EXHIBIT 4.4 - MASTER INDENTURE
[EXECUTION COPY]
================================================================================
----------
MASTER INDENTURE
Dated as of July 1, 2002
----------
FNANB CREDIT CARD MASTER NOTE TRUST
Issuer
and
JPMORGAN CHASE BANK
Indenture Trustee
----------
FNANB CREDIT CARD MASTER NOTE TRUST
----------
================================================================================
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE
ACT OF 1939 AND INDENTURE PROVISIONS/1/
Trust Indenture Indenture
--------------- ---------
310(a)(1).............................................. 6.11
(a)(2).............................................. 6.11
(a)(3).............................................. 6.10
(a)(4).............................................. Not Applicable
(a)(5).............................................. 6.11
(b)................................................. 6.8, 6.11
(c)................................................. Not Applicable
311(a)................................................. 6.12
(b)................................................. 6.12
(c)................................................. Not Applicable
312(a)................................................. 7.1, 7.2(a)
(b)................................................. 7.2(b)
(c)................................................. 7.2(c)
313(a)................................................. 7.4
(b)................................................. 7.4
(c)................................................. 7.3, 7.4
(d)................................................. 7.4
314(a)................................................. 3.10, 7.3(a)
(b)................................................. 3.6
(c)(1).............................................. 12.1(a)
(c)(2).............................................. 12.1(a)
(c)(3).............................................. 12.1(a)
(d)(1).............................................. 12.1(b)
(d)(2).............................................. Not Applicable
(d)(3).............................................. Not Applicable
(e)................................................ 12.1(a)
315(a)................................................. 6.1(b)
(b)................................................. 6.2
(c)................................................. 6.1(c)
(d)................................................. 6.1(d)
(d)(1).............................................. 6.1(d)
(d)(2).............................................. 6.1(d)
(d)(3).............................................. 6.1(d)
(e)................................................. 5.14
316(a)(1)(A)........................................... 5.12
316(a)(1)(B)........................................... 5.13
316(a)(2).............................................. Not Applicable
316(b)................................................. 5.8
317(a)(1).............................................. 5.4
317(a)(2).............................................. 5.4(d)
317(b)................................................. 5.4(a)
318(a)................................................. 12.7
----------
/1/ This reconciliation and tie shall not, for any purpose, be deemed to be
part of the within indenture.
TABLE OF CONTENTS
PAGE
----
ARTICLE I
DEFINITIONS
Section 1.1 Definitions...............................................2
Section 1.2 Other Definitional Provisions.............................2
ARTICLE II
THE NOTES
Section 2.1 Form Generally............................................3
Section 2.2 Denominations.............................................4
Section 2.3 Execution, Authentication and Delivery....................4
Section 2.4 Authenticating Agent......................................4
Section 2.5 Registration of and Limitations on Transfer
and New Issuance of Notes..............................5
Section 2.6 Mutilated, Destroyed, Lost or Stolen Notes................7
Section 2.7 Persons Deemed Owners.....................................8
Section 2.8 Appointment of Paying Agent...............................8
Section 2.9 Access to List of Noteholders' Names and Addresses........9
Section 2.10 Cancellation..............................................9
Section 2.11 New Issuance..............................................9
Section 2.12 Book-Entry Notes.........................................11
Section 2.13 Notices to Clearing Agency or Foreign Clearing Agency....12
Section 2.14 Definitive Notes.........................................12
Section 2.15 Global Note..............................................13
Section 2.16 Meetings of Noteholders..................................13
Section 2.17 Uncertificated Classes...................................13
ARTICLE III
REPRESENTATIONS AND COVENANTS OF ISSUER
Section 3.1 Payment of Principal and Interest........................14
Section 3.2 Maintenance of Office or Agency..........................14
Section 3.3 Money for Note Payments to Be Held in Trust..............14
Section 3.4 Existence................................................16
Section 3.5 Protection of Collateral.................................16
Section 3.6 Opinions as to Collateral................................17
Section 3.7 Performance of Obligations; Servicing of Receivables.....17
Section 3.8 Assignment...............................................18
Section 3.9 Negative Covenants.......................................19
Section 3.10 Statements as to Compliance..............................19
Section 3.11 Issuer May Consolidate, Etc., Only on Certain Terms......20
Section 3.12 Successor Substituted....................................21
Section 3.13 No Other Business........................................22
i
Section 3.14 Servicer's Obligations...................................22
Section 3.15 Investments..............................................22
Section 3.16 Capital Expenditures.....................................22
Section 3.17 Removal of Administrator.................................22
Section 3.18 Restricted Payments......................................22
Section 3.19 Notice of Events of Default..............................22
Section 3.20 Further Instruments and Acts.............................22
ARTICLE IV
SATISFACTION AND DISCHARGE, DEFEASANCE
Section 4.1 Satisfaction and Discharge of this Indenture.............23
Section 4.2 Application of Issuer Money..............................24
Section 4.3 Defeasance...............................................24
ARTICLE V
EARLY AMORTIZATION EVENTS, DEFAULTS AND REMEDIES
Section 5.1 Early Amortization Events................................25
Section 5.2 Events of Default........................................27
Section 5.3 Acceleration of Maturity; Rescission and Annulment.......28
Section 5.4 Collection of Indebtedness and Suits
for Enforcement by Indenture Trustee..................29
Section 5.5 Remedies; Priorities.....................................31
Section 5.6 Optional Preservation of the Collateral..................32
Section 5.7 Limitation on Suits......................................33
Section 5.8 Unconditional Rights of Noteholders to Receive
Principal and Interest................................33
Section 5.9 Restoration of Rights and Remedies.......................33
Section 5.10 Rights and Remedies Cumulative...........................33
Section 5.11 Delay or Omission Not Waiver.............................34
Section 5.12 Rights of Noteholders to Direct Indenture Trustee........34
Section 5.13 Waiver of Past Defaults..................................34
Section 5.14 Undertaking for Costs....................................35
Section 5.15 Waiver of Stay or Extension Laws.........................35
Section 5.16 Sale of Receivables......................................35
Section 5.17 Action on Notes..........................................36
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.1 Duties of the Indenture Trustee..........................36
Section 6.2 Notice of Early Amortization Event or
Event of Default......................................37
Section 6.3 Rights of Indenture Trustee..............................37
Section 6.4 Not Responsible for Recitals or Issuance of Notes........39
Section 6.5 Restrictions on Holding Notes............................39
Section 6.6 Money Held in Trust......................................39
Section 6.7 Compensation, Reimbursement and Indemnification..........39
ii
Section 6.8 Replacement of Indenture Trustee.........................40
Section 6.9 Successor Indenture Trustee by Merger....................41
Section 6.10 Appointment of Co-Indenture Trustee or Separate
Indenture Trustee.....................................41
Section 6.11 Eligibility; Disqualification............................43
Section 6.12 Preferential Collection of Claims Against................43
Section 6.13 Representations and Covenants of the
Indenture Trustee.....................................43
Section 6.14 Custody of the Collateral................................43
ARTICLE VII
NOTEHOLDERS' LIST AND REPORTS BY INDENTURE TRUSTEE AND ISSUER
Section 7.1 Issuer to Furnish Indenture Trustee Names
and Addresses of Noteholders............ .............44
Section 7.2 Preservation of Information; Communications
to Noteholders........................................44
Section 7.3 Reports by Issuer........................................44
Section 7.4 Reports by Indenture Trustee.............................45
ARTICLE VIII
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 8.1 Collection of Money......................................45
Section 8.2 Rights of Noteholders....................................46
Section 8.3 Establishment of Collection Account and
Allocations with Respect to the Exchangeable
Transferor Certificate................................46
ARTICLE IX
DISTRIBUTIONS AND REPORTS TO NOTEHOLDERS
ARTICLE X
SUPPLEMENTAL INDENTURES
Section 10.1 Supplemental Indentures Without Consent of Noteholders...51
Section 10.2 Supplemental Indentures with Consent of Noteholders......52
Section 10.3 Execution of Supplemental Indentures.....................54
Section 10.4 Effect of Supplemental Indenture.........................54
Section 10.5 Conformity With Trust Indenture Act......................54
Section 10.6 Reference in Notes to Supplemental Indentures............54
ARTICLE XI
TERMINATION
Section 11.1 Termination of Issuer....................................55
Section 11.2 Final Distribution.......................................55
Section 11.3 Issuer's Termination Rights..............................56
iii
ARTICLE XII
MISCELLANEOUS
Section 12.1 Compliance Certificates and Opinions etc................56
Section 12.2 Form of Documents Delivered to Indenture Trustee........57
Section 12.3 Acts of Noteholders.....................................58
Section 12.4 Notices, Etc. to Indenture Trustee and Issuer..........58
Section 12.5 Notices to Noteholders; Waiver..........................59
Section 12.6 Alternate Payment and Notice Provisions.................59
Section 12.7 Conflict with Trust Indenture Act.......................59
Section 12.8 Effect of Headings and Table of Contents................60
Section 12.9 Successors and Assigns..................................60
Section 12.10 Separability............................................60
Section 12.11 Benefits of Indenture...................................60
Section 12.12 Legal Holidays..........................................60
Section 12.13 GOVERNING LAW...........................................60
Section 12.14 Counterparts............................................60
Section 12.15 Issuer Obligation.......................................60
Section 12.16 No Petition.............................................61
iv
MASTER INDENTURE, dated as of July 1, 2002 (this "Indenture"), between
FNANB Credit Card Master Note Trust, a business trust organized under the laws
of the State of Delaware (the "Issuer"), and JPMorgan Chase Bank, as indenture
trustee (the "Indenture Trustee"). This Indenture may be supplemented at any
time and from time to time by an indenture supplement in accordance with Article
X (an "Indenture Supplement," and together with this Indenture and any
amendments, the "Indenture"). If a conflict exists between the terms and
provisions of this Indenture and any Indenture Supplement, the terms and
provisions of the Indenture Supplement shall be controlling with respect to the
related Series.
PRELIMINARY STATEMENT
The Issuer has duly authorized the execution and delivery of this
Indenture to provide for the issuance of its asset backed notes as provided in
this Indenture. All covenants and agreements made by the Issuer herein are for
the benefit and security of the Noteholders. The Issuer is entering into this
Indenture, and the Indenture Trustee is accepting the trusts created hereby, for
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged.
Simultaneously with the execution of this Indenture, the Issuer is
executing a Transfer and Servicing Agreement with DC Funding International,
Inc., a Delaware corporation, as Transferor, and First North American National
Bank, a national banking association, as Servicer, pursuant to which (a) the
Transferor will convey to the Issuer all of its right, title and interest in, to
and under (i) the Collateral Certificate, which the Transferor will have
received from FNANB Credit Card Master Trust, and (ii) on and after the
Certificate Trust Termination Date, the Receivables which the Transferor will
have purchased from First North American National Bank pursuant to the
Receivables Purchase Agreement, and (b) the Servicer will agree to service the
Receivables and make collections thereon on behalf of the Noteholders.
Under the Receivables Purchase Agreement and the Transfer and
Servicing Agreement, Receivables arising in the Accounts from time to time will
be conveyed thereunder to the Issuer.
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee, for the benefit of
the Holders of the Notes and the Enhancement Providers, all of the Issuer's
right, title and interest, whether now owned or hereafter acquired, in, to and
under (a) the Collateral Certificate, (b) from and after the Certificate Trust
Termination Date, (i) the Receivables created on or after the Certificate Trust
Termination Date, all monies due or to become due and all amounts received with
respect to such Receivables (including Finance Charge Receivables and
Recoveries), all proceeds of such Receivables (including Insurance Proceeds);
(ii) the Interchange Amount with respect to each Collection Period commencing on
or after the Certificate Trust Termination Date, (iii) all of its rights,
remedies, powers, privileges and claims under or with respect to the Receivables
Purchase Agreement (whether arising pursuant to the terms of the Receivables
Purchase Agreement or otherwise available to the Transferor at law or in
equity), including, without limitation, the rights of the Transferor to enforce
the Receivables Purchase Agreement and to
give or withhold any and all consents, requests, notices, directions, approvals,
extensions or waivers under or with respect to the Receivables Purchase
Agreement, together with all monies as are from time to time deposited in the
Collection Account, the Excess Funding Account and any other account or accounts
maintained for the benefit of the Noteholders (including, to the extent
specified in the related Indenture Supplement, investment earnings on such
amounts) and Eligible Investments and other investment property from time to
time held in such account, (c) all of its rights, remedies, powers, privileges
and claims under or with respect to the Transfer and Servicing Agreement
(whether arising pursuant to the terms of the Transfer and Servicing Agreement
or otherwise available to the Transferor at law or in equity) and (d) all
proceeds of all of the foregoing and all monies as are from time to time
available under any Enhancement for any Series for payment to Noteholders
(collectively, the "Collateral").
Such Grant is made in trust to secure the Notes equally and ratably
without prejudice, priority or distinction, except as expressly provided in this
Indenture and the Indenture Supplements, between any Note and any other Notes;
provided, however, that unless and to the extent provided for in an Indenture
Supplement for any Series, the security interest granted above in the Series
Accounts and Enhancement for a particular Series shall be to secure the Notes
for such Series only and, to the extent provided in the Indenture Supplement or
such Series, the providers of any Enhancement for such Series. This Indenture is
a security agreement within the meaning of the UCC.
The Indenture Trustee as Indenture Trustee on behalf of the
Noteholders acknowledges such Grant, accepts the trusts hereunder in accordance
with the provisions hereof and agrees to perform the duties herein required to
the end that the interest of the Noteholders may be adequately and effectively
protected.
LIMITED RECOURSE
The obligation of the Issuer to make payments of principal, interest
and other amounts in respect of the Notes is limited by recourse only to the
Collateral.
ARTICLE I
DEFINITIONS
Section 1.1 Definitions.
Capitalized terms used herein are defined in Annex A.
Section 1.2 Other Definitional Provisions.
(a) All terms defined in any Indenture Supplement or this Indenture
shall have the defined meanings when used in any certificate or other document
made or delivered pursuant hereto unless otherwise defined therein. The
definitions of all terms defined herein shall include the singular as well as
the plural form of such terms and the masculine of such terms as well as the
feminine and neuter genders of such terms.
2
(b) As used herein and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in Annex A,
and accounting terms partly defined in Annex A to the extent not defined, shall
have the respective meanings given to them under GAAP on the date of
determination. To the extent that the definitions of accounting terms herein are
inconsistent with the meanings of such terms under GAAP, the definitions
contained herein shall control.
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Indenture shall refer to any Indenture Supplement or
this Indenture as a whole and not to any particular provision of such Indenture
Supplement or this Indenture, as the case may be; Section, subsection, Schedule
and Exhibit references contained in this Indenture or any Indenture Supplement
are references to Sections, subsections, Schedules and Exhibits in or to this
Indenture or any Indenture Supplement unless otherwise specified; and the word
"including" means including without limitation.
(d) Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"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 meanings assigned to them by such definitions.
ARTICLE II
THE NOTES
Section 2.1 Form Generally. Any Series or Class of Notes, together
with the Indenture Trustee's certificate of authentication related thereto, may
be issued in bearer form (the "Bearer Notes") with attached interest coupons and
a special coupon (collectively, the "Coupons") or in fully registered form (the
"Registered Notes") and shall be in substantially the form of an exhibit to the
related Indenture Supplement with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture or such Indenture Supplement, and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon,
as may, consistently herewith, be determined by the officers executing such
Notes, as evidenced by their execution of such Notes. Any portion of the text of
any Note may be set forth on the reverse thereof, with an appropriate
3
reference thereto on the face of the Note. The terms of any Notes set forth in
an exhibit to the related Indenture Supplement are part of the terms of this
Indenture, as applicable.
The Definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods, all as determined by
the officers executing such Notes, as evidenced by their execution of such
Notes.
Each Note will be dated as of the date of its authentication.
Section 2.2 Denominations. Except as otherwise specified in the
related Indenture Supplement and the Notes, each class of Notes of each Series
shall be issued in fully registered form in minimum amounts of $1,000 and in
integral multiples of $1,000 in excess thereof (except that one Note of each
Class may be issued in a different amount, so long as such amount exceeds the
applicable minimum denomination for such Class), and shall be issued upon
initial issuance as one or more Notes in an aggregate original principal amount
equal to the applicable Invested Amount for such Class or Series.
Section 2.3 Execution, Authentication and Delivery. Each Note shall be
executed by manual or facsimile signature on behalf of the Issuer by an
Authorized Officer.
Notes bearing the manual or facsimile signature of an individual who
was, at the time when such signature was affixed, authorized to sign on behalf
of the Issuer shall not be rendered invalid, notwithstanding the fact that such
individual ceased to be so authorized prior to the authentication and delivery
of such Notes or does not hold such office at the date of issuance of such
Notes.
At any time and from time to time after the execution and delivery of
this Indenture, the Issuer may deliver Notes executed by the Issuer to the
Indenture Trustee for authentication and delivery, and the Indenture Trustee
shall authenticate at the written direction of the Issuer and deliver such Notes
as provided in this Indenture or the related Indenture Supplement and not
otherwise.
No Note shall be entitled to any benefit under this Indenture or the
applicable Indenture Supplement 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 or in the related Indenture Supplement executed
by or on behalf of the Indenture Trustee by the manual signature of a duly
authorized signatory, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder.
Section 2.4 Authenticating Agent.
(a) The Indenture Trustee, at the expense of the Servicer, may appoint
one or more authenticating agents with respect to the Notes which shall be
authorized to act on behalf of the Indenture Trustee in authenticating the Notes
in connection with the issuance, delivery, registration of transfer, exchange or
repayment of the Notes. Whenever reference is made in this Indenture to the
authentication of Notes by the Indenture Trustee or the Indenture Trustee's
certificate of authentication, such reference shall be deemed to include
authentication on behalf
4
of the Indenture Trustee by an authenticating agent and a certificate of
authentication executed on behalf of the Indenture Trustee by an authenticating
agent. Each authenticating agent must be acceptable to the Issuer and the
Servicer.
(b) Any institution succeeding to the corporate agency business of an
authenticating agent shall continue to be an authenticating agent without the
execution or filing of any power or any further act on the part of the Indenture
Trustee or such authenticating agent.
(c) An authenticating agent may at any time resign by giving written
notice of resignation to the Indenture Trustee, the Issuer and the Servicer. The
Indenture Trustee may at any time terminate the agency of an authenticating
agent by giving notice of termination to such authenticating agent and to the
Issuer and the Servicer. Upon receiving such a notice of resignation or upon
such a termination, or in case at any time an authenticating agent shall cease
to be acceptable to the Indenture Trustee or the Issuer and the Servicer, the
Indenture Trustee may promptly appoint a successor authenticating agent. Any
successor authenticating agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an authenticating agent.
No successor authenticating agent shall be appointed unless acceptable to the
Issuer and the Servicer.
(d) The Issuer agrees to pay to each authenticating agent from time to
time reasonable compensation for its services under this Section 2.4.
(e) The provisions of Sections 6.1 and 6.4 shall be applicable to any
authenticating agent.
(f) Pursuant to an appointment made under this Section 2.4, the Notes
may have endorsed thereon, in lieu of or in addition to the Indenture Trustee's
certificate of authentication, an alternative certificate of authentication in
substantially the following form:
"This is one of the Notes described in the within-mentioned Indenture.
---------------------------
---------------------------
as Authenticating Agent
for the Indenture Trustee
By:
---------------------------
Authorized Signatory"
Section 2.5 Registration of and Limitations on Transfer and New
Issuance of Notes. The Issuer shall cause to be kept a register (the "Note
Register") in which, subject to such reasonable regulations as it may prescribe,
the Issuer shall provide for the registration of Notes and the registration of
transfers of Notes. The Indenture Trustee initially shall be the transfer agent
and registrar (in such capacity, the "Transfer Agent and Registrar") for the
purpose of
5
registering Notes and transfers of Notes as herein provided. Upon any
resignation of any Transfer Agent and Registrar, the Issuer shall promptly
appoint a successor or, if it elects not to make such an appointment, assume the
duties of Transfer Agent and Registrar.
If a Person other than the Indenture Trustee is appointed by the
Issuer as Transfer Agent and Registrar, the Issuer will give the Indenture
Trustee prompt written notice of the appointment of a Transfer Agent and
Registrar and of the location, and any change in the location, of the Transfer
Agent and Registrar and Note Register. 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 Transfer Agent and Registrar by an
officer thereof as to the names and addresses of the Noteholders and the
principal amounts and numbers of such Notes.
Upon surrender for registration of transfer of any Note at the office
or agency of the Transfer Agent and Registrar, to be maintained as provided in
Section 3.2, the Issuer shall execute, and upon receipt of such surrendered Note
the Indenture Trustee shall authenticate and deliver to the Noteholder, in the
name of the designated transferee or transferees, one or more new Notes (of the
same Series and Class) in any authorized denominations of like tenor and
aggregate principal amount.
At the option of a Noteholder, Notes may be exchanged for other Notes
(of the same Series and Class) in any authorized denominations and of like tenor
and aggregate principal amount, upon surrender of such Notes to be exchanged at
the office or agency of the Transfer Agent and Registrar. Whenever any Notes are
so surrendered for exchange, the Issuer shall execute, and upon receipt of such
surrendered Note the Indenture Trustee shall authenticate and deliver to the
Noteholder, the Notes which the Noteholder making the exchange is entitled to
receive.
All Notes issued upon any registration of transfer or exchange of
Notes shall evidence the same obligations, evidence the same debt, and be
entitled to the same rights and privileges under this Indenture, as the Notes
surrendered upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument of
transfer in a form satisfactory to the Indenture Trustee duly executed by, the
Noteholder thereof or its attorney-in-fact duly authorized in writing, and by
such other documents as the Indenture Trustee may reasonably require.
Any Note held by the Transferor at any time after the date of its
initial issuance may be transferred or exchanged only upon the delivery to the
Owner Trustee and the Indenture Trustee of a Tax Opinion dated as of the date of
such transfer or exchange, as the case may be, with respect to such transfer or
exchange.
The registration of transfer of any Note shall be subject to the
additional requirements, if any, set forth in the related Indenture Supplement.
6
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Issuer and the Transfer Agent and Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of such Notes.
All Notes surrendered for registration of transfer and exchange shall
be delivered to the Indenture Trustee for cancellation. The Indenture Trustee
shall destroy the Global Note upon its exchange in full for Definitive Notes and
shall deliver a certificate of destruction to the Transferor. Such certificate
shall also state that a certificate or certificates of each Foreign Clearing
Agency referred to in the applicable Indenture Supplement was received with
respect to each portion of the Global Note exchanged for Definitive Notes.
The preceding provisions of this Section 2.5 notwithstanding, the
Issuer shall not be required to make, and Transfer Agent and Registrar need not
register, transfers or exchanges of Notes for a period of fifteen (15) days
preceding the due date for any payment with respect to the Note.
If and so long as any Series of Notes are listed on the Luxembourg
Stock Exchange and such exchange shall so require, the Issuer shall appoint a
co-transfer agent and co-registrar in Luxembourg or another European city. Any
reference in this Indenture to the Transfer Agent and Registrar shall include
any co-transfer agent and co-registrar unless the context otherwise requires.
The Indenture Trustee will enter into any appropriate agency agreement with any
co-transfer agent and co-registrar not a party to this Indenture, which will
implement the provisions of this Indenture that relate to such agent.
Section 2.6 Mutilated, Destroyed, Lost or Stolen Notes. If (a) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (b) in case of destruction, loss, or theft there is delivered to the
Indenture Trustee such security or indemnity as may be required by it to hold
the Issuer, the Noteholders and the Indenture Trustee harmless, then, in the
absence of notice to the Issuer, the Transfer Agent and Registrar or the
Indenture Trustee that such Note has been acquired by a protected purchaser (as
defined in Section 8-303 of the UCC as in effect in the applicable
jurisdiction), the Issuer shall execute, and the Indenture Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a replacement Note of like tenor (including the
same date of issuance) and principal amount, bearing a number not
contemporaneously outstanding; provided, however, that if any such mutilated,
destroyed, lost or stolen Note shall have become or within seven (7) days shall
be due and payable, or shall have been selected or called for redemption,
instead of issuing a replacement Note, the Issuer may pay such Note without
surrender thereof, except that any mutilated Note shall be surrendered. If,
after the delivery of such replacement Note or payment of a destroyed, lost or
stolen Note pursuant to the proviso to the preceding sentence, a protected
purchaser (as defined in Section 8-303 of the UCC as in effect in the applicable
jurisdiction) of the original Note in lieu of which such replacement Note was
issued presents for payment such original Note, the Issuer and the Indenture
Trustee shall be entitled to recover such replacement Note (or such payment)
from the Person to whom it was delivered or any Person taking such replacement
Note from such Person to whom such replacement Note was delivered or any
7
assignee of such Person, except a protected purchaser, and shall be entitled to
recover upon the security or indemnity provided therefor to the extent of any
loss, damage, cost or expense incurred by the Issuer or the Indenture Trustee in
connection therewith.
