders have offered to the Indenture Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
complying with such request;
(iv)
the Indenture Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute such Proceedings;
(v)
no direction inconsistent with such written request has been given to the
Indenture Trustee during such 60-day period by the Holders of a majority of
the Outstanding Amount of the Notes; and
(vi)
the Indenture Trustee is the Controlling Party.
It is understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Notes or to obtain or to seek to obtain priority or
preference over any other Holders or to enforce any right under this
Indenture, except in the manner herein provided.
In the event the Indenture Trustee shall receive conflicting or inconsistent
requests and indemnity from two or more groups of Holders of Notes, each
representing less than a majority of the Outstanding Amount of the Notes, the
Indenture Trustee in its sole discretion may determine what action, if any,
shall be taken, notwithstanding any other provisions of this Indenture.
SECTION 5.07.
Unconditional Rights of Noteholders To Receive Principal and Interest.
Notwithstanding any other provisions in this Indenture, the Holder of any
Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest, if any, on such Note on or after
the respective due dates thereof expressed in such Note or in this Indenture
(or, in the case of redemption, on or after the Redemption Date) and to
institute suit for the enforcement of any such payment, and such right shall
not be impaired without the consent of such Holder.
SECTION 5.08.
Restoration of Rights and Remedies. If the Indenture Trustee or any
Noteholder has instituted any Proceeding to enforce any right or remedy under
this Indenture and such Proceeding has been discontinued or abandoned for any
reason or has been determined adversely to the Indenture Trustee or to such
Noteholder, then and in every such case the Issuer, the Indenture Trustee and
the Noteholders shall, subject to any determination in such Proceeding, be
restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Indenture Trustee and the
Noteholders shall continue as though no such Proceeding had been instituted.
SECTION 5.09.
Rights and Remedies Cumulative. No right or remedy herein conferred upon
or reserved to the Indenture Trustee or to the Noteholders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to
the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.10.
Delay or Omission Not a Waiver. No delay or omission of the Indenture
Trustee, or any Holder of any Note or the Security Insurer 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 Indenture Trustee, to the Noteholders or the
Security Insurer may be exercised from time to time, and as often as may be
deemed expedient, by the Indenture Trustee, the Noteholders or the Security
Insurer as the case may be.
SECTION 5.11.
Control by Noteholders. If the Indenture Trustee is the Controlling Party,
the Holders of a majority of the Outstanding Amount of the Notes shall have
the right to direct the time, method and place of conducting any Proceeding
for any remedy available to the Indenture Trustee with respect to the Notes
or exercising any trust or power conferred on the Indenture Trustee; provided
that:
(i)
such direction shall not be in conflict with any rule of law or with this
Indenture;
(ii)
subject to the express terms of Section 5.04, any direction to the
Indenture Trustee to sell or liquidate the Trust Estate shall be by Holders
of Notes representing not less than 100% of the Outstanding Amount of the
Notes;
(iii)
if the conditions set forth in Section 5.05 have been satisfied and the
Indenture Trustee elects to retain the Trust Estate pursuant to such
Section, then any written direction to the Indenture Trustee by Holders of
Notes representing less than 100% of the Outstanding Amount of the Notes to
sell or liquidate the Trust Estate shall be of no force and effect; and
(iv)
the Indenture Trustee may take any other action deemed proper by the
Indenture Trustee that is not inconsistent with such direction.
Notwithstanding the rights of Noteholders set forth in this Section, subject
to Section 6.01, the Indenture Trustee need not take any action that it
determines might involve it in liability or might materially adversely affect
the rights of any Noteholders not consenting to such action.
SECTION 5.12.
Waiver of Past Defaults. Prior to the declaration of the acceleration of
the maturity of the Notes as provided in Section 5.02, at any time when the
Security Insurer is not the Controlling Party, the Holders of Notes of not
less than a majority of the Outstanding Amount of the Notes may waive any
past Default or Event of Default and its consequences except a Default (a) in
payment of principal of or interest on any of the Notes or (b) in respect of
a covenant or provision hereof which cannot be modified or amended without
the consent of the Holder of each Note. In the case of any such waiver, the
Issuer, the Indenture Trustee and the Holders of the Notes shall be restored
to their former positions and rights hereunder, respectively; but no such
waiver shall extend to any subsequent or other Default or impair any right
consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed to
have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right
consequent thereto.
SECTION 5.13.
Undertaking for Costs. All parties to this Indenture agree, and each
Holder of a Note by such Holder's acceptance thereof shall be deemed to have
agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including 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
Indenture Trustee, (b) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the
Outstanding Amount of the Notes or (c) any suit instituted by any Noteholder
for the enforcement of the payment of principal of or interest on any Note on
or after the respective due dates expressed in such Note and in this
Indenture (or, in the case of redemption, on or after the Redemption Date).
SECTION 5.14.
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 herein granted to the Indenture
Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
SECTION 5.15.
Action on Notes. The Indenture Trustee's right to seek and recover
judgment on the Notes or under this Indenture shall not be affected by the
seeking, obtaining or application of any other relief under or with respect to
this Indenture. Neither the lien of this Indenture nor any rights or remedies
of the Indenture Trustee or the Noteholders shall be impaired by the recovery of
any judgment by the Indenture Trustee against the Issuer or by the levy of
any execution under such judgment upon any portion of the Trust Estate or
upon any of the assets of the Issuer. Any money or property collected by the
Indenture Trustee shall be applied in accordance with Section 5.04(b).
SECTION 5.16.
Performance and Enforcement of Certain Obligations. (a) Promptly
following a request from the Indenture Trustee to do so and at the
Administrator's expense, the Issuer shall take all such lawful action as the
Indenture Trustee may request to compel or secure the performance and observance
by the Seller or the Servicer, as applicable, of each of their obligations to
the Issuer under or in connection with the Sale and Servicing Agreement or the
Receivables Purchase Agreement, as applicable, and to exercise any and all
rights, remedies, powers and privileges lawfully available to the Issuer
under or in connection with the Sale and Servicing Agreement or the
Receivables Purchase Agreement to the extent and in the manner directed by
the Indenture Trustee, including the transmission of notices of default on
the part of the Seller or the Servicer thereunder and the institution of
legal or administrative actions or proceedings to compel or secure
performance by the Seller or the Servicer of each of their obligations under
the Sale and Servicing Agreement or the Receivables Purchase Agreement.
(b)
If an Event of Default has occurred and is continuing at any time when the
Security Insurer is not the Controlling Party, the Indenture Trustee may, and
at the direction (which direction shall be in writing or by telephone
(confirmed in writing promptly thereafter)) of the Holders of not less than
a majority of the Outstanding Amount of the Notes shall, exercise all rights,
remedies, powers, privileges and claims of the Issuer against the Seller or
the Servicer under or in connection with the Sale and Servicing Agreement and
the Receivables Purchase Agreement including the right or power to take any
action to compel or secure performance or observance by the Seller or the
Servicer, as the case may be, of each of their obligations to the Issuer
thereunder and to give any consent, request, notice, direction, approval,
extension or waiver under the Sale and Servicing Agreement and the
Receivables Purchase Agreement, as the case may be, and any right of the
Issuer to take such action shall be suspended.
ARTICLE XXXIII
The Indenture Trustee
SECTION 6.01.
Duties of Indenture Trustee. (a) If an Event of Default has occurred and
is continuing of which a Responsible Officer of the Indenture Trustee has
actual knowledge, the Indenture Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b)
Except during the continuance of an Event of Default:
(i)
the Indenture Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Indenture Trustee; and
(ii)
in the absence of bad faith on its part, the Indenture Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Indenture Trustee and conforming to the requirements of this Indenture;
however, the Indenture Trustee shall examine the certificates and opinions
to determine whether or not they conform to the requirements of this
Indenture.
(c)
The Indenture Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i)
this paragraph does not limit the effect of paragraph (b) of this Section;
(ii)
the Indenture Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer unless it is proved that the Indenture
Trustee was negligent in ascertaining the pertinent facts; and
(iii)
the Indenture Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction received
by it pursuant to Section 5.11.
(d)
Every provision of this Indenture that in any way relates to the Indenture
Trustee is subject to paragraphs (a), (b), (c) and (g) of this Section.
(e)
The Indenture Trustee shall not be liable for interest on any money received
by it except as the Indenture Trustee may agree in writing with the Issuer.
(f)
Money held in trust by the Indenture Trustee need not be segregated from
other funds except to the extent required by law or the terms of this
Indenture or the Sale and Servicing Agreement.
(g)
No provision of this Indenture shall require the Indenture Trustee to expend
or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
(h)
Every provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Indenture Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
(i)
In no event shall the Trustee be required to perform, or be responsible for
the manner of performance of, any of the obligations of the Servicer or any
other party under the Sale and Servicing Agreement, except that ▇▇▇▇▇▇ Trust
and Savings Bank, solely in its capacity as Backup Servicer, shall perform
and be responsible for such obligations during such time, if any, as the
Backup Servicer shall be the successor to, and be vested with the rights,
powers, duties and privileges of, the Servicer in accordance with the terms
of the Sale and Servicing Agreement.
(j)
The Indenture Trustee shall, and hereby agrees that it will, hold the Policy
in trust, and will hold any proceeds of any claim on the Policy in trust
solely for the use and benefit of the Noteholders. The Indenture Trustee
will deliver to the Rating Agency notice of any change made to the Policy
prior to the Termination Date.
