TAMARACK LENDERS CORPORATION
AND
STERLING TRUST COMPANY,
TRUSTEE
CLASS A-1 AND A-2 NOTES
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INDENTURE
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Dated as of , 1998
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CROSS-REFERENCE TABLE
Trust Indenture
Act Section Indenture Section
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310 (a)(1) 7.10
(a)(2) 7.10
(a)(3) N/A
(a)(4) N/A
(a)(5) 7.10
(b) 7.8; 7.10; 11.2
(c) N/A
311 (a) 7.11
(b) 7.11
(c) N/A
312 (a) 2.6
(b) 11.3
(c) 11.3
313 (a) 7.6
(b) 7.6
(c) 11.2
(d) 7.6
314 (a) 5.7; 11.2
(b) N/A
(c)(1) 11.4
(c)(2) 11.4
(c)(3) N/A
(d) N/A
(e) 11.4
(f) N/A
315 (a) 7.1(b)
(b) 7.5; 11.2
(c) 7.1(a)
(d) 7.1(c)
(e) 6.11
316 (a)(1)(A) 6.5
(a)(1)(B) 6.4
(a)(2) N/A
(a)(last sentence) 1.1(Defn. of
"Outstanding Notes")
(b) 6.7
(c) N/A
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317 (a)(1) 6.8
(a)(2) 6.9
(b) 5.2
318 (a) 11.1
________________________
"N/A" means Not Applicable
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TABLE OF CONTENTS
HEADING
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RECITALS OF THE COMPANY. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE . . . . . . . . . . . . . . . . . 4
Section 1.2 Incorporation by Reference of Trust Indenture Act.. . . . 10
Section 1.3 Rules of Construction.. . . . . . . . . . . . . . . . . . 11
ARTICLE TWO
THE SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 2.1 Issuance in Series. . . . . . . . . . . . . . . . . . . . 11
Section 2.2 Forms Generally.. . . . . . . . . . . . . . . . . . . . . 13
Section 2.3 Form of Note. . . . . . . . . . . . . . . . . . . . . . . 13
Section 2.4 Denominations.. . . . . . . . . . . . . . . . . . . . . . 17
Section 2.5 Execution and Authentication. . . . . . . . . . . . . . . 18
Section 2.6 Registrar and Paying Agent. . . . . . . . . . . . . . . . 18
Section 2.7 Holder Lists. . . . . . . . . . . . . . . . . . . . . . . 18
Section 2.8 Transfer and Exchange.. . . . . . . . . . . . . . . . . . 19
Section 2.9 Replacement Notes.. . . . . . . . . . . . . . . . . . . . 19
Section 2.10 Temporary Notes.. . . . . . . . . . . . . . . . . . . . . 19
Section 2.11 Cancellation. . . . . . . . . . . . . . . . . . . . . . . 19
Section 2.12 Defaulted Interest. . . . . . . . . . . . . . . . . . . . 20
Section 2.13 Persons Deemed Owners.. . . . . . . . . . . . . . . . . . 20
Section 2.14. Documents Required for Issuance of Series of Notes. . . 20
ARTICLE THREE
REDEMPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 3.1 General.. . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 3.2 Notice of Redemption. . . . . . . . . . . . . . . . . . . 21
Section 3.3 Effect of Notice of Redemption. . . . . . . . . . . . . . 22
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ARTICLE FOUR
ACCOUNTS, DISBURSEMENTS AND RELEASES . . . . . . . . . . . . . . . . . . . . 22
Section 4.1 Trust Account; Operating Account. . . . . . . . . . . . . 22
Section 4.2 General Provisions Regarding Trust Account. . . . . . . . 25
Section 4.3 Reports by Trustee. . . . . . . . . . . . . . . . . . . . 26
ARTICLE FIVE
COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 5.1 Payment of Principal and Interest.. . . . . . . . . . . . 26
Section 5.2 Money for Note Payments to be Held in Trust.. . . . . . . 27
Section 5.3 Payment of Taxes and Other Claims.. . . . . . . . . . . . 28
Section 5.4 Limitation on Investment Activities.. . . . . . . . . . . 28
Section 5.5 Compliance Certificates.. . . . . . . . . . . . . . . . . 28
Section 5.6 Reporting.. . . . . . . . . . . . . . . . . . . . . . . . 29
Section 5.7 Performance of Obligations; Servicing Agreement.. . . . . 29
Section 5.8 Negative Covenants. . . . . . . . . . . . . . . . . . . . 30
ARTICLE SIX
DEFAULTS AND REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 6.1 Events of Default.. . . . . . . . . . . . . . . . . . . . 31
Section 6.2 Acceleration. . . . . . . . . . . . . . . . . . . . . . . 33
Section 6.3 Remedies. . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 6.4 Waiver of Past Defaults.. . . . . . . . . . . . . . . . . 33
Section 6.5 Control by Majority.. . . . . . . . . . . . . . . . . . . 33
Section 6.6 Limitation on Suits.. . . . . . . . . . . . . . . . . . . 34
Section 6.7 Rights of Holders to Receive Payment. . . . . . . . . . . 34