Upon the issuance of any replacement Note under this Section 2.6, 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 or the Transfer Agent and Registrar) connected therewith.
Every replacement Note issued pursuant to this Section 2.6 in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute
complete and indefeasible evidence of an obligation of the Issuer, as if
originally issued, whether or not the mutilated, destroyed, lost or stolen Note
shall be found at any time, 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 2.6 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 2.7 Persons Deemed Owners. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Transferor, the Indenture
Trustee and any agent of the Issuer, the Transferor or the Indenture Trustee
shall treat the Person in whose name any Note is registered as the owner of such
Note for the purpose of receiving distributions pursuant to the terms of the
applicable Indenture Supplement and for all other purposes whatsoever, whether
or not such Note is overdue, and neither the Issuer, the Transferor, the
Indenture Trustee nor any agent of the Issuer, the Transferor or the Indenture
Trustee shall be affected by any notice to the contrary.
Section 2.8 Appointment of Paying Agent.
(a) The Issuer reserves the right at any time to vary or terminate the
appointment of a Paying Agent for the Notes, and to appoint additional or other
Paying Agents, provided that it will at all times maintain the Indenture Trustee
as a Paying Agent.
If and so long as any Notes are listed on the Luxembourg Stock
Exchange and such exchange shall so require, the Indenture Trustee will appoint
a co-paying agent in Luxembourg or another European city. The Indenture Trustee
will enter into any appropriate agency agreement with any co-paying agent not a
party to this Indenture, which will implement the provisions of this Indenture
that relate to such agent.
Notice of all changes in the identity or specified office of a Paying
Agent will be delivered promptly to the Noteholders by the Indenture Trustee.
(b) The Indenture Trustee shall cause each Paying Agent (other than
itself) to execute and deliver to the Indenture Trustee an instrument in which
such Paying Agent shall agree with the Indenture Trustee that such Paying Agent
will hold all sums, if any, held by it for
8
payment to the Noteholders in trust for the benefit of the Noteholders entitled
thereto until such sums shall be paid to such Noteholders and shall agree, and
if the Indenture Trustee is the Paying Agent it hereby agrees, that it shall
comply with all requirements of the Code regarding the withholding by the
Indenture Trustee of payments in respect of federal income taxes due from the
Note Owners.
Section 2.9 Access to List of Noteholders' Names and Addresses.
(a) The Issuer will furnish or cause to be furnished to the Indenture
Trustee, the Servicer or the Paying Agent, within five (5) Business Days after
receipt by the Issuer of a written request therefor from the Indenture Trustee,
the Servicer or the Paying Agent, respectively, a list of the names and
addresses of the Noteholders. Unless otherwise provided in the related Indenture
Supplement, the Holders of not less than 10% of the principal balance of the
Outstanding Notes of any Series (the "Applicants") may apply in writing to the
Indenture Trustee, and if such application states that the Applicants desire to
communicate with other Noteholders of any Series with respect to their rights
under this Indenture or under the Notes and is accompanied by a copy of the
communication which such Applicants propose to transmit, then the Indenture
Trustee, after having been adequately indemnified by such Applicants for its
costs and expenses, shall afford or shall cause the Transfer Agent and Registrar
to afford such Applicants access during normal business hours to the most recent
list of Noteholders held by the Indenture Trustee and shall give the Servicer
notice that such request has been made, within five (5) Business Days after the
receipt of such application. Such list shall be as of a date no more than
forty-five (45) days prior to the date of receipt of such Applicants' request.
(b) Every Noteholder, by receiving and holding a Note, agrees that
none of the Issuer, the Indenture Trustee, the Transfer Agent and Registrar and
the Servicer or any of their respective agents and employees shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Noteholders hereunder, regardless of the sources from which
such information was derived.
Section 2.10 Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly canceled by it. The Issuer may at any time deliver to the
Indenture Trustee for cancellation any Notes previously authenticated and
delivered hereunder which the Issuer may have acquired in any lawful manner
whatsoever, and all Notes so delivered shall be promptly canceled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for
any Notes canceled as provided in this Section 2.10, except as expressly
permitted by this Indenture. All canceled Notes held by the Indenture Trustee
shall be destroyed unless the Issuer shall direct by a timely order that they be
returned to it.
Section 2.11 New Issuance.
(a) Upon any New Issuance, the Issuer shall execute and deliver to the
Indenture Trustee for authentication one or more new Series of Notes. Any such
Series of Notes shall be substantially in the form specified in the related
Indenture Supplement and shall bear, upon its face, the designation for such
Series selected by the Issuer. Except as specified in the
9
Indenture Supplement for any Series as to differing treatment of the Notes
within such Series, all Notes of any Series shall be equally and ratably
entitled as provided herein to the benefits hereof without preference, priority
or distinction on account of the actual time or times of authentication and
delivery (except that any Enhancement provided for any Series shall not be
available for any other Series), all in accordance with the terms and provisions
of this Indenture and the applicable Indenture Supplement.
(b) The Issuer may from time to time issue Series of Notes (each, a
"New Issuance"). The Issuer may perform a New Issuance, without the consent of
any Noteholder, by notifying the Indenture Trustee, in writing at least three
Business Days in advance (a "New Issuance Notice") of the date upon which the
New Issuance is to occur (a "New Issuance Date"). Any New Issuance Notice shall
state the designation of any Series to be issued on the New Issuance Date and,
with respect to each such Series: (x) its Initial Invested Amount (or the method
for calculating such Initial Invested Amount), if any, which amount may not be
greater than the current principal amount of the Exchangeable Transferor
Certificate minus the Minimum Transferor Amount at such time, and (y) its Note
Interest Rate (or the method for allocating interest payments or other cash flow
to such Series), if any. On the New Issuance Date, the Indenture Trustee shall
authenticate and deliver any such Series only upon delivery to it of the
following: (A) an Indenture Supplement in form satisfactory to the Indenture
Trustee executed by the Issuer and specifying the Principal Terms of such
Series, (B) an Opinion of Counsel to the effect that, unless otherwise specified
in the related Indenture Supplement, the newly issued Series of Notes (other
than any Class of Notes required to be retained by the Transferor) will be
characterized as either indebtedness or an interest in a partnership (that is
not taxable as a corporation) under existing law for Federal income tax purposes
and that the issuance of the newly issued Series of Notes will not have any
material adverse impact on the Federal income tax characterization of any
outstanding Series of Notes that have been the subject of a previous opinion of
tax counsel or result in the Issuer being taxable as an association or as a
publicly traded partnership taxable as a corporation for Federal or applicable
state tax purposes (such opinion, a "Tax Opinion"), (C) an agreement, if any,
pursuant to which the Enhancement Provider agrees to provide Enhancement and (D)
written confirmation from each Rating Agency that the New Issuance will not
result in the Rating Agency's reducing or withdrawing its rating on any then
outstanding Series of Notes rated by it. Upon satisfaction of such conditions,
the Indenture Trustee shall issue, as provided above, such Series of Notes.
There is no limit to the number of New Issuances that may be performed under
this Indenture.
(c) In conjunction with a New Issuance, the parties hereto shall
execute an Indenture Supplement, which shall specify the relevant terms with
respect to any Series of Notes, which may include, without limitation: (i) its
name or designation, (ii) an Initial Invested Amount or the method of
calculating the Initial Invested Amount, (iii) a Note Interest Rate (or formula
for the determination thereof), (iv) the interest payment date or dates and the
date or dates from which interest shall accrue, (v) the method of allocating
Collections of Principal Receivables for such Series and, if applicable, with
respect to other Series and the method by which the principal amount of Notes of
such Series shall amortize or accrete and the method for allocating Collections
of Finance Charge Receivables and Receivables in Defaulted Accounts, (vi) the
names of any accounts to be used by such Series and the terms governing the
operation of any such account, (vii) the Servicing Fee Percentage, (viii) the
Minimum Transferor Interest Percentage, (ix) the Minimum Aggregate Principal
Receivables, (x) the Stated Series
10
Termination Date, (xi) the terms of any Enhancement, (xii) the Enhancement
Provider, if any, (xiii) the base rate, if any, (xiv) the Repurchase Terms or
the terms on which the Notes of such Series may be remarketed to other
investors, (xv) any deposit into any account provided for such Series, (xvi) the
number of Classes within such Series, and if more than one Class, the rights and
priorities of each such Class, (xvii) the extent to which the Notes will be
issuable in temporary or permanent global form and, in such case, the depository
for such global certificate or certificates, the terms and conditions, if any,
upon which such global certificate may be exchanged in whole or in part for
Definitive Notes, and the manner in which any interest payable on a temporary or
global certificate will be paid, (xviii) whether the Notes may be issued in
bearer form and any limitations imposed thereon and provisions relating to
compliance with applicable laws and rules for bearer instruments, (xix) the
priority of such Series with respect to any other Series, (xx) whether
Interchange or other fees will be included in the funds available to be paid
with respect to such Series, (xxi) whether such Series will or may be paired
with any other Series and the Series with which it will be paired, if
applicable, (xxii) the Group, if any, to which such Series belongs, and (xxiii)
any other relevant terms of such Series (all such terms, the "Principal Terms"
of such Series). The terms of such Indenture Supplement may modify or amend the
terms of this Indenture solely as applied to such new Series. If on the date of
the issuance of such Series there is issued and outstanding no Series of Notes
which is currently rated by a Rating Agency, then as a condition to such New
Issuance a nationally recognized investment banking firm or commercial bank
shall also deliver to the Indenture Trustee an officer's certificate stating, in
substance, that the New Issuance will not have an adverse effect on the timing
or distribution of payments to such other Series of Notes then issued and
outstanding.
Section 2.12 Book-Entry Notes. Unless otherwise provided in any
related Indenture Supplement, the Notes, upon original issuance, shall be issued
in the form of typewritten or printed Notes representing the Book-Entry Notes to
be delivered to the depository specified in such Indenture Supplement which
shall be the Clearing Agency or Foreign Clearing Agency, by or on behalf of the
Issuer.
The Notes of each Series shall, unless otherwise provided in the
related Indenture Supplement, initially be registered in the Note Register in
the name of the nominee of the Clearing Agency or Foreign Clearing Agency for
such Book-Entry Notes and shall be delivered to the Indenture Trustee or,
pursuant to such Clearing Agency's or Foreign Clearing Agency's instructions
held by the Indenture Trustee's agent as custodian for the Clearing Agency or
Foreign Clearing Agency.
Unless and until Definitive Notes are issued under the limited
circumstances described in Section 2.14, no Note Owner shall be entitled to
receive a Definitive Note representing such Note Owner's interest in such Note.
Unless and until Definitive Notes have been issued to the Note Owners pursuant
to Section 2.14:
(a) the provisions of this Section 2.12 shall be in full force and
effect with respect to each such Series;
11
(b) the Indenture Trustee shall be entitled to deal with the Clearing
Agency or Foreign Clearing Agency and the Clearing Agency Participants for all
purposes of this Indenture (including the payment of principal of and interest
on the Notes of each such Series) as the authorized representatives of the Note
Owners;
(c) to the extent that the provisions of this Section 2.12 conflict
with any other provisions of this Indenture, the provisions of this Section 2.12
shall control with respect to each such Series;
(d) the rights of Note Owners of each such Series shall be exercised
only through the Clearing Agency or Foreign Clearing Agency and the applicable
Clearing Agency Participants and shall be limited to those established by law
and agreements between such Note Owners and the Clearing Agency or Foreign
Clearing Agency and/or the Clearing Agency Participants. Pursuant to the
depository agreement applicable to a Series, unless and until Definitive Notes
of such Series are issued pursuant to Section 2.14, the initial Clearing Agency
shall make book-entry transfers among the Clearing Agency Participants and
receive and transmit distributions of principal and interest on the Notes to
such Clearing Agency Participants; and
(e) whenever this Indenture requires or permits actions to be taken
based upon instructions or directions of the Holders of Notes representing a
specified percentage of the Outstanding Amount, the Clearing Agency or Foreign
Clearing Agency shall be deemed to represent such percentage only to the extent
that they have received instructions to such effect from the Note Owners and/or
Clearing Agency Participants owning or representing, respectively, such required
percentage of the beneficial interest in the Notes and has delivered such
instructions to the Indenture Trustee.
Section 2.13 Notices to Clearing Agency or Foreign Clearing Agency.
Whenever a notice or other communication to the Noteholders is required under
this Indenture, unless and until Definitive Notes shall have been issued to Note
Owners pursuant to Section 2.14, the Indenture Trustee shall give all such
notices and communications specified herein to be given to Noteholders to the
Clearing Agency or Foreign Clearing Agency, as applicable, and shall have no
obligation to the Note Owners.
Section 2.14 Definitive Notes. If (i) (A) the Transferor advises the
Indenture Trustee in writing that the Clearing Agency is no longer willing or
able to discharge properly its responsibilities as Clearing Agency with respect
to the Book-Entry Notes of a given Series and (B) the Indenture Trustee or
Issuer is unable to locate and reach an agreement on satisfactory terms with a
qualified successor, (ii) the Transferor, at its option, advises the Indenture
Trustee in writing that it elects to terminate the book-entry system through the
Clearing Agency with respect to such Series or (iii) after the occurrence of a
Servicer Default, Note Owners of Notes evidencing more than 50% of the principal
balance of the Outstanding Notes (or such other percentage as specified in the
related Indenture Supplement) of such Series advise the Indenture Trustee and
the applicable Clearing Agency through the applicable Clearing Agency
Participants in writing that the continuation of a book-entry system is no
longer in the best interests of the Note Owners of such Series, the Clearing
Agency shall notify all Note Owners of such Series of the occurrence of such
event and of the availability of Definitive Notes to Note Owners of such
12
Series requesting the same. Upon surrender to the Indenture Trustee of the Notes
of such Series, accompanied by registration instructions from the applicable
Clearing Agency, the Issuer shall execute and the Indenture Trustee shall
authenticate Definitive Notes of such Series and shall recognize the registered
holders of such Definitive Notes as Noteholders under this Indenture. Neither
the Issuer nor the Indenture Trustee shall be liable for any delay in delivery
of such instructions, and the Issuer and the Indenture Trustee may conclusively
rely on, and shall be fully protected in relying on, such instructions. Upon the
issuance of Definitive Notes of such Series, all references herein to
obligations imposed upon or to be performed by the applicable Clearing Agency or
Foreign Clearing Agency shall be deemed to be imposed upon and performed by the
Indenture Trustee, to the extent applicable with respect to such Definitive
Notes, and the Indenture Trustee shall recognize the registered holders of the
Definitive Notes of such Series as Noteholders of such Series hereunder.
Definitive Notes will be transferable and exchangeable at the offices of the
Transfer Agent and Registrar.
Section 2.15 Global Note. If specified in the related Indenture
Supplement for any Series, Notes may be initially issued in the form of a single
temporary Global Note (the "Global Note") in bearer form, without interest
coupons, in the denomination of the initial principal amount and substantially
in the form attached to the related Indenture Supplement. Unless otherwise
specified in the related Indenture Supplement, the provisions of this Section
2.15 shall apply to such Global Note. The Global Note will be authenticated by
the Indenture Trustee upon the same conditions, in substantially the same manner
and with the same effect as the Definitive Notes. The Global Note may be
exchanged in the manner described in the related Indenture Supplement for
Registered Notes or Bearer Notes in definitive form. Except as otherwise
specifically provided in the Indenture Supplement, any Notes that are issued in
bearer form pursuant to this Indenture shall be issued in accordance with the
requirements of Code section 163(f)(2).
Section 2.16 Meetings of Noteholders. To the extent provided by the
Indenture Supplement for any Series issued in whole or in part in Bearer Notes,
the Servicer or the Indenture Trustee may at any time call a meeting of the
Noteholders of such Series, to be held at such time and at such place as the
Servicer and the Indenture Trustee, as the case may be, shall determine, for the
purpose of approving a modification or amendment to, or obtaining a waiver of,
any covenant or condition set forth in this Indenture with respect to such
Series or in the Notes of such Series, subject to Article X.
Section 2.17 Uncertificated Classes. Notwithstanding anything to the
contrary contained in this Article II or in Article XI, unless otherwise
specified in any Indenture Supplement, any provisions contained in this Article
II and in Article XI relating to the registration, form, execution,
authentication, delivery, presentation, cancellation and surrender of Notes
shall not be applicable to any uncertificated Notes; provided, however, that,
except as otherwise specifically provided in the Indenture Supplement, any such
uncertificated Notes shall be issued in "registered form" within the meaning of
Code section 163(f)(1).
13
ARTICLE III
REPRESENTATIONS AND COVENANTS OF ISSUER
Section 3.1 Payment of Principal and Interest.
(a) The Issuer will duly and punctually pay principal and interest in
accordance with the terms of the Notes as specified in the relevant Indenture
Supplement.
(b) The Noteholders of a Series as of the Record Date in respect of a
Distribution Date shall be entitled to the interest accrued and payable and
principal payable on such Distribution Date as specified in the related
Indenture Supplement. All payment obligations under a Note are discharged to the
extent such payments are made to the Noteholder of record.
Section 3.2 Maintenance of Office or Agency. The Issuer will maintain
an office or agency within the State of New York and such other locations as may
be set forth in an Indenture Supplement where Notes may be presented or
surrendered for payment, where Notes may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Issuer in
respect of the Notes and this Indenture may be served. The Issuer hereby
initially appoints the Indenture Trustee at its Corporate Trust Office to serve
as its agent for the foregoing purposes. The Issuer will give prompt written
notice to the Indenture Trustee and the Noteholders 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 presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office, and the
Issuer hereby appoints the Indenture Trustee at its Corporate Trust Office as
its agent to receive all such presentations, surrenders, notices and demands.
Section 3.3 Money for Note Payments to Be Held in Trust. As specified
in Sections 8.3(a) and (b) herein and in the related Indenture Supplement, all
payments of amounts due and payable with respect to the Notes which are to be
made from amounts withdrawn from the Collection Account, any Series Account or
the Excess Funding Account shall be made on behalf of the Issuer by the
Indenture Trustee or by the Paying Agent, and no amounts so withdrawn from the
Collection Account, any Series Account or the Excess Funding Account shall be
paid over to or at the written direction of the Issuer except as provided in
this Section 3.3 and in the related Indenture Supplement.
The Issuer will cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee an instrument in which
such Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of
this Section 3.3, that such Paying Agent, in acting as Paying Agent, is an
express agent of the Issuer and, further, 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;
14
(ii) give a Trustee Officer of the Indenture Trustee written
notice of any default by the Issuer (or any other obligor upon the Notes)
of which it has actual knowledge in the making of any payment required to
be made with respect to the Notes;
(iii) at any time during the continuance of any such default,
upon the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to
the Indenture Trustee all sums held by it in trust for the payment of Notes
if at any time it ceases to meet the standards required to be met by a
Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the satisfaction and
discharge of this Indenture or for any other purpose, by Issuer Order direct any
Paying Agent to pay to the Indenture Trustee all sums held in trust by such
Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts
as those upon which such sums were held by such Paying Agent; and upon such
payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall be
released from all further liability with respect to such sums.
Subject to applicable laws with respect to escheat of funds, and after
such notice required with respect to Notes not surrendered for cancellation
pursuant to Section 11.2(b) is given, 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 remaining unclaimed for two years after such amount has become due and
payable shall be discharged from such trust, and the Indenture Trustee or such
Paying Agent, as the case may be, shall give prompt notice of such occurrence to
the Issuer and shall release such money to the Issuer on Issuer Order; and the
Holder of such Note shall thereafter, as an unsecured general creditor, look
only to the Issuer (and then only to the extent of the amounts so paid to the
Issuer) for payment thereof, and all liability of the Indenture Trustee or such
Paying Agent with respect to such trust money shall thereupon cease; provided,
however, that the Indenture Trustee or such Paying Agent, before being required
to make any such repayment, shall at the written 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 cost of any such notice or publication shall
be paid out of funds in the Collection Account or any Series Account held for
the benefit of the Noteholders. The Indenture Trustee shall also adopt and
employ, at the expense of the Issuer, any other reasonable means of notification
of such repayment (including, but not limited to, mailing notice of such
repayment to Holders whose Notes have been called but have not been surrendered
for redemption or whose right to or
15
interest in moneys due and payable but not claimed is determinable from the
records of the Indenture Trustee or of the Paying Agent, at the last address of
record for each such Holder).
Section 3.4 Existence. The Issuer will keep in full effect its
existence, rights and franchises as a business trust under the laws of the State
of Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other State or of the United States of America,
in which case the Issuer will keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
related instrument or agreement.
Section 3.5 Protection of Collateral. The Issuer will from time to
time prepare, or cause to be prepared, execute and deliver all such supplements
and amendments hereto and all such financing statements, continuation
statements, instruments of further assurance and other instruments, and will
take such other action necessary or advisable to:
(a) grant more effectively all or any portion of the Collateral as
security for the Notes;
(b) maintain or preserve the lien (and the priority thereof) of this
Indenture or to carry out more effectively the purposes hereof;
(c) perfect, publish notice of, or protect the validity of any Grant
made or to be made under this Indenture;
(d) enforce any of the Collateral; or
(e) preserve and defend title to the Collateral securing the Notes and
the rights therein of the Indenture Trustee and the Noteholders secured thereby
against the claims of all persons and parties.
The Issuer hereby represents that all of the representations and
warranties set out in Annex B are true and correct.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required pursuant to this Section 3.5, (and does hereby
authorize the recording and filing of any financing statement, continuation
statement or other instrument required pursuant to this Section 3.5), but the
Indenture Trustee shall not have any obligation to take any such action unless
instructed to do so by Noteholders in accordance with the terms hereof.
The Issuer shall pay or cause to be paid any taxes levied on all or
any part of the Receivables securing the Notes.
16
Section 3.6 Opinions as to Collateral.
(a) On the Closing Date relating to any new Series of Notes, the
Issuer shall furnish to the Indenture Trustee an Opinion of Counsel satisfactory
to the Rating Agencies either stating that, in the opinion of such counsel, such
action has been taken to perfect the lien and security interest of this
Indenture, including 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 so necessary and reciting the details of such action, or
stating that, in the opinion of such counsel, no such action is necessary to
maintain the perfection of such lien and security interest.
(b) On or before June 30 of each year, beginning with June 30, 2003,
the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel, dated
as of a date within 90 days of such day, satisfactory to the Rating Agencies
stating that, in the opinion of such counsel, no filing or other action, other
than such filing or other action described in such opinion, is necessary from
the date of such opinion through June 30th of the following year to continue the
perfected status of the lien and security interest of the Issuer in the
collateral described in the financing statements referred to in such opinion.
Section 3.7 Performance of Obligations; Servicing of Receivables.
(a) The Issuer will not take any action and will use its best efforts
not to permit any action to be taken by others that would release any Person
from any of such Person's material covenants or obligations under any instrument
or agreement included in the Collateral 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 Transfer and Servicing Agreement or
such other instrument or agreement.
(b) The Issuer may contract with other Persons 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 Administrator to assist the Issuer in performing
its duties under this Indenture.
(c) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the other Transaction
Documents and in the instruments and agreements relating to the Collateral,
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 Transfer and Servicing Agreement in accordance with and within
the time periods provided for herein and therein.
(d) If the Issuer shall have knowledge of the occurrence of a Servicer
Default under the Transfer and Servicing Agreement, the Issuer shall promptly
notify the Indenture Trustee in writing of such default, shall direct the
Indenture Trustee to promptly notify the Rating Agencies of such default, and
shall direct the Indenture Trustee to specify in such notice the action, if any,
being taken with respect to such default. If a Servicer Default shall arise from
17
the failure of the Servicer to perform any of its duties or obligations under
the Transfer and Servicing Agreement with respect to the Receivables, the Issuer
shall take all reasonable steps available to it to remedy such failure.