For purposes of this Section 6.01 and Section 8.03(c), the Indenture
Trustee, or a Responsible Officer thereof, shall be charged with actual
knowledge of an Event of Default if the Indenture Trustee receives written
notice of such Event of Default from the Issuer, the Servicer, the Backup
Servicer, the Security Insurer or Noteholders owning Notes aggregating not less
than 10% of the Outstanding Amount of the Notes.
SECTION 6.02.
Rights of Indenture Trustee. (a) The Indenture Trustee may conclusively
rely on any document believed by it to be genuine and to have been signed or
presented by the proper person. The Indenture Trustee need not investigate
any fact or matter stated in the document.
(b)
Before the Indenture Trustee acts or refrains from acting, it may require an
Officer's Certificate or an Opinion of Counsel. The Indenture Trustee shall
not be liable for any action it takes or omits to take in good faith in
reliance on an Officer's Certificate or Opinion of Counsel.
(c)
The Indenture Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian or nominee, and the Indenture Trustee shall not be
responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed with
due care by it hereunder.
(d)
The Indenture Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; provided, that the Indenture Trustee's conduct does not constitute
willful misconduct, negligence or bad faith.
(e)
The Indenture Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the
Notes shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.
SECTION 6.03.
Individual Rights of Indenture Trustee. The Indenture Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Issuer or its Affiliates with the same rights it
would have if it were not Indenture Trustee. Any Paying Agent, Note
Registrar, co-registrar or co-paying agent may do the same with like rights.
However, the Indenture Trustee must comply with Sections 6.11 and 6.12.
SECTION 6.04.
Indenture Trustee's Disclaimer. The Indenture Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Notes, it shall not be accountable for the Issuer's use
of the proceeds from the Notes, and it shall not be responsible for any
statement of the Issuer in the Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the
Indenture Trustee's certificate of authentication.
SECTION 6.05.
Notice of Defaults. If a Default occurs and is continuing and if it is
known to a Responsible Officer of the Indenture Trustee, the Indenture
Trustee shall mail to each Noteholder and the Security Insurer notice of the
Default within 30 days after it occurs. Except in the case of a Default in
payment of principal of or interest on any Note (including payments pursuant
to the mandatory redemption provisions of such Note), the Indenture Trustee
may withhold the notice to Noteholders if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice is
in the interests of Noteholders.
SECTION 6.06.
Reports by Indenture Trustee to Holders. The Indenture Trustee shall
deliver to each Noteholder such information as may be required to enable such
holder to prepare its federal and state income tax returns.
SECTION 6.07.
Compensation and Indemnity. The Issuer shall, or shall cause the
Administrator to, pay to the Indenture Trustee from time to time reasonable
compensation for its services. The Indenture Trustee's compensation shall
not be limited by any law on compensation of a trustee of an express trust.
The Issuer shall, or shall cause the Administrator to, reimburse the
Indenture Trustee 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 Indenture Trustee's agents,
counsel, accountants and experts. The Issuer shall, or shall cause the
Administrator to, indemnify the Indenture Trustee against any and all loss,
liability or expense (including attorneys' fees and expenses) incurred by it
in connection with the administration of this trust and the performance of
its duties hereunder or under the Sale and Servicing Agreement. The
Indenture Trustee shall notify the Issuer and the Administrator promptly of
any claim for which it may seek indemnity. Failure by the Indenture Trustee
to so notify the Issuer and the Administrator shall not relieve the Issuer or
the Administrator of its obligations hereunder. The Issuer shall, or shall
cause the Administrator to, defend any such claim, and the Indenture Trustee
may have separate counsel and the Issuer shall, or shall cause the
Administrator to, pay the fees and expenses of such counsel. Neither the
Issuer nor the Administrator need reimburse any expense or indemnify against
any loss, liability or expense incurred by the Indenture Trustee through the
Indenture Trustee's own willful misconduct, negligence or bad faith.
The Issuer's payment obligations to the Indenture Trustee and the
Administrator's indemnities to the Indenture Trustee pursuant to this Section
shall survive the discharge of this Indenture or the earlier resignation or
removal of the Indenture Trustee. When the Indenture Trustee incurs expenses
after the occurrence of a Default specified in Section 5.01(iv) or (v) with
respect to the Issuer, the expenses are intended to constitute expenses of
administration under Title 11 of the United States Code or any other
applicable federal or state bankruptcy, insolvency or similar law.
SECTION 6.08.
Replacement of Indenture Trustee. No resignation or removal of the
Indenture Trustee and no appointment of a successor Indenture Trustee shall
become effective until the acceptance of appointment by the successor
Indenture Trustee pursuant to this Section 6.08. The Indenture Trustee may
resign at any time by so notifying the Issuer and (if the Security Insurer is
the Controlling Party) the Security Insurer. The Holders of a majority in
Outstanding Amount of the Notes may, with the consent of the Controlling
Party, remove the Indenture Trustee by so notifying the Indenture Trustee and
may appoint a successor Indenture Trustee. The Issuer shall, with the
consent of the Controlling Party, and at the request of the Controlling
Party, remove the Indenture Trustee if:
(i)
the Indenture Trustee fails to comply with Section 6.11;
(ii)
the Indenture Trustee is adjudged a bankrupt or insolvent;
(iii)
a receiver or other public officer takes charge of the Indenture Trustee or
its property; or
(iv)
the Indenture Trustee otherwise becomes incapable of acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists in the
office of Indenture Trustee for any reason (the Indenture Trustee in such
event being referred to herein as the retiring Indenture Trustee), the Issuer
shall promptly appoint a successor Indenture Trustee acceptable (if the
Security Insurer is the Controlling Party) to the Security Insurer. If the
Issuer fails to appoint such a successor Indenture Trustee and the Security
Insurer is the Controlling Party, the Security Insurer may appoint a
successor Indenture Trustee.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuer. Thereupon
the resignation or removal of the retiring Indenture Trustee shall become
effective, and the successor Indenture Trustee shall have all the rights,
powers and duties of the Indenture Trustee under this Indenture. The
retiring Indenture Trustee shall be paid all amounts owed to it upon its
resignation or removal. The successor Indenture Trustee shall mail a notice
of its succession to Noteholders. The retiring Indenture Trustee shall
promptly transfer all property held by it as Indenture Trustee to the
successor Indenture Trustee. The retiring Indenture Trustee shall not be
liable for the acts or omissions of any Successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days after
the retiring Indenture Trustee resigns or is removed, the retiring Indenture
Trustee, the Security Insurer (if the Security Insurer is the Controlling
Party), the Issuer or the Holders of a majority in Outstanding Amount of the
Notes may petition any court of competent jurisdiction for the appointment of
a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any Noteholder
may petition any court of competent jurisdiction for the removal of the
Indenture Trustee and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to this
Section, the Issuer's and the Administrator's obligations under Section 6.07
shall continue for the benefit of the retiring Indenture Trustee.
SECTION 6.09.
Successor Indenture Trustee by Merger. If the Indenture 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 Indenture Trustee; provided, that such
corporation or banking association shall be otherwise qualified and eligible
under Section 6.11. The Indenture Trustee shall provide the Rating Agencies
prior written notice of any such transaction.
In case at the time such successor or successors by merger, conversion or
consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the
certificate of authentication of any predecessor trustee and deliver such
Notes so authenticated; and in case at that time any of the Notes shall not
have been authenticated, any successor to the Indenture Trustee may
authenticate such Notes either in the name of any predecessor hereunder or in
the name of the successor to the Indenture Trustee; and in all such cases
such certificates shall have the full force which it is anywhere in the Notes
or in this Indenture provided that the certificate of the Indenture Trustee
shall have.
SECTION 6.10.
Appointment of Co-Indenture Trustee or Separate Indenture 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 Indenture Trustee,
with the consent of the Security Insurer (if the Security Insurer is the
Controlling Party), shall have the power and may execute and deliver all
instruments to appoint one or more Persons to act as a co-trustee or co-
trustees, or separate trustee or separate trustees, of all or any part of the
Trust, and to vest in such Person or Persons, in such capacity and for the
benefit of the Noteholders, such title to the Trust Estate, or any part
hereof, and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and trusts as the Indenture Trustee may consider
necessary or desirable. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under
Section 6.11 and no notice to Noteholders of the appointment of any co-
trustee or separate trustee shall be required under Section 6.08 hereof.
(b)
Every separate trustee and co-trustee shall, to the extent permitted by law,
be appointed and act subject to the following provisions and conditions:
(i)
all rights, powers, duties and obligations conferred or imposed upon the
Indenture Trustee shall be conferred or imposed upon and exercised or
performed by the Indenture Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Indenture Trustee joining in such
act), except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed the Indenture Trustee shall
be incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of title
to the Trust Estate or any portion thereof in any such jurisdiction) shall
be exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Indenture Trustee;
(ii)
no trustee hereunder shall be personally liable by reason of any act or
omission of any other trustee hereunder; and
(iii)
the Indenture Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee.
(c)
Any notice, request or other writing given to the Indenture Trustee shall be
deemed to have been given to each of the then separate trustees and co-
trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article VI. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the Indenture 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 Indenture Trustee. Every such instrument shall
be filed with the Indenture Trustee.
(d)
Any separate trustee or co-trustee may at any time constitute the Indenture
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or co-
trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the extent permitted by law, without
the appointment of a new or successor trustee.
