Exhibit 4.3
EXECUTION COPY
INDENTURE
between
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AUTO LOAN TRUST 2004-HB2,
as Issuer
and
▇▇▇▇▇ Fargo Bank, National Association,
as Indenture Trustee
Dated as of June 30, 2004
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions........................................................................................2
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.................................................10
ARTICLE II
THE NOTES
SECTION 2.01. Form 11
SECTION 2.02. Execution, Authentication and Delivery............................................................11
SECTION 2.03. Temporary Notes...................................................................................12
SECTION 2.04. Registration; Registration of Transfer and Exchange...............................................12
SECTION 2.05. [Reserved]........................................................................................15
SECTION 2.06. Mutilated, Destroyed, Lost or Stolen Notes........................................................15
SECTION 2.07. Persons Deemed Note Owners........................................................................16
SECTION 2.08. Payment of Principal and Interest; Defaulted Interest.............................................16
SECTION 2.09. Cancellation......................................................................................17
SECTION 2.10. Book-Entry Notes..................................................................................17
SECTION 2.11. Notices to Clearing Agency........................................................................18
SECTION 2.12. Definitive Notes..................................................................................18
SECTION 2.13. Tax Treatment.....................................................................................19
ARTICLE III
COVENANTS
SECTION 3.01. Payment of Principal and Interest.................................................................19
SECTION 3.02. Maintenance of Office or Agency...................................................................19
SECTION 3.03. Money for Payments To Be Held in Trust............................................................19
SECTION 3.04. Existence.........................................................................................21
SECTION 3.05. Protection of Trust Estate........................................................................21
SECTION 3.06. Opinions as to Trust Estate.......................................................................22
SECTION 3.07. Performance of Obligations; Servicing of Receivables..............................................22
SECTION 3.08. Negative Covenants................................................................................24
SECTION 3.09. Annual Statement as to Compliance.................................................................24
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain Terms...............................................25
SECTION 3.11. Successor or Transferee...........................................................................26
SECTION 3.12. No Other Business.................................................................................26
SECTION 3.13. No Borrowing......................................................................................27
SECTION 3.14. Servicer's Obligations............................................................................27
i
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities.................................................27
SECTION 3.16. Capital Expenditures..............................................................................27
SECTION 3.17. Restricted Payments...............................................................................27
SECTION 3.18. Notice of Events of Default.......................................................................27
SECTION 3.19. Further Instruments and Acts......................................................................27
SECTION 3.20. Perfection Representation.........................................................................27
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01. Satisfaction and Discharge of Indenture...........................................................28
SECTION 4.02. Application of Trust Money........................................................................29
SECTION 4.03. Repayment of Moneys Held by Paying Agent..........................................................29
SECTION 4.04. Release of Collateral.............................................................................29
ARTICLE V
REMEDIES
SECTION 5.01. Events of Default.................................................................................29
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment................................................31
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture
Trustee; Authority of the Controlling Party.......................................................32
SECTION 5.04. Remedies; Priorities..............................................................................34
SECTION 5.05. Optional Preservation of the Receivables..........................................................36
SECTION 5.06. Limitation of Suits...............................................................................37
SECTION 5.07. Unconditional Rights of Noteholders To Receive Principal and Interest.............................37
SECTION 5.08. Restoration of Rights and Remedies................................................................37
SECTION 5.09. Rights and Remedies Cumulative....................................................................38
SECTION 5.10. Delay or Omission Not a Waiver....................................................................38
SECTION 5.11. Control by Controlling Class......................................................................38
SECTION 5.12. Waiver of Past Defaults...........................................................................38
SECTION 5.13. Undertaking for Costs.............................................................................39
SECTION 5.14. Waiver of Stay or Extension Laws..................................................................39
SECTION 5.15. Action on Notes...................................................................................39
SECTION 5.16. Performance and Enforcement of Certain Obligations................................................39
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.01. Duties of Indenture Trustee.......................................................................40
SECTION 6.02. Rights of Indenture Trustee.......................................................................42
SECTION 6.03. Individual Rights of Indenture Trustee............................................................43
SECTION 6.04. Disclaimer of Indenture Trustee...................................................................43
SECTION 6.05. Notice of Defaults................................................................................44
ii
SECTION 6.06. Reports by Indenture Trustee to Holders...........................................................44
SECTION 6.07. Compensation and Indemnity........................................................................44
SECTION 6.08. Replacement of Indenture Trustee..................................................................45
SECTION 6.09. Successor Indenture Trustee by Merger.............................................................46
SECTION 6.10. Appointment of Co-Indenture Trustee or Separate Indenture Trustee.................................46
SECTION 6.11. Eligibility; Disqualification.....................................................................47
SECTION 6.12. Preferential Collection of Claims Against Issuer..................................................48
SECTION 6.13. Waiver of Setoffs.................................................................................48
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.01. Note Registrar To Furnish Indenture Trustee and Owner Trustee Names
and Addresses of Noteholders......................................................................48
SECTION 7.02. Preservation of Information; Communications to Noteholders........................................49
SECTION 7.03. Reports by Issuer.................................................................................49
SECTION 7.04. Reports by Indenture Trustee......................................................................50
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.01. Collection of Money...............................................................................50
SECTION 8.02. Trust Accounts....................................................................................50
SECTION 8.03. General Provisions Regarding Accounts.............................................................52
SECTION 8.04. Release of Trust Estate...........................................................................52
SECTION 8.05. Opinion of Counsel................................................................................53
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures Without Consent of Noteholders............................................53
SECTION 9.02. Supplemental Indentures with Consent of Noteholders...............................................55
SECTION 9.03. Execution of Supplemental Indentures..............................................................56
SECTION 9.04. Effect of Supplemental Indenture..................................................................56
SECTION 9.05. Reference in Notes to Supplemental Indentures.....................................................57
SECTION 9.06. Conformity with Trust Indenture Act...............................................................57
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.01. Redemption.......................................................................................57
SECTION 10.02. Form of Redemption Notice........................................................................57
SECTION 10.03. Notes Payable on Redemption Date.................................................................58
iii
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Compliance Certificates and Opinions, etc........................................................58
SECTION 11.02. Form of Documents Delivered to Indenture Trustee.................................................60
SECTION 11.03. Acts of Noteholders..............................................................................61
SECTION 11.04. Notices, etc., to Indenture Trustee, Issuer and Rating Agencies..................................61
SECTION 11.05. Notices to Noteholders; Waiver...................................................................62
SECTION 11.06. Effect of Headings and Table of Contents.........................................................62
SECTION 11.07. Successors and Assigns...........................................................................62
SECTION 11.08. Separability.....................................................................................62
SECTION 11.09. Benefits of Indenture............................................................................62
SECTION 11.10. Legal Holidays...................................................................................63
SECTION 11.11. Governing Law....................................................................................63
SECTION 11.12. Counterparts.....................................................................................63
SECTION 11.13. Recording of Indenture...........................................................................63
SECTION 11.14. Trust Obligation.................................................................................63
SECTION 11.15. No Petition......................................................................................63
SECTION 11.16. Inspection.......................................................................................64
SECTION 11.17. Conflict with Trust Indenture Act................................................................64
SECTION 11.18. Limitation of Liability..........................................................................64
SCHEDULE A Schedule of Receivables
SCHEDULE B Perfection Representation
EXHIBIT A-1 Form of Class A-1 Note
EXHIBIT A-2 Form of Class A-2 Note
EXHIBIT A-3 Form of Class A-3 Note
EXHIBIT A-4 Form of Class A-4 Note
EXHIBIT B Form of Class B Note
EXHIBIT C Form of Class C Note
EXHIBIT D Form of Class D Note
EXHIBIT E Form of Class E Note
EXHIBIT F Form of Investment Letter
iv
THIS INDENTURE, dated as of June 30, 2004, is between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
AUTO LOAN TRUST 2004-HB2, a Delaware statutory trust (the "Issuer") and ▇▇▇▇▇
FARGO BANK, NATIONAL ASSOCIATION, as Indenture Trustee (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 1.90% Asset
Backed Notes, Class A-1 (the "Class A-1 Notes"), 2.40% Asset Backed Notes,
Class A-2 (the "Class A-2 Notes"), 2.94% Asset Backed Notes, Class A-3 (the
"Class A-3 Notes"), 3.46% Asset Backed Notes, Class A-4 (the "Class A-4 Notes"
and, together with the Class A-1 Notes, the Class A-2 Notes and the Class A-3
Notes, the "Class A Notes"), 3.37% Asset Backed Notes, Class B (the "Class B
Notes"), 3.24% Asset Backed Notes, Class C (the "Class C Notes"), 3.82% Asset
Backed Notes, Class D (the "Class D Notes") and 5.00% Asset Backed Notes,
Class E (the "Class E Notes" and, together with the Class A Notes, the Class B
Notes, the Class C Notes and the Class D Notes, the "Notes"):
GRANTING CLAUSE
(a) 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, whether now owned or existing or
hereafter acquired or arising, in, to and under each of the Initial
Receivables listed on Schedule A and all Subsequent Receivables listed on
Schedule A to any Subsequent Transfer Agreement executed and delivered from
time to time during the Funding Period, including:
(i) all interest, principal, and any other amounts received on or
with respect to each of the Receivables after the Cut-Off Date;
(ii) the security interests in the Financed Vehicles granted by
Obligors pursuant to the Receivables and any other interest of the Issuer
in such Financed Vehicles;
(iii) all other security interests or other property interests
created by or constituting each Receivable and any other property that
shall have secured the Receivables and that shall have been acquired by
or on behalf of the Issuer;
(iv) all of the Issuer's rights with respect to each Receivable and
the documentation relating to the Receivables, including, without
limitation, all rights under the VSI Policy with respect to such
Receivable and the contents of each Receivable File, including, without
limitation, all of the Issuer's enforcement and other rights under the
UCC and other Applicable Law;
(v) rebates of premiums on insurance policies and all other items
financed as part of the Receivables in effect as of the Cut-Off Date,
including but not limited to, service warranties;
(vi) all Servicing Rights with respect to, and all proceeds of and
rights to enforce, any of the foregoing, including, without limitation,
any Insurance Proceeds and Liquidation Proceeds;
(vii) all of the Issuer's rights and benefits under the Assignment,
Assumption and Recognition Agreement, as supplemented to reflect the
transfer of Subsequent Receivables, including the assignment of the right
to enforce the representations and warranties and the cure and repurchase
obligations of HNB under the Flow Purchase Agreement and the Assignment,
Assumption and Recognition Agreement;
(viii) all of the Issuer's rights and benefits (but not its
obligations) under the Sale and Servicing Agreement and each Subsequent
Transfer Agreement, including the representations and warranties and the
cure and repurchase obligations of HNB set forth therein (including the
Issuer's right to cause HNB to repurchase Receivables from the Issuer
under the circumstances described therein);
(ix) all funds on deposit from time to time in the Trust Accounts,
including the Pre-Funding Account, and the Certificate Distribution
Account and in all investments therein and proceeds thereof (including
all Investment Earnings thereon); and
(x) 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 that 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. This Indenture is a security agreement within the meaning of
the UCC.
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 and the other Basic Documents to which the
Indenture Trustee is a party in accordance with the terms of this Indenture
and the other Basic Documents to which the Indenture Trustee is a party to the
end that the interests of the Holders of the Notes may be adequately and
effectively protected.
2
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
(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. Terms not defined
herein shall have the meanings ascribed to them in the Sale and Servicing
Agreement.
"Act" has the meaning specified in Section 11.03(a).
"Affiliate" means, when used with reference to a specified
Person, any Person that (a) directly or indirectly controls or is controlled
by or is under common control with the specified Person, (b) is an officer of,
partner in or trustee of, or serves in a similar capacity with respect to, the
specified Person or of which the specified Person is an officer, partner or
trustee, or with respect to which the specified Person serves in a similar
capacity or (c) directly or indirectly is the beneficial owner of 10% or more
of any class of equity securities of the specified Person or of which the
specified Person is directly or indirectly the owner of 10% or more of any
class of equity securities.
"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).
"Book-Entry Note" 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) a Saturday or Sunday or
(b) a day on which banking or savings and loan institutions in the States of
New York or Delaware, the jurisdiction of the principal place of business of
the Servicer or the city in which the Corporate Trust Office of the Indenture
Trustee is located, are obligated or required by law or executive order to be
closed.
"Class" means each of the Class A-1 Notes, the Class A-2 Notes, the
Class A-3 Notes, the Class A-4 Notes, the Class B Notes, the Class C Notes,
the Class D Notes and the Class E Notes.
"Class A Note" means a Class A-1 Note, a Class A-2 Note, a Class A-3
Note or a Class A-4 Note, as the context may require.
"Class A-1 Notes" means the 1.90% Asset Backed Notes, Class A-1,
substantially in the form of Exhibit A-1.
3
"Class A-1 Rate" means a 1.90% per annum computed on the basis of a
360-day year consisting of twelve 30-day months.
"Class A-2 Notes" means the 2.40% Asset Backed Notes, Class A-2,
substantially in the form of Exhibit A-2.
"Class A-2 Rate" means a 2.40% per annum computed on the basis of a
360-day year consisting of twelve 30-day months.
"Class A-3 Notes" means the 2.94% Asset Backed Notes, Class A-3,
substantially in the form of Exhibit A-3.
"Class A-3 Rate" means a 2.94% per annum computed on the basis of a
360-day year consisting of twelve 30-day months.
"Class A-4 Notes" means the 3.46% Asset Backed Notes, Class A-4,
substantially in the form of Exhibit A-4.
"Class A-4 Rate" means a 3.46% per annum computed on the basis of a
360-day year consisting of twelve 30-day months.
"Class B Notes" means the 3.37% Asset Backed Notes, Class B,
substantially in the form of Exhibit B.
"Class B Rate" means 3.37% per annum, computed on the basis of a
360-day year consisting of twelve 30-day months.
"Class C Notes" means the 3.24% Asset Backed Notes, Class C,
substantially in the form of Exhibit C.
"Class C Rate" means 3.24% per annum, computed on the basis of a
360-day year consisting of twelve 30-day months.
"Class D Notes" means the 3.82% Asset Backed Notes, Class D,
substantially in the form of Exhibit D.
"Class D Rate" means 3.82% per annum, computed on the basis of a
360-day year consisting of twelve 30-day months.
"Class E Notes" means the 5.00% Asset Backed Notes, Class E,
substantially in the form of Exhibit E.
"Class E Rate" means 5.00% 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.
4
"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 August 30, 2004.
"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.
"Controlling Class" means (i) if the Class A Notes have not been
paid in full, the Class A Notes, (ii) if the Class A Notes have been paid in
full and Class B Notes remain Outstanding, the Class B Notes, (iii) if the
Class A Notes and the Class B Notes have been paid in full and Class C Notes
remain Outstanding, the Class C Notes, (iv) if the Class A Notes, the Class B
Notes and the Class C Notes have been paid in full and Class D Notes remain
Outstanding, the Class D Notes, and (v) if the Class A Notes, the Class B
Notes, the Class C Notes and the Class D Notes have been paid in full and
Class E Notes remain Outstanding, the Class E Notes.
"Controlling Party" means (i) if the Notes have not been paid in
full, the Indenture Trustee acting at the direction of at least a majority in
Outstanding Amount of the Noteholders of the Controlling Class and (ii) if the
Notes have been paid in full, the Owner Trustee acting at the direction of at
least a majority of the percentage interests in the Certificateholders.
"Corporate Trust Office" means, with respect to the Indenture
Trustee, 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 ▇▇▇▇▇ Fargo Bank,
National Association, Sixth and Marquette Avenue MAC, N9311-161, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇ (facsimile number (▇▇▇) ▇▇▇-▇▇▇▇); Attention: CTS/Asset Backed
Securities Administration, or at such other address as the Indenture Trustee
may designate from time to time by notice to the Noteholders 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 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.
"Depositor" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital II Inc.
"Event of Default" has the meaning specified in Section 5.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
5
"Executive Officer" means, with respect to any corporation, the
Chief Executive Officer, Chief Operating Officer, Chief Financial Officer,
President, any Executive Vice President, any Senior Vice President, any Vice
President, the Secretary, the Controller or the Treasurer of such corporation;
and with respect to any partnership, any general partner thereof.
"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 Person in whose name a Note is
registered on the Note Register.
"HNB" means The Huntington National Bank, a national banking
association.
"Indenture Trustee" means ▇▇▇▇▇ Fargo Bank, National Association, a
national banking association, 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 such Person (a) is in fact independent of the Issuer, any other obligor
on the Notes, the Depositor, 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 Depositor, the Seller or any Affiliate of any of the foregoing Persons and
(c) is not connected with the Issuer, any such other obligor, the Depositor,
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
reasonably satisfactory to 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.
"Insurance Company General Account" has the meaning set forth in
Section V(e) of Prohibited Transaction Class Exemption 95-60
6
"Interest Rate" means the Class A-1 Rate, the Class A-2 Rate, the
Class A-3 Rate, the Class A-4 Rate, the Class B Rate, the Class C Rate, the
Class D Rate or the Class E Rate, as the context may require.
"Issuer" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Auto Loan Trust 2004-HB2 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, as specified in this Indenture.
"Note" means a Class A-1 Note, a Class A-2 Note, a Class A-3 Note, a
Class A-4 Note, a Class B Note, a Class C Note, a Class D Note or a Class E
Note, as the context may require.
"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 the Issuer,
under the circumstances described in, and otherwise complying with, the
applicable requirements of Section 11.01, and delivered to the Indenture
Trustee, as specified in this Indenture. Unless otherwise specified, any
reference in this Indenture to an Officer's Certificate shall be to an
Officer's Certificate of the Issuer. The Indenture Trustee may rely on the
Owner Trustee's 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) to confirm the authority of
signatories to execute documents on its behalf.
"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 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.
"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
7
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 or the Note Registrar is presented
that any such Notes are held by a bona fide purchaser;
provided, however, 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 other Basic Document, Notes owned by the Issuer, any other obligor on
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 or the Note Registrar shall be
protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes that a Responsible
Officer of the Indenture Trustee or the Note Registrar, as the case may
be, 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 or the
Note Registrar, as the case may be, the pledgee's right so to act with
respect to such Notes and that the pledgee is not the Issuer, any other
obligor on the Notes, the Seller or any Affiliate of any of the foregoing
Persons.
"Outstanding Amount" means, as of any date of determination and as
to any Notes, the aggregate principal amount of such Notes Outstanding as of
such date of determination and, as of any date of determination and as to any
Certificates, the aggregate percentage interest of such Certificates
Outstanding as of such date of determination.
"Owner Trustee" means Wilmington Trust Company, 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, the Note Interest Distribution Account and the
Principal Distribution Account, including payments of principal of or interest
on the Notes on behalf of the Issuer. Initially, the Indenture Trustee shall
be the Paying Agent.