(e) On and after the receipt by the Servicer of a Termination Notice
pursuant to Section 7.1 of the Transfer and Servicing Agreement, the Servicer
shall continue to perform all servicing functions under this Indenture until the
date specified in the Termination Notice or until a date mutually agreed upon by
the Servicer and the Indenture Trustee. As promptly as possible after the giving
of a Termination Notice to the Servicer, the Indenture Trustee shall appoint a
Successor Servicer, and such Successor Servicer shall accept its appointment by
a written assumption in a form acceptable to the Indenture Trustee. In the event
that a Successor Servicer has not been appointed and accepted its appointment at
the time when the Servicer ceases to act as Servicer, the Indenture Trustee in
accordance with Section 7.2 of the Transfer and Servicing Agreement without
further action shall automatically be appointed the Successor Servicer. The
Indenture Trustee may delegate any of its servicing obligations to an Affiliate
or agent in accordance with Section 3.1(b) and Section 5.7 of the Transfer and
Servicing Agreement. Notwithstanding the foregoing, the Indenture Trustee shall,
if it is legally unable so to act, petition at the expense of the Servicer a
court of competent jurisdiction to appoint any established institution
qualifying as an Eligible Servicer as the Successor Servicer hereunder. The
Indenture Trustee shall give prompt notice to each Rating Agency and each
Enhancement Provider upon the appointment of a Successor Servicer. Upon its
appointment, the Successor Servicer shall be the successor in all respects to
the Servicer with respect to servicing functions under this Indenture and shall
be subject to all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof, and all references in
this Indenture to the Servicer shall be deemed to refer to the Successor
Servicer. In connection with any Termination Notice, the Indenture Trustee will
review any bids which it obtains from Eligible Servicers and shall be permitted
to appoint any Eligible Servicer submitting such a bid as a Successor Servicer
for servicing compensation, subject to the limitations set forth in Section 7.2
of the Transfer and Servicing Agreement. Notwithstanding anything else herein to
the contrary, in no event shall the Indenture Trustee be liable for any
servicing fee or for any differential between the Monthly Servicing Fee and any
amount necessary to engage a Successor Servicer.
Section 3.8 Assignment. Without derogating from the absolute nature of
the assignment granted to the Indenture Trustee under this Indenture or the
rights of the Indenture Trustee hereunder, the Issuer agrees (i) that it will
not, without the prior written consent of the Indenture Trustee and satisfaction
of the Rating Agency Condition, amend, modify, waive, supplement, terminate or
surrender, or agree to any amendment, modification, supplement, termination,
waiver or surrender of, the terms of any Collateral (except to the extent
otherwise provided in the Transfer and Servicing Agreement) or the Transaction
Documents (except to the extent otherwise provided in the Transaction Documents)
or waive timely performance or observance by the Servicer or the Transferor of
its obligations under the Transfer 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, collections of payments on the Receivables
(except to the extent otherwise provided in the Transfer and Servicing
Agreement) or 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
18
consent of the Holders of all the Outstanding Notes. If any such amendment,
modification, supplement or waiver shall be so consented to by the Indenture
Trustee and such Noteholders, the Issuer agrees, promptly following a request by
the Indenture Trustee to do so, to execute and deliver, in its own name and at
its own expense, such agreements, instruments, consents and other documents as
the Indenture Trustee may deem necessary or appropriate in the circumstances.
Section 3.9 Negative Covenants. So long as any Notes are Outstanding,
the Issuer will not:
(a) sell, transfer, exchange, or otherwise dispose of any part of the
Collateral unless directed to do so by the Indenture Trustee, except as
expressly permitted by this Indenture and any Indenture Supplement, the
Receivables Purchase Agreement, the Trust Agreement or the Transfer and
Servicing Agreement;
(b) claim any credit on, or make any deduction from, the principal and
interest payable in respect of the Notes (other than amounts properly withheld
from such payments under the Code or applicable state law) or assert any claim
against any present or former Noteholder by reason of the payment of any taxes
levied or assessed upon any part of the Collateral;
(c) incur, assume, guarantee or otherwise become liable, directly or
indirectly, for any indebtedness other than as contemplated by the Transaction
Documents;
(d) (i) 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, (ii) 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 Collateral or any part thereof or any interest therein or the
proceeds thereof or (iii) permit the lien of this Indenture not to constitute a
valid first priority security interest (other than with respect to a tax,
mechanics, or similar lien) in the Collateral; or
(e) voluntarily dissolve or liquidate in whole or in part.
Section 3.10 Statements as to Compliance. The Issuer will deliver to
the Indenture Trustee and the Rating Agencies, on or before June 30 of each
year, beginning with June 30, 2003, an Officer's Certificate stating, as to the
Authorized Officer signing such Officer's Certificate, that
(i) a review of the activities of the Issuer during the preceding
Fiscal Year and of its performance under this Indenture was made under the
supervision of such Authorized Officer, and
(ii) to the best of such Authorized Officer's knowledge, based on
such review, either there has occurred no event which, with the giving of
notice or the passage of time or both, would constitute an Event of Default
and the Issuer has fully performed all its obligations under this Indenture
throughout such year, or, if there has occurred such
19
an event, specifying each such event known to such Authorized Officer and
the nature and status thereof.
Section 3.11 Issuer May Consolidate, Etc., Only on Certain Terms.
(a) The Issuer shall not consolidate or merge with or into any other
Person, unless:
(1) the Person (if other than the Issuer) formed by or surviving
such consolidation or merger (the "Surviving Person") (i) is organized and
existing under the laws of the United States of America or any state or the
District of Columbia, (ii) is not subject to regulation as an "investment
company" under the 1940 Act and (iii) expressly assumes, by an indenture
supplemental hereto, executed and delivered to the Indenture Trustee, in a
form satisfactory to the Indenture Trustee, the obligation to make due and
punctual payment of the principal of and interest on all Notes and the
performance of every covenant of this Indenture on the part of the Issuer
to be performed or observed;
(2) immediately after giving effect to such transaction, no Event
of Default or Early Amortization Event shall have occurred and be
continuing;
(3) the Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that (i) such
consolidation or merger and such supplemental indenture comply with this
Section 3.11, (ii) all conditions precedent provided for in this Section
3.11 relating to such transaction have been complied with (including any
filing required by the Exchange Act), and (iii) such supplemental indenture
is duly authorized, executed and delivered and is valid, binding and
enforceable against the Surviving Person;
(4) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(5) the Issuer shall have received a Tax Opinion with respect to
such consolidation or merger; and
(6) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been taken.
For the avoidance of doubt, this Section 3.11 shall not apply to the
transfer of the Receivables and other assets to the Issuer on the Certificate
Trust Termination Date.
(b) The Issuer shall not convey or transfer any of its properties or
assets, including those included in the Collateral, substantially as an entirety
to any Person, unless:
(1) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of which is
hereby restricted (the "Acquiring Person") (A) is a United States citizen
or a Person organized and existing under the laws of the United States of
America or any state, or the District of Columbia,
20
(B) is not subject to regulation as an "investment company" under the 1940
Act, (C) expressly assumes, by an indenture supplemental hereto, executed
and delivered to the Indenture Trustee, in form satisfactory to the
Indenture Trustee, the obligation to make due and punctual payments of the
principal of and interest on all Notes and the performance of every
covenant of this Indenture on the part of the Issuer to be performed or
observed, (D) expressly agree by means of such supplemental indenture that
all right, title and interest so conveyed or transferred shall be subject
and subordinate to the rights of Holders of the Notes, (E) unless otherwise
provided in such supplemental indenture, expressly agree to indemnify,
defend and hold harmless the Issuer against and from any loss, liability or
expense arising under or related to this Indenture and the Notes and (F)
expressly agree by means of such supplemental indenture that such Person
(or if a group of Persons, then one specified Person) shall make all
filings with the Commission (and any other appropriate Person) required by
the Exchange Act in connection with the Notes;
(2) immediately after giving effect to such transaction, no Event
of Default or Early Amortization Event shall have occurred and be
continuing;
(3) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(4) the Issuer shall have received an Opinion of Counsel to the
effect that for federal income tax purposes, (a) such action will not
adversely affect the tax characterization as debt of the Notes of any
outstanding Series or Class that were characterized as debt at the time of
their issuance, (b) such action will not cause the Issuer to be deemed to
be an association (or publicly traded partnership) taxable as a corporation
and (c) such action will not cause or constitute an event in which gain or
loss would be recognized by any Noteholder with respect to such
transaction;
(5) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been taken; and
(6) the Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that (i) such
conveyance or transfer and such supplemental indenture comply with this
Section 3.11, (ii) all conditions precedent herein provided for relating to
such transaction have been complied with (including any filing required by
the Exchange Act), and (iii) such supplemental indenture is duly
authorized, executed and delivered and is valid, binding and enforceable
against the Acquiring Person.
Section 3.12 Successor Substituted. Upon any consolidation or merger,
or any conveyance or transfer of the properties and assets of the Issuer
substantially as an entirety in accordance with Section 3.11, the Surviving
Person or the Acquiring Person, as the case may be, shall succeed to, and be
substituted for, and may exercise every right and power of, the Issuer under
this Indenture with the same effect as if such Person had been named as the
Issuer herein. In the event of any such conveyance or transfer, the Person named
as the Issuer in the first
21
paragraph of this Indenture or any successor which shall theretofore have become
such in the manner prescribed in this Section 3.12 shall be released from its
obligations under this Indenture as issued immediately upon the effectiveness of
such conveyance or transfer, provided that the Issuer shall not be released from
any obligations or liabilities to the Indenture Trustee or the Noteholders
arising prior to such effectiveness.
Section 3.13 No Other Business. The Issuer shall not engage in any
business other than the purpose and powers set forth in Section 2.3 of the Trust
Agreement and all activities related thereto.
Section 3.14 Servicer's Obligations. The Issuer shall cause the
Servicer to comply with all of its obligations under the Transaction Documents.
Section 3.15 Investments. Except as contemplated by this Indenture,
the Transfer and Servicing Agreement, the Trust Agreement or the Administration
Agreement, the Issuer shall not own, purchase, repurchase or acquire (or agree
contingently to do so) any stock, obligations, assets or securities of, or any
other interest in, or make any capital contribution to, any other Person.
Section 3.16 Capital Expenditures. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
Section 3.17 Removal of Administrator. So long as any Notes are
outstanding, the Issuer shall not remove the Administrator without cause unless
the Rating Agency Condition shall have been satisfied in connection with such
removal.
Section 3.18 Restricted Payments. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the Issuer or to the Servicer, (ii) redeem, purchase, retire or
otherwise acquire for value any such ownership or equity interest or security or
(iii) set aside or otherwise segregate any amounts for any such purpose;
provided, however, that the Issuer may make, or cause to be made, (x)
distributions as contemplated by, and to the extent funds are available for such
purpose under, the Transaction Documents and (y) payments to the Indenture
Trustee pursuant to Section 6.7. The Issuer will not, directly or indirectly,
make payments to or distributions from the Collection Account except in
accordance with the Transaction Documents.
Section 3.19 Notice of Events of Default. The Issuer agrees to give a
Trustee Officer of the Indenture Trustee and the Rating Agencies prompt written
notice of each Event of Default hereunder and written notice of each default on
the part of the Servicer or the Transferor of its obligations under the Transfer
and Servicing Agreement and each default on the part of the Transferor of its
obligations under the Receivables Purchase Agreement, as applicable.
Section 3.20 Further Instruments and Acts. Upon request of the
Indenture Trustee, the Issuer will execute and deliver such further instruments
and do such further acts as may be reasonably necessary or proper to carry out
more effectively the purpose of this Indenture.
22
ARTICLE IV
SATISFACTION AND DISCHARGE, DEFEASANCE
Section 4.1 Satisfaction and Discharge of this Indenture. This
Indenture shall cease to be of further effect with respect to the Notes except
as to (a) rights of registration of transfer and exchange, (b) substitution of
mutilated, destroyed, lost or stolen Notes, (c) the rights of Noteholders to
receive payments of principal thereof and interest thereon, (d) Sections 3.3,
3.7, 3.9, 3.12, 3.13 and 12.16, (e) the rights and immunities of the Indenture
Trustee hereunder, including the rights of the Indenture Trustee under Section
6.7, and the obligations of the Indenture Trustee under Section 4.2, and (f) the
rights of Noteholders as beneficiaries hereof with respect to the property so
deposited with the Indenture Trustee and payable to all or any of them, and the
Indenture Trustee, on written 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:
(i) either
(A) all Notes theretofore authenticated and delivered (other
than (1) Notes which have been destroyed, lost or stolen and which
have been replaced, or paid as provided in Section 2.6, and (2) Notes
for whose full payment money has theretofore been deposited in trust
or segregated and held in trust by the Issuer and thereafter repaid to
the Issuer or discharged from such trust, as provided in Section 3.3)
have been delivered to the Indenture Trustee for cancellation; or
(B) all Notes not theretofore delivered to the Indenture
Trustee for cancellation
(1) have become due and payable;
(2) will become due and payable at the Stated Series
Termination Date for such Class or Series of Notes; or
(3) 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
(4) the Issuer, in the case of (1), (2) or (3) above, has
irrevocably deposited or caused to be irrevocably deposited with the
Indenture Trustee (such deposit to be made from other than the
Transferor's funds) cash or direct obligations of or obligations
guaranteed by the United States of America (which will mature prior to
the date such amounts are payable), in trust for such purpose, in an
amount sufficient to pay and discharge the entire indebtedness on such
Notes not theretofore delivered to the Indenture Trustee for
cancellation when due at the Stated Series Termination Date for such
Class or Series of Notes
23
or the Redemption Date (if Notes shall have been called for redemption
pursuant to the related Indenture Supplement), as the case may be;
(ii) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer; and
(iii) 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
12.1(a) and each stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of this Indenture have been
complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Issuer to the Indenture Trustee under Section 6.7 and of the
Indenture Trustee to the Noteholders under Section 4.2 shall survive.
Section 4.2 Application of Issuer Money. All monies deposited with the
Indenture Trustee pursuant to Section 4.1 shall be held in trust and applied by
it, in accordance with the provisions of the Notes, this Indenture and the
applicable Indenture Supplement, to make payments, either directly or through
any Paying Agent to the Noteholders and for the payment in respect of which such
monies have been deposited with the Indenture Trustee, of all sums due and to
become due thereon for principal and interest; but such monies need not be
segregated from other funds except to the extent required herein or in the
Transfer and Servicing Agreement or required by law.
Section 4.3 Defeasance. Notwithstanding anything to the contrary in
this Indenture, except as otherwise specifically provided with respect to any
Series in the related Indenture Supplement:
(a) The Issuer may at the Issuer's option be discharged from its
obligations hereunder with respect to any Series or all outstanding Series (the
"Defeased Series") on the date the applicable conditions set forth in Section
4.3(c) are satisfied (a "Defeasance"); provided, however, that the following
rights, obligations, powers, duties and immunities shall survive with respect to
the Defeased Series until otherwise terminated or discharged hereunder: (i) the
rights of the Holders of Notes of the Defeased Series to receive, solely from
the trust fund provided for in Section 4.3(c), payments in respect of principal
of and interest on such Notes when such payments are due; (ii) the right of any
Enhancement Provider to the repayment of any amount due to it under the related
Enhancement Agreement and Indenture Supplement, including interest thereon;
(iii) the Issuer's obligations with respect to such Notes under Sections 2.5 and
2.6; (iv) the rights (including the right to payment of its fees and expenses),
powers, trusts, duties, and immunities of the Issuer, the Paying Agent and the
Transfer Agent and Registrar hereunder; and (v) this Section 4.3.
(b) Subject to Section 4.3(c), the Issuer at its option may cause
Collections allocated to the Defeased Series and available to acquire Principal
Receivables to be applied to acquire Eligible Investments rather than Principal
Receivables.
24
(c) The following shall be the conditions to Defeasance under Section
4.3(a):
(i) The Issuer irrevocably shall have deposited or caused to be
deposited with the Indenture Trustee (such deposit to be made from other
than the Transferor's funds), under the terms of an irrevocable trust
agreement in form and substance satisfactory to the Indenture Trustee, as
trust funds in trust for making the payments described below, (A) U.S.
Dollars in an amount, or (B) Eligible Investments which through the
scheduled payment of principal and interest in respect thereof will
provide, not later than the due date of payment thereon, money in an
amount, or (C) a combination thereof, in each case sufficient to pay and
discharge, and which shall be applied by the Indenture Trustee to pay and
discharge, all remaining scheduled interest and principal payments on all
outstanding Notes of the Defeased Series on the dates scheduled for such
payments in this Indenture and the applicable Indenture Supplements and all
amounts owing to the Enhancement Providers with respect to the Defeased
Series;
(ii) prior to its exercise of its right pursuant to this Section
4.3 with respect to a Defeased Series to substitute money or Eligible
Investments for Receivables, the Issuer shall have delivered to the
Indenture Trustee an Opinion of Counsel to the effect that such deposit and
termination of obligations will not have any material adverse impact on the
Federal income tax characterization of any outstanding Series of Notes that
have been the subject of a previous opinion of tax counsel or result in the
Issuer being taxable as an association for Federal or applicable state tax
purposes and an Opinion of Counsel to the effect that such deposit and
termination of obligations will not result in the Issuer being required to
register as an "investment company" within the meaning of the 1940 Act;
(iii) the Issuer shall have delivered to the Indenture Trustee
and any Enhancement Provider an Officer's Certificate of the Issuer stating
the Issuer reasonably believes that such deposit and termination of
obligations will not, based on the facts known to such officer at the time
of such certification, then cause an Early Amortization Event with respect
to any Series or any event that, with the giving of notice or the lapse of
time, would result in the occurrence of an Early Amortization Event with
respect to any Series; and
(iv) the Rating Agency Condition shall have been satisfied.
ARTICLE V
EARLY AMORTIZATION EVENTS, DEFAULTS AND REMEDIES
Section 5.1 Early Amortization Events.
Unless modified with respect to any Series of Notes by the Indenture
Supplement for such Series, if any one of the following events shall occur:
(a) Circuit City shall consent or fail to object to the appointment of
a bankruptcy trustee, conservator, receiver or liquidator in any bankruptcy
proceeding, insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceeding of or relating to
25
Circuit City or of or relating to all or substantially all of its property, or a
decree or order of a court, agency or supervisory authority having jurisdiction
in the premises for the appointment of a bankruptcy trustee, conservator,
receiver or liquidator in any insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceeding, or for the winding-up or
liquidation of its affairs, shall have been entered against Circuit City or an
action seeking any such decree or order shall have been commenced and,
notwithstanding an objection by Circuit City, shall have remained undischarged
or unstayed for a period of sixty (60) days; or Circuit City shall admit in
writing its inability to pay its debts generally as they become due, file or
consent or fail to object (or object without dismissal of any such filing within
sixty (60) days of such filing or the earlier entry of any order providing for
such relief) to the filing of a petition to take advantage of any applicable
bankruptcy, insolvency or reorganization statute, make an assignment for the
benefit of its creditors or voluntarily suspend payment of its obligations;
(b) the Bank shall consent or fail to object to the appointment of a
conservator, receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceeding of or relating to the
Bank or of or relating to all or substantially all of its property, or a decree
or order of a court, agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator, receiver or liquidator in any
insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceeding, or for the winding-up or liquidation of its affairs, shall
have been entered against the Bank; or the Bank shall admit in writing its
inability to pay its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors or voluntarily suspend payment of
its obligations; or the Bank shall become unable for any reason to sell
Receivables to the Transferor in accordance with the provisions of the
Receivables Purchase Agreement;
(c) the Transferor shall consent or fail to object to the appointment
of a bankruptcy trustee, conservator, receiver or liquidator in any bankruptcy
proceeding, insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceeding of or relating to the Transferor or of or
relating to all or substantially all of its property, or a decree or order of a
court, agency or supervisory authority having jurisdiction in the premises for
the appointment of a bankruptcy trustee, conservator, receiver or liquidator in
any insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceeding, or for the winding-up or liquidation of its affairs, shall
have been entered against the Transferor or an action seeking any such decree or
order shall have been commenced and, notwithstanding an objection by the
Transferor, shall have remained undischarged or unstayed for a period of sixty
(60) days; or the Transferor shall admit in writing its inability to pay its
debts generally as they become due, file or consent or fail to object (or object
without dismissal of any such filing within sixty (60) days of such filing or
the earlier entry of any order providing for such relief) to the filing of a
petition to take advantage of any applicable bankruptcy, insolvency or
reorganization statute, make an assignment for the benefit of its creditors or
voluntarily suspend payment of its obligations (any such event described in this
clause (c) or in clause (a) or (b) above, an "Insolvency Event");
(d) the Issuer shall become an "investment company" within the meaning
of the 1940 Act; or
26
(e) on or after the Certificate Trust Termination Date, the Transferor
shall become unable for any reason to transfer Receivables to the Issuer in
accordance with the provisions of the Transfer and Servicing Agreement;
then, an Early Amortization Event with respect to all Series then outstanding
shall occur without any notice or other action on the part of the Indenture
Trustee or the Noteholders immediately upon the occurrence of such event. Upon a
Responsible Officer of the Indenture Trustee receiving actual notice thereof,
the Indenture Trustee shall advise the Rating Agencies in writing of the
occurrence of any Early Amortization Event.
Section 5.2 Events of Default. "Event of Default," wherever used
herein, means with respect to any Series 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):
(a) default in the payment of the principal of any Note of that
Series, if and to the extent not previously paid, when the same becomes due and
payable on its Stated Series Termination Date; or
(b) default in the payment of any interest on any Note of that Series
when the same becomes due and payable, and such default shall continue for a
period of thirty-five (35) days; or
(c) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer in an involuntary case
under any applicable federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, or appointing a receiver, conservator,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
the Issuer or ordering the winding-up or liquidation of the Issuer's affairs,
and such decree or order shall remain unstayed and in effect for a period of
sixty (60) consecutive days; or
(d) 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 the taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator, conservator or similar official of
the Issuer, or the making by the Issuer of any general assignment for the
benefit of creditors, or the failure by the Issuer generally to pay, or the
admission in writing by the Issuer of its inability to pay, its debts as such
debts become due, or the taking of action by the Issuer in furtherance of any of
the foregoing; or
(e) default in the observance or performance in any material respect
of any covenant or agreement of the Issuer made in this Indenture made in
respect of the Notes of such Series (other than a covenant or agreement, a
default in the observance or performance of which is elsewhere in this Section
5.2 specifically dealt with) (all of such covenants and agreements in the
Indenture which are not expressly stated to be for the benefit of a particular
Series being deemed to be in respect of the Notes of all Series for this
purpose) and such default shall
27
continue or not be cured for a period of sixty (60) days after there shall have
been given, by registered or certified mail, return receipt requested to the
Issuer by the Indenture Trustee or to the Issuer and the Indenture Trustee by
the Holders of Notes representing at least 25% of the principal balance of the
Outstanding Notes of such Series, a written notice specifying such default and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder and, as a result of such default, the interests of the
Holders of the Notes are materially and adversely affected and continue to be
materially and adversely affected during the 60-day period; or
(f) any additional events specified in the Indenture Supplement
related to such Series.
The Issuer shall deliver to a Trustee Officer of the Indenture
Trustee, within five (5) days after the occurrence thereof, written notice in
the form of an Officer's Certificate of any event which with the giving of
notice and the lapse of time would become an Event of Default, its status and
what action the Issuer is taking or proposes to take with respect thereto.
Section 5.3 Acceleration of Maturity; Rescission and Annulment. If an
Event of Default described in paragraph (a), (b) or (e) of Section 5.2 should
occur and be continuing with respect to a Series, then and in every such case
the Indenture Trustee or the Holders of Notes representing more than 50% of the
principal balance of the Outstanding Notes of such Series may declare all the
Notes of such Series to be immediately due and payable, by a notice in writing
to the Issuer (and to a Trustee Officer of the Indenture Trustee if declared by
Noteholders), and upon any such declaration the unpaid principal amount of such
Notes, together with accrued and unpaid interest thereon through the date of
acceleration, shall become immediately due and payable.
If an Event of Default described in paragraph (c) or (d) of Section
5.2 should occur and be continuing, then the unpaid principal of the Notes,
together with accrued and unpaid interest thereon through the date of
acceleration, shall automatically become due and payable.
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 provided in this Article V, the
Holders of Notes representing more than 50% of the principal balance of the
Outstanding Notes of such Series, by written notice to the Issuer, a Trustee
Officer of the Indenture Trustee and the Rating Agencies, may rescind and annul
such declaration and its consequences; provided, however, that:
(a) the Issuer has paid or deposited with the Indenture Trustee a sum
sufficient to pay:
(i) 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
28
(ii) all sums paid or advanced by the Indenture Trustee hereunder
and the reasonable compensation, expenses, disbursements and advances of
the Indenture Trustee and its agents and counsel; and
(b) 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 5.13.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
Section 5.4 Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee.