SECTION 6.11.
Eligibility; Disqualification. The Indenture Trustee shall at all times
satisfy the requirements of TIA & 310(a). The Indenture 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 the time deposits of
the Indenture Trustee shall be rated at least A-1 by Standard & Poor's and P-
1 by Moody's. At any time that the Security Insurer is the Controlling
Party, the Indenture Trustee shall provide copies of such reports to the
Security Insurer upon request. The Indenture Trustee shall comply with TIA
& 310(b), including the optional provision permitted by the second sentence
of TIA & 310(b)(9); provided, however, that there shall be excluded from the
operation of TIA & 310(b)(1) any indenture or indentures under which other
securities of the Issuer are outstanding if the requirements for such
exclusion set forth in TIA & 310(b)(1) are met.
SECTION 6.12.
Pennsylvania Motor Vehicle Sales Finance Act Licenses. The Indenture
Trustee shall use its best efforts to maintain the effectiveness of all
licenses required under the Pennsylvania Motor Vehicle Sales Finance Act in
connection with this Indenture and the transactions contemplated hereby until
the lien and security interest of this Indenture shall no longer be in effect
in accordance with the terms hereof.
SECTION 6.13.
Preferential Collection of Claims Against Issuer. The Indenture Trustee
shall comply with TIA & 311(a), excluding any creditor relationship listed in
TIA & 311(b). An Indenture Trustee who has resigned or been removed shall be
subject to TIA & 311(a) to the extent indicated.
ARTICLE XXXIV
Noteholders' Lists and Reports
SECTION 7.01.
Issuer To Furnish Indenture Trustee Names and Addresses of Noteholders.
The Issuer will furnish or cause to be furnished to the Indenture Trustee (a)
not more than five days after the earlier of (i) each Record Date and (ii) three
months after the last Record Date, a list, in such form as the Indenture
Trustee may reasonably require, of the names and addresses of the Holders of
Notes as of such Record Date, and (b) at such other times as the Indenture
Trustee may request in writing, within 30 days after receipt by the Issuer of
any such request, a list of similar form and content as of a date not more
than 10 days prior to the time such list is furnished; provided, however,
that so long as the Indenture Trustee is the Note Registrar, no such list
shall be required to be furnished. The Indenture Trustee or, if the
Indenture Trustee is not the Note Registrar, the Issuer shall furnish to the
Security Insurer (if the Security Insurer is the Controlling Party) in
writing on an annual basis and at such other times as the Security Insurer
may request a copy of the list of Noteholders.
SECTION 7.02.
Preservation of Information; Communications to Noteholders. (a) The
Indenture Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders of Notes contained in the
most recent list furnished to the Indenture Trustee as provided in
Section 7.01 and the names and addresses of Holders of Notes received by the
Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee
may destroy any list furnished to it as provided in such Section 7.01 upon
receipt of a new list so furnished. The Indenture Trustee shall make such
list available to the Security Insurer (if the Security Insurer is the
Controlling Party) on request, and to the Noteholders upon written request of
three or more Noteholders or one or more Noteholders evidencing not less than
25% of the Outstanding Amount of the Notes.
(b)
Noteholders may communicate pursuant to TIA & 312(b) with other Noteholders
with respect to their rights under this Indenture or under the Notes.
(c)
The Issuer, the Indenture Trustee and the Note Registrar shall have the
protection of TIA & 312(c).
SECTION 7.03.
Reports by Issuer. (a) The Issuer shall:
(i)
file with the Indenture Trustee, within 15 days after the Issuer is required
(if at all) to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission may from time to
time by rules and regulations prescribe) that the Issuer may be required to
file with the Commission pursuant to Section 13 or 15(d) of the Exchange
Act;
(ii)
file with the Indenture Trustee and the Commission in accordance with rules
and regulations prescribed from time to time by the Commission such
additional information, documents and reports with respect to compliance by
the Issuer with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations; and
(iii)
supply to the Indenture Trustee (and the Indenture Trustee shall transmit by
mail to all Noteholders described in TIA & 313(c)) such summaries of any
information, documents and reports required to be filed by the Issuer
pursuant to clauses (i) and (ii) of this Section 7.03(a) and by rules and
regulations prescribed from time to time by the Commission.
(b)
Unless the Issuer otherwise determines, the fiscal year of the Issuer shall
end on December 31 of each year.
SECTION 7.04.
Reports by Indenture Trustee. If required by TIA & 313(a), within 60 days
after each February 1 beginning with February 1, 1997, the Indenture Trustee
shall mail to each Noteholder as required by TIA & 313(c) a brief report
dated as of such date that complies with TIA & 313(a). The Indenture Trustee
also shall comply with TIA & 313(b).
A copy of each report at the time of its mailing to Noteholders shall be
filed by the Indenture Trustee with the Commission and each stock exchange,
if any, on which the Notes are listed. The Issuer shall notify the Indenture
Trustee if and when the Notes are listed on any stock exchange.
ARTICLE XXXV
Accounts, Disbursements and Releases
SECTION 8.01.
Collection of Money. Except as otherwise expressly provided herein, the
Indenture Trustee may demand payment or delivery of, and shall receive and
collect, directly and without intervention or assistance of any fiscal agent
or other intermediary, all money and other property payable to or receivable
by the Indenture Trustee pursuant to this Indenture. The Indenture Trustee
shall apply all such money received by it as provided in this Indenture.
Except as otherwise expressly provided in this Indenture, 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 Indenture 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 8.02.
Trust Accounts. (a) On or prior to the Closing Date, the Issuer shall
cause the Servicer to establish and maintain, in the name of the Indenture
Trustee, for the benefit of the Noteholders and the Certificateholders, the
Trust Accounts as provided in Section 5.02 of the Sale and Servicing
Agreement.
(b)
On or before each Distribution Date, the Total Distribution Amount with
respect to the preceding Collection Period will be deposited in the
Collection Account as provided in Section 5.02 of the Sale and Servicing
Agreement. On or before each Distribution Date, all amounts required to be
deposited in the Note Distribution Account with respect to the preceding
Collection Period pursuant to Section 5.05 of the Sale and Servicing
Agreement will be transferred from the Collection Account and/or the Spread
Account to the Note Distribution Account.
(c)
On each Distribution Date and Redemption Date, the Indenture Trustee shall
distribute all amounts on deposit in the Note Distribution Account to
Noteholders in respect of the Notes to the extent of amounts due and unpaid
on the Notes for principal and interest (including any premium) in the
following amounts and in the following order of priority (except as otherwise
provided in Section 5.04(b)):
(i)
accrued and unpaid interest on the Notes; provided, that if there are not
sufficient funds in the Note Distribution Account to pay the entire amount
of accrued and unpaid interest then due on the Notes, the amount in the Note
Distribution Account shall be applied to the payment of such interest on the
Notes pro rata on the basis of the total such interest due on the Notes;
(ii)
to the Holders of the Class A-1 Notes on account of principal until the
Outstanding Amount of the Class A-1 Notes is reduced to zero; and
(iii)
to the Holders of the Class A-2 Notes on account of principal until the
Outstanding Amount of the Class A-2 Notes is reduced to zero.
SECTION 8.03.
General Provisions Regarding Accounts. (a) So long as no Default or
Event of Default shall have occurred and be continuing, all or a portion of the
funds in the Trust Accounts shall be invested in Eligible Investments and
reinvested by the Indenture Trustee (or the investment manager referred to in
the definition of "Eligible Investments" in the Sale and Servicing Agreement)
upon Issuer Order, subject to the provisions of Section 5.02 of the Sale and
Servicing Agreement. All income or other gain from investments of moneys
deposited in the Trust Accounts shall be deposited by the Indenture Trustee
in the Collection Account, and any loss resulting from such investments shall
be charged to such account. The Issuer will not direct the Indenture Trustee
to make any investment of any funds or to sell any investment held in any of
the Trust Accounts unless the security interest Granted and perfected in such
account will continue to be perfected in such investment or the proceeds of
such sale, in either case without any further action by any Person, and, in
connection with any direction to the Indenture Trustee to make any such
investment or sale, if requested by the Indenture Trustee, the Issuer shall
deliver to the Indenture Trustee an Opinion of Counsel, acceptable to the
Indenture Trustee, to such effect.
(b)
Subject to Section 6.01(c), the Indenture Trustee shall not in any way be
held liable by reason of any insufficiency in any of the Trust Accounts
resulting from any loss on any Eligible Investment included therein except
for losses attributable to the Indenture Trustee's failure to make payments
on such Eligible Investments issued by the Indenture Trustee, in its
commercial capacity as principal obligor and not as trustee, in accordance
with their terms.
(c)
If (i) the Issuer (or the Servicer or any investment manager pursuant to
Section 5.02 of the Sale and Servicing Agreement) shall have failed to give
investment directions for any funds on deposit in the Trust Accounts to the
Indenture Trustee by 11:00 a.m. Eastern Time (or such other time as may be
agreed by the Issuer and Indenture Trustee) on any Business Day or (ii) a
Default or Event of Default shall have occurred and be continuing of which a
Responsible Officer of the Indenture Trustee has actual knowledge with
respect to the Notes but the Notes shall not have been declared due and
payable pursuant to Section 5.02 or (iii) if such Notes shall have been
declared due and payable following an Event of Default but amounts collected
or receivable from the Trust Estate are being applied in accordance with
Section 5.05 as if there had not been such a declaration, then the
Controlling Party shall, to the fullest extent practicable, invest and
reinvest funds in the Trust Accounts in one or more Eligible Investments.