"Person" means any individual, corporation, partnership, joint
venture, limited liability company, association, joint-stock company, trust,
national banking association, unincorporated organization or government or any
agency or political subdivision thereof or any other entity.
"Plan" means any (i) employee benefit plan (as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) that is subject to
8
Title I of ERISA, (ii) plan (as defined in section 4975(e)(1) of the Code))
that is subject to Section 4975 of the Code, including individual retirement
accounts or ▇▇▇▇▇ plans, or (iii) entity whose underlying assets include "plan
assets" (as determined under Department of Labor Regulation ss.2510.3-101 or
otherwise) by reason of investment in such entity by a plan described in (i)
or (ii), including, without limitation, as applicable, an Insurance Company
General Account.
"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.
"Qualifying SPE" has the meaning set forth in SFAS 140.
"Record Date" means, with respect to a Distribution Date or
Redemption Date, the day immediately preceding such Distribution Date or
Redemption Date, unless Definitive Notes are issued, in which case the Record
Date with respect to such Definitive Notes as to any Distribution Date shall
be the last day of the immediately preceding calendar month.
"Redemption Date" means, as the context requires, in the case of a
redemption of the Notes pursuant to Section 10.01, the Distribution Date
specified by the Servicer or the Issuer pursuant to Section 10.01.
"Redemption Price" means an amount equal to (x) the unpaid principal
amount of the Notes redeemed plus (y) accrued and unpaid interest thereon at
the applicable Interest Rate plus interest on any overdue interest at the
applicable Interest Rate (to the extent lawful) for each Note being so
redeemed to but excluding the Redemption Date, plus (z) any amounts due to the
Indenture Trustee or the Owner Trustee.
"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
or the Owner Trustee, as applicable, any officer within the Corporate Trust
Office of the Indenture Trustee or the Owner Trustee, including any Vice
President, Assistant Vice President, Assistant Treasurer, Assistant Secretary
or any other officer of the Indenture Trustee or the Owner Trustee customarily
performing functions with respect to corporate trust matters and having direct
responsibility for the administration of this Indenture and the other Basic
Documents 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, in each case having direct
responsibility for the administration of the Basic Documents.
"Rule 144A" has the meaning set forth in Section 2.04.
9
"Sale and Servicing Agreement" means the Sale and Servicing
Agreement, dated as of June 30, 2004, among the Issuer, the Depositor, the
Seller, the Servicer and the Indenture Trustee, as the same may be amended,
supplemented or otherwise modified from time to time.
"Schedule of Receivables" means the lists of Receivables set forth
in Schedule A (which Schedule may be in the form of microfiche or an
electronic file).
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Asset Funding Inc., in its capacity as
seller under the Sale and Servicing Agreement and as assignor under the
Assignment, Assumption and Recognition Agreement, and its successors in
interest.
"Servicer" means The Huntington National Bank, in its capacity as
servicer under the Sale and Servicing Agreement, and any Successor Servicer
thereunder.
"SFAS 140" means Statement of Accounting Standards No. 140 of the
Financial Accounting Standards Board, as it may be amended from time to time.
"Similar Law" means any foreign, federal, state or local law with
provisions substantially similar to Title I of ERISA or Section 4975 of the
Code.
"STAMP" has the meaning specified in Section 2.04.
"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).
"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 amended and as in force on the date hereof, unless otherwise
specifically provided.
Except as otherwise specified herein or as the context may otherwise
require, capitalized terms used herein but not otherwise defined shall have
the meanings ascribed thereto in the Sale and Servicing Agreement.
(b) 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;
10
(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 1.02. Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the TIA, such 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 II
THE NOTES
SECTION 2.01. Form. The Class A-1 Notes, the Class A-2 Notes, the Class
A-3 Notes, the Class A-4 Notes, the Class B Notes, the Class C Notes, the
Class D Notes and the Class E Notes, in each case together with the Indenture
Trustee's certificate of authentication, shall be in substantially the form
set forth in Exhibit ▇-▇, ▇▇▇▇▇▇▇ ▇-▇, Exhibit ▇-▇, ▇▇▇▇▇▇▇ ▇-▇, Exhibit B,
Exhibit C, Exhibit D and Exhibit E, 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 the Notes, as
evidenced by their execution of the Notes (but which do not affect the rights,
duties or
11
immunities of the Indenture Trustee). 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 such 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 ▇-▇, ▇▇▇▇▇▇▇ ▇-▇, Exhibit ▇-▇, ▇▇▇▇▇▇▇ ▇-▇,
Exhibit B, Exhibit C, Exhibit D and Exhibit E 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 by
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 Note Registrar shall upon Issuer Order authenticate and deliver
Class A-1 Notes for original issue in an aggregate principal amount of
$170,000,000, Class A-2 Notes for original issue in an aggregate principal
amount of $135,490,000, Class A-3 Notes for original issue in an aggregate
principal amount of $178,340,000 Class A-4 Notes for original issue in an
aggregate principal amount of $103,320,000, Class B Notes for original use in
an aggregate principal amount of $13,700,000, Class C Notes for original issue
in an aggregate principal amount of $17,200,000, Class D Notes for original
issue in an aggregate principal amount of $8,285,000 and Class E Notes for
original issue in an aggregate original principal amount of $10,832,000. The
aggregate principal amount of Class A-1 Notes, Class A-2 Notes, Class A-3
Notes, Class A-4 Notes, Class B Notes, Class C Notes, Class D Notes and Class
E Notes outstanding at any time may not exceed such respective amounts except
as provided in Section 2.06.
Each Note authenticated and delivered by the Note Registrar to or
upon Issuer Order on the Closing Date shall be dated as of the Closing Date.
All other Notes that are authenticated after the Closing Date for any other
purpose under this Indenture shall be dated the date of their authentication.
The Class A Notes, Class B Notes, Class C Notes and Class D Notes
shall be issuable as registered Notes in minimum denominations of $1,000 and
in integral multiples of $1,000 in excess thereof. The Class E Notes shall be
issuable as registered Notes in minimum denominations of $100,000 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 Note Registrar by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be
12
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 Note
Registrar 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. The Definitive Notes shall be
printed, lithographed or engraved, or provided by any combination thereof, or
in any other manner permitted by the rules and regulations of any applicable
securities exchange, all as determined by the Authorized Officers executing
such Definitive Notes. 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 Note Registrar 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, the Note Registrar
shall provide for the registration of Notes and the registration of transfers
of Notes. The Indenture Trustee is hereby initially appointed the "Note
Registrar" for the purpose of registering Notes and transfers of Notes as
herein provided. Any Note Registrar appointed in accordance with this Section
2.04 may at any time resign by giving at least thirty days advance written
notice of resignation to the Indenture Trustee (if the Indenture Trustee is
not the Note Registrar) and the Issuer. 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)
13
of the UCC are met, the Issuer shall execute, and the Note Registrar shall
authenticate and the Noteholder shall obtain from the Note Registrar, 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.
All Notes issued and authenticated 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.
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 Note Registrar, without having to verify that the requirements of
8-401(1) have been met, shall authenticate and the Noteholder shall obtain
from the Indenture Trustee, the Notes that the Noteholder making the exchange
is entitled to receive.
No sale, pledge or other transfer of a Class E Note shall be made
unless such sale, pledge or other transfer is (I)(A) pursuant to an effective
registration statement under the Securities Act, (B) for so long as the Class
E Notes are eligible for resale pursuant to Rule 144A under the Securities Act
to a Person the transferor reasonably believes after due inquiry is a
"qualified institutional buyer" as defined in Rule 144A under the Securities
Act ("Rule 144A") that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the transfer is
being made in reliance on Rule 144A, or (C) pursuant to another available
exemption from the registration requirements of the Securities Act and (II) in
accordance with any applicable securities laws of any State of the United
States and any other relevant jurisdiction. The Depositor and the Indenture
Trustee may require an opinion of counsel to be delivered to it in connection
with any transfer of the Class E Notes pursuant to clauses (I) (A) or (C)
above.
The Class E Notes shall bear legends stating that they have not been
registered under the Securities Act and are subject to the restrictions on
transfer described in this Section 2.04. Each transferee of a Class E Note
that is a Book-Entry Note, by acceptance of such Note, shall be deemed to have
accepted such Note subject to the restrictions on transferability set forth in
the immediately preceding paragraph and in the typewritten Note representing
such Book-Entry Note delivered to the Clearing Agency. A Class E Note in the
form of a Definitive Note may not be transferred, directly or indirectly, to
any Person, other than the Initial Purchaser, unless (A) the transferee of the
Class E Note certifies in an investment letter, substantially in the form of
Exhibit E attached hereto, to the Depositor and the Indenture Trustee that
such Person is a "qualified institutional buyer" (as defined in Rule 144A) or
(B) the transferee of the Class E Note delivers to the Depositor and the
Indenture Trustee an opinion of counsel that such transfer is permitted
pursuant to clause (I)(A) or (C) of the immediately preceding paragraph. Any
opinions of counsel required in connection with a transfer shall be by counsel
reasonably acceptable to the Depositor and the Indenture Trustee.
14
Each Person that acquires a Note shall be required to represent to
the Depositor and the Indenture Trustee, or in the case of a Note in
book-entry form, will be deemed to represent by its acceptance of the Note,
that (i) it is not, and is not acquiring the Note on behalf of or with "plan
assets" (as determined under Department of Labor Regulation ss.2510.3-101 or
otherwise) of, a Plan, or any employee benefit plan subject to Similar Law, or
(ii) it is acquiring a Class A Note, Class B Note, Class C Note or Class D
Note and is entitled to exemptive relief pursuant to a Department of Labor
prohibited transaction class exemption or other applicable exemption with
respect to its acquisition and continued holding of such Note, or its
acquisition and holding of a Class A Note, Class B Note, Class C Note or Class
D Note do not give rise to a non-exempt prohibited transaction. Any attempted
or purported transfer of a Note with respect to which neither of the foregoing
representations is true shall be void ab initio.
In order to preserve the exemption for resales and transfers
provided by Rule 144A under the Securities Act, the Issuer shall provide to
any Holder of a Class E Note and any prospective purchaser designated by such
Holder, upon request of such Holder or such prospective purchaser, such
information required by Rule 144A as will enable the resale of such Class D
Note to be made pursuant to Rule 144A. The Servicer, the Note Registrar and
the Indenture Trustee shall cooperate with the Issuer in providing the Issuer
such information regarding the Class D Notes, the Trust Estate and other
matters regarding the Issuer as the Issuer shall reasonably request to meet
its obligations under the preceding sentence.
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 Note Registrar 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 2.04 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 fifteen days preceding the due date for any payment with respect to
the Note.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the transfer
of Notes.
15
SECTION 2.05. [Reserved].
SECTION 2.06. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Note Registrar, or the Note Registrar
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (ii) there is delivered to the Note Registrar such security or
indemnity as may be required by it to hold the Issuer and the Note Registrar
harmless, then, in the absence of notice to the Issuer or the Note Registrar
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 an Issuer Order the Note Registrar 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 fifteen 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, 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 Note
Registrar 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 Note Registrar
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 and the Note Registrar) 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 Note Owners. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee, the
Note Registrar, the Paying Agent and any agent of the Issuer or the Indenture
Trustee 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 Note Registrar, the Paying Agent or any
agent of the Issuer, the Indenture Trustee
16
the Note Registrar, the Paying Agent or the Indenture Trustee shall be
affected by notice to the contrary.
SECTION 2.08. Payment of Principal and Interest; Defaulted Interest.
(a) The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes,
the Class A-4 Notes, the Class B Notes, the Class C Notes and the Class D
Notes shall accrue interest at the Class A-1 Rate, the Class A-2 Rate, the
Class A-3 Rate, the Class A-4 Rate, the Class B Rate, the Class C Rate, the
Class D Rate and the Class E Rate, respectively, as set forth in Exhibit ▇-▇,
▇▇▇▇▇▇▇ ▇-▇, Exhibit ▇-▇, ▇▇▇▇▇▇▇ ▇-▇, Exhibit B, Exhibit C, Exhibit D and
Exhibit E, 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 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 shall be made by wire transfer in immediately available funds to
the account designated by such nominee at least ten Business Days prior to
such Distribution Date; provided, however, that the final installment of
principal payable with respect to such Note on a Distribution Date or on the
related 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 Section 3.01 hereof and the forms of the
Notes set forth in Exhibit ▇-▇, ▇▇▇▇▇▇▇ ▇-▇, Exhibit ▇-▇, ▇▇▇▇▇▇▇ ▇-▇, Exhibit
B, Exhibit C, Exhibit D and Exhibit E. Notwithstanding the foregoing, the
entire unpaid principal amount of each Class of Notes may be declared
immediately due and payable, if not previously paid, in the manner provided in
Section 5.02 on any date on which an Event of Default shall have occurred and
be continuing by the Indenture Trustee or the Indenture Trustee acting at the
written direction of the Holders of Notes representing not less than a
majority of the Outstanding Amount of the Controlling Class. All principal
payments on each Class of Notes shall be made pro rata to the Noteholders of
each Class entitled thereto. Upon written notice thereof, 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 final installment of principal of and interest on such Note is expected to
be paid. Such notice 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) 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.
17
SECTION 2.09. Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Note Registrar, be delivered to the Note Registrar and
shall be promptly cancelled by the Note Registrar. The Issuer may at any time
deliver to the Note Registrar for cancellation any Notes previously
authenticated and delivered hereunder that 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 2.09, except as
expressly permitted by this Indenture. All cancelled Notes may be held or
disposed of by the Note Registrar 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 Note Registrar.
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 or on behalf of 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 Note 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 2.10 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 2.10
conflict with any other provisions of this Indenture, the provisions
of this Section 2.10 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 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
18
percentage of the Outstanding Amount of the Notes (or any Class
thereof, including the Controlling Class), 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 or
Clearing Agency Participants owning or representing, respectively,
such required percentage of the beneficial interest in the
Outstanding Amount of the Notes (or Class thereof, including the
Controlling Class) 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 Depositor 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 Depositor or the Indenture Trustee is unable to locate a
qualified successor or (ii) after the occurrence of an Event of Default or an
Event of Servicing Termination, Note 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 Note Registrar of the typewritten
Notes representing the Book-Entry Notes by the Clearing Agency, accompanied by
registration instructions, the Issuer shall execute and the Note Registrar
upon an Issuer Order 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 and the Note Registrar 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 of the Issuer 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.
ARTICLE III
COVENANTS
SECTION 3.01. Payment of Principal and Interest. The Issuer will duly and
punctually pay the principal of and interest, if any, on the Notes in
accordance with the terms of the Notes
19
and this Indenture. Without limiting the foregoing, subject to Section 8.02,
on each Distribution Date, the Issuer will cause to be distributed all amounts
deposited pursuant to the Sale and Servicing Agreement into the Note Interest
Distribution Account and the Principal Distribution Account (i) for the
benefit of the Class A-1 Notes, to the Class A-1 Noteholders, (ii) for the
benefit of the Class A-2 Notes, to the Class A-2 Noteholders, (iii) for the
benefit of the Class A-3 Notes, to the Class A-3 Noteholders, (iv) for the
benefit of the Class A-4 Notes, to the Class A-4 Noteholders, (v) for the
benefit of the Class B Notes, to the Class B Noteholders, (vi) for the benefit
of the Class C Notes, to the Class C Noteholders, (vii) for the benefit of the
Class D Notes, to the Class D Noteholders and (viii) for the benefit of the
Class E Notes, to the Class E 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
Depository Trust Company, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. The
Issuer will give prompt written notice to the Indenture Trustee 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 of the Indenture Trustee, 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, the Note Interest Distribution
Account and the Principal Distribution Account shall be made on behalf of the
Issuer by the Indenture Trustee or by another Paying Agent, and no amounts so
withdrawn from the Collection Account, the Note Interest Distribution Account
or the Principal Distribution Account for payments of Notes shall be paid over
to the Issuer except as provided in this Section. On or before each
Distribution Date and Redemption Date, the Issuer shall deposit or cause to be
deposited in the Note Interest Distribution Account and the Principal
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 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, 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;
20
(ii) give the Indenture Trustee notice of any default by the
Issuer (or any other obligor on 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 Indenture Trustee may at any time resign as Paying Agent by
giving at least thirty days' prior written notice of resignation to the
Issuer.
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 upon Issuer Request to 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 thirty
(30) days from the date of such publication, any unclaimed balance of such
money then remaining will be repaid to the Issuer. 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).
21
SECTION 3.04. Existence. The Issuer will keep in full effect its
existence, rights and franchises as a statutory trust under the laws of the
State of Delaware (unless it becomes, or any successor Issuer hereunder is or
becomes, organized under the laws of any other State or of the United States
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 hereby
authorizes, on or after the Closing Date, the filing by the Owner Trustee, on
its behalf, of 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.
SECTION 3.06. Opinions as to Trust Estate.
(a) On the Closing Date, the Issuer shall cause to be furnished to
the Indenture Trustee an Opinion of Counsel either stating that, in the
opinion of such counsel, such action has been taken with respect to the
recording and filing of this Indenture, any indentures supplemental hereto,
and any other requisite documents, and with respect to the execution and
filing of any financing statements and continuation statements, as are
necessary to perfect and make effective the 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 15, in each calendar year, beginning in 2005,
the Issuer shall furnish to the Indenture Trustee and the Rating Agencies 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
22
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 15 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 reasonable
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 with notification to
the Rating Agencies to assist it in performing its duties under this
Indenture, and any performance of such duties by a Person identified to the
Indenture Trustee in an Officer's Certificate of the Issuer shall be deemed to
be action taken by the Issuer. Initially, the Issuer has contracted with the
Servicer and the Owner Trustee 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 either the Indenture Trustee or the Holders of at least a
majority of the Outstanding Amount of each Class of Notes, voting separately.
(d) If the Issuer shall have knowledge of the occurrence of an Event
of Servicing Termination under the Sale and Servicing Agreement, the Issuer
shall promptly notify the Indenture Trustee and the Rating Agencies thereof,
and shall specify in such notice the action, if any, the Issuer is taking with
respect to such default.
(e) 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 thereof. As soon as a successor servicer (a "Successor
Servicer") is appointed, the Issuer shall notify the Indenture Trustee in
writing of such appointment, specifying in such notice the name and address of
such Successor Servicer.
(f) Without limitation of the absolute nature of the assignment
granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Issuer hereby agrees (i) except to extent
otherwise provided in any Basic Documents, that it will not, without the prior
written consent of the Indenture Trustee acting at the written direction of
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,
23
termination, waiver or surrender of, the terms of any Collateral 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 Outstanding Notes. If the Indenture Trustee
acting at the written direction of such Holders agrees to any such amendment,
modification, supplement or waiver, the Indenture Trustee agrees, promptly
following a written request by the Issuer to do so, to execute and deliver, at
the Issuer's own expense, such agreements, instruments, consents and other
documents as the Issuer may deem necessary or appropriate in the
circumstances.