(a) The Issuer covenants that if (i) default is made in the payment of
any interest on any Note when the same becomes due and payable, and such default
continues for a period of thirty-five (35) days following the date on which such
interest became due and payable, or (ii) default is made in the payment of
principal of any Note, if and to the extent not previously paid, when the same
becomes due and payable on the Stated Series Termination Date, the Issuer will,
upon demand of the Indenture Trustee, pay to it, for the benefit of the Holders
of the Notes of the affected Series, the whole amount then due and payable on
such Notes for principal and interest, with interest upon the overdue principal,
and, to the extent payment at such rate of interest shall be legally
enforceable, interest upon overdue installments of interest, as specified in the
related Indenture Supplement, and in addition thereto will pay such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Indenture Trustee and its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee, in its own name and as trustee of an express
trust, may institute a Proceeding for the collection of the sums so due and
unpaid, and may prosecute such Proceeding to judgment or final decree, and may
enforce the same against the Issuer or other obligor upon such Notes and collect
in the manner provided by law out of the property of the Issuer, wherever
situated, the moneys adjudged or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee may, as more particularly provided in Section 5.5, in its discretion,
proceed to protect and enforce its rights and the rights of the Noteholders of
the affected Series, by such appropriate Proceedings as the Indenture Trustee
shall deem most effective to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy or legal or equitable right vested in the Indenture Trustee by this
Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or any
other obligor upon the Notes of the affected Series, or any Person having or
claiming an ownership interest in the Collateral, Proceedings under Title 11 of
the United States Code or any other applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or in case
29
a receiver, conservator, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator, custodian or other similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor or Person, or in case of any other comparable judicial Proceedings
relative to the Issuer or other obligor upon the Notes of such Series, 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 5.4, shall be entitled and empowered, by intervention
in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes of such
Series and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Indenture Trustee (including
any claim for reasonable compensation to the Indenture Trustee and each
predecessor Indenture Trustee, and their respective agents, attorneys and
counsel, and for reimbursement of all expenses and liabilities incurred,
and all advances made, by the Indenture Trustee and each predecessor
Indenture Trustee, except as a result of negligence or willful misconduct)
and of the Noteholders of such Series allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote
on behalf of the Holders of Notes of such Series in any election of a
trustee, a standby trustee or Person performing similar functions in any
such Proceedings;
(iii) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute all amounts received
with respect to the claims of the Noteholders of such Series 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 of such Series allowed in any
judicial Proceedings relative to the Issuer, its creditors and its
property;
and any trustee, receiver, conservator, liquidator, custodian, assignee,
sequestrator or other similar official in any such Proceeding is hereby
authorized by each of such Noteholders to make payments to the Indenture
Trustee, and, in the event that the Indenture Trustee shall consent to the
making of payments directly to such Noteholders, to pay to the Indenture Trustee
such amounts as shall be sufficient to cover reasonable compensation to the
Indenture Trustee, each predecessor Indenture Trustee and their respective
agents, attorneys and counsel, and all other expenses and liabilities incurred,
and all advances made, by the Indenture Trustee and each predecessor Indenture
Trustee except as a result of negligence or willful misconduct.
(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
30
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 trial or other
Proceedings relative thereto, and any such action or 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
benefit of the Holders of the Notes of the affected Series as provided herein.
(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 of the affected Series, and it
shall not be necessary to make any such Noteholder a party to any such
Proceedings.
Section 5.5 Remedies; Priorities.
(a) If an Event of Default shall have occurred and be continuing with
respect to any Series, and the Notes of such Series have been accelerated
pursuant to Section 5.3, the Indenture Trustee may do one or more of the
following (subject to Sections 5.6 and 12.16):
(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
of the affected Series or under this Indenture with respect thereto,
whether by declaration or otherwise, enforce any judgment obtained, and
collect from the Issuer the portion of the Collateral allocated to such
Series and any other obligor upon such Notes moneys adjudged due;
(ii) take any other appropriate action to protect and enforce the
rights and remedies of the Indenture Trustee and the Holders of the Notes
of the affected Series;
(iii) cause the Issuer to sell Principal Receivables (or
interests therein) in an amount equal to the Invested Amount of the
accelerated Series and the related Finance Charge Receivables in accordance
with Section 5.16;
provided, however, that the Indenture Trustee may not exercise the remedy
described in subparagraph (iii) above unless (A) (1) the Holders of Notes
representing 100% of the principal balance of the Outstanding Notes of the
affected Series consent in writing thereto, (2) the Indenture Trustee determines
that any proceeds of such exercise distributable to the Noteholders of the
affected Series are sufficient to discharge in full all amounts then due and
unpaid upon the Notes for principal and interest and is directed to exercise
this remedy by Holders of Notes representing more than 50% of the principal
balance of the Outstanding Notes of such Series, or (3) the Indenture Trustee
determines that the Collateral may not continue to provide sufficient funds for
the payment of principal of and interest on the Notes as they would have become
due if the Notes had not been declared due and payable, and the Indenture
Trustee obtains the consent of the Holders of Notes representing at least
66-2/3% of the principal balance of the Outstanding
31
Notes of each Class of such Series and (B) the Indenture Trustee has obtained an
Opinion of Counsel to the effect that the exercise of such remedy complies with
applicable federal and state securities laws. In determining such sufficiency or
insufficiency with respect to clauses (A)(2) and (A)(3), the Indenture Trustee
may, but need not, obtain and conclusively rely upon an opinion of an
Independent investment banking or accounting firm of national reputation as to
the feasibility of such proposed action and as to the sufficiency of the
Collateral for such purpose.
The remedies provided in this Section 5.5(a) are the exclusive
remedies provided to the Noteholders with respect to the Collateral and each of
the Noteholders (by their acceptance of their respective interests in the Notes)
or the Indenture Trustee hereby expressly waive any other remedy that might have
been available under the applicable UCC.
(b) If the Indenture Trustee collects any money or property pursuant
to this Article V following the acceleration of the Notes of the affected Series
pursuant to Section 5.3 (so long as such a declaration shall not have been
rescinded or annulled), it shall pay out the money or property in the following
order:
FIRST: to the Indenture Trustee for amounts (including indemnification
amounts) due pursuant to Section 6.7; and
SECOND: unless otherwise specified in the related Indenture Supplement, to
the Servicer for distribution in accordance with Article IV of the
related Indenture Supplement with such amounts being deemed to be
Principal Collections and Finance Charge Collections in the same
proportion as (x) the outstanding principal balance of the Notes
bears to (y) the sum of the accrued and unpaid interest on the
Notes and other fees and expenses payable in connection therewith
under the applicable Indenture Supplement, including the amounts
payable under any Enhancements with respect to such Series.
(c) The Indenture Trustee may, upon written notification to the
Issuer, fix a record date and payment date for any payment to Noteholders of the
affected Series pursuant to this Section 5.5. At least fifteen (15) days before
such record date, the Indenture Trustee shall mail or send by facsimile, at the
expense of the Servicer, to each such Noteholder a notice that states the record
date, the payment date and the amount to be paid.
Section 5.6 Optional Preservation of the Collateral. If the Notes of
any Series have been declared to be due and payable under Section 5.3 following
an Event of Default and such declaration and its consequences have not been
rescinded and annulled, and the Indenture Trustee has not received directions
from the Noteholders pursuant to Section 5.12, the Indenture Trustee may, but
need not, elect to maintain possession of the portion of the Collateral which
secures such Notes and apply proceeds of the Collateral to make payments on such
Notes to the extent such proceeds are available therefor. 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 Collateral. In determining whether to
maintain possession of the Collateral, the Indenture Trustee may, but need not,
obtain and conclusively
32
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 Collateral for such purpose.
Section 5.7 Limitation on Suits. No Noteholder shall have any right by
virtue of any provisions of this Indenture to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Indenture,
unless such Noteholder previously shall have given notice to the Indenture
Trustee, and unless the Holders of Notes evidencing Undivided Interests
aggregating more than 25% of the Invested Amount of any Series which may be
adversely affected but for the institution of such suit, action or proceeding
shall have made written request upon the Indenture Trustee to institute such
action, suit or proceeding in its own name as Indenture Trustee hereunder and
shall have offered to the Indenture Trustee such reasonable indemnity as it may
require against the costs, expenses and liabilities to be incurred therein or
thereby, and the Indenture Trustee, for 60 days after its receipt of such
notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and intended,
and being expressly covenanted by each Noteholder with every other Noteholder
and the Indenture Trustee, that no one or more Noteholders shall have the right
in any manner whatsoever by virtue or by availing itself or themselves of any
provisions of this Indenture to affect, disturb or prejudice the rights of the
Noteholders of any other of the Notes, or to obtain or seek to obtain priority
over or preference to any other such Noteholder, or to enforce any right under
this Indenture, except in the manner herein provided and for the equal, ratable
and common benefit of all Noteholders. For the protection and enforcement of the
provisions of this Section 5.7, each and every Noteholder and the Indenture
Trustee shall be entitled to such relief as can be given either at law or in
equity. Each Note Owner by its acquisition of a Book Entry Note shall be deemed
to have consented to the provisions of this Section 5.7.
Section 5.8 Unconditional Rights of Noteholders to Receive Principal
and Interest. Notwithstanding any other provision in this Indenture, each
Noteholder shall have the right which is absolute and unconditional to receive
payment of the principal of and interest in respect of such Note as such
principal and interest becomes due and payable and to institute suit for the
enforcement of any such payment, and such right shall not be impaired without
the consent of such Noteholder.
Section 5.9 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, 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 Noteholder shall, subject to any determination in such Proceeding, be
restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Indenture Trustee and the Noteholders
shall continue as though no such Proceeding had been instituted.
Section 5.10 Rights and Remedies Cumulative. No right, remedy, power
or privilege herein conferred upon or reserved to the Indenture Trustee or to
the Noteholders is intended to be exclusive of any other right, remedy, power or
privilege, and every right, remedy, power or privilege shall, to the extent
permitted by law, be cumulative and in addition to every
33
other right, remedy, power or privilege given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or exercise of any
right or remedy shall not preclude any other further assertion or the exercise
of any other appropriate right or remedy.
Section 5.11 Delay or Omission Not Waiver. No failure to exercise and
no delay in exercising, on the part of the Indenture Trustee or of any
Noteholder or other Person, any right or remedy occurring hereunder upon any
Event of Default shall impair any such right or remedy or constitute a waiver
thereof of any such 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 by the Noteholders, as the case may be.
Section 5.12 Rights of Noteholders to Direct Indenture Trustee. The
Holders of Notes representing more than 50% of the principal balance of the
Outstanding Notes of any affected Series shall have the right to direct in
writing the time, method and place of conducting any Proceeding for any remedy
available to the Indenture Trustee with respect to such Series or exercising any
trust or power conferred on the Indenture Trustee with respect to such Series;
provided, however, that subject to Section 6.1:
(a) the Indenture Trustee shall have the right to decline any such
direction if the Indenture Trustee, after being advised by counsel, determines
that the action so directed is in conflict with any rule of law or with this
Indenture, and
(b) the Indenture Trustee shall have the right to decline any such
direction if the Indenture Trustee in good faith shall, by a Trustee Officer of
the Indenture Trustee, determine that the Proceedings so directed would be
illegal or involve the Indenture Trustee in personal liability or be unjustly
prejudicial to the Noteholders not parties to such direction.
Section 5.13 Waiver of Past Defaults. Prior to the declaration of the
acceleration of the maturity of the Notes of the affected Series as provided in
Section 5.3, Holders of Notes representing more than 66 2/3% of the principal
balance of the Outstanding Notes of such Series (or with respect to any such
Series with two or more Classes, of each Class), may, on behalf of all such
Noteholders, waive in writing any past default, with written notice to the
Indenture Trustee, with respect to such Notes and its consequences, except a
default:
(a) in the payment of the principal or interest in respect of any Note
of such Series, or
(b) in respect of a covenant or provision hereof that under Section
10.2 cannot be modified or amended without the consent of the Noteholder of each
Outstanding Note affected.
Upon any such written waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
34
Section 5.14 Undertaking for Costs. All parties to this Indenture
agree, and each Noteholder by its acceptance thereof shall be deemed to have
agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the 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 (other than the Indenture Trustee) 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 5.14 shall not apply to
any suit instituted by the Indenture Trustee, to any suit instituted by any
Noteholder, or group of Noteholders (in compliance with Section 5.8), holding
Notes representing more than 10% of the principal balance of the Outstanding
Notes of the affected Series, or to any suit instituted by any Noteholder for
the enforcement of the payment of the principal or interest in respect of any
Note on or after the Distribution Date on which any of such amounts was due (or,
in the case of redemption, on or after the applicable Redemption Date).
Section 5.15 Waiver of Stay or Extension Laws. The Issuer covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may adversely 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 5.16 Sale of Receivables.
(a) The method, manner, time, place and terms of any sale of
Receivables (or interests therein) pursuant to Section 5.5(a)(iii) shall be
commercially reasonable. The Indenture Trustee may from time to time postpone
any sale by public announcement made at the time and place of such sale.
(b) The Indenture Trustee is hereby irrevocably appointed the agent
and attorney-in-fact of the Issuer in connection with any sale of Receivables
(or interests therein) pursuant to Section 5.5(a)(iii). No purchaser or
transferee at any such sale shall be bound to ascertain the Indenture Trustee's
authority, inquire into the satisfaction of any conditions precedent or see to
the application of any monies.
(c) In its exercise of the foreclosure remedy pursuant to Section
5.5(a)(iii), the Indenture Trustee shall solicit bids for the sale of Principal
Receivables (or interests therein) in an amount equal to the Invested Amount of
the affected Series of Notes at the time of sale and the related Finance Charge
Receivables (or interests therein). The Transferor or any of its affiliates
shall be entitled to participate in, and to receive from the Indenture Trustee a
copy of each other bid submitted in connection with, such bidding process;
provided, however, that (i) at least one participant other than the Transferor
and any of its affiliates must submit a bona fide offer, and (ii) the Transferor
and any of its affiliates are prohibited from bidding an amount which exceeds
fair value for the transferred assets. The Indenture Trustee shall sell such
35
Receivables (or interests therein) to the bidder with the highest cash purchase
offer. Any such sale shall occur during the period beginning on a Determination
Date and ending on the following Distribution Date, in each case with respect to
the affected Series of Notes, and shall be based on the Invested Amount of the
affected Series of Notes as set forth in the monthly certificate delivered by
the Servicer on such Determination Date pursuant to Section 3.4(c) of the
Pooling and Servicing Agreement or Section 3.4(c) of the Transfer and Servicing
Agreement, as applicable. The proceeds of any such sale shall be applied as
specified in the applicable Indenture Supplement.
Section 5.17 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 or obtaining of or application for 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 Collateral or
upon any of the assets of the Issuer. Any money or property collected by the
Indenture Trustee shall be applied as specified in Section 5.5(b) and the
applicable Indenture Supplement.
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.1 Duties of the Indenture Trustee.
(a) If an Event of Default or an Early Amortization Event of which the
Indenture Trustee has knowledge shall have occurred and be continuing, 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 or negligence on its part, the
Indenture Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; provided, however, that the Indenture
Trustee shall, upon receipt of any certificates or opinions furnished to
the Indenture Trustee which are specifically required to be furnished
pursuant to any provision of this Indenture, examine such certificates and
opinions to determine whether or not they conform to the requirements of
this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section 6.1;
(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
36
(iii) the Indenture Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.12.
(d) The Indenture Trustee shall not be liable for interest on any
money received by it except as the Indenture Trustee may agree in writing with
the Issuer.
(e) 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 Transfer and Servicing Agreement.
(f) No provision of this Indenture shall require the Indenture Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers hereunder if the Indenture Trustee shall have reasonable
grounds to believe that repayment of such funds or indemnity satisfactory to it
against such risk or liability is not assured or provided to it.
(g) 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 6.1 and the TIA.
(h) The Indenture Trustee shall not be charged with knowledge of any
Event of Default, Servicer Default or Early Amortization Event unless either (1)
a Responsible Officer shall have actual knowledge of such Event of Default,
Servicer Default or Early Amortization Event or (2) written notice of such Event
of Default, Servicer Default or Early Amortization Event shall have been given
to the Indenture Trustee in accordance with the provisions of this Indenture.
Section 6.2 Notice of Early Amortization Event or Event of Default.
Upon the occurrence of any Early Amortization Event or Event of Default of which
a Trustee Officer has actual knowledge or has received written notice thereof,
the Indenture Trustee shall transmit by mail to all Noteholders as their names
and addresses appear on the Note Register and the Rating Agencies, notice of
such Early Amortization Event or Event of Default hereunder known to the
Indenture Trustee within thirty (30) days after it occurs or within ten (10)
Business Days after it receives such notice or obtains actual notice, if later.
Section 6.3 Rights of Indenture Trustee. Except as otherwise provided
in Section 6.1:
(a) the Indenture Trustee may conclusively rely and shall fully be
protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, note or other paper or document reasonably believed by it to be
genuine and to have been signed or presented by the proper party or parties;
(b) except during the continuance of an Event of Default, whenever in
the administration of this Indenture the Indenture Trustee shall deem it
desirable that a matter be proved or established prior to taking, suffering or
omitting any action hereunder, the Indenture
37
Trustee (unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, conclusively rely upon an Officer's
Certificate of the Issuer. The Issuer shall provide a copy of such Officer's
Certificate to the Noteholders at or prior to the time the Indenture Trustee
receives such Officer's Certificate;
(c) as a condition to the taking, suffering or omitting of any action
by it hereunder, the Indenture Trustee may consult with counsel and the advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in-good faith and in reliance thereon;
(d) the Indenture Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture or to honor the request
or direction of any of the Noteholders pursuant to 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 might be
incurred by it in compliance with such request or direction; provided, however,
that nothing contained herein shall relieve the Indenture Trustee of the
obligations upon the occurrence of an Event of Default (which has not been cured
or waived) to exercise such of the rights and powers vested in it by this
Indenture and to use the same degree of care or skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs;
(e) the Indenture Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
note or other paper or document, but the Indenture Trustee at the written
direction of one or more of the Noteholders and at the expense of the
Noteholders, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Indenture Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Issuer and the
Servicer, personally or by agent or attorney;
(f) the Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, attorneys, custodians or nominees and the Indenture Trustee shall not be
responsible for any (i) misconduct or negligence on the part of any agent,
attorney, custodians or nominees appointed with due care by it hereunder or (ii)
the supervision of such agents, attorneys, custodians or nominees after such
appointment with due care;
(g) the Indenture Trustee shall not be liable for any actions taken,
suffered or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights conferred upon the Indenture Trustee by this
Indenture; and
(h) in the event that the Indenture Trustee is also acting as Paying
Agent and Transfer Agent and Registrar and Successor Servicer, if it becomes
Successor Servicer pursuant to Section 7.2 of the Transfer and Servicing
Agreement, the rights and protections afforded to the Indenture Trustee pursuant
to this Article VI shall also be afforded to such Paying Agent and Transfer
Agent and Registrar and Successor Servicer, if it becomes Successor Servicer
pursuant to Section 7.2 of the Transfer and Servicing Agreement.
38
Section 6.4 Not Responsible for Recitals or Issuance of Notes. The
recitals contained herein and in the Notes, except the certificate of
authentication of the Indenture Trustee, shall be taken as the statements of the
Issuer, and the Indenture Trustee assumes no responsibility for their
correctness. Neither the Indenture Trustee nor any of its agents makes any
representation as to the validity or sufficiency of the Indenture, the Notes, or
any related document. The Indenture Trustee shall not be accountable for the use
or application by the Issuer of the proceeds from the Notes.
Section 6.5 Restrictions on Holding Notes. The Indenture Trustee shall
not in its individual capacity, but may in a fiduciary capacity, become the
owner or pledgee of Notes and may otherwise deal with the Issuer with the same
rights it would have if it were not Indenture Trustee, Paying Agent, Transfer
Agent and Registrar or such other agent. Any Paying Agent, Transfer Agent and
Registrar that is not also the Indenture Trustee or any other agent of the
Issuer, in its individual or any other capacity, may become the owner or pledgee
of Notes and may otherwise deal with the Issuer with the same rights it would
have if it were not Indenture Trustee, Paying Agent, Transfer Agent and
Registrar or such other agent.
Section 6.6 Money Held in Trust. Money held by the Indenture Trustee
in trust hereunder need not be segregated from other funds held by the Indenture
Trustee in trust hereunder except to the extent required herein or required by
law. The Indenture Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed upon in writing by the
Indenture Trustee and the Issuer.
Section 6.7 Compensation, Reimbursement and Indemnification. The
Servicer shall pay to the Indenture Trustee from time to time reasonable
compensation as has been agreed to in writing between the Servicer and the
Indenture Trustee for all services rendered by the Indenture Trustee and the
Authenticating Agent under this Indenture (which compensation shall not be
limited by any law on compensation of a trustee of an express trust). The
Servicer shall reimburse the Indenture Trustee for all reasonable out-of-pocket
expenses incurred or made by it, including costs of collection, in addition to
the compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Indenture Trustee's
agents, counsel, accountants and experts, except any such expense, disbursement
or advance as may arise from its negligence or bad faith and except as
concerning fees of the Servicer if and at such time as the Indenture Trustee is
acting as the Successor Servicer in accordance with the terms of the Transfer
and Servicing Agreement. The Issuer shall direct the Servicer to indemnify,
defend and hold harmless, and the Servicer shall indemnify the Indenture Trustee
and its officers, directors, employees and agents against any and all loss,
liability, expense, damage or claim (including the reasonable fees of either
in-house counsel or outside counsel) incurred by it in connection with the
administration of this trust and the performance of its duties hereunder and
under any other Transaction Document, including any claim arising from any
failure by Issuer or Transferor to pay when due any sales, excise, transfer or
personal taxes relating to the Receivables. The Indenture Trustee shall notify
the Issuer and the Servicer promptly of any claim for which it may seek
indemnity. Failure by the Indenture Trustee to so notify the Issuer and the
Servicer shall not relieve the Issuer or the Servicer of its obligations
hereunder unless such loss, liability or expense could have been avoided with
such prompt notification and then only to the extent of such loss, expense or
liability which could have been so avoided. The Servicer shall defend any claim
against the Indenture Trustee;
39
provided, however, that the Indenture Trustee may have separate counsel and, if
it does, the Servicer shall pay the reasonable fees and expenses of such
counsel. Neither the Issuer nor the Servicer need reimburse any expense or
indemnify against any loss, liability or expense incurred by the Indenture
Trustee through the Indenture Trustee's own willful misconduct, negligence or
bad faith.
The Servicer's payment obligations to the Indenture Trustee pursuant
to this Section 6.7 shall survive the discharge of this Indenture or earlier
resignation or removal of the Indenture Trustee. When the Indenture Trustee
incurs expenses after the occurrence of a Default specified in Section 5.2(c) or
5.2(d) 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 6.8 Replacement of Indenture Trustee. No resignation or
removal of the Indenture Trustee and no appointment of a successor Indenture
Trustee shall become effective until the acceptance of appointment by the
successor Indenture Trustee pursuant to this Section 6.8. The Indenture Trustee
may resign at any time by giving thirty (30) days written notice to the Issuer
and the Rating Agencies. The Holders of Notes representing more than 66 2/3% of
the Outstanding Amount may remove the Indenture Trustee by so notifying the
Indenture Trustee in writing and may appoint a successor Indenture Trustee. The
Administrator shall remove the Indenture Trustee upon written notice if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) the Indenture Trustee is adjudged a bankrupt or insolvent;
(iii) the Indenture Trustee shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings of or
relating to the Indenture Trustee or all or substantially all of its
property, or a decree or order of a court or agency or supervisory
authority having the jurisdiction in the premises for the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings, or for
the winding-up or liquidation of its affairs, shall have been entered
against the Indenture Trustee; or the Indenture Trustee shall admit in
writing its inability to pay its debts generally as they become due, file a
petition to take advantage of any applicable insolvency or reorganization
statue, make an assignment for the benefit of its creditors or voluntarily
suspend payment of its obligations; or
(iv) the Indenture Trustee otherwise becomes legally unable to
act.
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 Administrator
shall promptly appoint a successor Indenture Trustee.
A successor Indenture Trustee shall deliver a written acceptance of
its appointment to the retiring Indenture Trustee, the Servicer and to the
Issuer. Thereupon the
40
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 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, subject to the payment of any and all amounts
then due and owing to the Indenture Trustee.
If a successor Indenture Trustee does not take office within sixty
(60) days after the retiring Indenture Trustee resigns or is removed, the
retiring Indenture Trustee, the Issuer or the Holders of Notes representing more
than 50% of the Outstanding Amount 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 6.8, the Issuer's obligations under Section 6.7 shall continue for
the benefit of the retiring Indenture Trustee.