SECTION 8.04.
Release of Trust Estate. (a) Subject to the payment of its fees and
expenses pursuant to Section 6.07, the Indenture Trustee may, and when
required by the provisions of this Indenture shall, execute instruments to
release property from the lien of this Indenture, or convey the Indenture
Trustee's interest in the same, in a manner and under circumstances that are
not inconsistent with the provisions of this Indenture. No party relying
upon an instrument executed by the Indenture Trustee as provided in this
Article VIII shall be bound to ascertain the Indenture Trustee's authority,
inquire into the satisfaction of any conditions precedent or see to the
application of any moneys.
(b)
The Indenture Trustee shall, at such time as there are no Notes Outstanding
and all sums due the Indenture Trustee pursuant to Section 6.07 have been
paid and all amounts due to the Security Insurer have been paid, release any
remaining portion of the Trust Estate that secured the Notes from the lien of
this Indenture and release to the Issuer or any other Person entitled thereto
any funds then on deposit in the Trust Accounts. The Indenture Trustee shall
release property from the lien of this Indenture pursuant to this
Section 8.04(b) only upon receipt of an Issuer Request accompanied by an
Officer's Certificate, an Opinion of Counsel and (if required by the TIA)
Independent Certificates in accordance with TIA && 314(c) and 314(d)(1)
meeting the applicable requirements of Section 11.01.
The Issuer agrees, upon request by the Servicer and representation by the
Servicer that it has complied with the procedure in Section 9.01 of the Sale
and Servicing Agreement, to render the Issuer Request to the Indenture
Trustee in accordance with Section 4.04, and take such other actions as are
required in that Section.
SECTION 8.05.
Opinion of Counsel. The Indenture Trustee shall receive at least seven
days prior written notice when requested by the Issuer to take any action
pursuant to Section 8.04(a), accompanied by copies of any instruments involved,
and the Indenture Trustee shall also require, as a condition to such action, an
Opinion of Counsel, in form and substance satisfactory to the Indenture
Trustee, stating the legal effect of any such action, outlining the steps
required to complete the same, and concluding that all conditions precedent
to the taking of such action have been complied with and such action will not
materially and adversely impair the security for the Notes or the rights of
the Noteholders in contravention of the provisions of this Indenture;
provided, however, that such Opinion of Counsel shall not be required to
express an opinion as to the fair value of the Trust Estate. Counsel
rendering any such opinion may rely, without independent investigation, on
the accuracy and validity of any certificate or other instrument delivered to
the Indenture Trustee in connection with any such action.
ARTICLE XXXVI
Supplemental Indentures
SECTION 9.01.
Supplemental Indentures Without Consent of Noteholders. (a) Without the
consent of the Holders of any Notes but with the consent of the Security
Insurer (if the Security Insurer is the Controlling Party) and prior notice
to the Rating Agencies, the Issuer and the Indenture Trustee, when authorized
by an Issuer Order, at any time and from time to time, may enter into one or
more indentures supplemental hereto (which shall conform to the provisions of
the Trust Indenture Act as in force at the date of the execution thereof), in
form satisfactory to the Indenture Trustee, for any of the following
purposes:
(i)
to correct or amplify the description of any property at any time subject
to the lien of this Indenture, or better to assure, convey and confirm unto
the Indenture Trustee any property subject or required to be subjected to
the lien of this Indenture, or to subject to the lien of this Indenture
additional property;
(ii)
to evidence the succession, in compliance with the applicable provisions
hereof, of another person to the Issuer, and the assumption by any such
successor of the covenants of the Issuer herein and in the Notes contained;
(iii)
to add to the covenants of the Issuer, for the benefit of the Holders of
the Notes, or to surrender any right or power herein conferred upon the
Issuer;
(iv)
to convey, transfer, assign, mortgage or pledge any property to or with the
Indenture Trustee;
(v)
to cure any ambiguity, to correct or supplement any provision herein or in
any supplemental indenture that may be inconsistent with any other provision
herein or in any supplemental indenture or to make any other provisions with
respect to matters or questions arising under this Indenture or in any
supplemental indenture; provided, that such action shall not adversely
affect the interests of the Holders of the Notes;
(vi)
to evidence and provide for the acceptance of the appointment hereunder
by a successor trustee with respect to the Notes and to add to or change any
of the provisions of this Indenture as shall be necessary to facilitate the
administration of the trusts hereunder by more than one trustee, pursuant to
the requirements of Article VI; or
(vii)
to modify, eliminate or add to the provisions of this Indenture to such
extent as shall be necessary to effect the qualification of this Indenture
under the TIA or under any similar federal statute hereafter enacted and to
add to this Indenture such other provisions as may be expressly required by
the TIA.
The Indenture Trustee is hereby authorized to join in the execution of any
such supplemental indenture and to make any further appropriate agreements
and stipulations that may be therein contained.
(b)
The Issuer and the Indenture Trustee, when authorized by an Issuer Order,
may, also without the consent of any of the Holders of the Notes but with the
consent of the Security Insurer (if the Security Insurer is the Controlling
Party) and prior notice to the Rating Agencies, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to,
or changing in any manner or eliminating any of the provisions of, this
Indenture or of modifying in any manner the rights of the Holders of the
Notes under this Indenture; provided, however, that such action shall not, as
evidenced by an Opinion of Counsel, adversely affect in any material respect
the interests of any Noteholder (including the interests of the Security
Insurer to the extent it is, or will become, upon payment in full of all
amounts due to any other Noteholder hereunder or pursuant to a Note, a
Noteholder pursuant to Section 2.08(c) or Section 5.10 or the Sale and
Servicing Agreement.
SECTION 9.02.
Supplemental Indentures with Consent of Noteholders. The Issuer and the
Indenture Trustee, when authorized by an Issuer Order, also may, with prior
notice to the Rating Agencies and with the consent of (i) the Security
Insurer (if the Security Insurer is the Controlling Party) or (ii) of the
Holders of not less than a majority of the Outstanding Amount of the Notes
(if the Security Insurer is not the Controlling Party), by Act of such
Holders delivered to the Issuer and the Indenture Trustee, enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Holders of
the Notes under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Note
affected thereby:
(i)
change the date of payment of any installment of principal of or interest
on any Note, or reduce the principal amount thereof, the interest rate
thereon or the Redemption Price with respect thereto, change the provisions
of this Indenture relating to the application of collections on, or the
proceeds of the sale of, the Trust Estate to payment of principal of or
interest on the Notes, or change any place of payment where, or the coin or
currency in which, any Note or the interest thereon is payable, or impair
the right to institute suit for the enforcement of the provisions of this
Indenture requiring the application of funds available therefor, as provided
in Article V, to the payment of any such amount due on the Notes on or after
the respective due dates thereof (or, in the case of redemption, on or after
the Redemption Date);
(ii)
reduce the percentage of the Outstanding Amount of the Notes, the consent
of the Holders of which is required for any such supplemental indenture, or
the consent of the Holders of which is required for any waiver of compliance
with certain provisions of this Indenture or certain defaults hereunder and
their consequences provided for in this Indenture;
(iii)
modify or alter the provisions of the proviso to the definition of the term
"Outstanding";
(iv)
reduce the percentage of the Outstanding Amount of the Notes required to
direct the Indenture Trustee to direct the Issuer to sell or liquidate the
Trust Estate pursuant to Section 5.04;
(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 Basic Documents cannot be modified or waived without the
consent of the Holder of each Outstanding Note affected thereby;
(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
any Note on any Distribution Date (including the calculation of any of the
individual components of such calculation) or to affect the rights of the
Holders of Notes to the benefit of any provisions for the mandatory
redemption of the Notes contained herein; or
(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, terminate the lien of
this Indenture on any property at any time subject hereto or deprive the
Holder of any Note of the security provided by the lien of this Indenture.
The Indenture Trustee may in its discretion determine whether or not any
Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The
Indenture Trustee shall not be liable for any such determination made in good
faith.
It shall not be necessary for any Act of Noteholders under this Section to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee of any
supplemental indenture pursuant to this Section, the Indenture Trustee shall
mail to the Holders of the Notes to which such amendment or supplemental
indenture relates a notice setting forth in general terms the substance of
such supplemental indenture. Any failure of the Indenture Trustee to mail
such notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any such supplemental indenture.
SECTION 9.03.
Execution of Supplemental Indentures. In executing, or permitting the
additional trusts created by, any supplemental indenture permitted by this
Article IX or the modification thereby of the trusts created by this
Indenture, the Indenture Trustee shall be entitled to receive, and subject to
Sections 6.01 and 6.02, shall be fully protected in relying upon, an Opinion
of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Indenture Trustee may, but
shall not be obligated to, enter into any such supplemental indenture that
affects the Indenture Trustee's own rights, duties, liabilities or immunities
under this Indenture or otherwise.
SECTION 9.04.
Effect of Supplemental Indenture. Upon the execution of any supplemental
indenture pursuant to the provisions hereof, this Indenture shall be and
shall be deemed to be modified and amended in accordance therewith with
respect to the Notes affected thereby, and the respective rights, limitations
of rights, obligations, duties, liabilities and immunities under this
Indenture of the Indenture Trustee, the Issuer and the Holders of the Notes
shall thereafter be determined, exercised and enforced hereunder subject in
all respects to such modifications and amendments, and all the terms and
conditions of any such supplemental indenture shall be and be deemed to be
part of the terms and conditions of this Indenture for any and all purposes.