(g) The Issuer (or the Servicer on its behalf in accordance with the
standards applicable to it in the Sale and Servicing Agreement) shall maintain
its computer systems so that, from and after the time of the Grant under this
Indenture of the Receivables referenced in such Grant, the Issuer's (or the
Servicer's on its behalf) master computer records (including any backup
archives) that refer to a Receivable shall be coded to reflect that such
Receivable is part of the portfolio of Receivables that is the subject of this
Indenture and is owned by the Issuer. At or prior to the Closing Date, the
Issuer shall deliver to the Indenture Trustee a computer file, microfiche list
or printed list containing a true and complete list of all Receivables subject
to this Indenture. Such file or list shall be marked as Schedule A to this
Indenture, delivered to the Indenture Trustee as confidential and proprietary,
and is hereby incorporated into and made a part of this Indenture. The Issuer
further agrees not to alter the code referenced in the first sentence of this
paragraph with respect to any Receivable during the term of this Indenture
unless and until the lien on the related Financed Vehicle has been released in
accordance with the Basic Documents. Indication of such Receivables' inclusion
in the portfolio shall be deleted from or modified on the Issuer's (or the
Servicer's on its behalf) computer systems when, and only when, the lien on
the related Financed Vehicle has been released in accordance with the Basic
Documents.
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
Assignment, Assumption and Recognition Agreement (including any
supplement thereto in connection with the transfer of Subsequent
Receivables pursuant to the Sale and Servicing 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;
(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
24
(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 Rating Agencies within 75 days after the end
of each year (commencing with the year 2005), an Officer's Certificate stating
that:
(i) a review of the activities of the Issuer during such year
and of its performance under this Indenture has been made; and
(ii) 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
25
transaction will not have any material adverse federal 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) in all material
respects.
(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 and the Indenture Trustee 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,
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
federal 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
26
(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) in all material
respects.
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), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Auto Loan Trust
2004-HB2 will be released from every covenant and agreement of this Indenture
to be observed by 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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Auto Loan Trust 2004-HB2 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 any activities incidental thereto. The Issuer shall not fund the
purchase of any receivables other than the Receivables.
SECTION 3.13. No Borrowing. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
SECTION 3.14. Servicer's Obligations. The Issuer shall cause the Servicer
to comply with Sections 4.10, 4.11, 4.12 and Article VII of the Sale and
Servicing Agreement.
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities. Except
as contemplated by the Trust Agreement, the 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. 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
27
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, distributions as
contemplated by, and to the extent funds are available for such purpose under,
the Sale and Servicing Agreement, this Indenture or the Trust Agreement. The
Issuer will not, directly or indirectly, make payments to or distributions
from the Note Interest Distribution Account, the Principal Distribution
Account, the Pre-Funding Account or the Collection Account, as applicable,
except in accordance with this Indenture and the Basic Documents.
SECTION 3.18. Notice of Events of Default. The Issuer shall give the
Indenture Trustee and the Rating Agencies prompt written notice of each Event
of Default hereunder, of which the Issuer has actual knowledge, and of each
default on the part of the Servicer or the Depositor of its obligations under
the Sale and Servicing Agreement, of which the Issuer has actual knowledge.
SECTION 3.19. Further Instruments and Acts. Upon request of the Indenture
Trustee, the Issuer will execute and deliver such further instruments and so
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 3.20. Perfection Representation. The Issuer further makes all the
representations, warranties and covenants set forth in Schedule B.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01. Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect with respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of
mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to
receive payments of principal thereof and interest thereon, (iv) Sections
3.03, 3.04, 3.05, 3.08, 3.10, 3.11, 3.12, 3.13, 3.15, 3.16 and 3.17, (v) the
rights, obligations and immunities of the Indenture Trustee, the Note
Registrar and the Paying Agent hereunder (including the rights of the
Indenture Trustee, the Note Registrar and the Paying Agent under Section 6.07
and the obligations set forth in Section 4.02) and (vi) the rights of
Noteholders as beneficiaries hereof with respect to the property so deposited
with the Indenture Trustee for the benefit of 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 the payment of which money has theretofore
been deposited in trust or segregated and held in trust by the
Issuer and thereafter repaid to the Issuer or discharged
28
from such trust, as provided in Section 3.03) have been
delivered to the Note Registrar for cancellation; or
(2) all Notes not theretofore delivered to the Note
Registrar for cancellation:
a. have become due and payable,
b. will become due and payable within one year
of the Class E Final Scheduled Distribution Date, 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 (that 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 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), as the case may be;
(B) the Issuer has paid or caused to be paid all other
sums payable hereunder by the Issuer including, but not limited
to, fees and expenses due to the Indenture Trustee; and
(C) the Issuer has delivered to the Indenture Trustee an
Officer's Certificate, 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, on behalf of the Indenture Trustee, in accordance with the
provisions of the Notes and this Indenture to the payment, either directly or
through any Paying Agent, 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
29
need not be segregated from other funds except to the extent required herein,
in the Sale and Servicing Agreement or 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 written 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 by it of an Issuer Request
accompanied by an Officer's Certificate, 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.
ARTICLE V
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 of the
Controlling Class when the same becomes due and payable, and such
default shall continue for a period of thirty-five days;
(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;
(iii) default in the observance or performance of any material
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 5.01 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 thirty days after
there shall have been given, by registered or certified mail, to the
Issuer by the Indenture Trustee or to the Issuer and the Indenture
Trustee by the Holders of at least 25% of the Outstanding Amount of
the Controlling Class, a written notice specifying such
30
default or incorrect representation or warranty and requiring it to
be remedied and stating that such notice is a notice of Default
hereunder;
(iv) 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 the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Issuer or for any substantial part of the
Trust Estate, or the ordering of 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 sixty consecutive days; or
(v) 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 of or
taking of 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, upon its actual knowledge of such, promptly
deliver to the Indenture Trustee written notice in the form of an Officer's
Certificate of any event that 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 shall occur and be continuing, then and
in every such case, the Indenture Trustee may, or the Indenture Trustee as
directed in writing by the Holders of Notes representing not less than a
majority of the Outstanding Amount of the Controlling Class, shall, declare,
by written notice to the Issuer, all the Notes to be then immediately due and
payable, and upon any such declaration the Outstanding Amount of such Notes,
together with accrued and unpaid interest thereon through the date of
acceleration, shall become immediately due and payable pursuant to the last
paragraph of Section 5.06 of the Sale and Servicing Agreement. Notwithstanding
anything to the contrary in this clause (a), if an Event of Default specified
in clauses (iv) or (v) 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.
(b) At any time after such declaration of acceleration of maturity
has been made and before a judgment or decree for payment of the money due has
been obtained by the Indenture Trustee as hereinafter in this Article V
provided, the Holders of Notes representing a
31
majority of the Outstanding Amount of the Controlling Class, 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 by the Indenture Trustee hereunder and
the reasonable compensation, expenses and disbursements of the
Indenture Trustee and its agents and counsel and the reasonable
compensation, expenses and disbursements of the Owner 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.
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) a 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 thirty-five Business 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 entire amount then due and payable on such Notes in
respect of 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 related Interest Rate and, in
addition thereto, such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation,
expenses and disbursements 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 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 on such Notes and
collect in the manner provided by law out of the Trust Estate or the property
of any other obligor on such Notes, wherever situated, the moneys adjudged or
decreed to be payable.
(c) If an Event of Default occurs, the Indenture Trustee may, as
more particularly provided in Section 5.04, in its discretion or shall at the
written directions of the Holders of at least a majority of the Outstanding
Amount of the Notes proceed to protect and enforce its rights and the rights
of the Noteholders, by such appropriate Proceedings as the
32
Indenture Trustee or the Indenture Trustee at the written direction of the
Holders of at least a majority of the Outstanding Amount of the Notes shall
reasonably 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 on 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 Proceedings
relative to the Issuer or other obligor on 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, by intervention
in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the entire 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 reasonable
out-of-pocket expenses and liabilities incurred, by the Indenture
Trustee and each predecessor Indenture Trustee, except as a result
of negligence or bad faith) and of the Noteholders allowed in such
Proceedings;
(ii) unless prohibited by applicable law or regulation, to vote
on behalf of the Holders of Notes in any election of a trustee, a
standby trustee or a 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 or 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
33
Indenture Trustee and their respective agents, attorneys and
counsel, and all other expenses and liabilities incurred by the
Indenture Trustee and each predecessor Indenture Trustee except as a
result of negligence or bad faith.
(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,
the Indenture Trustee may do one or more of the following (subject to Section
5.06):
(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 on 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;
34
provided, however, the Indenture Trustee may not sell or otherwise liquidate
the Trust Estate following an Event of Default, other than Event of Default
described in Section 5.01(i) or (ii), unless, (i) with respect to any Event of
Default described in Section 5.01(iv) or (v):
(A) the holders of Notes evidencing 100% of the
Outstanding Amount of the Controlling Class (excluding Notes
held by a Seller, the Servicer or any of their respective
Affiliates) consent thereto; or
(B) the proceeds of such sale or liquidation are
sufficient to pay in full the principal of and the accrued
interest on the Outstanding Notes; or
(C) the Indenture Trustee determines based solely on an
analysis provided by an independent accounting firm which shall
not be at the expense of the Indenture Trustee 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 obtains the consent of holders of Notes evidencing
not less than 66?% of the Outstanding Amount of the Controlling
Class; or
(ii) with respect to an Event of Default described in Section
5.01(iii):
(A) the holders of all Outstanding Notes consent thereto; or
(B) the proceeds of such sale or liquidation are sufficient to
pay in full the principal of and accrued interest on the Outstanding
Notes.
In determining such sufficiency or insufficiency with respect to
clauses (i)(B) and (ii)(B) above, the Indenture Trustee may, at the Issuer's
expense and paid pursuant to Section 6.07, but need not, obtain and rely upon
an opinion of an Independent investment banking or accounting firm of national
reputation as to the feasibility of such proposed action and as to the
sufficiency of the Trust Estate for such purpose.
(b) If the Trust Estate is sold or liquidated pursuant to Section
5.04(a)(iv) and 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, the Paying Agent and the Note Registrar
(for amounts due under Section 6.07), and then to the Servicer and the
Owner Trustee the amounts due under Sections 5.06(b)(i) and (ii) of the
Sale and Servicing Agreement;
Second: to the Class A Noteholders for amounts due and unpaid on the
Notes in respect of interest (including any premium), ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Class A Notes in respect of interest (including any
premium);
35
Third: to Holders of the Class A Notes for amounts due and unpaid on the
Class A Notes in respect of principal, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Class A Notes in respect of principal, until the Outstanding Amount of
the Class A Notes is reduced to zero;
Fourth: to the Class B Noteholders for amounts due and unpaid on the
Notes in respect of interest (including any premium), ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Class B Notes in respect of interest (including any
premium);
Fifth: to Holders of the Class B Notes for amounts due and unpaid on the
Class B Notes in respect of principal, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Class B Notes in respect of principal, until the Outstanding Amount of
the Class B Notes is reduced to zero;
Sixth: to the Class C Noteholders for amounts due and unpaid on the Notes
in respect of interest (including any premium), ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Class C Notes in respect of interest (including any
premium);
Seventh: to Holders of the Class C Notes for amounts due and unpaid on
the Class C Notes in respect of principal, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Class C Notes in respect of principal, until the Outstanding Amount of
the Class C Notes is reduced to zero;
Eighth: to the Class D Noteholders for amounts due and unpaid on the
Notes in respect of interest (including any premium), ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Class D Notes in respect of interest (including any
premium);
Ninth: to Holders of the Class D Notes for amounts due and unpaid on the
Class D Notes in respect of principal, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Class D Notes in respect of principal, until the Outstanding Amount of
the Class D Notes is reduced to zero;
Tenth: to the Class E Noteholders for amounts due and unpaid on the Notes
in respect of interest (including any premium), ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Class E Notes in respect of interest (including any
premium);
Eleventh: to Holders of the Class E Notes for amounts due and unpaid on
the Class E Notes in respect of principal, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Class E Notes in respect of principal, until the Outstanding Amount of
the Class E Notes is reduced to zero; and
Twelfth: any excess amounts remaining after making the payments described
in clauses first through ninth above, to be applied pursuant to Section
5.06(b) of the Sale and Servicing Agreement to the extent that any
amounts payable thereunder have not been
36
previously paid pursuant to clauses first through ninth above. The
Indenture Trustee may fix a record date and payment date for any payment
to Noteholders pursuant to this Section. At least fifteen 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 or not to maintain possession of the Trust Estate, the
Indenture Trustee may, at the expense of the Issuer and paid pursuant to
Section 6.07, 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 Controlling Class 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 that may be incurred in complying with such request;
(iv) the Indenture Trustee for sixty days after its receipt of
such notice, request and offer of indemnity has failed to institute
such Proceedings; and
(v) no direction inconsistent with such written request has
been given to the Indenture Trustee during such sixty day period by
the Holders of a majority of the Outstanding Amount of the
Controlling Class.
It is understood and intended that no one or more Holders of Notes shall have
any right in any manner whatsoever 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.
37
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of
Notes pursuant to this Section, each representing less than a majority of the
Outstanding Amount of the Controlling Class, the Indenture Trustee shall act
at the direction of the group representing the greater percentage of the
Outstanding Amount of Notes and if there is no such group then 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 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 or to the Noteholders may be exercised from
time to time, and as often as may be deemed expedient, by the Indenture
Trustee or the Noteholders, as the case may be.
SECTION 5.11. Control by Controlling Class. If the Indenture Trustee
is the Controlling Party, the Holders of a majority of the Outstanding Amount
of the Controlling Class 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:
38
(i) such direction shall not be in conflict with any rule of
law or with this Indenture;
(ii) the Indenture Trustee shall not sell or liquidate the
Trust Estate except pursuant to the express terms of Section
5.04(a)(iv); and
(iii) 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, the
Holders of Notes of not less than a majority of the Outstanding Amount of the
Controlling Class 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 that
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, in the case of a right or remedy under
this Indenture which is instituted by the Controlling Class, more than 10% of
the Controlling Class) 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
39
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, the Issuer shall take all such lawful action as the Indenture Trustee may
request to compel or secure the performance and observance by HNB, 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
Assignment, Assumption and Recognition Agreement, as applicable (including any
supplement thereto in connection with the transfer of Subsequent Receivables
pursuant to the Sale and Servicing Agreement), 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 Assignment,
Assumption and Recognition Agreement (including any supplement thereto in
connection with the transfer of Subsequent Receivables pursuant to the Sale
and Servicing Agreement) to the extent and in the manner directed by the
Indenture Trustee, including the transmission of notices of default on the
part of HNB, the Seller or the Servicer thereunder and the institution of
legal or administrative actions or proceedings to compel or secure performance
by HNB, the Seller or the Servicer of each of their obligations under the Sale
and Servicing Agreement or the Assignment, Assumption and Recognition
Agreement (including any supplement thereto in connection with the transfer of
Subsequent Receivables pursuant to the Sale and Servicing Agreement);
provided, however, nothing herein shall in any way impose on the Indenture
Trustee the duty to monitor the performance of HNB, the Seller or the Servicer
of any of their respective liabilities, duties or obligations under any Basic
Document.
(b) If an Event of Default has occurred, the Indenture Trustee may,
and at the direction (which direction shall be in writing) of the Holders of
not less than a majority of the Outstanding Amount of the Controlling Class
shall, exercise all rights, remedies, powers, privileges and claims of the
Issuer against HNB, the Seller or the Servicer under or in connection with the
Sale and Servicing Agreement and the Assignment, Assumption and Recognition
Agreement (including any supplement thereto in connection with the transfer of
Subsequent Receivables pursuant to the Sale and Servicing Agreement) including
the right or power to take any action to compel or secure performance or
observance by HNB, the Seller or the Servicer, as
40
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 Assignment, Assumption and
Recognition Agreement (including any supplement thereto in connection with the
transfer of Subsequent Receivables pursuant to the Sale and Servicing
Agreement), as the case may be, and any right of the Issuer to take such
action shall be suspended.
ARTICLE VI
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 the face
value of the certificates, reports, resolutions, documents, orders,
opinions or other instruments furnished to the Indenture Trustee and
conforming to the requirements of this Indenture; provided, however,
that the Indenture Trustee shall not be responsible for the accuracy
or content of any such resolution, certificate, statement, opinion,
report, document, order or other instrument; however, with respect
to any such certificates or opinions that are required to be
delivered to the Indenture Trustee pursuant to this Indenture, the
Indenture Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture. If any such instrument is found not to conform in any
material respect to the requirements of this Agreement, the
Indenture Trustee shall notify the Noteholders of such instrument in
the event that the Indenture Trustee, after so requesting, does not
receive a satisfactorily corrected instrument.
(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;
41
(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 the terms of this
Indenture or any other Basic Document.
(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 indebtedness
evidenced by or arising under any of the Basic Documents, including principal
of or interest on the Notes, or 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 advance, 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 Indenture 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
as contemplated by Section 8.03 of the Sale and Servicing Agreement.
(j) The Indenture Trustee shall have no duty (A) to see to any
recording, filing, or depositing of this Indenture or any agreement referred
to herein or any financing statement or continuation statement evidencing a
security interest, or to see to the maintenance of any such recording or
filing or depositing or to any rerecording, refiling or redepositing of any
thereof, (B) to see to any insurance, or (C) to see to the payment or
discharge of any tax, assessment, or other governmental charge or any lien or
encumbrance of any kind owing with respect to, assessed or levied against, any
part of the Trust Estate.
For purposes of this Section 6.01 and Section 5.03(c), the Indenture
Trustee, or a Responsible Officer thereof, shall be charged with actual
knowledge of any default or an Event of Default if a Responsible Officer
actually knows of such default or Event of Default or the Indenture Trustee
receives written notice of such default or Event of Default from the Issuer,
the Servicer or Noteholders owning Notes aggregating not less than 10% of the
Outstanding Amount
42
of the Notes. Notwithstanding the foregoing, the Indenture Trustee shall not
be required to take notice and in the absence of such actual notice and
knowledge, the Indenture Trustee may conclusively assume that there is no such
default or Event of Default.
SECTION 6.02. Rights of Indenture Trustee.
(a) The Indenture Trustee may conclusively rely on the face value of
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 from the
appropriate party. 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 from the appropriate party. The right of the Indenture
Trustee to perform any discretionary act enumerated in this Indenture or in
any Basic Document shall not be construed as a duty of the Indenture Trustee
and the Indenture Trustee shall not be answerable for other than its
negligence or willful misconduct in the performance of such discretionary act.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of any such
agent, attorney or custodian appointed by the Indenture Trustee with due care.