The Administrator shall notify the Rating Agencies of any replacement
of the Indenture Trustee pursuant to this Section 6.8.
Section 6.9 Successor Indenture Trustee by Merger. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another corporation
or banking association, the resulting, surviving or transferee corporation
without any further act shall be the successor Indenture Trustee; provided,
however, that such corporation or banking association shall be otherwise
qualified and eligible under Section 6.11. The Indenture Trustee shall provide
the Rating Agencies prior written notice of any such transaction.
In case at the time such successor or successors by merger,
conversion, consolidation or transfer to the Indenture Trustee shall succeed to
the trusts created by this Indenture any of the Notes shall have been
authenticated but not delivered, any such successor to the Indenture Trustee may
adopt the certificate of authentication of any predecessor Indenture Trustee and
deliver such Notes so authenticated; and in case at that time any of the Notes
shall not have been authenticated, any successor to the Indenture Trustee may
authenticate such Notes in the name of the successor to the Indenture Trustee;
and in all such cases such certificates shall have the full force which it is
anywhere in the Notes or in this Indenture provided that the certificate of the
Indenture Trustee shall have.
Section 6.10 Appointment of Co-Indenture Trustee or Separate Indenture
Trustee.
(a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Collateral may at the time be located, the Indenture
Trustee shall have the power and may
41
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 Collateral, and to vest in such Person or Persons, in such
capacity and for the benefit of the Noteholders, such title to the Collateral,
or any part hereof, and, subject to the other provisions of this Section 6.10,
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 6.8.
(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 Collateral or any portion thereof in
any such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the
Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder;
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee; and
(iv) the Indenture Trustee shall not be liable for any act or
failure to act on the part of 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 Indenture and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Indenture on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all
42
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 6.11 Eligibility; Disqualification. The Indenture Trustee
shall at all times satisfy the requirements of TIA (S)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 a rating as to
its long-term unsecured debt obligations of at least Baa3 by Moody's (if Moody's
shall then be a Rating Agency) and BBB- by Standard & Poor's (if Standard &
Poor's shall then be a Rating Agency) and a rating as to its short-term deposits
or long-term unsecured debt obligations that satisfies the rating requirement of
any other Rating Agency assigning a rating for any Class of Notes of any then
outstanding Series and subject to supervision or examination by Federal or state
authority. The Indenture Trustee shall comply with TIA (S)310(b), including the
optional provision permitted by the second sentence of TIA (S)310(b)(9);
provided, however, that there shall be excluded from the operation of TIA
(S)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
(S)310(b)(1) are met.
Section 6.12 Preferential Collection of Claims Against. The Indenture
Trustee shall comply with TIA (S)311(a), excluding any creditor relationship
listed in TIA (S)311(b). An Indenture Trustee who has resigned or been removed
shall be subject to TIA (S)311(a) to the extent indicated.
Section 6.13 Representations and Covenants of the Indenture Trustee.
The Indenture Trustee represents, warrants and covenants that:
(i) the Indenture Trustee is duly organized and validly existing
under the laws of its jurisdiction or organization;
(ii) the Indenture Trustee has full power and authority to
deliver and perform this Indenture and has taken all necessary action to
authorize the execution, delivery and performance by it of this Indenture
and other Transaction Documents to which it is a party;
(iii) each of this Indenture and the other Transaction Documents
to which it is a party has been duly executed and delivered by the
Indenture Trustee and constitutes its legal, valid and binding obligation
in accordance with its terms; and
(iv) the Indenture Trustee meets the eligibility requirements set
forth in Section 6.11.
Section 6.14 Custody of the Collateral. The Indenture Trustee shall
hold such of the Trust Estate as consists of instruments, deposit accounts,
negotiable documents, money, goods, letters of credit, and advices of credit in
the State of New York. The Indenture Trustee shall hold such of the Trust Estate
as constitutes investment property through a securities intermediary, which
securities intermediary shall agree with the Indenture Trustee that (a) such
investment property shall at all times be credited to a securities account of
the Indenture Trustee, (b) such securities intermediary shall treat the
Indenture Trustee as entitled to exercise the rights
43
that comprise each financial asset credited to such securities account, (c) all
property credited to such securities account shall be treated as a financial
asset, (d) such securities intermediary shall comply with entitlement orders
originated by the Indenture Trustee without the further consent of any other
person or entity, (e) such securities intermediary will not agree with any
person or entity other than the Indenture Trustee to comply with entitlement
orders originated by such other person or entity, (f) such securities accounts
and the property credited thereto shall not be subject to any lien, security
interest, or right of set-off in favor of such securities intermediary or anyone
claiming through it (other than the Indenture Trustee), and (g) such agreement
shall be governed by the laws of the State of New York. Terms used in the
preceding sentence that are defined in the New York UCC and not otherwise
defined herein shall have the meaning set forth in the New York UCC. Except as
permitted by this Section 6.14, the Indenture Trustee shall not hold any part of
the Trust Estate through an agent or a nominee.
ARTICLE VII
NOTEHOLDERS' LIST AND REPORTS BY INDENTURE TRUSTEE AND ISSUER
Section 7.1 Issuer to Furnish Indenture Trustee Names and Addresses of
Noteholders. The Issuer will furnish or cause to be furnished to the Indenture
Trustee (a) not more than five days after each Record Date, a list, in such form
as the Indenture Trustee may reasonably require, of the names, addresses and
taxpayer identification numbers of the Noteholders as they appear on the Note
Register as of such Record Date, and (b) at such other times, as the Indenture
Trustee may request in writing, within ten (10) days after receipt by the Issuer
of any such request, a list of similar form and content as of a date not more
than ten (10) days prior to the time such list is furnished; provided, however,
that for so long as the Indenture Trustee is the Transfer Agent and Registrar,
the Indenture Trustee shall furnish to the Issuer such list in the same manner
prescribed in clause (b) above.
Section 7.2 Preservation of Information; Communications to
Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Noteholders contained in
the most recent list furnished to the Indenture Trustee as provided in Section
7.1 and the names, addresses and taxpayer identification numbers of the
Noteholders received by the Indenture Trustee in its capacity as Transfer Agent
and Registrar. The Indenture Trustee may destroy any list furnished to it as
provided in Section 7.1 upon receipt of a new list so furnished.
(b) Noteholders may communicate, pursuant to TIA (S)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 Transfer Agent and
Registrar shall have the protection of TIA (S)312(c).
Section 7.3 Reports by Issuer.
(a) The Issuer shall:
(i) file with the Indenture Trustee, within fifteen (15) days
after the Issuer is required to file the same with the Commission, copies
of the annual reports and of the
44
information, documents and other reports (or copies of such portions of any
of the foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Issuer may be required to file with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the Commission in
accordance with rules and regulations prescribed from time to time by the
Commission such additional information, documents and reports with respect
to compliance by the Issuer with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee
shall transmit by mail to all Noteholders described in TIA (S)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 7.3(a) as may
be required by rules and regulations prescribed from time to time by the
Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on the last day of February of each year.
(c) Delivery of such reports, information and documents to the
Indenture Trustee is for informational purposes only and the Indenture Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Issuer's compliance with any of the covenants hereunder.
Section 7.4 Reports by Indenture Trustee. If required by TIA
(S)313(a), within sixty (60) days after each March 31, beginning with March 31,
2003, the Indenture Trustee shall mail to each Noteholder as required by TIA
(S)313(c) a brief report dated as of such date that complies with TIA (S)313(a).
The Indenture Trustee also shall comply with TIA (S)313(b).
A copy of each report at the time of its mailing to Noteholders shall
be filed by the Indenture Trustee with the Commission and each stock exchange,
if any, on which any Notes are listed. The Issuer shall notify the Indenture
Trustee if and when any Notes are listed on any stock exchange.
ARTICLE VIII
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 8.1 Collection of Money. Except as otherwise expressly
provided herein and in the related Indenture Supplement, 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 hold all such money and
property received by it, other than amounts received by it pursuant to Section
6.7, in trust for the Noteholders and shall apply such money and property as
provided in this Indenture. Except as otherwise expressly provided in this
Indenture, if any default occurs in the making of any
45
payment or performance under the Transfer and Servicing Agreement or any other
Transaction Document, the Indenture Trustee may, and upon the written request of
the Holders of Notes representing more than 50% of the principal balance of the
Outstanding Notes of the affected Series shall, subject to Sections 6.1(f) and
6.3(d) 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
Early Amortization Event or a Default or Event of Default under this Indenture
and to proceed thereafter as provided in Article V.
Section 8.2 Rights of Noteholders. The Collateral shall secure the
rights of the Holders of the Notes of each Series to receive the portion of
Collections allocable to the Noteholders of such Series pursuant to this
Indenture and the related Indenture Supplement, funds and other property
credited to the Collection Account and the Excess Funding Account (or any
subaccount thereof) allocable to the Noteholders of such Series pursuant to this
Indenture and such Indenture Supplement, funds and other property credited to
any related Series Account and funds available pursuant to any related Series
Enhancement, it being understood that, except as specifically set forth in the
Indenture Supplement with respect thereto, the Notes of any Series or Class
shall not be secured by any interest in any Series Account or Series Enhancement
pledged for the benefit of any other Series or Class.
Section 8.3 Establishment of Collection Account and Allocations with
Respect to the Exchangeable Transferor Certificate. From and after the
Certificate Trust Termination Date:
(a) The Collection Account. The Indenture Trustee, for the benefit of
the Noteholders, shall establish and maintain or cause to be established and
maintained in the name of the Indenture Trustee, on behalf of the Issuer, with
an Eligible Institution a segregated trust account (the "Collection Account"),
bearing a designation clearly indicating that the funds deposited therein are
held for the benefit of the Noteholders. The Indenture Trustee shall possess all
right, title and interest in all funds on deposit from time to time in the
Collection Account and in all proceeds thereof. The Collection Account shall be
under the sole dominion and control of the Indenture Trustee for the benefit of
the Noteholders. If, at any time, the institution holding the Collection Account
ceases to be an Eligible Institution, the Indenture Trustee (or the Servicer on
its behalf) shall within five Business Days establish a new Collection Account
meeting the conditions specified above with an Eligible Institution and shall
transfer any cash and/or any investments to such new Collection Account, and
from the date such new Collection Account is established, it shall be the
"Collection Account." Pursuant to the authority granted to the Servicer in
Section 3.1(b) of the Transfer and Servicing Agreement, the Servicer shall have
the power, revocable by the Indenture Trustee, to make withdrawals and payments
from the Collection Account and to instruct the Indenture Trustee to make
withdrawals and payments from the Collection Account for the purposes of
carrying out the Servicer's or the Indenture Trustee's duties hereunder.
(b) Administration of the Collection Account. At the written direction
of the Servicer, funds on deposit in the Collection Account to be invested shall
be invested by the Indenture Trustee in Eligible Investments selected by the
Servicer. In the absence of written direction of the Servicer, funds on deposit
in the Collection Account shall be invested in money
46
market funds as specified in clause (v) of the definition of Eligible
Investments. All such Eligible Investments shall be held by the Indenture
Trustee for the benefit of the Noteholders. Investments of funds representing
Collections collected during any Collection Period shall be invested in Eligible
Investments that will mature so that such funds will be available by the close
of business on the Transfer Date next succeeding such Collection Period. Any
funds on deposit in the Collection Account to be so invested shall be invested
solely in Eligible Investments. All Eligible Investments shall be held to
maturity. The Indenture Trustee shall maintain possession of the negotiable
instruments or securities, if any, evidencing such Eligible Investments. On each
Distribution Date, all interest and other investment earnings (net of losses and
investment expenses) on funds on deposit in the Collection Account shall be paid
to the Holder of the Exchangeable Transferor Certificate. The Transferor, at its
option, may direct the Servicer's investment of funds pursuant to this Section
8.3(b). In no event shall the Indenture Trustee be liable for the selection of
such investments or for investment losses incurred thereon or for losses
incurred as a result of the liquidation of any such investment prior to its
stated maturity.
(c) Allocations For the Exchangeable Transferor Certificate. The
Servicer shall allocate to the Holder of the Exchangeable Transferor Certificate
an amount equal to the product of (i) the Transferor Percentage and (ii) the
aggregate amount of Collections allocated to Principal Receivables and Finance
Charge Receivables, respectively, in respect of each Collection Period.
Notwithstanding anything to the contrary in Section 8.3, unless specified in any
Indenture Supplement, the Servicer need not deposit this amount, or any other
amounts so allocated to the Exchangeable Transferor Certificate pursuant to any
Indenture Supplement, into the Collection Account and shall pay such amounts as
collected to the Holder of the Exchangeable Transferor Certificate.
(d) Allocation of Collections Between Collections of Principal
Receivables and Collections of Finance Charge Receivables. The Servicer shall
allocate Collections processed with respect to any Account to Finance Charge
Receivables to the extent of outstanding Finance Charge Receivables with respect
to such Account. The balance of Collections processed with respect to such
Account shall be allocated to Principal Receivables.
(e) Collections. The Servicer will apply all Collections with respect
to the Receivables for each Collection Period as described in this Article VIII
and each Indenture Supplement. Except as otherwise provided below, the Servicer
shall deposit all Collections into the Collection Account no later than the
second Business Day following the Date of Processing of such Collections.
Subject to the express terms of any Indenture Supplement, but notwithstanding
anything else in this Indenture to the contrary, for so long as, and only so
long as, the Bank or an Affiliate of the Bank shall be the Servicer hereunder
and (i) the Bank or such Affiliate shall maintain a short-term debt rating
(which may be an implied rating) of at least P-1 by Moody's and A-1 by Standard
& Poor's, or (ii) the Bank or such Affiliate shall obtain and maintain in force
a letter of credit or other surety covering collection risk of the Servicer
approved in writing by each Rating Agency and the holders of 66-2/3% of the
Invested
47
Amount of each Class of Notes of any then outstanding Series which is not
assigned a rating by any Rating Agency (it being understood that any such letter
of credit must include, without limitation, provisions acceptable to each Rating
Agency and such holders addressing the downgrade or withdrawal of any required
debt rating maintained by the issuer of such letter of credit), or (iii)(A) the
Bank shall obtain the consent of the holders of 66-2/3% of the Invested Amount
of each Class of Notes of any then outstanding Series which is not assigned a
rating by any Rating Agency and such consent shall not have been withdrawn in
accordance with the terms of the related Indenture Supplement and (B) the Rating
Agency Condition has been satisfied with respect to the Servicer's inability to
satisfy the rating requirement specified in clause (i), and for two Business
Days following any reduction of either such rating or failure to satisfy the
conditions of clause (ii), the Servicer need not deposit Collections into the
Collection Account or make payments to the holder of the Exchangeable Transferor
Certificate prior to the close of business on the second Business Day following
the Date of Processing, but rather may make a single deposit in the Collection
Account in immediately available funds on the Business Day prior to each
Distribution Date in an amount equal to the Collections with respect to the
Collection Period preceding such Distribution Date to the extent such amounts
and Collections are allocated to one or more Series in accordance with Article
VIII. Collections shall not be required to be invested in Eligible Investments
until such time as they are deposited into the Collection Account. The Servicer
shall promptly notify the Indenture Trustee and each Rating Agency of any
downgrade or withdrawal of its short-term credit or certificate of deposit
rating or, if an Affiliate of the Bank is acting as Servicer hereunder, of any
such downgrade or withdrawal with respect to such Affiliate.
If the Servicer is required to make daily deposits of Collections into
the Collection Account pursuant to this subsection, the Servicer may, prior to
the occurrence of an Early Amortization Event and subject to the provisions of
the applicable Indenture Supplement, cease depositing Collections of Finance
Charge Receivables received during any Collection Period and allocable to a
Series at such time as the amount of Collections of Finance Charge Receivables
allocable to such Series and deposited into the Collection Account equals the
sum of (i) the amount of interest scheduled to be paid on the next succeeding
Distribution Date with respect to such Series, (ii) if the Bank is no longer the
Servicer, the Investor Monthly Servicing Fee scheduled to be paid on such
Distribution Date with respect to such Series and (iii) the Pro Forma Investor
Default Amount for such Distribution Date with respect to such Series.
Collections of Finance Charge Receivables allocable to such Series in excess of
such amount shall be distributed on a daily basis as they are collected to the
Transferor.
If the Servicer is required to make daily deposits of Collections into
the Collection Account pursuant to this subsection, the Servicer may, during any
Amortization Period and subject to the provisions of the applicable Indenture
Supplement, cease depositing Collections of Principal Receivables received
during any Collection Period and allocable to a Series at such time as the
amount of Collections of Principal Receivables allocable to such Series and
deposited into the Collection Account equals the amount of principal scheduled
or permitted to be paid on the next succeeding Distribution Date with respect to
such Series. Collections of Principal Receivables allocable to such Series in
excess of such amount shall be distributed on a daily basis as they are
collected to the Transferor.
(f) Excess Funding Account. The Indenture Trustee, for the benefit of
the Noteholders, shall establish and maintain or cause to be established and
maintained in the name of the Indenture Trustee, on behalf of the Issuer, with
an Eligible Institution a segregated trust account (the "Excess Funding
Account"), which may be a subaccount of the Collection Account, bearing a
designation clearly indicating that the funds deposited therein are held for the
benefit of the Investor Noteholders. The Indenture Trustee shall possess all
right, title and interest in all
48
funds on deposit from time to time in the Excess Funding Account and in all
proceeds thereof. The Excess Funding Account shall be under the sole dominion
and control of the Indenture Trustee for the benefit of the Noteholders. If, at
any time, the institution holding the Excess Funding Account ceases to be an
Eligible Institution, the Indenture Trustee (or the Servicer on its behalf)
shall within five Business Days establish a new Excess Funding Account meeting
the conditions specified above with an Eligible Institution and shall transfer
any cash and/or any investments to such new Excess Funding Account, and from the
date such new Excess Funding Account is established, it shall be the "Excess
Funding Account." Pursuant to the authority granted to the Servicer in Section
3.1(b) of the Transfer and Servicing Agreement, the Servicer shall have the
power, revocable by the Indenture Trustee, to make withdrawals and payments from
the Excess Funding Account and to instruct the Indenture Trustee to make
withdrawals and payments from the Excess Funding Account for the purposes of
carrying out the Servicer's or the Indenture Trustee's duties hereunder.
At the written direction of the Servicer, funds on deposit in the
Excess Funding Account to be invested shall be invested by the Indenture Trustee
in Eligible Investments selected by the Servicer. In the absence of written
direction of the Servicer, funds on deposit in the Excess Funding Account shall
be invested in money market funds as specified in clause (v) of the definition
of Eligible Investments. All such Eligible Investments shall be held by the
Indenture Trustee for the benefit of the Noteholders. The Indenture Trustee
shall maintain for the benefit of the Noteholders possession of the negotiable
instruments or securities, if any, evidencing such Eligible Investments. Funds
on deposit in the Excess Funding Account on any date (after giving effect to any
withdrawals from the Excess Funding Account on such date) will be invested in
Eligible Investments that will mature so that funds will be available at the
close of business on the next Business Day following such date. In no event
shall the Indenture Trustee be liable for the selection of any such investments
or for investment losses incurred thereon or for losses incurred as a result of
the liquidation of any such investment prior to its stated maturity.
On each Determination Date, the Servicer shall instruct the Indenture
Trustee in writing to withdraw on the next succeeding Distribution Date from the
Excess Funding Account and deposit in the Collection Account all interest and
other investment earnings (net of losses and investment expenses) on funds on
deposit in the Excess Funding Account, for application as Collections of Finance
Charge Receivables with respect to the prior Collection Period. Interest
(including reinvested interest) and other investment income and earnings on
funds on deposit in the Excess Funding Account shall not be considered part of
the Excess Funding Amount for purposes of this Indenture. On each Business Day,
the Servicer shall determine the Transferor Amount. If the Transferor Amount
exceeds the Minimum Transferor Amount on any Business Day, the Servicer may
instruct the Indenture Trustee in writing to withdraw an amount equal to such
excess (but not to exceed the Excess Funding Amount) from the Excess Funding
Account on such day and pay such amount to the Holder of the Exchangeable
Transferor Certificate. If the Minimum Transferor Amount exceeds the Transferor
Amount on any Business Day, the Servicer shall deposit Collections of Principal
Receivables that would otherwise be distributed to the Transferor on such day
into the Excess Funding Account on such day in an amount equal to such excess.
On each Determination Date on which one or more Series is in an Amortization
Period, the Servicer shall determine the aggregate amount of Principal
Shortfalls, if any, with respect to each such Series that is a Principal Sharing
Series (after giving effect to the allocation
49
and payment provisions in the Indenture Supplement with respect to each such
Series on the next succeeding Distribution Date), and the Servicer shall
instruct the Indenture Trustee in writing to withdraw such amount (up to the
Excess Funding Amount) from the Excess Funding Account on the next succeeding
Distribution Date and allocate such amount among each such Series as Shared
Principal Collections as specified in each related Indenture Supplement.
(g) Shared Principal Collections. On each Distribution Date, (i) the
Servicer shall allocate Shared Principal Collections to each Principal Sharing
Series in a Group, pro rata, in proportion to the Principal Shortfalls, if any,
with respect to each such Series and (ii) the Servicer shall withdraw (or shall
instruct the Indenture Trustee to withdraw) from the Collection Account or the
Excess Funding Account and pay to the Holder of the Exchangeable Transferor
Certificate (A) an amount equal to the excess, if any, of (x) the aggregate
amount of Shared Principal Collections for all such Series for such Distribution
Date over (y) the aggregate amount of Principal Shortfalls for all such Series
for such Distribution Date and (B) the aggregate amount for all outstanding
Series of that portion of Collections which the related Indenture Supplements
specify are to be allocated and paid to the Transferor with respect to such
Distribution Date; provided, however, that such amounts shall be paid to the
Holder of the Exchangeable Transferor Certificate only to the extent that the
Transferor Amount for such Distribution Date (determined after giving effect to
any Principal Receivables transferred to the Issuer on such date) exceeds the
Minimum Transferor Amount; and, provided further, that, if on any Distribution
Date the Transferor Amount is less than or equal to the Minimum Transferor
Amount, the Servicer will not distribute to the Holder of the Exchangeable
Transferor Certificate any Shared Principal Collections then on deposit in the
Collection Account that otherwise would be distributed to such Holder, but shall
deposit such funds in the Excess Funding Account.
(h) Shared Excess Finance Charge Collection. On each Distribution
Date, (i) the Servicer shall allocate Shared Excess Finance Charge Collections
with respect to the Series in a Group to each Series in such Group, pro rata, in
proportion to the Finance Charge Shortfalls, if any, with respect to each such
Series and (ii) the Servicer shall withdraw (or shall instruct the Indenture
Trustee to withdraw) from the Collection Account and pay to the Holder of the
Exchangeable Transferor Certificate an amount equal to the excess, if any, of
(x) the aggregate amount of Shared Excess Finance Charge Collections for all
such Series for such Distribution Date over (y) the aggregate amount of Finance
Charge Shortfalls for all such Series for such Distribution Date to the extent
any Shared Excess Finance Charge Collections are held on deposit in the
Collection Account.
(i) Net Deposits. For so long as the Bank or an Affiliate of the Bank
shall be the Servicer hereunder and a Servicer Default shall not have occurred
and be continuing, the Servicer may make deposits into the Collection Account or
the Excess Funding Account on any date net of amounts payable as of such date to
the Transferor or the Servicer from amounts on deposit in the Collection Account
or the Excess Funding Account and may make deposits into the Collection Account
on each Transfer Date net of amounts payable on the following Distribution Date
to the Transferor or the Servicer from amounts on deposit in the Collection
Account, it being understood that the Investor Monthly Servicing Fee with
respect to any Series shall be payable to the Servicer only in accordance with
the provisions specified in the related Indenture Supplement and that the
foregoing shall in no event increase the amount payable to the Transferor or the
Servicer hereunder or pursuant to any Indenture Supplement.
50
ARTICLE IX
DISTRIBUTIONS AND REPORTS TO NOTEHOLDERS
Distributions shall be made to, and reports shall be provided to,
Noteholders as set forth in the applicable Indenture Supplement. The identity of
the Noteholders with respect to distributions and reports shall be determined
according to the immediately preceding Record Date.