Section 6.8 Collection Suit by Trustee. . . . . . . . . . . . . . . . 34
Section 6.9 Trustee may File Proofs of Claim. . . . . . . . . . . . . 35
Section 6.10 Priorities. . . . . . . . . . . . . . . . . . . . . . . . 35
Section 6.11 Undertaking for Costs.. . . . . . . . . . . . . . . . . . 35
Section 6.12 Stay, Extension or Usury Laws.. . . . . . . . . . . . . . 35
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ARTICLE SEVEN
TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 7.1 Duties of Trustee.. . . . . . . . . . . . . . . . . . . . 36
Section 7.2 Rights of Trustee.. . . . . . . . . . . . . . . . . . . . 37
Section 7.3 Individual Rights of Trustee. . . . . . . . . . . . . . . 38
Section 7.5 Notice of Default.. . . . . . . . . . . . . . . . . . . . 38
Section 7.6 Reports by Trustee to Holders.. . . . . . . . . . . . . . 38
Section 7.7 Compensation and Indemnity. . . . . . . . . . . . . . . . 39
Section 7.8 Replacement of Trustee. . . . . . . . . . . . . . . . . . 39
Section 7.9 Successor Trustee by Merger, etc. . . . . . . . . . . . . 40
Section 7.10 Eligibility; Disqualification.. . . . . . . . . . . . . . 40
Section 7.11 Preferential Collection of Claims Against Company.. . . . 40
Section 7.12 Withholding Taxes.. . . . . . . . . . . . . . . . . . . . 41
ARTICLE EIGHT
DISCHARGE OF INDENTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 8.1 Satisfaction and Discharge of Indenture.. . . . . . . . . 41
Section 8.2 Application of Trust Money. . . . . . . . . . . . . . . . 42
Section 8.3 Repayment to Company. . . . . . . . . . . . . . . . . . . 42
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS. . . . . . . . . . . . . . . . . . . . . 42
Section 9.1 Without Consent of Holders. . . . . . . . . . . . . . . . 42
Section 9.2 With Consent of Holders.. . . . . . . . . . . . . . . . . 43
Section 9.3 Compliance with Trust Indenture Act.. . . . . . . . . . . 43
Section 9.4 Revocation and Effect of Consents.. . . . . . . . . . . . 44
Section 9.5 Notation on or Exchange of Notes. . . . . . . . . . . . . 44
Section 9.6 Trustee to Sign Amendments, etc.. . . . . . . . . . . . . 44
ARTICLE TEN
MEETINGS AND HOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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Section 10.1 Purposes for Which Meetings may be Called.. . . . . . . . 44
Section 10.3 Call of Meetings by Company or Holders. . . . . . . . . . 45
Section 10.4 Who may Attend and Vote at Meetings.. . . . . . . . . . . 45
Section 10.6 Exercise of Rights of Trustee or Holders may not be
Hindered or Delayed by Call of Meeting. . . . . . . . . . 46
Section 10.7 Evidence of Actions by Holders. . . . . . . . . . . . . . 46
ARTICLE ELEVEN
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 11.1 Trust Indenture Act Controls. . . . . . . . . . . . . . . 46
Section 11.2 Notices.. . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 11.3 Communication by Holders with Other Holders.. . . . . . . 47
Section 11.4 Certificate and Opinion as to Conditions Precedent. . . . 48
Section 11.5 Rules by Paying Agent and Registrar.. . . . . . . . . . . 48
Section 11.6 Legal Holidays. . . . . . . . . . . . . . . . . . . . . . 48
Section 11.7 Governing Law.. . . . . . . . . . . . . . . . . . . . . . 48
Section 11.8 No Adverse Interpretation of Other Agreements.. . . . . . 48
Section 11.9 No Recourse Against Others. . . . . . . . . . . . . . . . 49
Section 11.10 Successors. . . . . . . . . . . . . . . . . . . . . . . . 49
Section 11.11 Duplicate Originals . . . . . . . . . . . . . . . . . . . 49
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THIS INDENTURE, dated as of __________________, 1998 is between TAMARACK
LENDERS CORPORATION, a Texas corporation (the "Company"), having its
principal office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇ and Sterling Trust Company, as Trustee (the "Trustee"), a trust company
organized and existing under the laws of the State of Texas and having its
principal office at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture and the issuance from time to time of its Notes in the maximum
aggregate principal amount of $20,000,000 (the "Notes"). The Notes may bear
such rates of interest, mature at such time or times, be issued in one or
more series and have such other provisions as may hereafter be established
under this Indenture.