(d) The Indenture Trustee shall not be liable for any action it
takes or omits to take in good faith that 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, at the Issuer's expense
(which amount shall be paid in the priority set forth in Section 5.06(b) of
the Sale and Servicing Agreement), 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.
(f) In the event that the Indenture Trustee is also acting as Paying
Agent, Note Registrar or collateral agent, the rights and protections afforded
to the Indenture Trustee pursuant to this Article VI shall be afforded to such
Paying Agent, Note Registrar or collateral agent.
(g) The Indenture Trustee shall be under no obligation to exercise
any of the trusts or powers vested in it by this Indenture or to institute,
conduct or defend any litigation hereunder or in relation hereto at the
request, order or direction of any of the Noteholders, pursuant to the
provisions of this Indenture, unless such Noteholders shall have offered to
the Indenture Trustee security or indemnity satisfactory to it against the
costs, expenses and liabilities which may be incurred therein or thereby.
43
(h) The right of the Indenture Trustee to perform any discretionary
act enumerated in this Indenture shall not be construed as a duty, and the
Indenture Trustee shall not be answerable for other than its negligence or
willful misconduct in the performance of such act.
(i) The Indenture Trustee shall not be required to give any bond or
surety in respect of the powers granted hereunder.
(j) The rights, protections and immunities of the Indenture Trustee
under this Indenture set forth in subsections (a), (b), (c), (d), (e) and (i)
of this Section 6.02 shall also apply to the Indenture Trustee under each
other Basic Document to which the Indenture Trustee is a party.
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. Disclaimer of Indenture Trustee. The Indenture Trustee
shall not be responsible for and makes no representation as to the validity or
adequacy of this Indenture, the Trust Estate or the Notes, nor shall the
Indenture Trustee be accountable for the Issuer's use of the proceeds from the
Notes, and the Indenture Trustee shall not be responsible for any statement of
the Issuer in the Indenture, any Basic Document 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 actually known to a Responsible Officer of the
Indenture Trustee, the Indenture Trustee shall mail to each Noteholder notice
of the Default within thirty 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.
(a) The Issuer shall cause the payment to be made to the Indenture
Trustee from time to time compensation for its services to the extent of and
in the priority set forth in Section 5.06(b)(ii) of the Sale and Servicing
Agreement and as outlined in the fee letter from the Indenture Trustee to
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital II Inc., dated August 30, 2004. The Indenture
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Issuer shall cause reimbursement to be made
to the Indenture Trustee for all reasonable out-of-pocket expenses incurred or
made by it, including costs of collection, in
44
addition to the compensation for its services, out of the Trust to the extent
of and in accordance with the priority in Section 5.06(b)(ii) and (xiii) of
the Sale and Servicing Agreement. Such expenses shall include the reasonable
out-of-pocket compensation and expenses, disbursements and advances of the
Indenture Trustee's agents, counsel, accountants and experts. The Issuer shall
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
any other Basic Document to which the Indenture Trustee is a party out of the
Trust to the extent of and in accordance with the priority in Section
5.06(b)(ii) and (xiii) of the Sales and Servicing Agreement. The Indenture
Trustee shall notify the Issuer promptly of any claim for which it may seek
indemnity. Failure by the Indenture Trustee to so notify the Issuer shall not
relieve the Issuer of its obligations hereunder if no material prejudice to
the Issuer shall have resulted from such failure and, in such event, only to
the extent of such prejudice. The Issuer will not 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.
As security for the performance of the obligations of the Issuer
under this Section the Indenture Trustee shall have a lien prior to the
Holders upon all property and funds held or collected by the Indenture Trustee
as such, except funds held in trust for the payment of principal of or
interest on the Notes.
The Issuer's payment obligations and 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.
(a) 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(a). The Indenture Trustee may resign at any time by so notifying
the Issuer and each Rating Agency. The Holders of a majority in Outstanding
Amount of the Controlling Class may remove the Indenture Trustee by so
notifying the Indenture Trustee and may appoint a successor Indenture Trustee.
The Issuer shall 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;
(iv) the Indenture Trustee otherwise becomes incapable of
acting; or
45
(v) the Indenture Trustee breaches any representation, warranty
or covenant made by it under any Basic Document.
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.
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 sixty
days after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Holders of a majority in Outstanding
Amount of the Controlling Class 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 obligations under Section 6.07 shall continue for
the benefit of the retiring Indenture Trustee.
SECTION 6.09. Successor Indenture Trustee by Merger.
(a) If the Indenture Trustee consolidates with, merges or converts
into, or transfers all or substantially all its corporate trust business or
assets to, another Person, the resulting, surviving or transferee Person
without any further act shall be the successor Indenture Trustee; provided,
that such Person shall be qualified and eligible under Section 6.11. The
Indenture Trustee shall provide the Rating Agencies notice of any such
transaction.
In the event that the Indenture Trustee is also acting as the Note
Registrar, then, in case at the time such successor or successors by merger,
conversion or consolidation to the Note Registrar shall succeed to the
obligations of the Note Registrar any of the Notes shall have been
authenticated but not delivered, any such successor to the Note Registrar 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 Note Registrar may
authenticate such Notes either in the name of any predecessor hereunder or in
the name of the successor to the Note Registrar; and in all such cases such
certificates shall have the full force that it is anywhere in the Notes or in
this Indenture provided that the certificate of the Note Registrar shall have.
46
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 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 thereof, 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 (including the Indenture Trustee)
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.
47
(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.
(a) The Indenture Trustee shall at all times satisfy the
requirements of TIA ss. 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. The Indenture Trustee shall comply with TIA ss. 310(b), including the
optional provision permitted by the second sentence of TIA ss. 310(b)(9);
provided, however, that there shall be excluded from the operation of TIA ss.
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
ss. 310(b)(1) are met.
(b) Within ninety days after ascertaining the occurrence of an Event
of Default which shall not have been cured or waived, unless authorized by the
Commission, the Indenture Trustee shall resign with respect to the Class A
Notes, the Class B Notes, the Class C Notes, the Class D Notes and/or the
Class E Notes in accordance with Section 6.08 of this Indenture, and the
Issuer shall appoint a successor Indenture Trustee for each of such Classes of
Notes, as applicable, so that there will be separate Indenture Trustees for
the Class A Notes, the Class B Notes, the Class C Notes, the Class D Notes and
the Class E Notes. In the event the Indenture Trustee fails to comply with the
terms of the preceding sentence, the Indenture Trustee shall comply with
clauses (ii) and (iii) of TIA Section 310(b).
(c) In the case of the appointment hereunder of a successor
Indenture Trustee with respect to any Class of Notes pursuant to this Section
6.11, the Issuer, the retiring Indenture Trustee and the successor Indenture
Trustee with respect to such Class of Notes shall execute and deliver an
indenture supplemental hereto wherein each successor Indenture Trustee shall
accept such appointment and which (i) shall contain such provisions as shall
be necessary or desirable to transfer and confirm to, and to vest in, the
successor Indenture Trustee all the rights, powers, trusts and duties of the
retiring Indenture Trustee with respect to the Notes of the Class to which the
appointment of such successor Indenture Trustee relates, (ii) if the retiring
Indenture Trustee is not retiring with respect to all Classes of Notes, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Indenture
Trustee with respect to the Notes of each Class as to which the retiring
Indenture Trustee is not retiring shall continue to be vested in the Indenture
Trustee and (iii) shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Indenture Trustee, it
being understood that nothing herein or in such supplemental indenture shall
constitute such Indenture Trustees co-trustees of the same trust and that each
such Indenture Trustee shall be a trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by
48
any other such Indenture Trustee; and upon the removal of the retiring
Indenture Trustee shall become effective to the extent provided herein.
SECTION 6.12. Preferential Collection of Claims Against Issuer. The
Indenture Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). An Indenture Trustee who has resigned
or been removed shall be subject to TIA ss. 311(a) to the extent indicated.
SECTION 6.13. Waiver of Setoffs. The Indenture Trustee hereby
expressly waives any and all rights of setoff that the Indenture Trustee may
otherwise at any time have under applicable law with respect to any Trust
Account and agrees that amounts in the Trust Accounts shall at all times be
held and applied solely in accordance with the provisions hereof and of the
other Basic Documents.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.01. Note Registrar To Furnish Indenture Trustee and Owner
Trustee Names and Addresses of Noteholders. The Note Registrar will furnish or
cause to be furnished to the Indenture Trustee and the Owner Trustee at such
times as the Indenture Trustee or the Owner Trustee may request in writing,
within thirty days after receipt by the Note Registrar of any such request, a
list, in such form as the Indenture Trustee or Owner Trustee may reasonably
require, of the names and addresses of the Holders of Notes as of a date not
more than ten days prior to the time such list is furnished; provided,
however, that so long as the Indenture Trustee is the Note Registrar, no such
list shall be required to be furnished to the Indenture Trustee.
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 Owner Trustee on written 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 ss. 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 ss. 312(c).
SECTION 7.03. Reports by Issuer.
(a) The Indenture Trustee shall, on behalf of the Issuer:
49
(i) file 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 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) upon Issuer Request, transmit by mail to all Noteholders
described in TIA ss. 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 ss.
313(a), within sixty days after each September 15 beginning with September 15,
2005, the Indenture Trustee shall mail to each Noteholder as required by TIA
ss. 313(c) a brief report dated as of such date that complies with TIA ss.
313(a). The Indenture Trustee also shall comply with TIA ss. 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 so long as such
filings are required by law or by rules or regulations promulgated by the
Commission. Upon its actual knowledge of such, the Issuer shall notify the
Indenture Trustee if and when the Notes are listed on any stock exchange.
ARTICLE VIII
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.
50
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, in the case of the Collection Account,
with a designation that the funds deposited therein are also held for the
benefit of the Certificateholders), the Trust Accounts as provided in Section
5.01 of the Sale and Servicing Agreement.
(b) The Issuer shall cause the Servicer to deposit into the
Collection Account, as provided in Section 5.02(a) of the Sale and Servicing
Agreement, all amounts received in respect of the Receivables (other than
Repurchased Receivables) and investment earnings from amounts on deposit in
the Pre-Funding Account and other amounts comprising the Total Distribution
Amount. On or before each Distribution Date, all amounts required to be
deposited in the Note Interest Distribution Account and the Principal
Distribution Account with respect to the related Collection Period pursuant to
Section 5.06(b) of the Sale and Servicing Agreement will be transferred from
the Collection Account to the Note Interest Distribution Account or the
Principal Distribution Account, as applicable.
(c) On each Distribution Date and Redemption Date, the Indenture
Trustee shall distribute all amounts on deposit in the Note Interest
Distribution Account to the Noteholders in respect of the Notes to the extent
of amounts due and unpaid on the Notes for interest in the amounts and in the
order of priority set forth in Section 5.06(c) of the Sale and Servicing
Agreement (except as otherwise provided in Section 5.06(e) of the Sale and
Servicing Agreement and Section 5.04(b) hereof).
(d) On each Distribution Date and Redemption Date, the Indenture
Trustee shall distribute all amounts on deposit in the Principal Distribution
Account to the Noteholders in respect of the Notes to the extent of amounts
due and unpaid on the Notes for principal in the amounts and in the order of
priority set forth in Section 5.06(d) of the Sale and Servicing Agreement
(except as otherwise provided in Section 5.06(e) of the Sale and Servicing
Agreement and Section 5.04(b) hereof).
(e) Notwithstanding any other provision of this Article VIII, and
subject to Section 5.04(b):
(i) If the Notes have been accelerated following the occurrence
and during the continuation of an Event of Default specified in
Section 5.01(i), 5.01(ii), 5.01(iv) or 5.01(v), the Indenture
Trustee shall (v) transfer, on behalf of the Indenture Trustee, the
funds on deposit in the Collection Account remaining after the
application of clauses 5.06(b)(i) through (iii) of the Sale and
Servicing Agreement to the Principal Distribution Account to the
extent necessary to reduce the Outstanding Amount of all the Class A
Notes to zero, or (w) if the Class A Notes shall have been paid in
full, to transfer the funds on deposit in the Collection Account
remaining after the application of clauses 5.06(b)(i) through (v) of
the Sale and Servicing Agreement to the Principal Distribution
Account to the extent necessary to reduce the Outstanding Amount of
all the Class B Notes to zero, or (x) if the Class A Notes and Class
B Notes shall have been paid in full, to
51
transfer the funds on deposit in the Collection Account remaining
after the application of clauses 5.06(b)(i) through (vii) of the
Sale and Servicing Agreement to the Principal Distribution Account
to the extent necessary to reduce the Outstanding Amount of all the
Class C Notes to zero, or (y) if the Class A Notes, Class B Notes
and Class C Notes shall have been paid in full, to transfer the
funds on deposit in the Collection Account remaining after the
application of clauses 5.06(b)(i) through (ix) of the Sale and
Servicing Agreement to the Principal Distribution Account to the
extent necessary to reduce the Outstanding Amount of all the Class D
Notes to zero, or (z) if the Class A Notes, Class B Notes, Class C
Notes and Class D Notes shall have been paid in full, to transfer
the funds on deposit in the Collection Account remaining after the
application of clauses 5.06(b)(i) through (xi) of the Sale and
Servicing Agreement to the Principal Distribution Account to the
extent necessary to reduce the Outstanding Amount of all the Class E
Notes to zero. Any amounts transferred to the Principal Distribution
Account pursuant to clause (w) shall be applied to the repayment of
principal of the Class A-1 Notes, the Class A-2 Notes the Class A-3
Notes and the Class A-4 Notes pro rata based on the respective
Outstanding Amounts of the Class A-1 Notes, the Class A-2 Notes the
Class A-3 Notes and the Class A-4 Notes.
(ii) If the Notes have been accelerated following the
occurrence and during the continuation of an Event of Default
specified in Section 5.01(iii), the Indenture Trustee shall transfer
the funds on deposit in the Collection Account remaining after the
application of clauses 5.06(b)(i) through (xii) of the Sale and
Servicing Agreement to the Principal Distribution Account to the
extent necessary to reduce the principal amount of all the Notes to
zero in the order and priority set forth in Section 5.06(d) of the
Sale and Servicing Agreement.
In the case of an event described in clause (i) or (ii), the
Holders of the Certificates will not receive any distributions until
the principal amount and accrued interest on all the Notes has been
paid in full.
(iii) If any portion of the Pre-Funded Amount is deposited into
the Principal Distribution Account at the end of the Funding Period
pursuant to Section 5.07(b) of the Sale and Servicing Agreement, the
Indenture Trustee shall distribute such amount to the Noteholders as
principal of the Notes on the related Distribution Date, after
giving effect to all other principal distributions to be made on
such Distribution Date, and such amount will be distributed in the
following order of priority: (1) to the Class A-1 Noteholders on
account of principal until the Outstanding Amount of the Class A-1
Notes is reduced to zero, (2) to the Class A-2 Noteholders on
account of principal until the Outstanding Amount of the Class A-2
Notes is reduced to zero; (3) to the Class A-3 Noteholders on
account of principal until the Outstanding Amount of the Class A-3
Notes is reduced to zero; (4) to the Class A-4 Noteholders on
account of principal until the Outstanding Amount of the Class A-4
Notes is reduced to zero; (5) to the Class B Noteholders on account
of principal until the Outstanding Amount of the Class B Notes is
reduced to zero; (6) to the Class C Noteholders on account of
principal
52
until the Outstanding Amount of the Class C Notes is reduced to
zero; (7) to the Class D Noteholders on account of principal until
the Outstanding Amount of the Class D Notes is reduced to zero and
(8) to the Class E Noteholders on account of principal until the
Outstanding Amount of the Class E Notes is reduced to zero.
SECTION 8.03. General Provisions Regarding Accounts. 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.
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 in full, 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 by it 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.
(c) 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(b), 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
53
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 IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Holders of any Notes but with prior
written notice to the Rating Agencies (with copy to the Indenture Trustee),
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 supplemental
indentures 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
54
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 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; and each Rating Agency shall have notified the Issuer or
the Indenture Trustee in writing that such action will not result in a
reduction, withdrawal or downgrade of the then-current rating of any Class of
Notes. Notwithstanding anything to the contrary in this Section 9.01(b), if at
the time the Issuer and the Indenture Trustee propose to enter into an
indenture or supplemental indenture under this Section 9.01(b) the Issuer is
required to be a Qualifying SPE in order for the Seller to continue to account
for the transfer of the Receivables as a sale under SFAS 140, then prior to
the time that the Issuer and the Indenture Trustee enter into such indenture
or supplemental indenture the Issuer shall deliver to the Indenture Trustee an
Accountant's Letter which states that the amendments to be effected by such
indenture or supplemental indenture would not "significantly change" (within
the meaning of SFAS 140) the Permitted Activities of the Issuer so as to cause
the Issuer to fail to qualify as a Qualifying SPE.
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 the
Holders of not less than a majority of the Outstanding Amount of the Notes of
the Controlling Class, 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);
55
(ii) reduce the percentage of the Outstanding Amount of the
Notes or of the Controlling Class, 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 (x) the provisions of the proviso to the
definition of the term "Outstanding" or (y) the definition of
"Controlling Class";
(iv) reduce the percentage of the Outstanding Amount of the
Notes or of the Controlling Class 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 or at the advice of counsel
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.
56
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 and all conditions
precedent have been met and any such reliance shall be binding upon the
Holders of all Notes, whether theretofore or thereafter authenticated and
delivered hereunder. 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. The Indenture Trustee shall provide a fully executed copy of any
supplemental indentures to this Indenture to each Rating Agency.
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 Paying Agent, the Note
Registrar, 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 Note Registrar shall,
bear a notation in form approved by the Note Registrar as to any matter
provided for in such supplemental indenture. If the Issuer or the Note
Registrar shall so determine, new Notes so modified as to conform, in the
opinion of the Note Registrar and the Issuer, to any such supplemental
indenture may be prepared and executed by the Issuer and authenticated and
delivered by the Note Registrar 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 X
REDEMPTION OF NOTES
SECTION 10.01. Redemption. The Outstanding Notes are subject to
redemption in whole, but not in part, at the direction of the Servicer or,
under certain circumstances, a Certificateholder evidencing 100% of the
percentage interests in the Certificates pursuant to Section 9.01 of the Sale
and Servicing Agreement, on any Distribution Date on which the Servicer or
such a Certificateholder exercises its option to purchase the Trust Estate
pursuant to said Section 9.01, 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
57
furnish the Rating Agencies and the Indenture Trustee notice of such
redemption. If the Outstanding Notes are to be redeemed pursuant to this
Section 10.01, the Servicer or a Certificateholder evidencing 100% of the
percentage interests in the Certificates, as applicable, shall furnish notice
of such election to the Indenture Trustee not later than twenty days prior to
the Redemption Date and shall deposit the Business Day prior to the Redemption
Date with the Indenture Trustee in the Collection Account for distribution by
the Indenture Trustee, the Redemption Price of the Notes to be redeemed,
whereupon all such Outstanding 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 Outstanding Notes.