ARTICLE X
SUPPLEMENTAL INDENTURES
Section 10.1 Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Holders of any Notes but with prior
notice to each Rating Agency with respect to the Notes of all Series rated by
such Rating Agency (and, in the case of clause (xi) below, upon satisfaction of
the Rating Agency Condition with respect to the Notes of all Series rated by
such Rating Agency), the Issuer and the Indenture Trustee, when authorized by an
Issuer Order, at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the TIA
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 Section 3.12,
of another person to the Issuer, and the assumption by any such successor
of the covenants of the Issuer contained herein and in the Notes;
(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, however, 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 indenture 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
51
administration of the trusts hereunder by more than one indenture trustee,
pursuant to the requirements of Article VI;
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the qualification
of this Indenture under the TIA or under any similar federal statute
hereafter enacted and to add to this Indenture such other provisions as may
be expressly required by the TIA;
(viii) to provide for the issuance of one or more new Series of
Notes, in accordance with the provisions of Section 2.11; or
(ix) to provide for the termination of any interest rate swap
agreement or other form of credit enhancement or maturity guarantee
agreement in accordance with the provisions of the related Indenture
Supplement.
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 Noteholders of any Series then
Outstanding but upon satisfaction of the Rating Agency Condition with respect to
the Notes of all Series rated by such Rating Agency, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to, or
changing in any manner or eliminating any of the provisions of, this Indenture
or of modifying in any manner the rights of the Holders of the Notes under this
Indenture; provided, however, that the Transferor shall have delivered to the
Owner Trustee and the Indenture Trustee an Officer's Certificate, dated the date
of any such action, stating that all requirements for such amendments contained
in the Indenture have been met and the Transferor reasonably believes that such
action will not have an Adverse Effect. Additionally, notwithstanding the
preceding sentence, the Issuer and the Indenture Trustee, when authorized by an
Issuer Order, may, without the consent of any Noteholders of any Series then
Outstanding or the Enhancement Providers for any Series, enter into an indenture
or indentures supplemental hereto to add, modify or eliminate such provisions as
may be necessary or advisable in order to enable all or a portion of the Issuer
(i) to qualify as, and to permit an election to be made to cause the Issuer to
be treated as, a "financial asset securitization investment trust" as described
in the provisions of Section 860L of the Code, and (ii) to avoid the imposition
of state or local income or franchise taxes imposed on the Issuer's property or
its income; provided, however, that (i) the Transferor delivers to the Indenture
Trustee and the Owner Trustee an Officer's Certificate to the effect that the
proposed amendments meet the requirements set forth in this Section 10.1(b),
(ii) the Rating Agency Condition shall have been satisfied and (iii) such
amendment does not affect the rights, duties, protections, indemnities,
immunities or obligations of the Indenture Trustee or the Owner Trustee
hereunder. The amendments which the Transferor may make without the consent of
Noteholders pursuant to the preceding sentence include the addition or sale of
Receivables.
Section 10.2 Supplemental Indentures with Consent of Noteholders. The
Issuer and the Indenture Trustee, when authorized by an Issuer Order, also may,
upon satisfaction of the
52
Rating Agency Condition and with the consent of the Holders of Notes
representing more than 66-2/3% of the principal balance of the Outstanding Notes
of each adversely affected Series, 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, changing in any
manner or eliminating any of the provisions of this Indenture or of modifying in
any manner the rights of such Noteholders under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent of the
Holder of each outstanding Note affected thereby:
(a) change the due date of any installment of principal of or interest
on any Note, or reduce the principal amount thereof, the interest rate specified
thereon or the redemption price with respect thereto or change any place of
payment where, or the coin or currency in which, any Note or any interest
thereon is payable;
(b) 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);
(c) reduce the percentage of the Outstanding Notes of any Series 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 as provided for in this Indenture;
(d) reduce the percentage of the Outstanding Notes of any Series, the
consent of the Holders of which is required to direct the Indenture Trustee to
sell or liquidate the Collateral if the proceeds of such sale would be
insufficient to pay the principal amount and accrued but unpaid interest on the
outstanding Notes of such Series;
(e) decrease the percentage of the Outstanding Notes required to amend
the sections of this Indenture which specify the applicable percentage of the
Outstanding Notes of any Series necessary to amend the Indenture or any
Transaction Documents which require such consent;
(f) modify or alter the provisions of this Indenture prohibiting the
voting of Notes held by the Issuer, any other Obligor on the Notes, a Transferor
or any affiliate thereof; or
(g) 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 Collateral for
any Notes or, except as otherwise permitted or contemplated herein, terminate
the Lien of this Indenture on any such Collateral at any time subject hereto or
deprive the Holder of any Note of the security provided by the Lien of this
Indenture.
The Indenture Trustee may in its discretion determine whether or not
any Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The Indenture
Trustee shall not be liable for any such determination made in good faith.
53
Satisfaction of the Rating Agency Condition shall not be required with
respect to the execution of any supplemental indenture pursuant to this Section
10.2 for which the consent of all of the affected Noteholders is required;
provided, however, that each Rating Agency shall be given prompt notice of any
such supplemental indenture.
It shall not be necessary for any Act of Noteholders under this
Section 10.2 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 10.2, the Indenture
Trustee shall mail to the Holders of the Notes to which such amendment or
supplemental indenture relates written notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Indenture Trustee
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
Section 10.3 Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article X or the modification thereby of the trusts created by
this Indenture, the Indenture Trustee shall be entitled to receive, and shall be
fully protected in relying upon, an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by this
Indenture. The Indenture Trustee may, but shall not be obligated to, enter into
any such supplemental indenture that affects the Indenture Trustee's own rights,
duties, liabilities or immunities under this Indenture or otherwise.
Section 10.4 Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture under this Article X, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes, and every Holder of Notes theretofore
or thereafter authenticated and delivered hereunder shall be bound thereby. This
Section 10.4 does not apply to Indenture Supplements.
Section 10.5 Conformity With Trust Indenture Act. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article X shall conform to the requirements of the TIA as then in effect so long
as this Indenture shall then be qualified under the TIA.
Section 10.6 Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article X may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer shall so determine,
new Notes so modified as to conform, in the opinion of the Indenture Trustee and
the Issuer, to any such supplemental indenture may be prepared and executed by
the Issuer and authenticated and delivered by the Indenture Trustee in exchange
for the outstanding Notes.
54
ARTICLE XI
TERMINATION
Section 11.1 Termination of Issuer. The Issuer and the respective
obligations and responsibilities of the Indenture Trustee created hereby (other
than the obligation of the Indenture Trustee to make payments to Noteholders as
hereinafter set forth) shall terminate, except with respect to the duties
described in Section 11.2(b), as provided in the Trust Agreement.
Section 11.2 Final Distribution.
(a) The Servicer shall give the Indenture Trustee and the Rating
Agencies at least thirty (30) days prior written notice of the Distribution Date
on which the Noteholders of any Series or Class may surrender their Notes for
payment of the final distribution on and cancellation of such Notes (or, in the
event of a final distribution resulting from the application of Section 2.6 of
the Transfer and Servicing Agreement, notice of such Distribution Date promptly
after the Servicer has determined that a final distribution will occur, if such
determination is made less than thirty (30) days prior to such Distribution
Date). Such notice shall be accompanied by an Officer's Certificate setting
forth the information specified in Section 3.5 of the Transfer and Servicing
Agreement covering the period during the then-current calendar year through the
date of such notice. Not later than the fifth day of the month in which the
final distribution in respect of such Series or Class is payable to Noteholders,
the Indenture Trustee shall provide notice to Noteholders of such Series or
Class specifying (i) the date upon which final payment of such Series or Class
will be made upon presentation and surrender of Notes of such Series or Class at
the office or offices therein designated, (ii) the amount of any such final
payment and (iii) that the Record Date otherwise applicable to such payment date
is not applicable, payments being made only upon presentation and surrender of
such Notes at the office or offices therein specified (which in the case of
Bearer Notes shall be outside the United States). The Indenture Trustee shall
give such notice to the Transfer Agent and Registrar and the Paying Agent at the
time such notice is given to Noteholders.
(b) Notwithstanding a final distribution to the Noteholders of any
Series or Class (or the termination of the Issuer), except as otherwise provided
in this paragraph, all funds then on deposit in the Collection Account and any
Series Account allocated to such Noteholders shall continue to be held in trust
for the benefit of such Noteholders and the Paying Agent or the Indenture
Trustee shall pay such funds to such Noteholders upon surrender of their Notes,
if certificated (and any excess shall be paid in accordance with the terms of
any Enhancement Agreement). In the event that all such Noteholders shall not
surrender their Notes for cancellation within six (6) months after the date
specified in the notice from the Indenture Trustee described in paragraph (a),
the Indenture Trustee shall give a second notice to the remaining such
Noteholders to surrender their Notes for cancellation and receive the final
distribution with respect thereto (which surrender and payment, in the case of
Bearer Notes, shall be outside the United States). If within one year after the
second notice all such Notes shall not have been surrendered for cancellation,
the Indenture Trustee may take appropriate steps, or may appoint an agent to
take appropriate steps, to contact the remaining such Noteholders concerning
surrender of their Notes, and the cost thereof shall be paid out of the funds in
the Collection Account or any Series Account held for the benefit of such
Noteholders. The Indenture Trustee
55
and, upon the written request of the Servicer, the Paying Agent shall pay to the
Issuer any monies held by them for the payment of principal or interest that
remains unclaimed for two (2) years pursuant to and as described in Section 3.3.
After payment to the Issuer, Noteholders entitled to the money must look to the
Issuer for payment as general creditors unless an applicable abandoned property
law designates another Person.
Section 11.3 Issuer's Termination Rights. Upon the termination of the
Issuer pursuant to the terms of the Trust Agreement, the Indenture Trustee shall
assign and convey to the Holders of the Exchangeable Transferor Certificate,
upon their direction, or any of their designees, without recourse,
representation or warranty, all right, title and interest of the Issuer in the
Receivables, whether then existing or thereafter created, all Recoveries related
thereto all monies due or to become due and all amounts received or receivable
with respect thereto (including all moneys then held in the Collection Account
or any Series Account) and all proceeds thereof, except for amounts held by the
Indenture Trustee pursuant to Section 11.2(b). The Indenture Trustee shall
execute and deliver such instruments of transfer and assignment, in each case
without recourse, as shall be reasonably requested in writing by the Holders of
the Exchangeable Transferor Certificate to vest in the Holders of the
Exchangeable Transferor Certificate or any of their designees all right, title
and interest which the Indenture Trustee had in the Collateral and such other
property.
ARTICLE XII
MISCELLANEOUS
Section 12.1 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) (if required by the TIA) an
Independent Certificate from a firm of certified public accountants meeting the
applicable requirements of this Section 12.1, 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
56
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) Other than with respect to the release of any Receivables in
Removed Accounts, whenever any property or investment property is 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 (90) days of
such release) of the property or securities proposed to be released and stating
that in the opinion of such person the proposed release will not impair the
security under this Indenture in contravention of the provisions hereof.
Notwithstanding any other provision of this Section 12.1, the Issuer may (A)
collect, liquidate, sell or otherwise dispose of Receivables as and to the
extent permitted or required by the Transaction Documents and (B) make cash
payments out of the Series Accounts as and to the extent permitted or required
by the Transaction Documents.
Section 12.2 Form of Documents Delivered to Indenture Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of a Responsible 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 a
Responsible 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, a Transferor, the Issuer or the
Administrator, stating that the information with respect to such factual matters
is in the possession of the Servicer, a Transferor, the Issuer or the
Administrator, unless such Responsible Officer or Counsel has actual knowledge
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 (2) 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
57
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 conclusively rely upon the truth and accuracy
of any statement or opinion contained in any such document as provided in
Article VI.
Section 12.3 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 their
agents duly appointed in writing and satisfying any requisite percentages as to
minimum number or dollar value of outstanding principal amount represented by
such Noteholders; 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 conclusive in favor of the Indenture
Trustee and the Issuer, if made in the manner provided in this Section 12.3.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder (and any
transferee thereof) of every Note issued upon the registration thereof in
exchange therefor or in lieu thereof, in respect of anything done, omitted or
suffered to be done by the Indenture Trustee or the Issuer in reliance thereon,
whether or not notation of such action is made upon such Note.
Section 12.4 Notices, Etc. to Indenture Trustee and Issuer. Any
request, demand, authorization, direction, notice, consent, waiver or Act of
Noteholders or other documents provided or permitted by the Indenture to be made
upon, given or furnished to, or filed with:
(a) 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 a Trustee Officer, by facsimile transmission or by other means
acceptable to the Indenture Trustee to or with the Indenture Trustee at its
Corporate Trust Office; or
(b) 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, care of the Owner Trustee, at ▇▇▇▇▇▇ Square
North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Corporate Trust Administration, telecopy number (▇▇▇) ▇▇▇-▇▇▇▇, telephone number
(▇▇▇) ▇▇▇-▇▇▇▇, or at any other address previously furnished
58
in writing to the Indenture Trustee by the Issuer. A copy of each notice to the
Issuer shall be sent in writing and mailed, first-class postage prepaid, to the
Administrator at First North American National Bank, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn.: Chief Financial Officer, telecopy number (770)
▇▇▇-▇▇▇▇, telephone number (▇▇▇) ▇▇▇-▇▇▇▇.
Section 12.5 Notices to Noteholders; Waiver. Where the 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 by registered or certified mail or first class postage prepaid or
national overnight courier service to each Noteholder affected by such event, at
its 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 which is mailed in the manner herein
provided shall conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In the event that, 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 any Rating Agency, failure
to give such notice shall not affect any other rights or obligations created
hereunder and shall not under any circumstance constitute a Default or Event of
Default.
Section 12.6 Alternate Payment and Notice Provisions. Notwithstanding
any provision of this Indenture or any of the Notes to the contrary, the Issuer,
with the prior written consent of the Indenture Trustee, may enter into any
agreement with any Holder of a Note providing for a method of payment, or notice
by the Indenture Trustee or any Paying Agent to such Holder, that is different
from the methods provided for in this Indenture for such payments or notices.
The Issuer will furnish to the Indenture Trustee a copy of each such agreement
and the Indenture Trustee will cause payments to be made and notices to be given
in accordance with such agreements.
Section 12.7 Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this indenture by any of the provisions of the TIA,
such required provision shall control.
The provisions of TIA (S)(S)310 through 317 that impose duties on any
person (including the provisions automatically deemed included herein unless
expressly excluded by
59
this Indenture) are a part of and govern this Indenture, whether or not
physically contained herein.
Section 12.8 Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 12.9 Successors and Assigns. All covenants and agreements in
this Indenture by the Issuer and the Servicer shall bind their respective
successors and assigns, whether so expressed or not.
Section 12.10 Separability. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
Section 12.11 Benefits of Indenture. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the Noteholders, the Servicer and the
Transferor, any benefit.
Section 12.12 Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no additional interest
shall accrue for the period from and after any such nominal date.
Section 12.13 GOVERNING LAW. THIS INDENTURE AND EACH NOTE SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE
TO ITS CHOICE OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 12.14 Counterparts. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 12.15 Issuer Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Indenture Trustee or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully
60
liable, to the extent provided by applicable law, for any unpaid consideration
for stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity. For all purposes of this Indenture, in the performance of
any duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of
Articles V, VI and VII of the Trust Agreement.
Section 12.16 No Petition. The Indenture Trustee, by entering into
this Indenture, and each Noteholder, by accepting a Note, hereby covenant and
agree that they will not at any time institute against the Issuer, FNANB Credit
Card Master Trust or the Transferor, or join in instituting against the Issuer,
FNANB Credit Card Master Trust or the Transferor any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any United States federal or state bankruptcy or similar law.
61
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 attested, all as of the day and year first above written.
FNANB CREDIT CARD MASTER NOTE TRUST,
as Issuer
By: WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Owner Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Financial Services Officer
JPMORGAN CHASE BANK,
not in its individual capacity
but solely as Indenture Trustee
By: /s/ ▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇
Title: Vice President
Acknowledged and Accepted:
FIRST NORTH AMERICAN NATIONAL BANK,
as Servicer
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President
DC FUNDING INTERNATIONAL, INC.,
as Transferor
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
FNANB Credit Card Master Note Trust
Master Indenture Signature Page
62
ANNEX A
to
MASTER INDENTURE
DEFINITIONS
"Account" means each MasterCard(R) or VISA(R) credit card account
originated by the Bank, which account (i) is identified in the Bank's master
computer files by the four digit identifying code number 2003, 2004, 2009, 3101,
3102, 3103, 3104, 3312, 3313, 3314, 3315, 3316, 3317, 4951, 4952, 4954, 4955,
4957 or 4969 or (ii) is identified in a computer file or microfiche list
delivered to the trustee of the FNANB Credit Card Master Trust by the Transferor
pursuant to Section 2.1 or 2.6 of the Pooling and Servicing Agreement or to the
Indenture Trustee by the Transferor pursuant to Section 2.1 or 2.6 of the
Transfer and Servicing Agreement. The term "Account" shall include (A) each
Transferred Account, (B) each Additional Account, but only from and after the
Additional Account Closing Date with respect thereto, (C) each Automatic
Additional Account, but only from and after the Creation Date with respect
thereto, and (D) each Removed Account, but only prior to the Removal Date with
respect thereto.
"Account Agreements" is defined in Section 1.1 of the Receivables
Purchase Agreement.
"Account Guidelines" means the written policies and procedures of the
Bank relating to the operation of its MasterCard and VISA credit card business,
including, without limitation, the policies and procedures for determining the
creditworthiness of customers and the extension of credit to customers and
relating to the maintenance of MasterCard and VISA credit card accounts and the
collection of receivables, as such policies and procedures may be amended from
time to time in accordance with Section 5.1(c) of the Receivables Purchase
Agreement.
"Accumulation Period" is defined (if at all), with respect to any
Series or Class, in the related Indenture Supplement.
"Acquiring Person" is defined in Section 3.10(b) of the Indenture.
"Act" is defined in Section 12.3(a) of the Indenture.
"Additional Account Closing Date" means, with respect to any
Additional Account, the date on which such Additional Account will be included
as an Account pursuant to Section 2.6 of the Transfer and Servicing Agreement.
"Additional Account Cut-Off Date" means, with respect to any
Additional Account, the last day of the Collection Period preceding the related
Additional Account Closing Date.
"Additional Accounts" is defined in Section 2.6(a) of the Transfer and
Servicing Agreement.
1
"Adjustment Amount" is defined in Section 3.8(a) of the Transfer and
Servicing Agreement.
"Adjustment Payment" is defined in Section 3.8(a) of the Transfer and
Servicing Agreement.
"Administration Agreement" means the Administration Agreement, dated
as of July 1, 2002 between the Issuer and the Administrator, as the same may be
amended, supplemented or otherwise modified from time to time.
"Administrator" means First North American National Bank, in its
capacity as administrator under the Administration Agreement, and any successor
in that capacity.
"Adverse Effect" means, with respect to any action, that such action
will (a) result in the occurrence of an Early Amortization Event or an Event of
Default or (b) materially and adversely affect the amount or timing of
distributions to be made to the Noteholders of any Series or Class pursuant to
the Transaction Documents.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with
such Person.
"Aggregate Automatic Addition Limit" means (i) the number of Eligible
Accounts designated as Automatic Additional Accounts pursuant to Section 2.6(d)
of the Pooling and Servicing Agreement or the Transfer and Servicing Agreement,
as applicable, which would either (x) with respect to any calendar quarter,
equal 15% of the sum of the number of Accounts as of the first day of such
calendar quarter and the number of Additional Accounts included as Accounts
pursuant to Section 2.6(a) or Section 2.6(b) of the Pooling and Servicing
Agreement or the Transfer and Servicing Agreement, as applicable, since such
first day and (y) with respect to any period of twelve consecutive Collection
Periods, equal 20% of the sum of the number of Accounts as of the first day of
such period and the number of Additional Accounts included as Accounts pursuant
to Section 2.6(a) or Section 2.6(b) of the Pooling and Servicing Agreement or
the Transfer and Servicing Agreement, as applicable, since such first day or
(ii) such higher number of Automatic Additional Accounts as may be approved in
writing by the Rating Agencies.
"Aggregate Invested Amount" means, on any date of determination, the
sum of the Invested Amounts with respect to all Series then outstanding.
"Aggregate Invested Percentage" means, on any date of determination,
the sum of the applicable Invested Percentages with respect to all Series then
outstanding.
"Aggregate Principal Receivables" means, on any date of determination,
the aggregate amount of Principal Receivables at the end of such date.
"Amortization Period" means, with respect to any Series, the
Accumulation Period, Controlled Amortization Period, Principal Amortization
Period, Early Amortization Period or other type of amortization period specified
in the related Indenture Supplement.
2
"Applicants" is defined in Section 2.9 of the Indenture.
"Assignment" is defined in Section 2.6 of the Transfer and Servicing
Agreement.
"Authorized Newspaper" means one or more newspapers of general
circulation in the Borough of Manhattan, The City of New York printed in the
English language and customarily published on each Business Day, whether or not
published on Saturdays, Sundays and holidays.
"Authorized Officer" means:
(a) 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, containing the specimen
signature of each such Person, delivered by the Owner Trustee to the Indenture
Trustee on the Closing Date (as such list may be modified or supplemented from
time to time thereafter) and any Vice President or more senior officer of the
Administrator who is authorized to act for the Administrator in matters relating
to the Issuer and to be acted upon by the Administrator pursuant to the
Administration Agreement and who is identified on the list of Authorized
Officers, containing the specimen signatures of each such Person, delivered by
the Administrator to the Indenture Trustee on the Closing Date (as such list may
be modified or supplemented from time to time thereafter);
(b) with respect to the Transferor, any officer of the Transferor who
is authorized to act for the Transferor in matters relating to the Transferor
and who is identified on the list of Authorized Officers, containing the
specimen signature of each such Person, delivered by the Transferor to the
Indenture Trustee on the Closing Date (as such list may be modified or
supplemented from time to time thereafter); and
(c) with respect to the Servicer, any officer of the Servicer who is
authorized to act for the Servicer in matters relating to the Servicer and who
is identified on the list of Authorized Officers, containing the specimen
signature of each such Person, delivered by the Servicer to the Indenture
Trustee on the Closing Date (as such list may be modified or supplemented from
time to time thereafter).
"Automatic Additional Accounts" is defined in Section 2.6(d) of the
Transfer and Servicing Agreement.
"Bank" means First North American National Bank, a national banking
association, and any successor thereto.
"Bearer Note" is defined in Section 2.1 of the Indenture.
"Book-Entry Notes" means beneficial interests in the Notes, ownership
and transfers of which shall be made through book entries by a Clearing Agency
or Foreign Clearing Agency as described in Section 2.13 of the Indenture.
"Business Day" means any day other than a Saturday, a Sunday or a day
on which banking institutions in Richmond, Virginia, Atlanta, Georgia or New
York, New York (or, with
3
respect to any Series, any additional city specified in the related Supplement)
are authorized or obligated by law or executive order to be closed.
"Business Trust Statute" means Title 12, Chapter 28 of the Delaware
Code.
"Certificate of Trust" means the Certificate of Trust that appears as
Exhibit A to the Trust Agreement.
"Certificate Trust Termination Date" means the date on which the FNANB
Credit Card Master Trust is terminated and all of the Receivables held by the
FNANB Credit Card Master Trust are transferred to the Issuer.
"Circuit City" means Circuit City Stores, Inc., a Virginia
corporation, and any successor thereto.
"Class" means, with respect to any Series, any one of the classes of
Notes of that Series.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Clearstream" means Clearstream Banking, societe anonyme, a
professional depository incorporated under the laws of Luxembourg, and any
successor thereto.
"Closing Date" means, with respect to any Series, the closing date
specified in the related Indenture Supplement.
"Collateral" is defined in the Granting Clause of the Indenture.
"Collateral Certificate" means the certificate, representing an
undivided interest in the assets held in the FNANB Credit Card Master Trust,
issued pursuant to the Pooling and Servicing Agreement and the Collateral Series
Supplement, dated as of July 19, 2002, to the Pooling and Servicing Agreement.
"Collection Account" is defined in Section 8.3(a) of the Indenture.
"Collection Period" means, unless otherwise provided in any Indenture
Supplement, the period from and including the first day of a calendar month to
and including the last day of such calendar month.
"Collections" means all payments and other amounts (including
Insurance Proceeds) received by the Servicer with respect to the Receivables, in
the form of cash, checks, wire transfers, ATM transfers or other form of payment
in accordance with the related Account Agreements in effect from time to time.
Collections with respect to any Collection Period shall
4
be deemed to include (i) all Recoveries, if any, received during such Collection
Period, (ii) the Interchange Amount, if any, with respect to such Collection
Period and (iii) all interest and other investment earnings (net of losses and
investment expenses), if any, received during such Collection Period on funds on
deposit in the Excess Funding Account.
"Commission" means the Securities and Exchange Commission.