SECTION 9.05.
Reference in Notes to Supplemental Indentures. Notes authenticated and
delivered after the execution of any supplemental indenture pursuant to this
Article IX may, and if required by the Indenture Trustee shall, bear a
notation in form approved by the Indenture Trustee as to any matter provided
for in such supplemental indenture. If the Issuer or the Indenture Trustee
shall so determine, new Notes so modified as to conform, in the opinion of
the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes.
SECTION 9.06.
Conformity with Trust Indenture Act. Every amendment of this Indenture and
every supplemental indenture executed pursuant to this Article IX shall
conform to the requirements of the Trust Indenture Act as then in effect so
long as this Indenture shall then be qualified under the Trust Indenture Act.
ARTICLE XXXVII
Redemption of Notes
SECTION 10.01.
Redemption. (a) The Class A-2 Notes are subject to redemption in whole,
but not in part, at the direction of the Servicer pursuant to Section 9.01(a)
of the Sale and Servicing Agreement, on any Distribution Date on which the
Servicer exercises its option to purchase the Trust Estate pursuant to said
Section 9.01(a), for a purchase price equal to the Redemption Price;
provided, that the Issuer has available funds sufficient to pay the
Redemption Price. The Servicer or the Issuer shall furnish the Security
Insurer (if the Security Insurer is the Controlling Party) and the Rating
Agencies notice of such redemption. If the Class A-2 Notes are to be
redeemed pursuant to this Section 10.01(a), the Servicer or the Issuer shall
furnish notice of such election to the Indenture Trustee not later than
20 days prior to the Redemption Date and the Issuer shall deposit by 10:00
A.M. New York City time on the Redemption Date with the Indenture Trustee in
the Note Distribution Account the Redemption Price of the Class A-2 Notes to
be redeemed, whereupon all such Class A-2 Notes shall be due and payable on
the Redemption Date upon the furnishing of a notice complying with
Section 10.02 to each Holder of the Notes.
(b)
In the event that the assets of the Trust are sold pursuant to Section 9.02
of the Trust Agreement, all amounts on deposit in the Note Distribution
Account shall be paid to the Noteholders up to the Outstanding Amount of the
Notes and all accrued and unpaid interest thereon. If amounts are to be paid
to Noteholders pursuant to this Section 10.01(b), the Servicer or the Issuer
shall, to the extent practicable, furnish notice of such event to the
Indenture Trustee not later than 20 days prior to the Redemption Date,
whereupon all such amounts shall be payable on the Redemption Date.
SECTION 10.02.
Form of Redemption Notice. (a) Notice of redemption under
Section 10.01(a) shall be given by the Indenture Trustee by first-class mail,
postage prepaid, or by facsimile mailed or transmitted not later than 10 days
prior to the applicable Redemption Date to each Holder of Notes, as of the
close of business on the Record Date preceding the applicable Redemption
Date, at such Holder's address or facsimile number appearing in the Note
Register.
All notices of redemption shall state:
(i)
the Redemption Date;
(ii)
the Redemption Price; and
(iii)
the place where such Notes are to be surrendered for payment of the
Redemption Price (which shall be the office or agency of the Issuer to be
maintained as provided in Section 3.02).
Notice of redemption of the Notes shall be given by the Indenture Trustee in
the name and at the expense of the Issuer. Failure to give notice of
redemption, or any defect therein, to any Holder of any Note shall not impair
or affect the validity of the redemption of any other Note.
(b)
Prior notice of redemption under Section 10.01(b) is not required to be
given to Noteholders.
SECTION 10.03.
Notes Payable on Redemption Date. The Notes or portions thereof to be
redeemed shall, following notice of redemption as required by Section 10.02
(in the case of redemption pursuant to Section 10.01(a)), on the Redemption
Date become due and payable at the Redemption Price and (unless the Issuer
shall default in the payment of the Redemption Price) no interest shall
accrue on the Redemption Price for any period after the date to which accrued
interest is calculated for purposes of calculating the Redemption Price.
ARTICLE XXXVIII
Miscellaneous
SECTION 11.01.
Compliance Certificates and Opinions, etc. (a) Upon any application or
request by the Issuer to the Indenture Trustee to take any action under any
provision of this Indenture, the Issuer shall furnish to the Indenture
Trustee (i) an Officer's Certificate stating that all conditions precedent,
if any, provided for in this Indenture relating to the proposed action have
been complied with and (ii) an Opinion of Counsel stating that in the opinion
of such counsel all such conditions precedent, if any, have been complied
with and (iii) (if required by the TIA) an Independent Certificate from a
firm of certified public accountants meeting the applicable requirements of
this Section, 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:
(1)
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;
(2)
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;
(3)
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
(4)
a statement as to whether, in the opinion of each such signatory, such
condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Collateral or other property or
securities with the Indenture 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 11.01(a)
or elsewhere in this Indenture, furnish to the Indenture Trustee and the
Security Insurer (if the Security Insurer is 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
deposit) to the Issuer of the Collateral or other property or securities to
be so deposited.
(ii)
Whenever the Issuer is required to furnish to the Indenture Trustee
and the Security Insurer an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause (i)
above, the Issuer shall also deliver to the Indenture Trustee and the
Security Insurer an Independent Certificate as to the same matters, if the
fair value to the Issuer of the securities to be so deposited and of all
other such securities made the basis of any such withdrawal or release since
the commencement of the then-current fiscal year of the Issuer, as set forth
in the certificates delivered pursuant to clause (i) above and this clause
(ii), is 10% or more of the Outstanding Amount of the Notes, but such a
certificate need not be furnished with respect to any securities so
deposited, if the fair value thereof to the Issuer as set forth in the
related Officer's Certificate is less than $25,000 or less than one percent
of the Outstanding Amount of the Notes.
(iii)
Whenever any property or securities are to be released from the lien
of this Indenture, the Issuer shall also furnish to the Indenture Trustee
and the Security Insurer (if the Security Insurer is 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.
(iv)
Whenever the Issuer is required to furnish to the Indenture Trustee
and the Security Insurer an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause (iii)
above, the Issuer shall also furnish to the Indenture Trustee and the
Security Insurer an Independent Certificate as to the same matters if the
fair value of the property or securities and of all other property, other
than property as contemplated by clause (v) below or securities released
from the lien of this Indenture since the commencement of the then-current
calendar year, as set forth in the certificates required by clause (iii)
above and this clause (iv), equals 10% or more of the Outstanding Amount of
the Notes, but such certificate need not be furnished in the case of any
release of property or securities if the fair value thereof as set forth in
the related Officer's Certificate is less than $25,000 or less than one
percent of the then Out standing Amount of the Notes.
(v)
Notwithstanding Section 4.04 or any other provision of this Section,
the Issuer may, without compliance with the requirements of the other
provisions of this Section, (A) collect, liquidate, sell or otherwise
dispose of Receivables and Financed Vehicles as and to the extent permitted
or required by the Basic Documents and (B) make cash payments out of the
Trust Accounts as and to the extent permitted or required by the Basic
Documents, so long as the Issuer shall deliver to the Indenture Trustee
every six months, commencing December 15, 1997, an Officer's Certificate of
the Issuer stating that all the dispositions of Collateral described in
clauses (A) or (B) above that occurred during the preceding six calendar
months were in the ordinary course of the Issuer's business and that the
proceeds thereof were applied in accordance with the Basic Documents.
SECTION 11.02.
Form of Documents Delivered to Indenture Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.
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 such officer's
certificate or opinion is based are erroneous. Any such certificate of an
Authorized Officer or Opinion of Counsel may be based, insofar as it relates
to factual matters, upon a certificate or opinion of, or representations by,
an officer or officers of the Servicer, the Seller, the Issuer or the
Administrator, stating that the information with respect to such factual
matters is in the possession of the Servicer, the Seller, the Issuer or the
Administrator, 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.
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.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application
or at the effective date of such certificate or report (as the case may be),
of the facts and opinions stated in such document shall in such case be
conditions precedent to the right of the Issuer to have such application
granted or to the sufficiency of such certificate or report. The foregoing
shall not, however, be construed to affect the Indenture Trustee's right to
rely upon the truth and accuracy of any statement or opinion contained in any
such document as provided in Article VI.
SECTION 11.03.
Acts of Noteholders. (a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Indenture to be
given or taken by Noteholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Noteholders in
person or by agents duly appointed in writing; and except as herein otherwise
expressly provided such action shall become effective when such instrument or
instruments are delivered to the Indenture Trustee and, where it is hereby
expressly required, to the Issuer. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Noteholders signing such instrument or instruments.
Proof of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Indenture and (subject to
Section 6.01) conclusive in favor of the Indenture Trustee and the Issuer, if
made in the manner provided in this Section.
(b)
The fact and date of the execution by any person of any such instrument or
writing may be proved in any manner that the Indenture Trustee deems
sufficient.
(c)
The ownership of Notes shall be proved by the Note Register.
(d)
Any request, demand, authorization, direction, notice, consent, waiver or
other action by the Holder of any Notes shall bind the Holder of every Note
issued upon the registration thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon, whether or not notation
of such action is made upon such Note.
SECTION 11.04.