SECTION 10.02. Form of Redemption Notice. Notice of redemption under
Section 10.01 shall be given by the Indenture Trustee by first-class mail,
postage prepaid, or by facsimile mailed or transmitted not less than ten days
and not more than thirty days prior to the applicable Redemption Date to each
Holder of Outstanding 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;
(iii) the place where such Outstanding 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); and
(iv) that interest on the Outstanding Notes shall cease to
accrue on the Redemption Date.
Notice of redemption of the Outstanding Notes shall be given by the Indenture
Trustee in the name and at the expense of the Issuer. Failure to give notice
of redemption, or any defect therein, to any Holder of any Note shall not
impair or affect the validity of the redemption of any other Note.
SECTION 10.03. Notes Payable on Redemption Date. The Outstanding
Notes shall, following notice of redemption as required by Section 10.02 (in
the case of redemption pursuant to Section 10.01), 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.
58
ARTICLE XI
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:
(i) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory,
such signatory has made such examination or investigation as is
necessary to enable such signatory to express an informed opinion as
to whether or not such covenant or condition has been complied with;
and
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) (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 an Officer's
Certificate certifying or stating the opinion of each person signing such
certificate as to the fair value (within ninety 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 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 an
Independent Certificate as to the same matters, if the fair
59
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 an Officer's Certificate certifying or stating
the opinion of each person signing such certificate as to the fair
value (within ninety 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) Other than with respect to the release of any Repurchased
Receivable, whenever the Issuer is required to furnish to the
Indenture Trustee 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
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 Outstanding 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.
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.
60
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 or the Issuer, stating that
the information with respect to such factual matters is in the possession of
the Servicer, the Seller or the Issuer, unless such counsel knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
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.
61
(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:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Auto Loan Trust 2004-HB2, in care of Wilmington Trust
Company, as Owner Trustee, ▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Corporate Trust
Administration, or at any other address previously furnished in
writing to the Indenture Trustee by the Issuer. The Issuer shall
promptly transmit any notice received by it from the Noteholders to
the Indenture Trustee.
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, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, (ii) in
the case of Standard & Poor's, at the following address: Standard & Poor's, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: Asset Backed Surveillance Department and (iii) in the
case of Fitch, at the following address: Fitch, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇; 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.
62
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. 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 11.07. 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 their respective successors, co-trustees and
agents.
SECTION 11.08. 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 11.09. Benefits of Indenture. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the
parties hereto (including ▇▇▇▇▇ Fargo Bank, National Association in its
capacities as Note Registrar and Paying Agent) 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 11.10. 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 11.11. 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.
63
SECTION 11.12. 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 11.13. 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 upon request and at the expense of the Servicer
accompanied by an Opinion of Counsel (which may be counsel to the Servicer 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 11.14. 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, the Note Registrar, the Paying Agent or the
Owner Trustee in its individual capacity, (ii) any owner or holder 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, the Note Registrar, the Paying Agent or the Owner Trustee
in its individual capacity, any holder of a beneficial interest, the Owner
Trustee, the Note Registrar, the Paying Agent or the Indenture Trustee or of
any successor or assign of the Indenture Trustee, the Note Registrar, the
Paying Agent or the Owner Trustee in their individual capacities, except as
any such Person may have expressly agreed (it being understood that the
Indenture Trustee, the Note Registrar, the Paying Agent and the Owner Trustee
have no such obligations in their individual capacities). 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 11.15. 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 Issuer or the
Depositor, or join in any institution against the Issuer or the Depositor, of
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to the
Notes, this Indenture or any of the other Basic Documents.
SECTION 11.16. Inspection. The Issuer agrees that, on reasonable
prior notice, it will permit any representative of the Indenture Trustee
during the Issuer's normal business hours, to examine all the books of
account, records, reports and other papers of the Issuer, to make copies and
extracts therefrom, to cause such books to be audited by Independent certified
public accountants, and to discuss the Issuer's affairs, finances and accounts
with the Issuer's officers, employees and Independent certified public
accountants, all at such reasonable times and as often as may be reasonably
requested; provided, however, that the Indenture Trustee may only cause the
books of the Issuer to be audited on an annual basis, unless there occurs an
Event of Default hereunder. The Indenture Trustee shall cause its respective
representatives to, hold in confidence all such information except to the
extent such information is publicly available or such disclosure may be
required by law (and all reasonable applications for confidential
64
treatment are unavailing) and except to the extent that the Indenture Trustee
may reasonably determine with the advice of counsel and after consultation
with the Issuer that such disclosure is consistent with its obligations
hereunder.
SECTION 11.17. Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required or deemed to be included in this Indenture by any of the provisions
of the Trust Indenture Act, such required or deemed 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.
SECTION 11.18. Limitation of Liability. It is expressly understood
and agreed by the parties hereto that (a) this Indenture is executed and
delivered by Wilmington Trust Company, not individually or personally but
solely as Owner Trustee of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Auto Loan Trust 2004-HB2, in the
exercise of the powers and authority conferred and vested in it, (b) each of
the representations, undertakings and agreements herein made on the part of
the Issuer is made and intended not as personal representations, undertakings
and agreements by Wilmington Trust Company but is made and intended for the
purpose for binding only the Issuer, (c) nothing herein contained shall be
construed as creating any liability on Wilmington Trust Company, individually
or personally, to perform any covenant either expressed or implied contained
herein, all such liability, if any, being expressly waived by the parties
hereto and by any Person claiming by, through or under the parties hereto and
(d) under no circumstances shall Wilmington Trust Company be personally liable
for the payment of any indebtedness or expenses of the Issuer or be liable for
the breach or failure of any obligation, representation, warranty or covenant
made or undertaken by the Issuer under this Indenture or any other related
documents.
* * * * *
65
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.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AUTO LOAN TRUST
2004-HB2,
By: Wilmington Trust Company,
not in its individual capacity
but solely as Owner Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Financial Services Officer
▇▇▇▇▇ Fargo Bank, National
Association,
as Indenture Trustee
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
66
SCHEDULE A
Schedule of Receivables
[On file with the Indenture Trustee]
Sch. A-1
SCHEDULE B
Perfection Representation
1. General. The Indenture creates a valid and continuing security
interest (as defined in the UCC) in all of the Issuer's right, title and
interest in and to the Receivables in favor of the Trustee which, (a) is
enforceable upon execution of the Indenture against creditors of and
purchasers from the Issuer as such enforceability may be limited by applicable
debtor relief laws, now or hereafter in effect, and by general principles of
equity (whether considered in a suit at law or in equity), and (b) upon filing
of the financing statements described in clause 4 below will be prior to all
other Liens (other than Liens permitted pursuant to clause 3 below).
2. Characterization. The Receivables constitute "tangible chattel
paper" within the meaning of UCC Section 9-102. The Issuer has taken all steps
necessary to perfect its security interest against the Obligor in the Financed
Vehicles securing the Receivables.
3. Creation. Immediately prior to the conveyance of the Receivables
pursuant to the Indenture, the Issuer owns and has good and marketable title
to, or has a valid security interest in, the Receivables free and clear of any
Lien, claim or encumbrance of any Person.
4. Perfection. The Issuer has caused or will have caused, within ten
days of the Closing Date, the filing of all appropriate financing statements
in the proper filing office in the appropriate jurisdictions under applicable
law in order to perfect the security interest granted to the Indenture Trustee
under the Indenture in the Receivables.
5. Priority. Other than the security interests granted to the
Indenture Trustee pursuant to the Indenture, the Issuer has not pledged,
assigned, sold, granted a security interest in, or otherwise conveyed any of
the Receivables, the Issuer has not authorized the filing of and is not aware
of any financing statements against the Issuer that includes a description of
collateral covering the Receivables other than any financing statement (i)
relating to the security interests granted to the Indenture Trustee under the
Indenture (ii) that has been terminated, or (iii) that has been granted
pursuant to the terms of the Basic Documents. None of the tangible chattel
paper that constitutes or evidences the Receivables has any marks or notations
indicating that they are pledged, assigned or otherwise conveyed to any Person
other than the Indenture Trustee, except the ▇▇▇▇ noting the transfer to the
Seller.
Sch. B-1
EXHIBIT A-1
[FORM OF CLASS A-1 NOTE]
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY ("DTC"), A NEW YORK CORPORATION, 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.
BY ITS ACCEPTANCE OF THIS NOTE, THE HOLDER OF THIS NOTE AND ANY
SUBSEQUENT TRANSFEREE IS DEEMED TO REPRESENT AND WARRANT TO THE ISSUER AND TO
THE INDENTURE TRUSTEE THAT (i) IT IS NOT AND IS NOT ACTING ON BEHALF OF OR
INVESTING THE ASSETS OF ANY (A) EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION
3(3) OF ERISA) THAT IS SUBJECT TO TITLE I OF ERISA OR SIMILAR LAW, (B) PLAN
(AS DEFINED IN SECTION 4975(E)(1) OF THE CODE) THAT IS SUBJECT TO SECTION 4975
OF THE CODE OR SIMILAR LAW, INCLUDING INDIVIDUAL RETIREMENT ACCOUNTS OR ▇▇▇▇▇
PLANS, OR (C) ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF
A PLAN'S INVESTMENT IN SUCH ENTITY, INCLUDING, WITHOUT LIMITATION, AS
APPLICABLE, AN INSURANCE COMPANY GENERAL ACCOUNT OR (ii) ITS ACQUISITION AND
HOLDING OF THE NOTE EITHER SATISFIES ALL REQUIREMENTS FOR EXEMPTIVE RELIEF
PURSUANT TO A DEPARTMENT OF LABOR PROHIBITED TRANSACTION EXEMPTION OR OTHER
APPLICABLE EXEMPTION, OR WILL NOT RESULT IN A NON-EXEMPT VIOLATION OF SIMILAR
LAW. ANY ATTEMPTED OR PURPORTED TRANSFER OF A NOTE WITH RESPECT TO WHICH
NEITHER OF THE FOREGOING REPRESENTATIONS IS TRUE SHALL BE VOID AB INITIO.
THIS NOTE DOES NOT REPRESENT DEPOSITS OR OBLIGATIONS OF OR AN
INTEREST IN ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL II INC., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ASSET FUNDING
INC. OR ANY OF THEIR AFFILIATES.
Exh. A-1-1
REGISTERED $__________(1)
No. R-__ CUSIP NO. 61747R AN 0
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AUTO LOAN TRUST 2004-HB2
1.90% ASSET BACKED NOTE, CLASS A-1
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AUTO LOAN TRUST 2004-HB2, a statutory 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 [INSERT
INITIAL PRINCIPAL AMOUNT OF NOTE] DOLLARS, payable from time to time on each
Distribution Date, from the Principal Distribution Account, in an amount, if
any, of the Class A Principal Distributable Amount payable in respect of
principal on the Class A-1 Notes pursuant to Section 3.01 of the Indenture
dated as of June 30, 2004 (the "Indenture"), among the Issuer and ▇▇▇▇▇ Fargo
Bank, National Association, a national banking association, 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
August 15, 2006 (the "Class A-1 Final Scheduled Distribution Date") and the
Redemption Date, if any, pursuant to Section 10.01 of the Indenture.
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 the last sentence of Section 3.01 of the
Indenture. Interest on this Note will accrue for each Distribution Date from
and including the 15th day of the preceding calendar month (or, in the case of
the first Distribution Date, from the Closing Date) to and including the 14th
day of the calendar month in which such Distribution Date occurs. 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.
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.
-------------------
(1) Denominations of $1,000 and integral multiples of $1,000 in excess
thereof.
Exh. A-1-2
Unless the certificate of authentication hereon has been executed by
the Note Registrar 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.
Exh. A-1-3
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: August 30, 2004 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AUTO LOAN TRUST
2004-HB2
By: WILMINGTON TRUST COMPANY, not
in its individual capacity but solely as
Owner Trustee under the Trust Agreement
By:_________________________________
Authorized Signatory
Exh. A-1-4
CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: August 30, 2004 ▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Note Registrar
By:
---------------------------------
Authorized Signatory
Exh. A-1-5
REVERSE OF CLASS A-1 NOTE
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its 1.90% 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, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes, the Class B Notes, the Class C Notes, the Class D Notes and
the Class E 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 day is not a Business
Day, the next succeeding Business Day, commencing September 15, 2004.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Class A-1 Final Scheduled
Distribution Date and the Redemption Date, if any, pursuant to Section 10.01
of the Indenture. Notwithstanding the foregoing, the entire unpaid principal
amount of the Notes shall be due and payable on the date on which an Event of
Default shall have occurred and be continuing and the Indenture Trustee or the
Noteholders evidencing not less than a majority of the Outstanding Amount of
the Controlling Class 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
Exh. A-1-6
payable shall be payable only upon presentation and surrender of this Note and
shall specify the place where this Note may be presented and surrendered for
payment.
The Issuer shall pay interest on overdue installments of interest at
the Class A-1 Rate to the extent lawful.
As provided in Section 10.01 of the Indenture, the Outstanding Notes
may be redeemed in whole, but not in part, at the option of the Servicer or,
under certain circumstances, a Certificateholder evidencing 100% of the
percentage interests in the Certificates on any Distribution Date on or after
the date on which the Pool Balance is less than or equal to 10% of the Initial
Pool Balance.
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 Note Registrar 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 subject to certain exceptions set
forth in the Indenture.
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, the Note Registrar,
the Paying Agent or the Owner Trustee in their individual capacities, (ii) any
owner or holder of a beneficial interest in the Issuer, including the Seller
or (iii) any partner, owner, beneficiary, agent, officer, director or employee
of the Indenture Trustee, the Note Registrar, the Paying Agent or the Owner
Trustee in their individual capacities, any holder of a beneficial interest in
the Owner Trustee, the Note Registrar, the Paying Agent or the Indenture
Trustee or of any successor or assign of the Indenture Trustee, the Note
Registrar, the Paying Agent or the Owner Trustee in their individual
capacities, except as any such Person may have expressly agreed (it being
understood that the Indenture Trustee, the Note Registrar, the Paying Agent
and the Owner Trustee have no such obligations in their individual capacity).
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 prior to the end of the period that is one year and one day after there
has been paid in full all debt issued by any securitization
Exh. A-1-7
vehicle in respect of which the Depositor holds any interest, they will not
institute against the Depositor or the Issuer, or join in, or assist or
encourage others to institute, any institution against the Depositor 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.
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 Note Registrar, the Paying Agent
and any agent of the Issuer or the Indenture Trustee may treat the Person in
whose name this Note is registered (as of the day of determination or as of
such other date as may be specified in the Indenture) as the owner hereof 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 this Note be
overdue, and none of the Issuer, the Indenture Trustee, the Note Registrar,
the Paying Agent 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 Holders of Notes representing a
majority of the Outstanding Amount of all Notes at the time Outstanding. The
Indenture also contains provisions permitting Holders of Notes representing
specified percentages of the Outstanding Amount of the Notes or of the
Controlling Class, 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 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.
Exh. A-1-8
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 Wilmington Trust Company in its
individual capacity, ▇▇▇▇▇ Fargo Bank, National Association in its individual
capacity, any owner of a beneficial interest in the Issuer, the Seller, the
Depositor, the Servicer, 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.
Exh. A-1-9
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 whatsoever. 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.
Exh. ▇-▇-▇▇
▇▇▇▇▇▇▇ ▇-▇
[FORM OF CLASS A-2 NOTE]
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY ("DTC"), A NEW YORK CORPORATION, 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.
BY ITS ACCEPTANCE OF THIS NOTE, THE HOLDER OF THIS NOTE AND ANY
SUBSEQUENT TRANSFEREE IS DEEMED TO REPRESENT AND WARRANT TO THE ISSUER AND TO
THE INDENTURE TRUSTEE THAT (i) IT IS NOT AND IS NOT ACTING ON BEHALF OF OR
INVESTING THE ASSETS OF ANY (A) EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION
3(3) OF ERISA) THAT IS SUBJECT TO TITLE I OF ERISA OR SIMILAR LAW, (B) PLAN
(AS DEFINED IN SECTION 4975(E)(1) OF THE CODE) THAT IS SUBJECT TO SECTION 4975
OF THE CODE OR SIMILAR LAW, INCLUDING INDIVIDUAL RETIREMENT ACCOUNTS OR ▇▇▇▇▇
PLANS, OR (C) ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF
A PLAN'S INVESTMENT IN SUCH ENTITY, INCLUDING, WITHOUT LIMITATION, AS
APPLICABLE, AN INSURANCE COMPANY GENERAL ACCOUNT OR (ii) ITS ACQUISITION AND
HOLDING OF THE NOTE EITHER SATISFIES ALL REQUIREMENTS FOR EXEMPTIVE RELIEF
PURSUANT TO A DEPARTMENT OF LABOR PROHIBITED TRANSACTION EXEMPTION OR OTHER
APPLICABLE EXEMPTION, OR WILL NOT RESULT IN A NON-EXEMPT VIOLATION OF SIMILAR
LAW. ANY ATTEMPTED OR PURPORTED TRANSFER OF A NOTE WITH RESPECT TO WHICH
NEITHER OF THE FOREGOING REPRESENTATIONS IS TRUE SHALL BE VOID AB INITIO.
THIS NOTE DOES NOT REPRESENT DEPOSITS OR OBLIGATIONS OF OR AN
INTEREST IN ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL II INC., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ASSET FUNDING
INC. OR ANY OF THEIR AFFILIATES.
Exh. A-2-1
REGISTERED $__________(1)
No. R-___ CUSIP NO. 61747R AP 5
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AUTO LOAN TRUST 2004-HB2
2.40% ASSET BACKED NOTE, CLASS A-2
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AUTO LOAN TRUST 2004-HB2, a statutory 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 [INSERT
INITIAL PRINCIPAL AMOUNT OF NOTE] DOLLARS, payable from time to time on each
Distribution Date, from the Principal Distribution Account, in an amount, if
any, of the Class A Principal Distributable Amount payable in respect of
principal on the Class A-2 Notes pursuant to Section 3.01 of the Indenture
dated as of June 30, 2004 (the "Indenture"), among the Issuer and ▇▇▇▇▇ Fargo
Bank, National Association, a national banking association, 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 July
16, 2007 (the "Class A-2 Final Scheduled Distribution Date") and the
Redemption Date, if any, pursuant to Section 10.01 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 the last sentence of Section 3.01 of the
Indenture. Interest on this Note will accrue for each Distribution Date from
and including the 15th day of the preceding calendar month (or, in the case of
the first Distribution Date, from the Closing Date) to and including the 14th
day of the calendar month in which such Distribution Date occurs. 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.