"Corporate Trust Office" means
(a) for the Indenture Trustee, the principal office at which at any
particular time its corporate trust business shall be administered, which office
at the date of the execution of the Indenture is located at ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; and
(b) for the Owner Trustee, the principal office at which at any
particular time its corporate trust business shall be administered, which office
at the date of the execution of the Indenture is located at ▇▇▇▇▇▇ Square North,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust
Administration.
"Coupon" is defined in Section 2.1 of the Indenture.
"Creation Date" means, with respect to any Account or Receivable, the
Business Day on which such Account is first identified in the Servicer's master
computer files by the four digit identifying code number 2003, 2004, 2009, 3101,
3102, 3103, 3104, 3312, 3313, 3314, 3315, 3316, 3317, 4951, 4952, 4954, 4955,
4957 or 4969 or the date on which such Receivable is created, as applicable.
"Date of Processing" means, with respect to any transaction, the
Business Day on which such transaction is first recorded on the Servicer's
computer master file of MasterCard and VISA credit card accounts (without regard
to the effective date of such recordation).
"DC Funding" means DC Funding International, Inc., a Delaware
corporation, and any successor thereto.
"Debtor Relief Laws" means the Bankruptcy Code of the United States of
America and all other applicable liquidation, conservatorship, bankruptcy,
fraudulent conveyance, moratorium, rearrangement, receivership, insolvency,
reorganization, suspension of payments, or similar debtor relief laws from time
to time in effect affecting the rights of creditors (including creditors of
national banking associations) generally.
"Default" means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.
"Default Amount" means, for any Collection Period, the aggregate
amount of Principal Receivables (other than Ineligible Receivables) in all
Accounts which became Defaulted Accounts during such Collection Period
(determined in each case as of the date on which the related Account became a
Defaulted Account) minus Recoveries, if any, received during such Collection
Period; provided, however, that the Default Amount shall not be less than zero.
5
"Defaulted Account" means each Account with respect to which, in
accordance with the Account Guidelines pursuant to which such Account is
governed or the customary and usual servicing procedures of the Servicer for
servicing consumer revolving credit card receivables comparable to the
Receivables, the Servicer has charged off the Receivables in such Account as
uncollectible. An Account shall be deemed a Defaulted Account no later than the
earlier of (i) the last day of the calendar month in which such Account becomes
180 days delinquent on a contractual basis and (ii) 30 days after receipt of
notice by the Servicer that the related Obligor has died or has filed a
bankruptcy petition or has had a bankruptcy petition filed against him.
Notwithstanding any other provision hereof, any Receivables in a Defaulted
Account which are Ineligible Receivables shall be treated as Ineligible
Receivables rather than Receivables in Defaulted Accounts.
"Defeasance" is defined in Section 4.3 of the Indenture.
"Defeased Series" is defined in Section 4.3 of the Indenture.
"Definitive Notes" means Notes in definitive, fully registered form.
"Determination Date" means, with respect to any Series, the eighth day
of each calendar month or, if such day is not a Business Day, the next
succeeding Business Day, or such other date as may be specified in the related
Indenture Supplement.
"Discount Collections" means, on any Date of Processing, the product
of (a) a fraction the numerator of which is the amount of Discount Option
Receivables and the denominator of which is the sum of the Principal Receivables
and the Discount Option Receivables, in each case at the end of the prior
Collection Period, and (b) Collections of Principal Receivables (without giving
effect to Discount Option Receivables) on such Date of Processing.
"Discount Option Receivables" means, on any Date of Processing, the
sum of (a) the aggregate Discount Option Receivables at the end of the prior
Date of Processing (which amount, at the end of the Date of Processing prior to
the Initial Cut-Off Date was $1,610,469,630) plus (b) any new Discount Option
Receivables created on such Date of Processing minus (c) any Discount
Collections received on such Date of Processing. Discount Option Receivables
created on any Date of Processing means the product of the amount of any
Principal Receivables created on such Date of Processing (without giving effect
to Discount Option Receivables) and the Discount Percentage.
"Discount Percentage" is defined in Section 2.8(a) of the Transfer and
Servicing Agreement.
"Distribution Date" means, with respect to any Series, the fifteenth
day of each calendar month, or, if such fifteenth day is not a Business Day, the
next succeeding Business Day, or such other date as may be specified in the
related Supplement.
"Dollars," "$" or "U.S. $" means United States dollars.
"DTC" means The Depository Trust Company.
6
"Early Amortization Event" means, with respect to any Series, each
event specified in Section 5.1 of the Indenture and each additional event, if
any, specified in the related Indenture Supplement as an Early Amortization
Event with respect to such Series.
"Early Amortization Period" is defined (if at all), with respect to
any Series, in the related Indenture Supplement.
"Eligible Account" means, with respect to Accounts existing on the
Initial Closing Date, as of the Initial Cut-Off Date, with respect to Additional
Accounts, as of the related Additional Account Cut-Off Date, and with respect to
Automatic Additional Accounts (including Automatic Additional Accounts included
as Accounts prior to the Certificate Trust Termination Date), as of the related
Creation Date, each Account (i) which is in existence and owned by the Bank,
(ii) which is payable in United States dollars, (iii) the credit card or cards
related to which have not been reported lost or stolen or designated fraudulent,
(iv) which was created in accordance with, or under standards no less stringent
than, the Account Guidelines, (v) which is not identified by the Bank in its
computer files as having been canceled due to the bankruptcy, insolvency or
death of the related Obligor, (vi) the receivables in which have not been
charged off as uncollectible prior to the Initial Cut-Off Date, the Additional
Account Cut-Off Date or the Creation Date, as applicable, in accordance with the
Account Guidelines, (vii) the receivables in which have not been assigned,
pledged or sold (other than pursuant to the Receivables Purchase Agreement, the
Pooling and Servicing Agreement or the Transfer and Servicing Agreement), (viii)
the Obligor of which has provided, as its most recent billing address, an
address in the United States or its territories or possessions or a United
States military address (provided, however, that up to 1% of the Accounts (based
on the aggregate outstanding balance of the receivables in such Accounts as a
percentage of the aggregate outstanding balance of all Receivables) may have an
Obligor which has provided, as its most recent billing address, an address
outside the United States and its territories and possessions which is not a
United States military address) and (ix) with respect to which neither the
Transferor nor any Affiliate of the Transferor is the Obligor.
"Eligible Institution" means (i) a depository institution, which may
include the Indenture Trustee, organized under the laws of the United States or
any state thereof or the District of Columbia (or any domestic branch or agency
of a foreign bank), which at all times has either a long-term unsecured debt
rating of at least Baa3 from Moody's or a long-term unsecured debt rating, a
short-term unsecured debt rating or a certificate of deposit rating acceptable
to Moody's and the deposits in which are insured by the FDIC or (ii) any other
depository institution, which may include the Indenture Trustee, approved in
writing by each Rating Agency; provided, however, that (A) the commercial paper,
short-term debt obligations or other short-term deposits of the depository
institution described in clause (i) above must be rated at least P-1 by Moody's
and at least A-1+ by Standard & Poor's (and at least F-1 by Fitch if Fitch is a
Rating Agency for any then outstanding Series and the commercial paper,
short-term debt obligations or other short-term deposits of such depository
institution are rated by Fitch) if deposits are to be held in an account
maintained with such depository institution pursuant to the Indenture for 30 or
fewer days and (B) the long-term unsecured debt obligations of the depository
institution described in clause (i) above must be rated at least AA- by Standard
& Poor's if deposits are to be held in an account maintained with such
depository institution pursuant to the Indenture for more than 30 days.
7
"Eligible Investments" means instruments, investment property or other
property, other than securities issued by or obligations of the Bank or any
Affiliate of the Bank, which evidence:
(i) direct obligations of, or obligations fully guaranteed as to
timely payment by, the United States or any agency or instrumentality
thereof the obligations of which are backed by the full faith and credit of
the United States;
(ii) demand deposits, time deposits, bankers' acceptances or
certificates of deposit of any depository institution or trust company
organized under the laws of the United States or any state thereof or the
District of Columbia (or any domestic branch or agency of a foreign bank)
and subject to supervision and examination by federal or state banking or
depository institution authorities; provided, however, that, at the time of
investment, the commercial paper or other unsecured short-term debt
obligations of such depository institution or trust company must be rated
at least P-1 by Moody's and at least A-1+ by Standard & Poor's (and a
rating of at least F-1+ by Fitch if Fitch is a Rating Agency for any then
outstanding Series and the commercial paper, short-term debt obligations or
other short-term deposits of such depository institution or trust company
are rated by Fitch);
(iii) commercial paper having, at the time of investment, a
rating of at least P-1 by Moody's and at least A-1+ by Standard & Poor's
(and a rating of at least F-1+ by Fitch if Fitch is a Rating Agency for any
then outstanding Series and such commercial paper is rated by Fitch);
(iv) demand deposits, time deposits and certificates of deposit
fully insured by the FDIC having, at the time of investment, a rating of at
least P-1 by Moody's and at least A-1+ by Standard & Poor's (and a rating
of at least F-1+ by Fitch if Fitch is a Rating Agency for any then
outstanding Series and such demand deposits, time deposits or certificates
of deposit are rated by Fitch); or
(v) money market funds having, at the time of investment, a
rating in the highest rating category assigned by Moody's and Standard &
Poor's (and a rating in the highest rating category assigned by Fitch if
Fitch is a Rating Agency for any then outstanding Series and such money
market funds are rated by Fitch), including, without limitation, money
market funds for which the Trustee or any Affiliate of the Trustee is
investment manager or advisor;
and any other investment as to which the Rating Agency Condition shall have been
satisfied. "Eligible Receivable" means each Receivable:
(i) which has arisen under an Eligible Account;
(ii) which was created in compliance with all applicable
Requirements of Law and pursuant to an Account Agreement which complies
with all applicable Requirements of Law in either case the failure to
comply with which would have a material adverse effect upon the
Noteholders;
8
(iii) with respect to which all material consents, licenses,
approvals or authorizations of, or registrations with, any Governmental
Authority required to be obtained or given by the Bank in connection with
the creation of such Receivable or the execution, delivery and performance
by the Bank of the related Account Agreement have been duly obtained or
given and are in full force and effect as of such date of creation;
(iv) which has been the subject of a valid sale by the Bank to
the Transferor of all of the Bank's right, title and interest in such
Receivable pursuant to the Receivables Purchase Agreement and as to which
at the time of the transfer of such Receivable to the Issuer, the Issuer
will have good and marketable title, free and clear of all Liens (other
than Liens permitted under Section 2.5(b) of the Transfer and Servicing
Agreement);
(v) which, in the case of a Receivable created on or after the
Certificate Trust Termination Date, has been the subject of either a valid
transfer and assignment from the Transferor to the Issuer of all of the
Transferor's right, title and interest therein or the grant of a first
priority perfected security interest therein (and in the proceeds thereof
to the extent set forth in Section 9-315 of the UCC as in effect in the
Relevant UCC State), effective until the termination of the Issuer;
(vi) which will at all times be the legal, valid and binding
payment obligation of the Obligor thereof enforceable against such Obligor
in accordance with its terms, except as such enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws, now or hereafter in effect, affecting the enforcement of
creditors' rights in general and except as such enforceability may be
limited by general principles of equity (whether considered in a suit at
law or in equity);
(vii) which constitutes an "account" under and as defined in
Article 9 of the UCC as in effect in the State of New York and the Relevant
UCC State;
(viii) which, at the time of its transfer to the Issuer, has not
been waived or modified except as permitted under the Transfer and
Servicing Agreement;
(ix) which is not subject to any setoff, right of rescission,
counterclaim or other defense (including the defense of usury), other than
defenses arising out of applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors'
rights in general;
(x) as to which the Transferor has satisfied all obligations to
be fulfilled at the time of its transfer to the Issuer;
(xi) as to which the Transferor has done nothing, at the time of
its transfer to the Issuer, to impair the rights of the Issuer or
Noteholders therein; and
(xii) which was originated by the Bank in the ordinary course of
business.
"Eligible Servicer" means the Bank, the Indenture Trustee, or any
entity which, at the time of its appointment as Servicer, (i) has a net worth of
not less than $50,000,000 as of the
9
end of its most recent fiscal quarter, (ii) is servicing a portfolio of consumer
revolving credit card accounts, (iii) is legally qualified and has the capacity
to service the Accounts, (iv) has demonstrated the ability to professionally
service a portfolio of similar accounts in accordance with standards of skill
and care customary in the industry and (v) is qualified to use the software that
is then currently being used to service the Accounts or obtains the right to use
or has its own software which is adequate to perform its duties under the
Transaction Documents.
"Enhancement" means, with respect to any Series or Class, any letter
of credit, guaranteed rate agreement, maturity guaranty facility, liquidity
facility, cash collateral account, collateral indebtedness amount, collateral
interest, collateralized trust obligation, cash collateral guaranty, surety
bond, insurance policy, tax protection agreement, interest rate swap, interest
rate cap, spread account, reserve account, subordination arrangement,
cross-support feature or other contract, agreement or arrangement (including any
combination of any such contracts, agreements or arrangements) established or
entered into for the benefit of the Noteholders of such Series or Class, in each
case as set forth in the related Indenture Supplement.
"Enhancement Agreement" means any agreement, instrument or document
governing the terms of any Enhancement or pursuant to which any Enhancement is
issued or outstanding.
"Enhancement Invested Amount" is defined (if at all), with respect to
any Series, in the related Indenture Supplement.
"Enhancement Provider" means, with respect to any Series, that Person
designated as such in the related Indenture Supplement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated thereunder.
"Euroclear Operator" means Euroclear Bank S.A./N.V or any successor
thereto.
"Event of Default" is defined in Section 5.2 of the Indenture.
"Excess Automatic Additional Accounts" means, with respect to any
calendar quarter or any period of twelve consecutive months, all Automatic
Additional Accounts designated by the Transferor during such calendar quarter or
such twelve month period after the designation of the Automatic Additional
Account that caused the number of Automatic Additional Accounts designated
during such calendar quarter or such twelve month period to equal the applicable
Aggregate Automatic Addition Limit.
"Excess Funding Account" is defined in Section 8.3 of the Indenture.
"Excess Funding Amount" means the amount on deposit in the Excess
Funding Account.
"Excess Recoveries" means, with respect to any Collection Period, all
Recoveries received during such Collection Period in excess of the Default
Amount for such Collection
10
Period (calculated without deducting such Recoveries in calculating the Default
Amount for such Collection Period).
"Exchange" is defined in Section 3.4 of the Trust Agreement.
"Exchange Act" means the Securities Exchange Act of 1934.
"Exchangeable Transferor Certificate" means the certificate executed
by the Transferor and authenticated by the Owner Trustee, substantially in the
form of Exhibit 3.4 to the Trust Agreement, and any Exchangeable Transferor
Certificate reissued pursuant to Section 3.4 of the Trust Agreement.
"Expenses" is defined in Section 7.2 of the Trust Agreement.
"FDIC" means the Federal Deposit Insurance Corporation, or any
successor thereto.
"Finance Charge Receivables" means (i) Receivables created in respect
of Finance Charges, cash advance fees, annual fees, late charges, overlimit
charges, returned check charges and all other fees and charges on the Accounts
(other than Insurance Charges) and (ii) Discount Option Receivables. Collections
of Finance Charge Receivables with respect to any Collection Period shall be
deemed to include (i) all Excess Recoveries, if any, received during such
Collection Period, (ii) the Interchange Amount, if any, with respect to such
Collection Period and (iii) all interest and other investment earnings (net of
losses and investment expenses), if any, received during such Collection Period
on funds on deposit in the Excess Funding Account.
"Finance Charge Shortfalls" is defined, with respect to any Series, in
the related Indenture Supplement.
"Finance Charges" is defined in the Account Agreement applicable to
each Account.
"Fiscal Year" means the period commencing on March 1 of any year and
ending on February 28 (or February 29, if applicable) of the following year.
"Fitch" means Fitch, Inc.
"Fixed Allocation Percentage" is defined, with respect to any Series,
in the related Indenture Supplement.
"Floating Allocation Percentage" is defined, with respect to any
Series, in the related Indenture Supplement.
"Foreign Clearing Agency" means, with respect to any Series,
Clearstream or the Euroclear Operator or any other established clearing agency
for securities outside the United States designated in the related Indenture
Supplement.
11
"GAAP" means generally accepted accounting principles in the United
States in effect from time to time.
"Global Note" is defined in Section 2.16 of the Indenture.
"Governmental Authority" means the United States, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Grant" means to mortgage, pledge, bargain, warrant, alienate, remise,
release, convey, assign, transfer, create, and ▇▇▇▇▇ ▇ ▇▇▇▇ upon and a security
interest in and right of set-off against, deposit, set over and confirm pursuant
to the 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 if available 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.
"Group" means, with respect to any Series, the group of Series, if
any, in which the related Indenture Supplement specifies such Series is to be
included.
"Indemnified Parties" is defined in Section 7.2 of the Trust
Agreement.
"Indenture" means the Master Indenture, dated as of July 1, 2002,
between the Issuer and the Indenture Trustee, as the same may be amended,
supplemented or otherwise modified from time to time.
"Indenture Supplement" means, with respect to any Series, a supplement
to the Indenture, executed and delivered in connection with the original
issuance of the Notes of such Series pursuant to Section 2.11 of the Indenture,
and an amendment to the Indenture executed pursuant to Section 10.1 or 10.2 of
the Indenture, and, in either case, including all amendments thereof and
supplements thereto.
"Indenture Trustee" means JPMorgan Chase Bank, in its capacity as
trustee under the Indenture, its successors in interest and any successor
indenture trustee under the Indenture.
"Independent" means, when used with respect to any specified Person,
that the Person (a) is in fact independent of the Issuer, any other obligor upon
the Notes, the Transferor 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 Transferor or any Affiliate
of any of the foregoing Persons and (c) is not connected with the Issuer, any
such other obligor, the Transferor or any Affiliate of any of the foregoing
Persons as an officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar functions.
12
"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 12.1 of the
Indenture, made by an Independent appraiser or other expert appointed by an
Issuer Order, and such opinion or certificate shall state that the signer has
read the definition of "Independent" in the Indenture and that the signer is
Independent within the meaning thereof.
"Indirect Participant" means Persons such as securities brokers and
dealers, banks and trust companies that clear or maintain a custodial
relationship with a participant of DTC, either directly or indirectly.
"Ineligible Receivable" is defined in Section 2.4(d)(iii) of the
Transfer and Servicing Agreement.
"Initial Closing Date" means October 30, 1997.
"Initial Cut-Off Date" means the opening of business on September 30,
1997.
"Initial Invested Amount" means, with respect to any Series, the
amount specified in the related Indenture Supplement.
"Insolvency Event" is defined in Section 5.1 of the Indenture.
"Insurance Charges" means, with respect to any Account, the monthly
premiums charged to the related Obligor with respect to any Insurance Policies.
"Insurance Policies" means any credit insurance policies offered
through the Bank with respect to the Accounts.
"Insurance Proceeds" means amounts received or recovered pursuant to
any Insurance Policies.
"Interchange" means interchange fees payable to the Bank, in its
capacity as credit card issuer, through MasterCard International Incorporated or
VISA USA Incorporated, with respect to the MasterCard and VISA credit card
accounts owned by the Bank (including the Accounts but excluding the MasterCard
or VISA credit card accounts, if any, included in the Circuit City Credit Card
Master Trust).
"Interchange Amount" means, with respect to any Collection Period, the
amount of Interchange paid to the Bank with respect to such Collection Period
multiplied by a fraction the numerator of which is the aggregate amount of
cardholder charges for goods and services (net of adjustments arising from
rebates, discounts, allowances, disputes or chargebacks) in the Accounts with
respect to such Collection Period and the denominator of which is the aggregate
amount of cardholder charges for goods and services (net of adjustments arising
from rebates, discounts, allowances, disputes or chargebacks) in all the
MasterCard and VISA credit card accounts owned by the Bank (including the
Accounts but excluding the MasterCard or VISA credit card accounts, if any,
included in the Circuit City Credit Card Master Trust) with respect to such
Collection Period.
13
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time.
"Invested Amount" is defined, with respect to any Series, in the
related Indenture Supplement.
"Invested Percentage" is defined, with respect to any Series, in the
related Indenture Supplement.
"Investor Charge Offs" is defined, with respect to any Series, in the
related Indenture Supplement.
"Investor Default Amount" is defined, with respect to any Series, in
the related Indenture Supplement.
"Investor Monthly Servicing Fee" is defined in Section 3.2 of the
Transfer and Servicing Agreement.
"Issuer" means the FNANB Credit Card Master Note Trust, which is
established by the Trust Agreement.
"Issuer Order" and "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.
"Lien" means any security interest, mortgage, deed of trust, pledge,
hypothecation, assignment, participation, deposit arrangement, encumbrance, lien
(statutory or other), preference, priority right or interest or other security
agreement or preferential arrangement of any kind or nature whatsoever,
including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing, other than any lien or filing made pursuant to the
Indenture or the Receivables Purchase Agreement, any assignment or transfer made
pursuant to Section 6.9 or 7.2 of the Pooling and Servicing Agreement, any
assignment or transfer made pursuant to Section 3.8 of the Indenture, or any
assignment or transfer made pursuant to Section 4.2 of the Transfer and
Servicing Agreement.
"Manager" means the managing underwriter of any Series.
"Minimum Aggregate Principal Receivables" means, on any date of
determination, the aggregate of the amounts set forth in each Indenture
Supplement for each then outstanding Series as the "Minimum Aggregate Principal
Receivables" for such Series, which amount for any such Series shall be the
Initial Invested Amount of such Series unless otherwise specified in the related
Indenture Supplement.
"Minimum Transferor Amount" means, on any date of determination, the
product of the Aggregate Principal Receivables on such date and the Minimum
Transferor Interest Percentage on such date.
14
"Minimum Transferor Interest Percentage" means, on any date of
determination, the highest percentage set forth in any Indenture Supplement for
any then outstanding Series as the "Minimum Transferor Interest Percentage" for
such Series.
"Monthly Servicing Fee" is defined in Section 3.2 of the Transfer and
Servicing Agreement.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"1940 Act" means the Investment Company Act of 1940, as amended from
time to time.
"New Issuance" means the procedure described under Section 2.11 of the
Indenture.
"New Issuance Date" is defined, with respect to any Series issued
pursuant to a New Issuance, in Section 2.11 of the Indenture.
"New Issuance Notice" is defined, with respect to any Series issued
pursuant to a New Issuance, in Section 2.11 of the Indenture.
"Noteholder" or "Holder" means the Person in whose name a Note is
registered on the Note Register and, if applicable, the holder of any Global
Note, or Coupon, as the case may be, or such other Person deemed to be a
"Noteholder" or "Holder" in any related Indenture Supplement.
"Note Interest Rate" means, as of any particular date of determination
and with respect to any Series or Class, the interest rate as of such date
specified therefor in the related Indenture Supplement.
"Note Owner" means, with respect to a Book-Entry Note, the Person who
is the 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 accordance with the rules of such Clearing Agency).
"Note Principal Balance" means, as of any particular date of
determination and with respect to any Series or Class, the amount specified in
the related Indenture Supplement.
"Note Register" is defined in Section 2.5 of the Indenture.
"Notes" means all Series of Notes issued by the Issuer pursuant to the
Indenture and the applicable Indenture Supplements.
"Obligor" means, with respect to any Account, each Person obligated to
make payments with respect to such Account, including any guarantor thereof.
15
"Officer's Certificate" means a certificate signed by any Vice
President or more senior officer of either of the Transferor or the Servicer and
delivered to the Indenture Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for or an employee of the Person providing the opinion, and who shall be
reasonably acceptable to the Indenture Trustee; provided, however, that any Tax
Opinion or other opinion relating to federal income tax matters shall be an
opinion of nationally recognized tax counsel; and, provided further, that no
such written opinion (including, without limitation, any Tax Opinion) shall be
an expense of the Indenture Trustee.
"Outstanding" means, as of the date of determination, all Notes
theretofore authenticated and delivered under the Indenture except:
(i) Notes theretofore canceled by the Note Registrar or delivered
to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Indenture Trustee
or any Paying Agent in trust for the Holders of such Notes (provided,
however, that if such Notes are to be redeemed, notice of such redemption
has been duly given pursuant to the Indenture or provision therefor,
satisfactory to the Indenture Trustee, has been made); and
(iii) Notes in exchange for or in lieu of other Notes which have
been authenticated and delivered pursuant to the Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Notes are
held by a protected purchaser;
provided, however, that in determining whether the Holders of Notes representing
the requisite Outstanding Notes have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Notes owned by the Issuer, any
other obligor upon the Notes, the Transferor, the Servicer or any Affiliate of
any of the foregoing Persons shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Indenture Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Notes that a Trustee Officer of the Indenture
Trustee actually knows to be so owned shall be so disregarded. Notes so owned
that have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Indenture Trustee the pledgee's
right so to act with respect to such Notes and that the pledgee is not the
Issuer, any other obligor upon the Notes, the Transferor, the Servicer or any
Affiliate of any of the foregoing Persons. In making any such determination, the
Indenture Trustee may conclusively rely on the representations of the pledgee
and shall not be required to undertake any independent investigation.