Notices, etc., to Indenture Trustee, Issuer and Rating Agencies. Any
request, demand, authorization, direction, notice, consent, waiver or Act of
Noteholders or other documents provided or permitted by this Indenture shall
be in writing and, if such request, demand, authorization, direction, notice,
consent, waiver or act of Noteholders is to be made upon, given or furnished
to or filed with:
(i)
the Indenture Trustee by any Noteholder or by the Issuer, shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Indenture Trustee at its Corporate Trust Office; or
(ii)
the Issuer by the Indenture Trustee or by any Noteholder, shall be
sufficient for every purpose hereunder if in writing and mailed first-class,
postage prepaid to the Issuer addressed to: First Merchants Auto Trust
1997-1, in care of Chase Manhattan Bank Delaware, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention of Corporate Trustee Administration
Department, or at any other address previously furnished in writing to the
Indenture Trustee by the Issuer or the Administrator. The Issuer shall
promptly transmit any notice received by it from the Noteholders to the
Indenture Trustee;
(iii)
the Security Insurer shall be sufficient for any purpose hereunder if in
writing and mailed by registered mail or personally delivered or telexed or
faxed to the Security Insurer at: Financial Security Assurance Inc., ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Surveillance Department;
Telex No.: (▇▇▇) ▇▇▇-▇▇▇▇, Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇; Facsimile Nos.:
(▇▇▇) ▇▇▇-▇▇▇▇, (▇▇▇) ▇▇▇-▇▇▇▇. (In each case in which notice or other
communication to the Security Insurer refers to an Event of Default, a claim
on the Policy or with respect to which failure on the part of the Security
Insurer to respond shall be deemed to constitute consent or acceptance, then
a copy of such notice or other communication should also be sent to the
attention of the General Counsel and the Head Financial Guaranty Group
"URGENT MATERIAL ENCLOSED".)
Notices required to be given to the Rating Agencies by the Issuer, the
Indenture Trustee or the Owner Trustee shall be in writing, personally
delivered or mailed by certified mail, return receipt requested, to (i) in
the case of Moody's, at the following address: ▇▇▇▇▇'▇ Investors Service,
Inc., ABS Monitoring Department, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
and (ii) in the case of Standard & Poor's, at the following address:
Standard & Poor's Ratings Services, a Division of The McGraw Hill Companies,
Inc., ▇▇ ▇▇▇▇▇▇▇▇ (▇▇▇▇ ▇▇▇▇▇), ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of Asset
Backed Surveillance Department; or as to each of the foregoing, at such other
address as shall be designated by written notice to the other parties.
SECTION 11.05.
Notices to Noteholders; Waiver. Where this Indenture provides for notice
to Noteholders of any event, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class,
postage prepaid to each Noteholder affected by such event, at such Holder's
address as it appears on the Note Register, not later than the latest date,
and not earlier than the earliest date, prescribed for the giving of such
notice. In any case where notice to Noteholders is given by mail, neither
the failure to mail such notice nor any defect in any notice so mailed to any
particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner
herein provided shall conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a result of
a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Noteholders when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.
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 11.06.
Alternate Payment and Notice Provisions. Notwithstanding any provision of
this Indenture or any of the Notes to the contrary, the Issuer may enter into
any agreement with any Holder of a Note providing for a method of payment, or
notice by the Indenture Trustee or any Paying Agent to such Holder, that is
different from the methods provided for in this Indenture for such payments
or notices. The Issuer will furnish to the Indenture Trustee a copy of each
such agreement and the Indenture Trustee will cause payments to be made and
notices to be given in accordance with such agreements.
SECTION 11.07.
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 11.08.
Successors and Assigns. All covenants and agreements in this Indenture and
the Notes by the Issuer shall bind its successors and assigns, whether so
expressed or not. All agreements of the Indenture Trustee in this Indenture
shall bind its successors, co-trustees and agents.
SECTION 11.09.
Separability. In case any provision in this Indenture or in the Notes
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 11.10.
Benefits of Indenture. The Security Insurer and its successors and assigns
shall be third-party beneficiaries to the provisions of this Indenture, and
shall be entitled to rely upon and directly to enforce the provisions of this
Indenture so long as the Security Insurer is the Controlling Party. Nothing
in this Indenture or in the Notes, express or implied, shall give to any
Person, other than the parties hereto, the Security Insurer and their
successors hereunder, and the Noteholders, and any other party secured
hereunder, and any other Person with an ownership interest in any part of the
Trust Estate, any benefit or any legal or equitable right, remedy or claim
under this Indenture.
SECTION 11.11.
Legal Holidays. In any case where the date on which any payment is due
shall not be a Business Day, then (notwithstanding any other provision of the
Notes 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 11.12.
GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.13.
Counterparts. This Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same instrument.
SECTION 11.14.
Recording of Indenture. If this Indenture is subject to recording in any
appropriate public recording offices, such recording is to be effected by the
Issuer and at its expense accompanied by an Opinion of Counsel (which may be
counsel to the Indenture Trustee or any other counsel reasonably acceptable
to the Indenture Trustee) to the effect that such recording is necessary
either for the protection of the Noteholders or any other Person secured
hereunder or for the enforcement of any right or remedy granted to the
Indenture Trustee under this Indenture.
SECTION 11.15.
Trust Obligation. No recourse may be taken, directly or indirectly, with
respect to the obligations of the Issuer, the Owner Trustee or the Indenture
Trustee on the Notes or under this Indenture or any certificate or other
writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer, including the Seller, or
(iii) any partner, owner, beneficiary, agent, officer, director, employee or
agent of the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Owner
Trustee or the Indenture Trustee or of any successor or assign of the
Indenture Trustee or the Owner Trustee in its individual capacity, except as
any such Person may have expressly agreed (it being understood that the
Indenture Trustee and the Owner Trustee have no such obligations in their
individual capacity) and except that any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any
unpaid consideration for stock, unpaid capital contribution or failure to pay
any installment or call owing to such entity. For all purposes of this
Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the
benefits of, the terms and provisions of Article VI, VII and VIII of the
Trust Agreement.
SECTION 11.16.
No Petition. The Indenture Trustee, by entering into this Indenture, and
each Noteholder, by accepting a Note, hereby covenant and agree that they
will not at any time institute against the Seller or the Issuer, or join in
any institution against the Seller or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar
law in connection with any obligations relating to the Notes, this Indenture
or any of the Basic Documents.
SECTION 11.17.
Inspection. The Issuer agrees that, on reasonable prior notice, it will
permit any representative of the Indenture Trustee or of the Security Insurer
(if the Security Insurer is the Controlling Party), during the Issuer's
normal business hours, to examine all the books of account, records, reports
and other papers of the Issuer, to make copies and extracts therefrom, to
cause such books to be audited by Independent certified public accountants,
and to discuss the Issuer's affairs, finances and accounts with the Issuer's
officers, employees and Independent certified public accountants, all at such
reasonable times and as often as may be reasonably requested. The Indenture
Trustee 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 Indenture Trustee may reasonably determine that
such disclosure is consistent with its obligations hereunder.
SECTION 11.18.
Conflict with Trust Indenture Act. If any provision hereof limits,
qualifies or conflicts with another provision hereof that is required to be
included in this Indenture by any of the provisions of the Trust Indenture
Act, such required provision shall control.
The provisions of TIA && 310 through 317 that impose duties on any person
(including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused this
Indenture to be duly executed by their respective officers, thereunto duly
authorized and duly attested, all as of the day and year first above written.
FIRST MERCHANTS AUTO TRUST 1997-1,
by:
CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity
but solely as Owner Trustee,
by:
Name:
Title:
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
not in its individual capacity but solely as
Indenture Trustee,
by:
Name:
Title:
STATE OF NEW YORK
}
} ss.:
COUNTY OF NEW YORK
}
BEFORE ME, the undersigned authority, a Notary Public in and for said county
and state, on this day personally appeared ▇▇▇▇ ▇. ▇▇▇▇▇▇, known to me to be
the person and officer whose name is subscribed to the foregoing instrument
and acknowledged to me that the same was the act of the said FIRST MERCHANTS
AUTO TRUST 1997-1, a Delaware business trust, and that s/he executed the same
as the act of said business trust for the purpose and consideration therein
expressed, and in the capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 31st
day of March, 1997.
Notary Public in and for the State of New York.
My commission expires:
________________________________________________
STATE OF NEW YORK
}
} ss.:
COUNTY OF NEW YORK
}
BEFORE ME, the undersigned authority, a Notary Public in and for said county
and state, on this day personally appeared ______________________, known to
me to be the person and officer whose name is subscribed to the foregoing
instrument and acknowledged to me that the same was the act of ▇▇▇▇▇▇ TRUST
AND SAVINGS BANK, an Illinois banking corporation, and that s/he executed the
same as the act of said corporation for the purpose and consideration therein
stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this _____ day of March, 1997.
Notary Public in and for the State of New York.