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.
-------------
(1) Denominations of $1,000 and integral multiples of $1,000 in excess
thereof.
Exh. A-2-2
Unless the certificate of authentication hereon has been executed by
the Note Registrar 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.
Exh. A-2-3
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: August 30, 2004 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AUTO LOAN
TRUST 2004-HB2
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Owner Trustee under the Trust Agreement
By:
-------------------------------
Authorized Signatory
Exh. A-2-4
CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: August 30, 2004 ▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Note Registrar
By:
-------------------------------
Authorized Signatory
Exh. A-2-5
REVERSE OF CLASS A-2 NOTE
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its 2.40% 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, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes, the Class B Notes, the Class C Notes, the Class D Notes and
the Class E 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 only after the
principal on the Class A-1 Notes is paid in full with respect to such
Distribution Date. "Distribution Date" means the 15th day of each month, or,
if any such day is not a Business Day, the next succeeding Business Day,
commencing September 15, 2004. 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 of the Indenture. Notwithstanding the foregoing, the entire
unpaid principal amount of the Notes shall be due and payable on the date on
which an Event of Default shall have occurred and be continuing and the
Indenture Trustee or the Noteholders evidencing not less than a majority of
the Outstanding Amount of the Controlling Class 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-2 Notes shall be made pro
rata to the Class A-2 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
Exh. A-2-6
payable shall be payable only upon presentation and surrender of this Note and
shall specify the place where this Note may be presented and surrendered for
payment.
The Issuer shall pay interest on overdue installments of interest at
the Class A-2 Rate to the extent lawful.
As provided in Section 10.01 of the Indenture, the Outstanding Notes
may be redeemed in whole, but not in part, at the option of the Servicer or,
under certain circumstances, a Certificateholder evidencing 100% of the
percentage interests in the Certificates on any Distribution Date on or after
the date on which the Pool Balance is less than or equal to 10% of the Initial
Pool Balance.
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 Note Registrar 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 subject to certain exceptions set
forth in the Indenture.
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, the Note Registrar,
the Paying Agent or the Owner Trustee in their individual capacities, (ii) any
owner or holder of a beneficial interest in the Issuer, including the Seller
or (iii) any partner, owner, beneficiary, agent, officer, director or employee
of the Indenture Trustee, the Note Registrar, the Paying Agent or the Owner
Trustee in their individual capacities, any holder of a beneficial interest in
the Owner Trustee, the Note Registrar, the Paying Agent or the Indenture
Trustee or of any successor or assign of the Indenture Trustee, the Note
Registrar, the Paying Agent or the Owner Trustee in their individual
capacities, except as any such Person may have expressly agreed (it being
understood that the Indenture Trustee, the Note Registrar, the Paying Agent
and the Owner Trustee have no such obligations in their individual capacity).
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 prior to the end of the period that is one year and one day after there
has been paid in full all debt issued by any securitization
Exh. A-2-7
vehicle in respect of which the Depositor holds any interest, they will not
institute against the Depositor or the Issuer, or join in, or assist or
encourage others to institute, any institution against the Depositor 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.
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 Note Registrar, the Paying Agent
and any agent of the Issuer or the Indenture Trustee may treat the Person in
whose name this Note is registered (as of the day of determination or as of
such other date as may be specified in the Indenture) as the owner hereof 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 this Note be
overdue, and none of the Issuer, the Indenture Trustee, the Note Registrar,
the Paying Agent 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 Holders of Notes representing a
majority of the Outstanding Amount of all Notes at the time Outstanding. The
Indenture also contains provisions permitting Holders of Notes representing
specified percentages of the Outstanding Amount of the Notes or of the
Controlling Class, 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 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.
Exh. A-2-8
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 Wilmington Trust Company in its
individual capacity, ▇▇▇▇▇ Fargo Bank, National Association in its individual
capacity, any owner of a beneficial interest in the Issuer, the Seller, the
Depositor, the Servicer, 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.
Exh. A-2-9
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 whatsoever. 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.
Exh. ▇-▇-▇▇
▇▇▇▇▇▇▇ ▇-▇
[FORM OF CLASS A-3 NOTE]
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY ("DTC"), A NEW YORK CORPORATION, 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.
BY ITS ACCEPTANCE OF THIS NOTE, THE HOLDER OF THIS NOTE AND ANY
SUBSEQUENT TRANSFEREE IS DEEMED TO REPRESENT AND WARRANT TO THE ISSUER AND TO
THE INDENTURE TRUSTEE THAT (i) IT IS NOT AND IS NOT ACTING ON BEHALF OF OR
INVESTING THE ASSETS OF ANY (A) EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION
3(3) OF ERISA) THAT IS SUBJECT TO TITLE I OF ERISA OR SIMILAR LAW, (B) PLAN
(AS DEFINED IN SECTION 4975(E)(1) OF THE CODE) THAT IS SUBJECT TO SECTION 4975
OF THE CODE OR SIMILAR LAW, INCLUDING INDIVIDUAL RETIREMENT ACCOUNTS OR ▇▇▇▇▇
PLANS, OR (C) ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF
A PLAN'S INVESTMENT IN SUCH ENTITY, INCLUDING, WITHOUT LIMITATION, AS
APPLICABLE, AN INSURANCE COMPANY GENERAL ACCOUNT OR (ii) ITS ACQUISITION AND
HOLDING OF THE NOTE EITHER SATISFIES ALL REQUIREMENTS FOR EXEMPTIVE RELIEF
PURSUANT TO A DEPARTMENT OF LABOR PROHIBITED TRANSACTION EXEMPTION OR OTHER
APPLICABLE EXEMPTION, OR WILL NOT RESULT IN A NON-EXEMPT VIOLATION OF SIMILAR
LAW. ANY ATTEMPTED OR PURPORTED TRANSFER OF A NOTE WITH RESPECT TO WHICH
NEITHER OF THE FOREGOING REPRESENTATIONS IS TRUE SHALL BE VOID AB INITIO.
THIS NOTE DOES NOT REPRESENT DEPOSITS OR OBLIGATIONS OF OR AN
INTEREST IN ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL II INC., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ASSET FUNDING
INC. OR ANY OF THEIR AFFILIATES.
Exh. A-3-1
REGISTERED $__________(1)
No. R-___ CUSIP NO. 61747R AQ 3
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AUTO LOAN TRUST 2004-HB2
2.94% ASSET BACKED NOTE, CLASS A-3
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AUTO LOAN TRUST 2004-HB2, a statutory 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 [INSERT
INITIAL PRINCIPAL AMOUNT OF NOTE] DOLLARS, payable from time to time on each
Distribution Date, from the Principal Distribution Account, in an amount, if
any, of the Class A Principal Distributable Amount payable in respect of
principal on the Class A-3 Notes pursuant to Section 3.01 of the Indenture
dated as of June 30, 2004 (the "Indenture"), among the Issuer and ▇▇▇▇▇ Fargo
Bank, National Association, a national banking association, 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 March
16, 2009 (the "Class A-3 Final Scheduled Distribution Date") and the
Redemption Date, if any, pursuant to Section 10.01 of the Indenture. No
payments of principal of the Class A-3 Notes shall be made until the Class A-1
Notes and the Class A-2 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 the last sentence of Section 3.01 of the
Indenture. Interest on this Note will accrue for each Distribution Date from
and including the 15th day of the preceding calendar month (or, in the case of
the first Distribution Date, from the Closing Date) to and including the 14th
day of the calendar month in which such Distribution Date occurs. 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.
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.
--------------
(1) Denominations of $1,000 and integral multiples of $1,000 in excess
thereof.
Exh. A-3-2
Unless the certificate of authentication hereon has been executed by
the Note Registrar 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.
Exh. A-3-3
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: August 30, 2004 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AUTO LOAN
TRUST 2004-HB2
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Owner Trustee under the Trust Agreement
By:
-------------------------------
Authorized Signatory
Exh. A-3-4
CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: August 30, 2004 ▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Note Registrar
By:
-------------------------------
Authorized Signatory
Exh. A-3-5
REVERSE OF CLASS A-3 NOTE
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its 2.94% Asset Backed Notes, Class A-3 (herein called the
"Class A-3 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-3 Notes are subject to all
terms of the Indenture.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes, the Class B Notes, the Class C Notes, the Class D Notes and
the Class E 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-3 Notes will be payable on each
Distribution Date in an amount described on the face hereof only after the
principal on the Class A-1 Notes and the Class A-2 Notes are paid in full with
respect to such Distribution Date. "Distribution Date" means the 15th day of
each month, or, if any such day is not a Business Day, the next succeeding
Business Day, commencing September 15, 2004. As described above, the entire
unpaid principal amount of this Note shall be due and payable on the earlier
of the Class A-3 Final Scheduled Distribution Date and the Redemption Date, if
any, pursuant to Section 10.01 of the Indenture. Notwithstanding the
foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which an Event of Default shall have occurred and be
continuing and the Indenture Trustee or the Noteholders evidencing not less
than a majority of the Outstanding Amount of the Controlling Class 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-3 Notes
shall be made pro rata to the Class A-3 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
Exh. A-3-6
payable shall be payable only upon presentation and surrender of this Note and
shall specify the place where this Note may be presented and surrendered for
payment.
The Issuer shall pay interest on overdue installments of interest at
the Class A-3 Rate to the extent lawful.
As provided in Section 10.01 of the Indenture, the Outstanding Notes
may be redeemed in whole, but not in part, at the option of the Servicer or,
under certain circumstances, a Certificateholder evidencing 100% of the
percentage interests in the Certificates on any Distribution Date on or after
the date on which the Pool Balance is less than or equal to 10% of the Initial
Pool Balance.
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 Note Registrar 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 subject to certain exceptions set
forth in the Indenture.
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, the Note Registrar,
the Paying Agent or the Owner Trustee in their individual capacities, (ii) any
owner or holder of a beneficial interest in the Issuer, including the Seller
or (iii) any partner, owner, beneficiary, agent, officer, director or employee
of the Indenture Trustee, the Note Registrar, the Paying Agent or the Owner
Trustee in their individual capacities, any holder of a beneficial interest in
the Owner Trustee, the Note Registrar, the Paying Agent or the Indenture
Trustee or of any successor or assign of the Indenture Trustee, the Note
Registrar, the Paying Agent or the Owner Trustee in their individual
capacities, except as any such Person may have expressly agreed (it being
understood that the Indenture Trustee, the Note Registrar, the Paying Agent
and the Owner Trustee have no such obligations in their individual capacity).
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 prior to the end of the period that is one year and one day after there
has been paid in full all debt issued by any securitization
Exh. A-3-7
vehicle in respect of which the Depositor holds any interest, they will not
institute against the Depositor or the Issuer, or join in, or assist or
encourage others to institute, any institution against the Depositor 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.
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 Note Registrar, the Paying Agent
and any agent of the Issuer or the Indenture Trustee may treat the Person in
whose name this Note is registered (as of the day of determination or as of
such other date as may be specified in the Indenture) as the owner hereof 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 this Note be
overdue, and none of the Issuer, the Indenture Trustee, the Note Registrar,
the Paying Agent 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 Holders of Notes representing a
majority of the Outstanding Amount of all Notes at the time Outstanding. The
Indenture also contains provisions permitting Holders of Notes representing
specified percentages of the Outstanding Amount of the Notes or of the
Controlling Class, 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 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.
Exh. A-3-8
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 Wilmington Trust Company in its
individual capacity, ▇▇▇▇▇ Fargo Bank, National Association in its individual
capacity, any owner of a beneficial interest in the Issuer, the Seller, the
Depositor, the Servicer, 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.
Exh. A-3-9
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 whatsoever. 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.
Exh. ▇-▇-▇▇
▇▇▇▇▇▇▇ ▇-▇
[FORM OF CLASS A-4 NOTE]
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY ("DTC"), A NEW YORK CORPORATION, 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.
BY ITS ACCEPTANCE OF THIS NOTE, THE HOLDER OF THIS NOTE AND ANY
SUBSEQUENT TRANSFEREE IS DEEMED TO REPRESENT AND WARRANT TO THE ISSUER AND TO
THE INDENTURE TRUSTEE THAT (i) IT IS NOT AND IS NOT ACTING ON BEHALF OF OR
INVESTING THE ASSETS OF ANY (A) EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION
3(3) OF ERISA) THAT IS SUBJECT TO TITLE I OF ERISA OR SIMILAR LAW, (B) PLAN
(AS DEFINED IN SECTION 4975(E)(1) OF THE CODE) THAT IS SUBJECT TO SECTION 4975
OF THE CODE OR SIMILAR LAW, INCLUDING INDIVIDUAL RETIREMENT ACCOUNTS OR ▇▇▇▇▇
PLANS, OR (C) ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF
A PLAN'S INVESTMENT IN SUCH ENTITY, INCLUDING, WITHOUT LIMITATION, AS
APPLICABLE, AN INSURANCE COMPANY GENERAL ACCOUNT OR (ii) ITS ACQUISITION AND
HOLDING OF THE NOTE EITHER SATISFIES ALL REQUIREMENTS FOR EXEMPTIVE RELIEF
PURSUANT TO A DEPARTMENT OF LABOR PROHIBITED TRANSACTION EXEMPTION OR OTHER
APPLICABLE EXEMPTION, OR WILL NOT RESULT IN A NON-EXEMPT VIOLATION OF SIMILAR
LAW. ANY ATTEMPTED OR PURPORTED TRANSFER OF A NOTE WITH RESPECT TO WHICH
NEITHER OF THE FOREGOING REPRESENTATIONS IS TRUE SHALL BE VOID AB INITIO.
THIS NOTE DOES NOT REPRESENT DEPOSITS OR OBLIGATIONS OF OR AN
INTEREST IN ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL II INC., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ASSET FUNDING
INC. OR ANY OF THEIR AFFILIATES.
Exh. A-4-1
REGISTERED $__________(1)
No. R-___ CUSIP NO. 61747R AR 1
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AUTO LOAN TRUST 2004-HB2
3.46% ASSET BACKED NOTE, CLASS A-4
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AUTO LOAN TRUST 2004-HB2, a statutory 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 [INSERT
INITIAL PRINCIPAL AMOUNT OF NOTE] DOLLARS, payable from time to time on each
Distribution Date, from the Principal Distribution Account, in an amount, if
any, of the Class A Principal Distributable Amount payable in respect of
principal on the Class A-4 Notes pursuant to Section 3.01 of the Indenture
dated as of June 30, 2004 (the "Indenture"), among the Issuer and ▇▇▇▇▇ Fargo
Bank, National Association, a national banking association, 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 March
15, 2012 (the "Class A-4 Final Scheduled Distribution Date") and the
Redemption Date, if any, pursuant to Section 10.01 of the Indenture. No
payments of principal of the Class A-4 Notes shall be made until the Class A-1
Notes, the Class A-2 Notes and the Class A-3 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 the last sentence of Section 3.01 of the
Indenture. Interest on this Note will accrue for each Distribution Date from
and including the 15th day of the preceding calendar month (or, in the case of
the first Distribution Date, from the Closing Date) to and including the 14th
day of the calendar month in which such Distribution Date occurs. 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.
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.
-----------------
(1) Denominations of $1,000 and integral multiples of $1,000 in excess
thereof.
Exh. A-4-2
Unless the certificate of authentication hereon has been executed by
the Note Registrar 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.
Exh. A-4-3
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: August 30, 2004 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AUTO LOAN
TRUST 2004-HB2
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Owner Trustee under the Trust Agreement
By:
-------------------------------
Authorized Signatory
Exh. A-4-4
CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: August 30, 2004 ▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Note Registrar
By:
-------------------------------
Authorized Signatory
Exh. A-4-5
REVERSE OF CLASS A-4 NOTE
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its 3.46% Asset Backed Notes, Class A-4 (herein called the
"Class A-4 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-4 Notes are subject to all
terms of the Indenture.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes, the Class B Notes, the Class C Notes, the Class D Notes and
the Class E 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-4 Notes will be payable on each
Distribution Date in an amount described on the face hereof only after the
principal on the Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes
are paid in full with respect to such Distribution Date. "Distribution Date"
means the 15th day of each month, or, if any such day is not a Business Day,
the next succeeding Business Day, commencing September 15, 2004. As described
above, the entire unpaid principal amount of this Note shall be due and
payable on the earlier of the Class A-4 Final Scheduled Distribution Date and
the Redemption Date, if any, pursuant to Section 10.01 of the Indenture.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable on the date on which an Event of Default shall have
occurred and be continuing and the Indenture Trustee or the Noteholders
evidencing not less than a majority of the Outstanding Amount of the
Controlling Class 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-4 Notes shall be made pro rata to the Class A-4 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
Exh. A-4-6
payable shall be payable only upon presentation and surrender of this Note and
shall specify the place where this Note may be presented and surrendered for
payment.
The Issuer shall pay interest on overdue installments of interest at
the Class A-4 Rate to the extent lawful.
As provided in Section 10.01 of the Indenture, the Outstanding Notes
may be redeemed in whole, but not in part, at the option of the Servicer or,
under certain circumstances, a Certificateholder evidencing 100% of the
percentage interests in the Certificates on any Distribution Date on or after
the date on which the Pool Balance is less than or equal to 10% of the Initial
Pool Balance.
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 Note Registrar 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 subject to certain exceptions set
forth in the Indenture.
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, the Note Registrar,
the Paying Agent or the Owner Trustee in their individual capacities, (ii) any
owner or holder of a beneficial interest in the Issuer, including the Seller
or (iii) any partner, owner, beneficiary, agent, officer, director or employee
of the Indenture Trustee, the Note Registrar, the Paying Agent or the Owner
Trustee in their individual capacities, any holder of a beneficial interest in
the Owner Trustee, the Note Registrar, the Paying Agent or the Indenture
Trustee or of any successor or assign of the Indenture Trustee, the Note
Registrar, the Paying Agent or the Owner Trustee in their individual
capacities, except as any such Person may have expressly agreed (it being
understood that the Indenture Trustee, the Note Registrar, the Paying Agent
and the Owner Trustee have no such obligations in their individual capacity).
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 prior to the end of the period that is one year and one day after there
has been paid in full all debt issued by any securitization
Exh. A-4-7
vehicle in respect of which the Depositor holds any interest, they will not
institute against the Depositor or the Issuer, or join in, or assist or
encourage others to institute, any institution against the Depositor 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.