"Outstanding Amount" means the aggregate principal amount of all Notes
Outstanding at the date of determination.
"Owner Trustee" means Wilmington Trust Company, not in its individual
capacity but in its capacity as owner trustee under the Trust Agreement, its
successors in interest and any successor owner trustee under the Trust
Agreement.
16
"Paying Agent" means any paying agent appointed pursuant to Section
2.8 of the Indenture and shall initially be the Indenture Trustee; provided,
however, that if the Indenture Supplement for a Series so provides, a separate
or additional Paying Agent may be appointed with respect to such Series.
"Permitted Activities" means the primary activities of the Issuer,
which are:
(i) holding Receivables and the other Trust Property, which
assets cannot be contrary to the status of the Issuer as a qualified
special purpose entity under existing accounting literature, including
passive derivative financial instruments that pertain to beneficial
interests issued or sold to parties other than the Transferor or Affiliates
or agents of the Transferor;
(ii) issuing Notes and other interests in the Issuer;
(iii) receiving Collections and making payments on Notes and
interests in accordance with the terms of the Indenture and any Indenture
Supplement; and
(iv) engaging in other activities that are necessary to
accomplish or incidental to the foregoing activities, which other
activities cannot be contrary to the status of the Issuer as a qualified
special purpose entity under existing accounting literature.
"Person" means any legal person, including any individual,
corporation, partnership, limited liability company, limited liability
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, Governmental Authority or other entity of similar
nature.
"Pooling and Servicing Agreement" means the Amended and Restated
Master Pooling and Servicing Agreement, dated as of December 31, 2001, among DC
Funding, the Bank and JPMorgan Chase Bank (successor trustee to First Union
National Bank), as the same may be amended, supplemented or otherwise modified
from time to time.
"Principal Amortization Period" is defined (if at all), with respect
to any Series, in the related Indenture Supplement.
"Principal Receivables" means Receivables other than Finance Charge
Receivables, Receivables in Defaulted Accounts and Discount Option Receivables.
"Principal Sharing Series" means a Series that, pursuant to the
related Supplement, is entitled to receive Shared Principal Collections.
"Principal Shortfalls" is defined, with respect to any Series, in the
related Indenture Supplement.
"Principal Terms" is defined, with respect to any Series issued
pursuant to a New Issuance, in Section 2.11 of the Indenture.
17
"Proceeding" means any suit in equity, action at law or other judicial
or administrative proceeding.
"Pro Forma Investor Default Amount" means, for any Distribution Date
with respect to any Series, the average of the Investor Default Amounts for such
Series for the three consecutive Distribution Dates preceding such Distribution
Date; provided, however, that the Investor Default Amount for the three
consecutive Distribution Dates preceding the initial Distribution Date with
respect to any Series shall be calculated based on the Default Amount and
Invested Percentages that would have applied had such Series been outstanding at
all relevant times with an Invested Amount equal to the Initial Invested Amount
of such Series.
"Publication Date" is defined in Section 5.5.
"Rating Agency" means, with respect to any outstanding Series or
Class, each rating agency selected by the Transferor to rate the Notes of such
Series or Class.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have notified the Transferor, the Servicer and the Indenture
Trustee that such action will not result in a reduction or withdrawal of its
rating of any outstanding Series or Class with respect to which it is a Rating
Agency.
"Reassignment" is defined in Section 2.7 of the Transfer and Servicing
Agreement.
"Receivable" means any amount owing by an Obligor under an Account
from time to time, including, without limitation, amounts owing for the payment
of goods and services, cash advances, Insurance Charges, Finance Charges, cash
advance fees, annual fees, late charges, overlimit charges, returned check
charges and all other fees and charges. In calculating the aggregate amount of
Receivables on any day, the amount of Receivables shall be reduced by the
aggregate amount of credit balances, and other adjustments stated in Section 3.8
of the Transfer and Servicing Agreement, in the Accounts on such day. Any
Receivables which the Transferor is unable to transfer as provided in Section
2.5(d) of the Transfer and Servicing Agreement shall not be included in
calculating the aggregate amount of Receivables.
"Receivables Purchase Agreement" means the Receivables Purchase
Agreement dated as of December 31, 2001, between the Bank and DC Funding, and
acknowledged and accepted by the Trustee, as the same may be amended,
supplemented or otherwise modified from time to time.
"Receivables Trust" means (a) prior to the Certificate Trust
Termination Date, the FNANB Credit Card Master Trust and (b) on and after the
Certificate Trust Termination Date, the Issuer.
"Record Date" means, with respect to any Series and any Distribution
Date, the last Business Day of the immediately preceding Collection Period or
such other date as may be specified in the related Indenture Supplement.
18
"Recoveries" means all amounts (including Insurance Proceeds, if any)
received by the Servicer with respect to Receivables in Defaulted Accounts (net
of any out-of-pocket costs and expenses of collection and certain other
post-charge off adjustments).
"Redemption Date" means, with respect to any Series, the date or dates
specified in the related Indenture Supplement.
"Registered Notes" is defined in Section 2.1 of the Indenture.
"Relevant UCC State" means all jurisdictions where a UCC filing is
required to perfect and maintain the security interest of the trustee of the
FNANB Credit Card Master Trust, or on and after the Certificate Trust
Termination Date, the Issuer in the Receivables and the proceeds thereof.
"Removal Date" means the date on which the Receivables in certain
designated Removed Accounts will be reassigned by the Indenture Trustee to the
Transferor.
"Removal Notice Date" means the fifth Business Day prior to a Removal
Date.
"Removed Accounts" is defined in Section 2.7 of the Transfer and
Servicing Agreement.
"Requirements of Law" for any Person means the certificate of
incorporation or articles of association and by-laws or other organizational or
governing documents of such Person, and any law, treaty, rule or regulation, or
order or determination of an arbitrator or Governmental Authority, in each case
applicable to or binding upon such Person or to which such Person is subject,
whether Federal, state or local (including usury laws, the Federal Truth in
Lending Act and Regulation Z and Regulation B of the Board of Governors of the
Federal Reserve System).
"Responsible Officer" means any officer of the Indenture Trustee or
the Owner Trustee, as the case may be, assigned by it to administer its
corporate trust matters.
"Securities Act" means the Securities Act of 1933.
"Series" means any series of Notes, which may include within any such
Series a Class or Classes of Notes subordinate to another such Class or Classes
of Notes.
"Series Account" means, with respect to any Series, any of the
accounts established and designated as such pursuant to the related Indenture
Supplement.
"Series Adjustment Amount" means, with respect to any Collection
Period for any Series, the product of (i) the percentage equivalent of a
fraction, the numerator of which is the Invested Amount with respect to such
Series as of the last day of such Collection Period and the denominator of which
is the Aggregate Invested Amount on such last day and (ii) the Adjustment Amount
as of such last day.
"Servicer" means the Bank or, after any Service Transfer, the
Successor Servicer.
19
"Servicer Default" is defined in Section 7.1 of the Transfer and
Servicing Agreement.
"Service Transfer" is defined in Section 7.1 of the Transfer and
Servicing Agreement.
"Servicing Agreement" means (i) before the Certificate Trust
Termination Date, the Pooling and Servicing Agreement, and (ii) on and after the
Certificate Trust Termination Date, the Transfer and Servicing Agreement.
"Servicing Fee Percentage" is defined, with respect to any Series, in
the related Indenture Supplement.
"Servicing Officer" means any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Receivables whose name
appears on a list of servicing officers furnished to the Indenture Trustee by
the Servicer, as such list may from time to time be amended.
"Shared Excess Finance Charge Collections" is defined, with respect to
any Series, in the related Indenture Supplement.
"Shared Principal Collections" is defined, with respect to any Series,
in the related Indenture Supplement.
"Standard & Poor's" means Standard & Poor's, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"Stated Series Termination Date" is defined, with respect to any
Series, in the related Indenture Supplement.
"Successor Servicer" is defined in Section 7.2(a) of the Transfer and
Servicing Agreement.
"Supplemental Interest" is defined in Section 3.4 of the Trust
Agreement.
"Surviving Person" is defined in Section 3.10(a) of the Indenture.
"Tax Opinion" is defined in Section 2.11(b) of the Indenture.
"Termination Notice" is defined in Section 7.1 of the Transfer and
Servicing Agreement.
"Transaction Documents" means the Indenture, the Indenture
Supplements, the Transfer and Servicing Agreement, the Trust Agreement, the
Administration Agreement, the Receivables Purchase Agreement and, until the
Certificate Trust Termination Date, the Pooling and Servicing Agreement and the
Collateral Series Supplement, and any other related documents.
20
"Transfer Agent and Registrar" is defined in Section 2.5 of the
Indenture.
"Transfer and Servicing Agreement" means the Transfer and Servicing
Agreement, dated as of July 1, 2002, among the Issuer, DC Funding and the Bank,
and acknowledged and accepted by the Indenture Trustee, as the same by be
amended, supplemented or modified from time to time.
"Transfer Date" means the Business Day preceding each Distribution
Date.
"Transferor" means DC Funding.
"Transferor Amount" means, on any date of determination, the Aggregate
Principal Receivables at the end of the day immediately prior to such date of
determination, plus the Excess Funding Amount at the end of such day, minus the
Aggregate Invested Amount at the end of such day, minus any Enhancement Invested
Amount at the end of such day (to the extent not included in the Aggregate
Invested Amount).
"Transferor Interest" means the ownership interest in the Trust
evidenced by the Exchangeable Transferor Certificate.
"Transferor Interest Percentage" means, on any date of determination,
the Transferor Amount divided by the Aggregate Principal Receivables.
"Transferor Percentage" means, on any date of determination, when used
with respect to Collections of Principal Receivables, Finance Charge Receivables
and Receivables in Defaulted Accounts, one hundred percent minus the Aggregate
Invested Percentage calculated on such date with respect to such categories of
Receivables as calculated by the Servicer.
"Transferred Account" means a MasterCard or VISA credit card account
with respect to which a new credit card account number has been issued by the
Servicer or the Bank in accordance with its usual and customary servicing
practices and in accordance with the Account Guidelines, and which can be traced
or identified by reference to or by way of the computer files or microfiche
lists delivered to the trustee of the FNANB Credit Card Master Trust pursuant to
Sections 2.1 and 2.6 of the Pooling and Servicing Agreement or to the Indenture
Trustee pursuant to Sections 2.1 and 2.6 of the Transfer and Servicing Agreement
as an account into which an Account has been transferred (including such
transfers occurring between the Initial Cut-Off Date and the Initial Closing
Date and between any Additional Account Cut-Off Date and the related Additional
Account Closing Date).
"Trust" means the FNANB Credit Card Master Note Trust, a Delaware
business trust.
"Trust Agreement" means the Trust Agreement dated as of July 1, 2002,
between DC Funding and the Owner Trustee, as the same may be amended,
supplemented or otherwise modified from time to time.
"Trust Assets" is defined in Section 2.1 of the Transfer and Servicing
Agreement.
21
"Trust Estate" means all right, title and interest of the Issuer in
and to the property and rights assigned to the Issuer pursuant to Section 2.5 of
the Trust Agreement and Section 2.1 of the Transfer and Servicing Agreement, all
monies, investment property, instruments and other property on deposit from time
to time in the Collection Account, the Series Accounts and the Excess Funding
Account and all other property of the Issuer from time to time, including any
rights of the Owner Trustee and the Issuer pursuant to the Transaction
Documents.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939.
"Trust Termination Date" is defined in Section 8.1 of the Trust
Agreement.
"Trustee Officer" means, with respect to the Indenture Trustee, any
officer assigned to the Corporate Trust Office, including any managing director,
vice president, assistant vice president, assistant treasurer, assistant
secretary or any other officer of the Indenture Trustee customarily performing
functions similar to those performed by any of the above designated officers and
having direct responsibility for the administration of the applicable
Transaction 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.
"UCC" means the Uniform Commercial Code, as in effect in any specified
jurisdiction.
"United States" means the United States of America.
"Zero Balance Account" means an Account with a Receivable balance of
zero which (i) has been closed in accordance with the Account Guidelines or (ii)
has had no activity for at least six months.
22
ANNEX B
to
MASTER INDENTURE
PERFECTION REPRESENTATIONS, WARRANTIES
AND COVENANTS
(A) Effective on the Initial Closing Date and on each Closing Date
with respect to each Series prior to the Certificate Trust Termination Date, in
addition to the representations, warranties and covenants contained in the
Indenture, Issuer hereby represents, warrants and covenants to the Indenture
Trustee as follows:
(1) The Indenture creates a valid and continuing security interest (as
defined in the applicable UCC) in the Collateral Certificate (the "Collateral"
for the purposes of this paragraph (A)) in favor of the Indenture Trustee, which
security interest is prior to all other Liens, and is enforceable as such
against creditors of and purchasers from the Issuer (other than Liens permitted
pursuant to paragraph (A)(3) below).
(2) The Collateral Certificate constitutes a "certificated security,"
"instrument" or "general intangible" within the meaning of the applicable UCC.
(3) Issuer owns and has good and marketable title to the Collateral
free and clear of any Lien, claim or encumbrance of any Person; provided,
however, that nothing in this paragraph 3 shall prevent or be deemed to prohibit
Issuer from suffering to exist upon any of the Collateral any Liens for any
taxes if such taxes shall not at the time be due and payable or if Issuer shall
currently be contesting the validity thereof in good faith by appropriate
proceedings and shall have set aside on its books adequate reserves under GAAP
with respect thereto. Issuer has received all consents and approvals required by
the terms of the Collateral to the grant of a security interest in the
Collateral hereunder to the Indenture Trustee.
(4) (a) If perfection is by filing (i) Issuer has caused, or will have
caused within 10 days, 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 in the Collateral granted to the
Indenture Trustee under the Indenture. (b) If perfection is by possession, all
original executed copies of each promissory note or security certificate that
constitute or evidence the Collateral have been delivered to the Indenture
Trustee. Each security certificate either (i) is in bearer form, (ii) has been
indorsed, by an effective endorsement, to the Indenture Trustee or in blank or
(iii) has been registered in the name of the Indenture Trustee. (c) With regard
to Eligible Investments that constitute "deposit accounts" within the meaning of
the applicable UCC (the "deposit accounts"), Issuer has delivered to the
Indenture Trustee a fully executed agreement pursuant to which the bank
maintaining the deposit accounts has agreed to comply with all instructions
originated by the Indenture Trustee directing disposition of the funds in such
deposit accounts without further consent by the Issuer, or Issuer has taken all
steps necessary to cause Indenture Trustee to become the account holder of the
deposit accounts. (d) If perfection is by control, with regard to Eligible
Investments that constitute "uncertificated securities" within the meaning of
the applicable UCC, each issuer of Eligible Investments that
1
constitutes an uncertificated security has registered the Indenture Trustee as
the registered owner, or the Issuer is the registered owner of such
uncertificated security and has agreed in writing that it will comply with
instructions originated by the Indenture Trustee without further consent by the
Issuer.
(5) Other than the grant of a security interest in the Collateral to
the Indenture Trustee pursuant to the Indenture, Issuer has not pledged,
assigned, sold, granted a security interest in, or otherwise conveyed any of the
Collateral. Issuer has not authorized the filing of and is not aware of any
financing statements against Issuer that include a description of collateral
covering the Collateral other than any financing statement relating to the
security interest granted to the Indenture Trustee under the Indenture or that
has been terminated. (a) If perfection is by filing, Issuer has in its
possession all original copies of the promissory notes or security certificates
that constitute or evidence the Collateral. The promissory notes or security
certificates that constitute or evidence the Collateral do not have any marks or
notations indicating that they have been pledged, assigned or otherwise conveyed
to any Person other than the Indenture Trustee. All financing statements to be
filed against the Issuer in favor of the Indenture Trustee in connection
herewith describing the Collateral will contain a statement to the effect that
"A purchase of or security interest in any collateral described in this
financing statement will violate the rights of the Indenture Trustee". (b) If
perfection is by possession, none of the promissory notes or security
certificates that constitute or evidence the Collateral has any marks or
notations indicating that they have been pledged, assigned or otherwise conveyed
to any Person other than the Indenture Trustee. With regard to deposit accounts,
the deposit accounts are not in the name of any Person other than the Issuer or
the Indenture Trustee. The Issuer has not consented to the bank maintaining the
deposit accounts to comply with instructions of any Person other than the
Indenture Trustee.
(6) Issuer is not aware of any judgment, ERISA or tax lien filings
against Issuer.
(7) Notwithstanding any other provision of the Indenture, the
representations and warranties set forth in this Annex B shall be continuing,
and remain in full force and effect, until such time as all Notes have been
finally and fully paid. The parties hereto shall not, without satisfying the
Rating Agency Condition, waive a breach of any representation or warranty set
forth in this Annex B. In order to evidence the interests of Issuer and the
Indenture Trustee under the Indenture, Issuer and Servicer shall take such
action, or execute and deliver such instruments (other than filing financing
statements) as may be necessary or advisable (including, without limitation,
such actions as are requested by Indenture Trustee) to maintain and perfect, as
a first priority interest, Issuer's or the Indenture Trustee's security interest
in the Collateral. The Servicer shall, from time to time and within the time
limits established by law, prepare and present to the Indenture Trustee for the
Indenture Trustee's authorization and approval all financing statements,
amendments, continuations or initial financing statements in lieu of a
continuation statement, or other filings necessary to continue, maintain and
perfect such security interest as a first priority interest. The Indenture
Trustee's approval of such filings shall authorize the Servicer to file such
financing statements under the applicable UCC without the signature of Issuer or
Indenture Trustee where allowed by applicable law. Notwithstanding anything else
in the Indenture to the contrary, the Servicer shall not have any authority to
file a
2
termination, partial termination, release, partial release, or any amendment
that deletes the name of a debtor or excludes collateral of any such financing
statements, without the prior written consent of the Indenture Trustee. The
Indenture Trustee may require, prior to authorizing or filing any such
termination, partial termination, release, partial release or amendment, that
Servicer provide an Opinion of Counsel that such filings are authorized under
the Indenture.
(B) Effective on the Certificate Trust Termination Date and on each
Closing Date with respect to each Series after the Certificate Trust Termination
Date, in addition to the representations, warranties and covenants contained in
the Indenture, Issuer hereby represents, warrants and covenants to the Indenture
Trustee as follows:
(1) The Indenture creates a valid and continuing security interest (as
defined in the applicable UCC) in (i) the Receivables conveyed (whether as a
valid transfer or as a grant of a security interest) to the Issuer pursuant to
the Servicing Agreement and (ii) Eligible Investments (the Eligible Investments
together with the Receivables, the "Collateral" for the purposes of this
paragraph (B)) in favor of the Indenture Trustee, which security interest is
prior to all other Liens, and is enforceable as such against creditors of and
purchasers from the Issuer (other than Liens permitted pursuant to paragraph
(B)(3) below).
(2) The Receivables constitute "accounts" within the meaning of the
applicable UCC. The Eligible Investments constitute "instruments," "payment
intangibles," "uncertificated securities" or "deposit accounts" under the
applicable UCC.
(3) Immediately prior to the grant of the security interest in the
Collateral pursuant to the Indenture, Issuer owns and has good and marketable
title to the Collateral free and clear of any Lien, claim or encumbrance of any
Person; provided, however, that nothing in this paragraph 3 shall prevent or be
deemed to prohibit Issuer from suffering to exist upon any of the Collateral any
Liens for any taxes if such taxes shall not at the time be due and payable or if
Issuer shall currently be contesting the validity thereof in good faith by
appropriate proceedings and shall have set aside on its books adequate reserves
under GAAP with respect thereto. Issuer has received all consents and approvals
required by the terms of the Collateral to the grant of the security interest in
the Collateral hereunder to the Indenture Trustee.
(4) (a) If perfection is by filing (i) Issuer has caused, or will have
caused within 10 days, 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 in the Collateral granted to the
Indenture Trustee under the Indenture. (b) If perfection is by possession, all
original executed copies of each promissory note or security certificate that
constitute or evidence the Collateral have been delivered to the Indenture
Trustee. Each security certificate either (i) is in bearer form, (ii) has been
indorsed, by an effective endorsement, to the Indenture Trustee or in blank or
(iii) has been registered in the name of the Indenture Trustee. (c) With regard
to Eligible Investments that constitute "deposit accounts" within the meaning of
the applicable UCC, Issuer has delivered to the Indenture Trustee a fully
executed agreement pursuant to which the bank maintaining the deposit accounts
has agreed to comply with all instructions originated by the Indenture Trustee
directing disposition of the funds in such deposit accounts without further
consent by the Issuer, or Issuer has taken all steps necessary to cause
3
Indenture Trustee to become the account holder of the deposit accounts. (d) If
perfection is by control, with regard to Eligible Investments that constitute
"uncertificated securities" within the meaning of the applicable UCC, each
issuer of Eligible Investments that constitutes an uncertificated security has
registered the Indenture Trustee as the registered owner, or the Issuer is the
registered owner of such uncertificated security and has agreed in writing that
it will comply with instructions originated by the Indenture Trustee without
further consent by the Issuer.
(5) Other than the grant of a security interest in the Collateral to
the Indenture Trustee pursuant to the Indenture, Issuer has not pledged,
assigned, sold, granted a security interest in, or otherwise conveyed any of the
Collateral. Issuer has not authorized the filing of and is not aware of any
financing statements against Issuer that include a description of collateral
covering the Collateral other than any financing statement relating to the
security interest granted to the Indenture Trustee under the Indenture or that
has been terminated. (a) If perfection is by filing, Issuer has in its
possession all original copies of the promissory notes or security certificates
that constitute or evidence the Collateral. The promissory notes or security
certificates that constitute or evidence the Collateral do not have any marks or
notations indicating that they have been pledged, assigned or otherwise conveyed
to any Person other than the Indenture Trustee. All financing statements to be
filed against the Issuer in favor of the Indenture Trustee in connection
herewith describing the Collateral will contain a statement to the effect that
"A purchase of or security interest in any collateral described in this
financing statement will violate the rights of the Indenture Trustee". (b) If
perfection is by possession, none of the promissory notes or security
certificates that constitute or evidence the Collateral has any marks or
notations indicating that they have been pledged, assigned or otherwise conveyed
to any Person other than the Indenture Trustee. With regard to deposit accounts,
the deposit accounts are not in the name of any Person other than the Issuer or
the Indenture Trustee. The Issuer has not consented to the bank maintaining the
deposit accounts to comply with instructions of any Person other than the
Indenture Trustee.
(6) Issuer is not aware of any judgment, ERISA or tax lien filings
against Issuer.
(7) Notwithstanding any other provision of the Indenture, the
representations and warranties set forth in this Annex B shall be continuing,
and remain in full force and effect, until such time as all Notes have been
finally and fully paid. The parties hereto shall not, without satisfying the
Rating Agency Condition, waive a breach of any representation or warranty set
forth in this Annex B. In order to evidence the interests of Issuer and the
Indenture Trustee under the Indenture, Issuer and Servicer shall take such
action, or execute and deliver such instruments (other than filing financing
statements) as may be necessary or advisable (including, without limitation,
such actions as are requested by Indenture Trustee) to maintain and perfect, as
a first priority interest, Issuer's or the Indenture Trustee's security interest
in the Collateral. The Servicer shall, from time to time and within the time
limits established by law, prepare and present to the Indenture Trustee for the
Indenture Trustee's authorization and approval all financing statements,
amendments, continuations or initial financing statements in lieu of a
continuation statement, or other filings necessary to continue, maintain and
perfect such security interest as a first priority interest. The Indenture
Trustee's approval of such filings shall
4
authorize the Servicer to file such financing statements under the applicable
UCC without the signature of Issuer or Indenture Trustee where allowed by
applicable law. Notwithstanding anything else in the Indenture to the contrary,
the Servicer shall not have any authority to file a termination, partial
termination, release, partial release, or any amendment that deletes the name of
a debtor or excludes collateral of any such financing statements, without the
prior written consent of the Indenture Trustee. The Indenture Trustee may
require, prior to authorizing or filing any such termination, partial
termination, release, partial release or amendment, that Servicer provide an
Opinion of Counsel that such filings are authorized under the Indenture.
5