My commission expires:
________________________________________
SCHEDULE A
[To be Provided on the Closing Date]
EXHIBIT A-1
[FORM OF CLASS A-1 NOTE]
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK,
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED$
No. R- CUSIP NO. ▇▇▇▇▇▇▇▇▇
FIRST MERCHANTS AUTO TRUST 1997-1
FLOATING RATE ASSET BACKED NOTE, CLASS A-1
FIRST MERCHANTS AUTO TRUST 1997-1, a business trust organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to ______________________, or
registered assigns, the principal sum of [ ] DOLLARS, payable on
each Distribution Date in an amount equal to the result obtained by
multiplying (i) a fraction the numerator of which is $ [INSERT INITIAL
PRINCIPAL AMOUNT OF NOTE] and the denominator of which is $68,000,000 by
(ii) the aggregate amount, if any, payable from the Note Distribution Account
in respect of principal on the Class A-1 Notes pursuant to Section 3.01 of
the Indenture dated as of March 1, 1997 (the "Indenture"), between the Issuer
and ▇▇▇▇▇▇ Trust and Savings Bank, an Illinois banking corporation, as
Indenture Trustee (the "Indenture Trustee"); provided, however, that the
entire unpaid principal amount of this Note shall be due and payable on
aUGUST 15, 2000 (the "Class A-1 Final Scheduled Distribution Date").
Capitalized terms used but not defined herein are defined in the Indenture,
which also contains rules as to construction that shall be applicable herein.
The Issuer will pay interest on this Note at a rate per annum equal to LIBOR
plus 0.13%, subject to a maximum rate of 11.0% per annum, on each
Distribution Date until the principal of this Note is paid or made available
for payment, on the principal amount of this Note outstanding on the
preceding Distribution Date (after giving effect to all payments of principal
made on the preceding Distribution Date), subject to certain limitations
contained in Section 3.01 of the Indenture. LIBOR for each Floating Rate
Interest Accrual Period and related Distribution Date will be determined on
the related LIBOR Determination Date by the Calculation Agent as set forth in
Section 2.14 of the Indenture. All determinations of LIBOR by the
Calculation Agent shall, in the absence of manifest error, be conclusive for
all purposes, and each Holder of this Note, by accepting a Class A-1 Note,
agrees to be bound by such determination. Interest on this Note will accrue
for each Distribution Date from the Closing Date (in the case of the first
Distribution Date) or from the most recent Distribution Date on which
interest has been paid to but excluding such Distribution Date. Interest
will be computed on the basis of the actual number of days in each Floating
Rate Interest Accrual Period divided by 360. Such principal of and interest
on this Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of
this Note.
The Notes are entitled to the benefits of a financial guaranty insurance
policy (the "Policy") issued by Financial Security Assurance, Inc. ("the
Security Insurer"), pursuant to which the Security Insurer has
unconditionally guaranteed payments of the Noteholders' Interest
Distributable Amount and the Noteholders' Principal Distributable Amount on
each Distribution Date (collectively, the "Scheduled Payment"), all as more
fully set forth in the Indenture.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer, as of the date set forth
below.
Date:
FIRST MERCHANTS AUTO TRUST 1997-1,
by:
CHASE MANHATTAN BANK DELAWARE, not in its individual
capacity but solely as Owner
Trustee under the Trust Agreement,
by: _________________________________
Authorized Signatory
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the within-
mentioned Indenture.
Date:
▇▇▇▇▇▇ TRUST AND SAVINGS BANK, not in its individual capacity but solely as
Indenture Trustee,
by: _________________________________
Authorized Signatory REVERSE OF CLASS A-1 NOTE
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Floating Rate Asset Backed Notes, Class A-1 (herein called
the "Class A-1 Notes"), all issued under the Indenture, to which Indenture
and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights and obligations thereunder of the Issuer,
the Indenture Trustee and the Holders of the Notes. The Class A-1 Notes are
subject to all terms of the Indenture.
The Class A-1 Notes and the Class A-2 Notes (collectively, the "Notes") are
and will be secured by the collateral pledged as security therefor as
provided in the Indenture.
Principal of the Class A-1 Notes will be payable on each Distribution Date in
an amount described on the face hereof. "Distribution Date" means the 15th
day of each month, or, if any such date is not a Business Day, the next
succeeding Business Day, commencing April 15, 1997.
As described above, the entire unpaid principal amount of this Note shall be
due and payable on the Class A-1 Final Scheduled Distribution Date. Notwith-
standing the foregoing, (i) if an Event of Default occurs at a time when no
Security Insurer Default has occurred under the Policy, the Security Insurer
may elect either to continue to make Scheduled Payments on the Notes or to
make one or more accelerated payments on the Notes and (ii) if an Event of
Default occurs at any time after a Security Insurer Default has occurred
under the Policy, the Indenture Trustee or the Holders of Notes representing
not less than a majority of the Outstanding Amount of the Notes have declared
the Notes to be immediately due and payable in the manner provided in
Section 5.02 of the Indenture. All principal payments on the Class A-1 Notes
shall be made pro rata to the Class A-1 Noteholders entitled thereto.
Payments of interest on this Note due and payable on each Distribution Date,
together with the installment of principal, if any, to the extent not in full
payment of this Note, shall be made by check mailed to the Person whose name
appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register as of the close of business on each Record Date,
except that with respect to Notes registered on the Record Date in the name
of the nominee of the Clearing Agency (initially, such nominee to be Cede &
Co.), payments will be made by wire transfer in immediately available funds
to the account designated by such nominee. Such checks shall be mailed to
the Person entitled thereto at the address of such Person as it appears on
the Note Register as of the applicable Record Date without requiring that
this Note be submitted for notation of payment. Any reduction in the
principal amount of this Note (or any one or more Predecessor Notes) effected
by any payments made on any Distribution Date shall be binding upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not noted
hereon. If funds are expected to be available, as provided in the Indenture,
for payment in full of the then remaining unpaid principal amount of this
Note on a Distribution Date, then the Indenture Trustee, in the name of and
on behalf of the Issuer, will notify the Person who was the Registered Holder
hereof as of the Record Date preceding such Distribution Date by notice
mailed or transmitted by facsimile prior to such Distribution Date, and the
amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Indenture Trustee's principal Corporate Trust
Office or at the office of the Indenture Trustee's agent appointed for such
purposes located in the City of New York.
The Issuer shall pay interest on overdue installments of interest at the
Class A-1 Rate to the extent lawful.
As provided in the Indenture and subject to the limitations set forth therein
and on the face hereof, the transfer of this Note may be registered on the
Note Register upon surrender of this Note for registration of transfer at the
office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof 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
the Securities Transfer Agent's Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Note Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service
charge will be charged for any registration of transfer or exchange of this
Note, but the transferor may be required to pay a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
such registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a
Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee
in its individual capacity, (ii) any owner of a beneficial interest in the
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or
employee of the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Owner
Trustee or the Indenture Trustee or of any successor or assign of the
Indenture Trustee or the Owner Trustee in its individual capacity, except as
any such Person may have expressly agreed and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a
Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner
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 under any United States federal or
state bankruptcy or similar law in connection with any obligations relating
to the Notes, the Indenture or the Basic Documents.
The Issuer has entered into the Indenture and this Note is issued with the
intention that, for federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness of the Issuer
secured by the Trust Estate. Each Noteholder, by acceptance of a Note (and
each Note Owner by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this Note, the
Issuer, the Indenture Trustee, the Security Insurer and any agent of the
Issuer, the Indenture Trustee or the Security Insurer may treat the Person in
whose name this Note (as of the day of determination or as of such other date
as may be specified in the Indenture) is registered as the owner hereof for
all purposes, whether or not this Note be overdue, and none of the Issuer,
the Indenture Trustee, the Security Insurer or any such agent shall be
affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Security Insurer and the Holders
of Notes representing a majority of the Outstanding Amount of all Notes at
the time Outstanding. The Indenture also contains provisions permitting the
Holders of Notes representing specified percentages of the Outstanding Amount
of the Notes, on behalf of the Holders of all the Notes, to waive compliance
by the Issuer with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Note (or any one or more Predecessor Notes)
shall be conclusive and binding upon such Holder and upon all future Holders
of this Note and of any Note issued upon the registration of transfer hereof
or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Note. The Indenture also permits the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture with the consent of the Security Insurer but without the
consent of Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the Issuer
under the Indenture.
The Notes are issuable only in registered form in denominations as provided
in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the laws of
the State of New York, without reference to its conflict of law provisions,
and the obligations, rights and remedies of the parties hereunder and
thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or of the
Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly provided
in the Basic Documents, none of Chase Manhattan Bank Delaware in its
individual capacity, ▇▇▇▇▇▇ Trust and Savings Bank in its individual
capacity, any owner of a beneficial interest in the Issuer, or any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be
had to any of them for, the payment of principal of or interest on this Note
or performance of, or omission to perform, any of the covenants, obligations
or indemnifications contained in the Indenture. The Holder of this Note by
its acceptance hereof agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, the Holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; provided, however, that nothing contained herein shall be
taken to prevent recourse to, and enforcement against, the assets of the
Issuer for any and all liabilities, obligations and undertakings contained in
the Indenture or in this Note.
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
__________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
___________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ____________________________________________, attorney, to
transfer said Note on the books kept for registration thereof, with full
power of substitution in the premises.
Dated:
*/
Signature Guaranteed:
*/
________________________
*/
NOTICE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Note Registrar, which requirements include membership
or participation in STAMP or such other "signature guarantee program" as may
be determined by the Note Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.