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 Note Registrar, the Paying Agent
and any agent of the Issuer or the Indenture Trustee may treat the Person in
whose name this Note is registered (as of the day of determination or as of
such other date as may be specified in the Indenture) as the owner hereof 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 this Note be
overdue, and none of the Issuer, the Indenture Trustee, the Note Registrar,
the Paying Agent 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 Holders of Notes representing a
majority of the Outstanding Amount of all Notes at the time Outstanding. The
Indenture also contains provisions permitting Holders of Notes representing
specified percentages of the Outstanding Amount of the Notes or of the
Controlling Class, 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 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.
Exh. A-4-8
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 Wilmington Trust Company in its
individual capacity, ▇▇▇▇▇ Fargo Bank, National Association in its individual
capacity, any owner of a beneficial interest in the Issuer, the Seller, the
Depositor, the Servicer, 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.
Exh. A-4-9
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 whatsoever. 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.
Exh. A-4-10
EXHIBIT B
[FORM OF CLASS B NOTE]
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY ("DTC"), A NEW YORK CORPORATION, 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.
BY ITS ACCEPTANCE OF THIS NOTE, THE HOLDER OF THIS NOTE AND ANY
SUBSEQUENT TRANSFEREE IS DEEMED TO REPRESENT AND WARRANT TO THE ISSUER AND TO
THE INDENTURE TRUSTEE THAT (i) IT IS NOT AND IS NOT ACTING ON BEHALF OF OR
INVESTING THE ASSETS OF ANY (A) EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION
3(3) OF ERISA) THAT IS SUBJECT TO TITLE I OF ERISA OR SIMILAR LAW, (B) PLAN
(AS DEFINED IN SECTION 4975(E)(1) OF THE CODE) THAT IS SUBJECT TO SECTION 4975
OF THE CODE OR SIMILAR LAW, INCLUDING INDIVIDUAL RETIREMENT ACCOUNTS OR ▇▇▇▇▇
PLANS, OR (C) ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF
A PLAN'S INVESTMENT IN SUCH ENTITY, INCLUDING, WITHOUT LIMITATION, AS
APPLICABLE, AN INSURANCE COMPANY GENERAL ACCOUNT OR (ii) ITS ACQUISITION AND
HOLDING OF THE NOTE EITHER SATISFIES ALL REQUIREMENTS FOR EXEMPTIVE RELIEF
PURSUANT TO A DEPARTMENT OF LABOR PROHIBITED TRANSACTION EXEMPTION OR OTHER
APPLICABLE EXEMPTION, OR WILL NOT RESULT IN A NON-EXEMPT VIOLATION OF SIMILAR
LAW. ANY ATTEMPTED OR PURPORTED TRANSFER OF A NOTE WITH RESPECT TO WHICH
NEITHER OF THE FOREGOING REPRESENTATIONS IS TRUE SHALL BE VOID AB INITIO.
THIS NOTE DOES NOT REPRESENT DEPOSITS OR OBLIGATIONS OF OR AN
INTEREST IN ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL II INC., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ASSET FUNDING
INC. OR ANY OF THEIR AFFILIATES.
Exh. B-1
REGISTERED $__________(1)
No. R-___ CUSIP NO. 61747R AS 9
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AUTO LOAN TRUST 2004-HB2
3.37% ASSET BACKED NOTE, CLASS B
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AUTO LOAN TRUST 2004-HB2, a statutory 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 [INSERT
INITIAL PRINCIPAL AMOUNT OF NOTE] DOLLARS, payable from time to time on each
Distribution Date, from the Principal Distribution Account, in an amount, if
any, of the Class B Principal Distributable Amount payable in respect of
principal on the Class B Notes pursuant to Section 3.01 of the Indenture dated
as of June 30, 2004 (the "Indenture"), among the Issuer and ▇▇▇▇▇ Fargo Bank,
National Association, a national banking association, 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 March 15, 2012
(the "Class B Final Scheduled Distribution Date") and the Redemption Date, if
any, pursuant to Section 10.01 of the Indenture. The Class B Notes are
subordinated to the Class A Notes as and to the extent set forth in the
Indenture. 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 the last sentence of Section 3.01 of the
Indenture. Interest on this Note will accrue for each Distribution Date from
and including the 15th day of the preceding calendar month (or, in the case of
the first Distribution Date, from the Closing Date) to and including the 14th
day of the calendar month in which such Distribution Date occurs. 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.
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.
-------------------
(1) Denominations of $1,000 and integral multiples of $1,000 in excess
thereof.
Exh. B-2
Unless the certificate of authentication hereon has been executed by
the Note Registrar 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.
Exh. B-3
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: August 30, 2004 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AUTO LOAN
TRUST 2004-HB2
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Owner Trustee under the Trust Agreement
By:
-------------------------------
Authorized Signatory
Exh. B-4
CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: August 30, 2004 ▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Note Registrar
By:
-------------------------------
Authorized Signatory
Exh. B-5
REVERSE OF CLASS B NOTE
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its 3.37% Asset Backed Notes, Class B (herein called the "Class
B 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 B Notes are subject to all
terms of the Indenture.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes, the Class B Notes, the Class C Notes, the Class D Notes and
the Class E Notes (collectively, the "Notes") are and will be secured by the
collateral pledged as security therefor as provided in the Indenture. The
Class B Notes are subordinated in right of payment to the Class A Notes as and
to the extent provided in the Indenture.
Principal of the Class B Notes will be payable on each Distribution
Date in an amount described on the face hereof only after principal on the
Class A Notes has been paid in full with respect to such Distribution Date are
paid in full. "Distribution Date" means the 15th day of each month, or, if any
such day is not a Business Day, the next succeeding Business Day, commencing
September 15, 2004.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Class B Final Scheduled
Distribution Date and the Redemption Date, if any, pursuant to Section 10.01
of the Indenture. Notwithstanding the foregoing, the entire unpaid principal
amount of the Notes shall be due and payable on the date on which an Event of
Default shall have occurred and be continuing and the Indenture Trustee or the
Noteholders evidencing not less than a majority of the Outstanding Amount of
the Controlling Class 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 B Notes shall be made pro rata to the Class B
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
Exh. B-6
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 and shall specify the place where this
Note may be presented and surrendered for payment.
The Issuer shall pay interest on overdue installments of interest at
the Class B Rate to the extent lawful.
As provided in Section 10.01 of the Indenture, the Outstanding Notes
may be redeemed in whole, but not in part, at the option of the Servicer or,
under certain circumstances, a Certificateholder evidencing 100% of the
percentage interests in the Certificates on any Distribution Date on or after
the date on which the Pool Balance is less than or equal to 10% of the Initial
Pool Balance.
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 Note Registrar 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 subject to certain exceptions set
forth in the Indenture.
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, the Note Registrar,
the Paying Agent or the Owner Trustee in their individual capacities, (ii) any
owner or holder of a beneficial interest in the Issuer, including the Seller
or (iii) any partner, owner, beneficiary, agent, officer, director or employee
of the Indenture Trustee, the Note Registrar, the Paying Agent or the Owner
Trustee in their individual capacities, any holder of a beneficial interest in
the Owner Trustee, the Note Registrar, the Paying Agent or the Indenture
Trustee or of any successor or assign of the Indenture Trustee, the Note
Registrar, the Paying Agent or the Owner Trustee in their individual
capacities, except as any such Person may have expressly agreed (it being
understood that the Indenture Trustee, the Note Registrar, the Paying Agent
and the Owner Trustee have no such obligations in their individual capacity).
Exh. B-7
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 prior to the end of the period that is one year and one day after there
has been paid in full all debt issued by any securitization vehicle in respect
of which the Depositor holds any interest, they will not institute against the
Depositor or the Issuer, or join in, or assist or encourage others to
institute, any institution against the Depositor 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.
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 Note Registrar, the Paying Agent
and any agent of the Issuer or the Indenture Trustee may treat the Person in
whose name this Note is registered (as of the day of determination or as of
such other date as may be specified in the Indenture) as the owner hereof 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 this Note be
overdue, and none of the Issuer, the Indenture Trustee, the Note Registrar,
the Paying Agent 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 Holders of Notes representing a
majority of the Outstanding Amount of all Notes at the time Outstanding. The
Indenture also contains provisions permitting Holders of Notes representing
specified percentages of the Outstanding Amount of the Notes or of the
Controlling Class, 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 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.
Exh. B-8
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 Wilmington Trust Company in its
individual capacity, ▇▇▇▇▇ Fargo Bank, National Association in its individual
capacity, any owner of a beneficial interest in the Issuer, the Seller, the
Depositor, the Servicer, 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.
Exh. B-9
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 whatsoever. 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.
Exh. B-10
EXHIBIT C
[FORM OF CLASS C NOTE]
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY ("DTC"), A NEW YORK CORPORATION, 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.
BY ITS ACCEPTANCE OF THIS NOTE, THE HOLDER OF THIS NOTE AND ANY
SUBSEQUENT TRANSFEREE IS DEEMED TO REPRESENT AND WARRANT TO THE ISSUER AND TO
THE INDENTURE TRUSTEE THAT (i) IT IS NOT AND IS NOT ACTING ON BEHALF OF OR
INVESTING THE ASSETS OF ANY (A) EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION
3(3) OF ERISA) THAT IS SUBJECT TO TITLE I OF ERISA OR SIMILAR LAW, (B) PLAN
(AS DEFINED IN SECTION 4975(E)(1) OF THE CODE) THAT IS SUBJECT TO SECTION 4975
OF THE CODE OR SIMILAR LAW, INCLUDING INDIVIDUAL RETIREMENT ACCOUNTS OR ▇▇▇▇▇
PLANS, OR (C) ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF
A PLAN'S INVESTMENT IN SUCH ENTITY, INCLUDING, WITHOUT LIMITATION, AS
APPLICABLE, AN INSURANCE COMPANY GENERAL ACCOUNT OR (ii) ITS ACQUISITION AND
HOLDING OF THE NOTE EITHER SATISFIES ALL REQUIREMENTS FOR EXEMPTIVE RELIEF
PURSUANT TO A DEPARTMENT OF LABOR PROHIBITED TRANSACTION EXEMPTION OR OTHER
APPLICABLE EXEMPTION, OR WILL NOT RESULT IN A NON-EXEMPT VIOLATION OF SIMILAR
LAW. ANY ATTEMPTED OR PURPORTED TRANSFER OF A NOTE WITH RESPECT TO WHICH
NEITHER OF THE FOREGOING REPRESENTATIONS IS TRUE SHALL BE VOID AB INITIO.
THIS NOTE DOES NOT REPRESENT DEPOSITS OR OBLIGATIONS OF OR AN
INTEREST IN ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL II INC., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ASSET FUNDING
INC. OR ANY OF THEIR AFFILIATES.
Exh. C-1
REGISTERED $__________(1)
No. R-___ CUSIP NO. 61747R AT 7
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AUTO LOAN TRUST 2004-HB2
3.24% ASSET BACKED NOTE, CLASS C
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AUTO LOAN TRUST 2004-HB2, a statutory 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 [INSERT
INITIAL PRINCIPAL AMOUNT OF NOTE] DOLLARS, payable from time to time on each
Distribution Date, from the Principal Distribution Account, in an amount, if
any, of the Class C Principal Distributable Amount payable in respect of
principal on the Class C Notes pursuant to Section 3.01 of the Indenture dated
as of June 30, 2004 (the "Indenture"), among the Issuer and ▇▇▇▇▇ Fargo Bank,
National Association, a national banking association, 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 March 15, 2012
(the "Class C Final Scheduled Distribution Date") and the Redemption Date, if
any, pursuant to Section 10.01 of the Indenture. The Class C Notes are
subordinated to the Class A Notes and the Class B Notes as and to the extent
set forth in the Indenture. 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 the last sentence of Section 3.01 of the
Indenture. Interest on this Note will accrue for each Distribution Date from
and including the 15th day of the preceding calendar month (or, in the case of
the first Distribution Date, from the Closing Date) to and including the 14th
day of the calendar month in which such Distribution Date occurs. 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.
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.
-----------------
(1) Denominations of $1,000 and integral multiples of $1,000 in excess
thereof.
Exh. C-2
Unless the certificate of authentication hereon has been executed by
the Note Registrar 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.
Exh. C-3
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: August 30, 2004 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AUTO LOAN
TRUST 2004-HB2
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Owner Trustee under the Trust Agreement
By:
-------------------------------
Authorized Signatory
Exh. C-4
CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: August 30, 2004 ▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Note Registrar
By:
-------------------------------
Authorized Signatory
Exh. C-5
REVERSE OF CLASS C NOTE
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its 3.24% Asset Backed Notes, Class C (herein called the "Class
C 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 C Notes are subject to all
terms of the Indenture.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes, the Class B Notes, the Class C Notes, the Class D Notes and
the Class E Notes (collectively, the "Notes") are and will be secured by the
collateral pledged as security therefor as provided in the Indenture. The
Class C Notes are subordinated in right of payment to the Class A Notes and
the Class B Notes as and to the extent provided in the Indenture.
Principal of the Class C Notes will be payable on each Distribution
Date in an amount described on the face hereof only after the principal on the
Class A Notes and the Class B Notes has been paid in full for such
Distribution Date. "Distribution Date" means the 15th day of each month, or,
if any such day is not a Business Day, the next succeeding Business Day,
commencing September 15, 2004.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Class C Final Scheduled
Distribution Date and the Redemption Date, if any, pursuant to Section 10.01
of the Indenture. Notwithstanding the foregoing, the entire unpaid principal
amount of the Notes shall be due and payable on the date on which an Event of
Default shall have occurred and be continuing and the Indenture Trustee or the
Noteholders evidencing not less than a majority of the Outstanding Amount of
the Controlling Class 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 C Notes shall be made pro rata to the Class C
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
Exh. C-6
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 and shall specify the place where this
Note may be presented and surrendered for payment.
The Issuer shall pay interest on overdue installments of interest at
the Class C Rate to the extent lawful.
As provided in Section 10.01 of the Indenture, the Outstanding Notes
may be redeemed in whole, but not in part, at the option of the Servicer or,
under certain circumstances, a Certificateholder evidencing 100% of the
percentage interests in the Certificates on any Distribution Date on or after
the date on which the Pool Balance is less than or equal to 10% of the Initial
Pool Balance.
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 Note Registrar 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 subject to certain exceptions set
forth in the Indenture.
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, the Note Registrar,
the Paying Agent or the Owner Trustee in their individual capacities, (ii) any
owner or holder of a beneficial interest in the Issuer, including the Seller
or (iii) any partner, owner, beneficiary, agent, officer, director or employee
of the Indenture Trustee, the Note Registrar, the Paying Agent or the Owner
Trustee in their individual capacities, any holder of a beneficial interest in
the Owner Trustee, the Note Registrar, the Paying Agent or the Indenture
Trustee or of any successor or assign of the Indenture Trustee, the Note
Registrar, the Paying Agent or the Owner Trustee in their individual
capacities, except as any such Person may have expressly agreed (it being
understood that the Indenture Trustee, the Note Registrar, the Paying Agent
and the Owner Trustee have no such obligations in their individual capacity).
Exh. C-7
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 prior to the end of the period that is one year and one day after there
has been paid in full all debt issued by any securitization vehicle in respect
of which the Depositor holds any interest, they will not institute against the
Depositor or the Issuer, or join in, or assist or encourage others to
institute, any institution against the Depositor 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.
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 Note Registrar, the Paying Agent
and any agent of the Issuer or the Indenture Trustee may treat the Person in
whose name this Note is registered (as of the day of determination or as of
such other date as may be specified in the Indenture) as the owner hereof 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 this Note be
overdue, and none of the Issuer, the Indenture Trustee, the Note Registrar,
the Paying Agent 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 Holders of Notes representing a
majority of the Outstanding Amount of all Notes at the time Outstanding. The
Indenture also contains provisions permitting Holders of Notes representing
specified percentages of the Outstanding Amount of the Notes or of the
Controlling Class, 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 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.
Exh. C-8
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 Wilmington Trust Company in its
individual capacity, ▇▇▇▇▇ Fargo Bank, National Association in its individual
capacity, any owner of a beneficial interest in the Issuer, the Seller, the
Depositor, the Servicer, 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.
Exh. C-9
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 whatsoever. 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.
Exh. C-10
EXHIBIT D
[FORM OF CLASS D NOTE]
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY ("DTC"), A NEW YORK CORPORATION, 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.
BY ITS ACCEPTANCE OF THIS NOTE, THE HOLDER OF THIS NOTE AND ANY
SUBSEQUENT TRANSFEREE IS DEEMED TO REPRESENT AND WARRANT TO THE ISSUER AND TO
THE INDENTURE TRUSTEE THAT (i) IT IS NOT AND IS NOT ACTING ON BEHALF OF OR
INVESTING THE ASSETS OF ANY (A) EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION
3(3) OF ERISA) THAT IS SUBJECT TO TITLE I OF ERISA OR SIMILAR LAW, (B) PLAN
(AS DEFINED IN SECTION 4975(E)(1) OF THE CODE) THAT IS SUBJECT TO SECTION 4975
OF THE CODE OR SIMILAR LAW, INCLUDING INDIVIDUAL RETIREMENT ACCOUNTS OR ▇▇▇▇▇
PLANS, OR (C) ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF
A PLAN'S INVESTMENT IN SUCH ENTITY, INCLUDING, WITHOUT LIMITATION, AS
APPLICABLE, AN INSURANCE COMPANY GENERAL ACCOUNT OR (ii) ITS ACQUISITION AND
HOLDING OF THE NOTE EITHER SATISFIES ALL REQUIREMENTS FOR EXEMPTIVE RELIEF
PURSUANT TO A DEPARTMENT OF LABOR PROHIBITED TRANSACTION EXEMPTION OR OTHER
APPLICABLE EXEMPTION, OR WILL NOT RESULT IN A NON-EXEMPT VIOLATION OF SIMILAR
LAW. ANY ATTEMPTED OR PURPORTED TRANSFER OF A NOTE WITH RESPECT TO WHICH
NEITHER OF THE FOREGOING REPRESENTATIONS IS TRUE SHALL BE VOID AB INITIO.
THIS NOTE DOES NOT REPRESENT DEPOSITS OR OBLIGATIONS OF OR AN
INTEREST IN ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL II INC., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ASSET FUNDING
INC. OR ANY OF THEIR AFFILIATES.
Exh. D-1
REGISTERED $__________(1)
No. R-___ CUSIP NO. 61747R AU 4
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AUTO LOAN TRUST 2004-HB2
3.82% ASSET BACKED NOTE, CLASS D
MORGAN ▇▇▇▇▇▇▇ AUTO LOAN TRUST 2004-HB2, a statutory 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 [INSERT
INITIAL PRINCIPAL AMOUNT OF NOTE] DOLLARS, payable from time to time on each
Distribution Date, from the Principal Distribution Account, in an amount, if
any, of the Class D Principal Distributable Amount payable in respect of
principal on the Class D Notes pursuant to Section 3.01 of the Indenture dated
as of June 30, 2004 (the "Indenture"), among the Issuer and ▇▇▇▇▇ Fargo Bank,
National Association, a national banking association, 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 March 15, 2012
(the "Class D Final Scheduled Distribution Date") and the Redemption Date, if
any, pursuant to Section 10.01 of the Indenture. The Class D Notes are
subordinated to the Class A Notes, the Class B Notes and the Class C Notes as
and to the extent set forth in the Indenture. 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 the last sentence of Section 3.01 of the
Indenture. Interest on this Note will accrue for each Distribution Date from
and including the 15th day of the preceding calendar month (or, in the case of
the first Distribution Date, from the Closing Date) to and including the 14th
day of the calendar month in which such Distribution Date occurs. 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.
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.
-----------------
(1) Denominations of $1,000 and integral multiples of $1,000 in excess
thereof.
▇▇▇. ▇-▇
Unless the certificate of authentication hereon has been executed by
the Note Registrar 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.
Exh. D-3
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: August 30, 2004 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AUTO LOAN
TRUST 2004-HB2
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Owner Trustee under the Trust Agreement
By:
-------------------------------
Authorized Signatory
Exh. D-4
CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: August 30, 2004 ▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Note Registrar
By:
-------------------------------
Authorized Signatory
Exh. D-5
REVERSE OF CLASS D NOTE
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its 3.82% Asset Backed Notes, Class D (herein called the "Class
D 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 D Notes are subject to all
terms of the Indenture.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes, the Class B Notes, the Class C Notes, the Class D Notes and
the Class E Notes (collectively, the "Notes") are and will be secured by the
collateral pledged as security therefor as provided in the Indenture. The
Class D Notes are subordinated in right of payment to the Class A Notes, the
Class B Notes and the Class C Notes as and to the extent provided in the
Indenture.
Principal of the Class D Notes will be payable on each Distribution
Date in an amount described on the face hereof only after the principal on the
Class A Notes, the Class B Notes and the Class C Notes has been paid in full
for such Distribution Date. "Distribution Date" means the 15th day of each
month, or, if any such day is not a Business Day, the next succeeding Business
Day, commencing September 15, 2004.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Class D Final Scheduled
Distribution Date and the Redemption Date, if any, pursuant to Section 10.01
of the Indenture. Notwithstanding the foregoing, the entire unpaid principal
amount of the Notes shall be due and payable on the date on which an Event of
Default shall have occurred and be continuing and the Indenture Trustee or the
Noteholders evidencing not less than a majority of the Outstanding Amount of
the Controlling Class 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 D Notes shall be made pro rata to the Class D
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
Exh. D-6
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 and shall specify the place
where this Note may be presented and surrendered for payment.
The Issuer shall pay interest on overdue installments of interest at
the Class D Rate to the extent lawful.
As provided in Section 10.01 of the Indenture, the Outstanding Notes
may be redeemed in whole, but not in part, at the option of the Servicer or,
under certain circumstances, a Certificateholder evidencing 100% of the
percentage interests in the Certificates on any Distribution Date on or after
the date on which the Pool Balance is less than or equal to 10% of the Initial
Pool Balance.
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 Note Registrar 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 subject to certain exceptions set
forth in the Indenture.
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, the Note Registrar,
the Paying Agent or the Owner Trustee in their individual capacities, (ii) any
owner or holder of a beneficial interest in the Issuer, including the Seller
or (iii) any partner, owner, beneficiary, agent, officer, director or employee
of the Indenture Trustee, the Note Registrar, the Paying Agent or the Owner
Trustee in their individual capacities, any holder of a beneficial interest in
the Owner Trustee, the Note Registrar, the Paying Agent or the Indenture
Trustee or of any successor or assign of the Indenture Trustee, the Note
Registrar, the Paying Agent or the Owner Trustee in their individual
capacities, except as any such Person may have expressly agreed (it being
understood that the Indenture Trustee, the Note Registrar, the Paying Agent
and the Owner Trustee have no such obligations in their individual capacity).
Exh. D-7
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 prior to the end of the period that is one year and one day after there
has been paid in full all debt issued by any securitization vehicle in respect
of which the Depositor holds any interest, they will not institute against the
Depositor or the Issuer, or join in, or assist or encourage others to
institute, any institution against the Depositor 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.
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 Note Registrar, the Paying Agent
and any agent of the Issuer or the Indenture Trustee may treat the Person in
whose name this Note is registered (as of the day of determination or as of
such other date as may be specified in the Indenture) as the owner hereof 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 this Note be
overdue, and none of the Issuer, the Indenture Trustee, the Note Registrar,
the Paying Agent 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 Holders of Notes representing a
majority of the Outstanding Amount of all Notes at the time Outstanding. The
Indenture also contains provisions permitting Holders of Notes representing
specified percentages of the Outstanding Amount of the Notes or of the
Controlling Class, 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 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.
Exh. D-8
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 Wilmington Trust Company in its
individual capacity, ▇▇▇▇▇ Fargo Bank, National Association in its individual
capacity, any owner of a beneficial interest in the Issuer, the Seller, the
Depositor, the Servicer, 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.
Exh. D-9
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 whatsoever. 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.
Exh. D-10
EXHIBIT E
[FORM OF CLASS E NOTE]
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR 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.
THIS CLASS E NOTE ("CLASS E NOTE") HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (the "SECURITIES
ACT"), OR THE APPLICABLE SECURITIES LAWS OF ANY STATE. ACCORDINGLY, TRANSFER
OF THIS CLASS E NOTE IS SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN SECTION
2.04 OF THE INDENTURE. BY ITS ACCEPTANCE OF THIS CLASS E NOTE, THE HOLDER OF
THIS CLASS E NOTE IS DEEMED TO REPRESENT TO THE DEPOSITOR AND THE INDENTURE
TRUSTEE THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" (A "QIB"), AS SUCH TERM
IS DEFINED IN RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") AND IS
ACQUIRING THIS CLASS E NOTE FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF
OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE QIBS).
NO SALE, PLEDGE OR OTHER TRANSFER OF A NOTE SHALL BE MADE UNLESS
SUCH SALE, PLEDGE OR OTHER TRANSFER IS (I)(A) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (B) FOR SO LONG AS THE NOTES
ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT TO A
PERSON THE TRANSFEROR REASONABLY BELIEVES AFTER DUE INQUIRY IS A QIB THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB TO WHOM NOTICE IS
GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR (C)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, AND (II) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES AND ANY OTHER RELEVANT JURISDICTION. EACH
TRANSFEREE OF A BENEFICIAL INTEREST IN THIS NOTE SHALL BE DEEMED TO MAKE THE
FOREGOING REPRESENTATIONS. THE DEPOSITOR AND THE INDENTURE TRUSTEE MAY REQUIRE
AN OPINION OF COUNSEL TO BE DELIVERED TO IT IN CONNECTION WITH ANY TRANSFER OF
THE NOTES PURSUANT TO CLAUSES (I)(A) OR (C) ABOVE. EACH TRANSFEREE OF A
BENEFICIAL INTEREST IN THIS NOTE SHALL BE DEEMED TO MAKE THE FOREGOING
REPRESENTATIONS.
Exh. E-1
BY ITS ACCEPTANCE OF THIS CLASS E NOTE, THE HOLDER AND ANY
SUBSEQUENT TRANSFEREE IS DEEMED TO REPRESENT AND WARRANT THAT IT IS NOT AND IS
NOT ACTING ON BEHALF OF OR INVESTING THE ASSETS OF ANY (A) EMPLOYEE BENEFIT
PLAN (AS DEFINED IN SECTION 3(3) OF ERISA) THAT IS SUBJECT TO TITLE I OF ERISA
OR SIMILAR LAW, (B) PLAN (AS DEFINED IN SECTION 4975(E)(1) OF THE CODE) THAT
IS SUBJECT TO SECTION 4975 OF THE CODE OR SIMILAR LAW, INCLUDING INDIVIDUAL
RETIREMENT ACCOUNTS OR ▇▇▇▇▇ PLANS, OR (C) ENTITY WHOSE UNDERLYING ASSETS
INCLUDE PLAN ASSETS BY REASON OF A PLAN'S INVESTMENT IN SUCH ENTITY,
INCLUDING, WITHOUT LIMITATION, AS APPLICABLE, AN INSURANCE COMPANY GENERAL
ACCOUNT.
THE PROVIDING OF INFORMATION RELATING TO THE HUNTINGTON NATIONAL
BANK AND THE RECEIVABLES TO PERSONS INVESTING IN THIS CLASS E NOTE IS LIMITED
BY AND IS SUBJECT TO THE TERMS OF SECTION 9.01(b)(III) OF THE PURCHASE AND
SERVICING AGREEMENT, DATED AS OF May 31, 2004, BETWEEN THE HUNTINGTON NATIONAL
BANK AND ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ASSET FUNDING INC.
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.
THIS NOTE DOES NOT REPRESENT DEPOSITS OR OBLIGATIONS OF OR AN
INTEREST IN ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL II INC., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ASSET FUNDING
INC. OR ANY OF THEIR AFFILIATES.
Exh. E-2
REGISTERED $__________(1)
No. R-___ CUSIP NO. ▇▇▇▇▇▇ ▇▇ ▇
▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AUTO LOAN TRUST 2004-HB2
5.00% ASSET BACKED NOTE, CLASS E
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AUTO LOAN TRUST 2004-HB2, a statutory 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 [INSERT
INITIAL PRINCIPAL AMOUNT OF NOTE] DOLLARS, payable from time to time on each
Distribution Date, from the Principal Distribution Account, in an amount, if
any, of the Class E Principal Distributable Amount payable in respect of
principal on the Class E Notes pursuant to Section 3.01 of the Indenture dated
as of June 30, 2004 (the "Indenture"), among the Issuer and ▇▇▇▇▇ Fargo Bank,
National Association, a national banking association, 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 March 15, 2012
(the "Class E Final Scheduled Distribution Date") and the Redemption Date, if
any, pursuant to Section 10.01 of the Indenture. The Class E Notes are
subordinated to the Class A Notes, the Class B Notes, the Class C Notes and
the Class D Notes as and to the extent set forth in the Indenture. 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 the last sentence of Section 3.01 of the
Indenture. Interest on this Note will accrue for each Distribution Date from
and including the 15th day of the preceding calendar month (or, in the case of
the first Distribution Date, from the Closing Date) to and including the 14th
day of the calendar month in which such Distribution Date occurs. 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.
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.
-------------------
(1) Denominations of $100,000 and integral multiples of $1,000 in excess
thereof.
Exh. e-3
Unless the certificate of authentication hereon has been executed by
the Note Registrar 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.
Exh. E-4
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: August 30, 2004 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AUTO LOAN
TRUST 2004-HB2
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Owner Trustee under the Trust Agreement
By:
-------------------------------
Authorized Signatory
Exh. E-5
CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: August 30, 2004 ▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Note Registrar
By:
-------------------------------
Authorized Signatory
Exh. E-6
REVERSE OF CLASS E NOTE
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its 5.00% Asset Backed Notes, Class E (herein called the "Class
E 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 E Notes are subject to all
terms of the Indenture.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes, the Class B Notes, the Class C Notes, the Class D Notes and
the Class E Notes (collectively, the "Notes") are and will be secured by the
collateral pledged as security therefor as provided in the Indenture. The
Class E Notes are subordinated in right of payment to the Class A Notes, the
Class B Notes, the Class C Notes and the Class D Notes as and to the extent
provided in the Indenture.
Principal of the Class E Notes will be payable on each Distribution
Date in an amount described on the face hereof only after principal on the
Class A Notes, the Class B Notes, the Class C Notes and the Class D Notes has
been paid in full for such Distribution Date. "Distribution Date" means the
15th day of each month, or, if any such day is not a Business Day, the next
succeeding Business Day, commencing September 15, 2004.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Class E Final Scheduled
Distribution Date and the Redemption Date, if any, pursuant to Section 10.01
of the Indenture. Notwithstanding the foregoing, the entire unpaid principal
amount of the Notes shall be due and payable on the date on which an Event of
Default shall have occurred and be continuing and the Indenture Trustee or the
Noteholders evidencing not less than a majority of the Outstanding Amount of
the Controlling Class 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 E Notes shall be made pro rata to the Class E
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
Exh. E-7
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 and shall specify the place
where this Note may be presented and surrendered for payment.
The Issuer shall pay interest on overdue installments of interest at
the Class E Rate to the extent lawful.
As provided in Section 10.01 of the Indenture, the Outstanding Notes
may be redeemed in whole, but not in part, at the option of the Servicer or,
under certain circumstances, a Certificateholder evidencing 100% of the
percentage interests in the Certificates on any Distribution Date on or after
the date on which the Pool Balance is less than or equal to 10% of the Initial
Pool Balance.
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 Note Registrar 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 subject to certain exceptions set
forth in the Indenture.
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, the Note Registrar,
the Paying Agent or the Owner Trustee in their individual capacities, (ii) any
owner or holder of a beneficial interest in the Issuer, including the Seller
or (iii) any partner, owner, beneficiary, agent, officer, director or employee
of the Indenture Trustee, the Note Registrar, the Paying Agent or the Owner
Trustee in their individual capacities, any holder of a beneficial interest in
the Owner Trustee, the Note Registrar, the Paying Agent or the Indenture
Trustee or of any successor or assign of the Indenture Trustee, the Note
Registrar, the Paying Agent or the Owner Trustee in their individual
capacities, except as any such Person may have expressly agreed (it being
understood that the Indenture Trustee, the Note Registrar, the Paying Agent
and the Owner Trustee have no such obligations in their individual capacity).
Exh. E-8
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 prior to the end of the period that is one year and one day after there
has been paid in full all debt issued by any securitization vehicle in respect
of which the Depositor holds any interest, they will not institute against the
Depositor or the Issuer, or join in, or assist or encourage others to
institute, any institution against the Depositor 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.
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 Note Registrar, the Paying Agent
and any agent of the Issuer or the Indenture Trustee may treat the Person in
whose name this Note is registered (as of the day of determination or as of
such other date as may be specified in the Indenture) as the owner hereof 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 this Note be
overdue, and none of the Issuer, the Indenture Trustee, the Note Registrar,
the Paying Agent 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 Holders of Notes representing a
majority of the Outstanding Amount of all Notes at the time Outstanding. The
Indenture also contains provisions permitting Holders of Notes representing
specified percentages of the Outstanding Amount of the Notes or of the
Controlling Class, 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 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.
Exh. E-9
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 Wilmington Trust Company in its
individual capacity, ▇▇▇▇▇ Fargo Bank, National Association in its individual
capacity, any owner of a beneficial interest in the Issuer, the Seller, the
Depositor, the Servicer, 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.
Exh. E-10
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 whatsoever. 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.
Exh. E-11
EXHIBIT F
FORM OF INVESTMENT LETTER
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital II Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Bank, National Association
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
In connection with our proposed purchase of $______________
aggregate principal amount of Class E Notes (the "Securities") of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Auto Loan Trust 2004-HB2 (the "Issuer"), we confirm that:
1. We understand that the Securities have not been registered under
the Securities Act of 1933, as amended (the "Securities Act"), and may not be
sold except as permitted in the following sentence. We, understand and agree,
on our own behalf and on behalf of any accounts for which we are acting as
hereinafter stated, (x) that such Securities are being offered only in a
transaction not involving any public offering within the meaning of the
Securities Act and (y) that such Securities may be resold, pledged or
transferred only (i) to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital II Inc. (the "Company") or
(ii) to a person or entity that the transferor of the Securities reasonably
believes, after due inquiry is a "qualified institutional buyer" (a "QIB"), as
such term is defined in Rule 144A under the Securities Act ("Rule 144A"),
acting for its own account (and not for the account of others) or as a
fiduciary or agent for others (which others also are QIBs) and in reliance on,
and to whom notice is given that the sale, pledge or transfer is being made in
reliance on, Rule 144A. We will notify any purchaser of the Securities from us
of the above resale restrictions if then applicable. We further understand
that in connection with any transfer of the Securities by us that the Company
and the Indenture Trustee may request, and if so requested we will furnish,
such certificates and other information as they may reasonably require to
confirm that any such transfer complies with the foregoing restrictions. We
understand that no sale, pledge or other transfer may be made to any one
person or entity of Securities with a face amount of less than $25,000 and, in
the case of any person or entity acting on behalf of one or more third parties
(other than a bank (as defined in Section 3(a)(2) of the Securities Act)
acting in its fiduciary capacity), of Securities with a face amount of less
than $25,000 for each such third party.
2. We are a QIB and are acquiring the Securities for our own account
(and not for the account of others) or as a fiduciary or agent for others
(which others also are QIBs). We are familiar with Rule 144A and are aware
that the seller of the Securities and other parties intend to rely on the
statements made herein and the exemption from the registration requirements of
the Securities Act provided by Rule 144A. In this regard, we have received (a)
a copy of the Prospectus, dated May 5, 2004, the Prospectus Supplement, dated
August 20, 2004 and the Private Placement Memorandum, dated August 20, 2004,
relating to the Securities and
Exh. F-1
(b) such other written information, if any, as we have requested concerning
the Indenture, the Securities, the Issuer and the trustees. We have reviewed
and understand the material to which reference is made in this paragraph 2,
and understand that risks are involved in an investment in the Securities. We
represent that in making our investment decision to acquire the Securities, we
have not relied on representations, warranties, opinions, projections,
financial or other information or analyses, if any, supplied to us by any
person, including the Issuer, the Company, the trustees or any of their
respective affiliates except as expressly contained in the Prospectus, the
Prospectus Supplement and the Private Placement Memorandum and in the other
written information, if any, provided pursuant to our request.
3. We (a) are not (i) an "employee benefit plan" (as defined in
Section 3(3) of The Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) that is subject to the provisions of Title I of ERISA or
(ii) a "plan" (as defined in Section 4975(e)(1) of the Internal Revenue Code
of 1986, as amended (the "Code")) that is subject to Section 4975 of the Code
(each a "Benefit Plan") and (b) are not investing on behalf of, or with plan
assets of, a Benefit Plan.
4. We understand that the Company, the Issuer, the Indenture Trustee
and others will rely upon the truth and accuracy of the foregoing
acknowledgments, representations and agreements, and we agree that if any of
the acknowledgments, representations and agreements deemed to have been made
by us by our purchase of the Securities, for our own account or for one or
more accounts as to each of which we exercise sole investment discretion, are
no longer accurate, we shall promptly notify the Company, the Issuer and the
Indenture Trustee.
5. You are entitled to rely upon this letter and you are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.
Very truly yours,
[NAME OF PURCHASER]
By:
-------------------------------
Name:
Title:
Date:
Exh. F-2