EXHIBIT A-2
[FORM OF CLASS A-2 NOTE]
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK,
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.REGISTERED$
No. R- CUSIP NO. ▇▇▇▇▇▇▇▇▇
FIRST MERCHANTS AUTO TRUST 1997-1
6.75% ASSET BACKED NOTE, CLASS A-2
FIRST MERCHANTS AUTO TRUST 1997-1, a business trust organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to ______________________, or
registered assigns, the principal sum of [ ] DOLLARS, payable on
each Distribution Date in an amount equal to the result obtained by
multiplying (i) a fraction the numerator of which is $ [INSERT INITIAL
PRINCIPAL AMOUNT OF NOTE] and the denominator of which is $29,595,000 by
(ii) the aggregate amount, if any, payable from the Note Distribution Account
in respect of principal on the Class A-2 Notes pursuant to Section 3.01 of
the Indenture dated as of March 1, 1997 (the "Indenture"), between the Issuer
and ▇▇▇▇▇▇ Trust and Savings Bank, an Illinois banking corporation, as
Indenture Trustee (the "Indenture Trustee"); provided, however, that the
entire unpaid principal amount of this Note shall be due and payable on the
earlier of December 17, 2001 (the "Class A-2 Final Scheduled Distribution
Date") and the Redemption Date, if any, pursuant to Section 10.01(a) of the
Indenture. No payments of principal of the Class A-2 Notes shall be made
until the Class A-1 Notes have been paid in full. Capitalized terms used but
not defined herein are defined in the Indenture, which also contains rules as
to construction that shall be applicable herein.
The Issuer will pay interest on this Note at the rate per annum set forth
above, on each Distribution Date until the principal of this Note is paid or
made available for payment, on the principal amount of this Note outstanding
on the preceding Distribution Date (after giving effect to all payments of
principal made on the preceding Distribution Date), subject to certain
limitations contained in Section 3.01 of the Indenture. Interest on this Note
will accrue for each Distribution Date from and including the 15th day of the
month preceding the month of such Distribution Date (in the case of the first
Distribution Date, from the Closing Date) to but excluding the 15th day of
the month of such Distribution Date. Interest will be computed on the basis
of a 360-day year of twelve 30-day months. Such principal of and interest on
this Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of
this Note.
The Notes are entitled to the benefits of a financial guaranty insurance
policy (the "Policy") issued by Financial Security Assurance, Inc. ("the
Security Insurer"), pursuant to which the Security Insurer has
unconditionally guaranteed payments of the Noteholders' Interest
Distributable Amount and the Noteholders' Principal Distributable Amount on
each Distribution Date (collectively, the "Scheduled Payment"), all as more
fully set forth in the Indenture.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer, as of the date set forth
below.
Date:
FIRST MERCHANTS AUTO TRUST 1997-1,
by:
CHASE MANHATTAN BANK DELAWARE, not in its individual
capacity but solely as Owner
Trustee under the Trust Agreement,
by: _________________________________
Authorized Signatory
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the within-
mentioned Indenture.
Date:
▇▇▇▇▇▇ TRUST AND SAVINGS BANK, not in its individual capacity but solely as
Indenture Trustee,
by: _________________________________
Authorized Signatory REVERSE OF CLASS A-2 NOTE
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its 6.75% Asset Backed Notes, Class A-2 (herein called the
"Class A-2 Notes"), all issued under the Indenture, to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement
of the respective rights and obligations thereunder of the Issuer, the
Indenture Trustee and the Holders of the Notes. The Class A-2 Notes are
subject to all terms of the Indenture.
The Class A-1 Notes and the Class A-2 Notes (collectively, the "Notes") are
and will be secured by the collateral pledged as security therefor as
provided in the Indenture.
Principal of the Class A-2 Notes will be payable on each Distribution Date in
an amount described on the face hereof. "Distribution Date" means the 15th
day of each month, or, if any such date is not a Business Day, the next
succeeding Business Day, commencing April 15, 1997.
As described above, the entire unpaid principal amount of this Note shall be
due and payable on the earlier of the Class A-2 Final Scheduled Distribution
Date and the Redemption Date, if any, pursuant to Section 10.01(a) of the
Indenture. Section 10.01(a) of the Indenture provides that the Class A-2
Notes may be redeemed in whole, but not in part, at the option of the
Servicer (with the consent of the Security Insurer under certain
circumstances), on any Distribution Date on or after the date on which the
Outstanding Amount of the Notes is less than or equal to 10% of the original
Outstanding Amount of the Notes. Notwithstanding the foregoing, (i) if an
Event of Default occurs at a time when no Security Insurer Default has
occurred under the Policy, the Security Insurer may elect either to continue
to make Scheduled Payments on the Notes or to make one or more accelerated
payments on the Notes and (ii) if an Event of Default occurs at any time
after a Security Insurer Default has occurred under the Policy, the Indenture
Trustee or the Holders of Notes representing not less than a majority of the
Outstanding Amount of the Notes have declared the Notes to be immediately due
and payable in the manner provided in Section 5.02 of the Indenture. All
principal payments on the Class A-1 Notes shall be made pro rata to the
Class A-1 Noteholders entitled thereto.
Payments of interest on this Note due and payable on each Distribution Date,
together with the installment of principal, if any, to the extent not in full
payment of this Note, shall be made by check mailed to the Person whose name
appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register as of the close of business on each Record Date,
except that with respect to Notes registered on the Record Date in the name
of the nominee of the Clearing Agency (initially, such nominee to be Cede &
Co.), payments will be made by wire transfer in immediately available funds
to the account designated by such nominee. Such checks shall be mailed to
the Person entitled thereto at the address of such Person as it appears on
the Note Register as of the applicable Record Date without requiring that
this Note be submitted for notation of payment. Any reduction in the
principal amount of this Note (or any one or more Predecessor Notes) effected
by any payments made on any Distribution Date shall be binding upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not noted
hereon. If funds are expected to be available, as provided in the Indenture,
for payment in full of the then remaining unpaid principal amount of this
Note on a Distribution Date, then the Indenture Trustee, in the name of and
on behalf of the Issuer, will notify the Person who was the Registered Holder
hereof as of the Record Date preceding such Distribution Date by notice
mailed or transmitted by facsimile prior to such Distribution Date, and the
amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Indenture Trustee's principal Corporate Trust
Office or at the office of the Indenture Trustee's agent appointed for such
purposes located in the City of New York.
The Issuer shall pay interest on overdue installments of interest at the
Class A-2 Rate to the extent lawful.
As provided in the Indenture and subject to the limitations set forth therein
and on the face hereof, the transfer of this Note may be registered on the
Note Register upon surrender of this Note for registration of transfer at the
office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof 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
the Securities Transfer Agent's Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Note Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service
charge will be charged for any registration of transfer or exchange of this
Note, but the transferor may be required to pay a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
such registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a
Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee
in its individual capacity, (ii) any owner of a beneficial interest in the
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or
employee of the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Owner
Trustee or the Indenture Trustee or of any successor or assign of the
Indenture Trustee or the Owner Trustee in its individual capacity, except as
any such Person may have expressly agreed and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a
Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner
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 under any United States federal or
state bankruptcy or similar law in connection with any obligations relating
to the Notes, the Indenture or the Basic Documents.
The Issuer has entered into the Indenture and this Note is issued with the
intention that, for federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness of the Issuer
secured by the Trust Estate. Each Noteholder, by acceptance of a Note (and
each Note Owner by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this Note, the
Issuer, the Indenture Trustee, the Security Insurer and any agent of the
Issuer, the Indenture Trustee or the Security Insurer may treat the Person in
whose name this Note (as of the day of determination or as of such other date
as may be specified in the Indenture) is registered as the owner hereof for
all purposes, whether or not this Note be overdue, and none of the Issuer,
the Indenture Trustee, the Security Insurer or any such agent shall be
affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Security Insurer and the Holders
of Notes representing a majority of the Outstanding Amount of all Notes at
the time Outstanding. The Indenture also contains provisions permitting the
Holders of Notes representing specified percentages of the Outstanding Amount
of the Notes, on behalf of the Holders of all the Notes, to waive compliance
by the Issuer with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Note (or any one or more Predecessor Notes)
shall be conclusive and binding upon such Holder and upon all future Holders
of this Note and of any Note issued upon the registration of transfer hereof
or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Note. The Indenture also permits the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture with the consent of the Security Insurer but without the
consent of Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the Issuer
under the Indenture.
The Notes are issuable only in registered form in denominations as provided
in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the laws of
the State of New York, without reference to its conflict of law provisions,
and the obligations, rights and remedies of the parties hereunder and
thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or of the
Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly provided
in the Basic Documents, none of Chase Manhattan Bank Delaware in its
individual capacity, ▇▇▇▇▇▇ Trust and Savings Bank in its individual
capacity, any owner of a beneficial interest in the Issuer, or any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be
had to any of them for, the payment of principal of or interest on this Note
or performance of, or omission to perform, any of the covenants, obligations
or indemnifications contained in the Indenture. The Holder of this Note by
its acceptance hereof agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, the Holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; provided, however, that nothing contained herein shall be
taken to prevent recourse to, and enforcement against, the assets of the
Issuer for any and all liabilities, obligations and undertakings contained in
the Indenture or in this Note. ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
__________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
___________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ____________________________________________, attorney, to
transfer said Note on the books kept for registration thereof, with full
power of substitution in the premises.
Dated:
*/
Signature Guaranteed:
*/
________________________
*/
NOTICE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Note Registrar, which requirements include membership
or participation in STAMP or such other "signature guarantee program" as may
be determined by the Note Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.
EXHIBIT B
FORM OF NOTE DEPOSITORY AGREEMENT