All acts necessary to make the Notes, when executed by the Company,
authenticated and delivered hereunder and duly issued by the Company, the valid
obligations of the Company and to make this Indenture a valid agreement of the
Company, in accordance with their and its terms, have been accomplished.
Therefore, for and in consideration of the premises and the purchase or
acceptance of the Notes by the Holders (as herein defined) thereof, it is
mutually covenanted and agreed, for the equal and proportionate benefit of all
Holders, as follows:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1 Definitions.
"Accounts" means the Trust Account and the Operating Account established by
the Company under the provisions of Section 4.1.
"Affiliate" means, as to any Person, any other Person which directly or
indirectly controls, or is under common control with, or is controlled by,
such Person. As used in this definition "control" (including, with its
correlative meanings, "controlled by" and "under common control with") means
possession, directly or indirectly, of power to direct or cause the direction
of management or policies (whether through ownership of capital stock,
partnership interests, by contract or otherwise), provided that, in any
event, any Person which owns directly or indirectly 10% or more of the
securities having ordinary voting power for the election of directors or
other governing body of a corporation or 10% or more of the partnership or
other ownership interests of any other Person (other than as a limited
partner of such other Person)
1
will be deemed to control such other Person for the purposes of this
definition; and provided further that no individual shall be an Affiliate of
a corporation or partnership solely by reason of his being an officer,
director or partner of such entity.
"Allowed Expenses" means any amounts due the Trustee under Section 7.7,
any Servicing Fees, any fees payable for the transfer of the lien reflected
in the Title Documents into and out of the Company's name, any federal, state
and local taxes and assessments incurred by the Company (including corporate
franchise taxes and any payments by the Company to any of its Affiliates as
reimbursements for tax payments made by such Affiliate for the Company's
benefit or the benefit obtained by the Company from use of tax losses
employed by such Affiliate to offset taxable income of the Company), any bank
service charges and account fees relating to the Accounts and the
subscription escrow account established for the receipt of the proceeds from
the offering and sale of the Notes, the lockbox fees, account fees and bank
service charges relating to the Collections Account, any legal and accounting
fees and printing expenses (excluding Offering Expenses, but including those
otherwise incurred to comply with reporting and other requirements under
Federal and state securities laws and for reports, compliance certificates
and opinions required by the Indenture), premiums for vehicle value
insurance, charges for vehicle warranty repair service contracts (including
fees paid to vehicle dealers), any Liquidation Expenses (as to each Financed
Vehicle, limited to the related Liquidation Proceeds), any Insurance Expenses
(as to each Financed Vehicle, limited to the related Insurance Proceeds), and
any other Allowed Expenses as described in or defined by the prospectus which
offers the Notes for sale.
"Assignment" means the original instrument of assignment of a Contract
and all other documents securing such Contract made by the Servicer to the
Company (or in the case of any Contract acquired by the Company from another
Person, from such other Person to the Company), which is in a form sufficient
under the laws of the jurisdiction under which the security interest in the
related Financed Vehicle arises to permit the assignee to exercise all rights
granted by the Obligor under such Contract and such other documents to the
obligee and to exercise all rights available under applicable law under such
Contract and which may, to the extent permitted by the laws of such
jurisdiction, be an assignment constituting a part of the form of the
Contract itself or a blanket instrument of assignment covering other
Contracts as well.
"Bankruptcy Law" shall have the meaning provided in Section 6.1.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a Legal Holiday.
"Collection Period" means with respect to any Payment Date or Report
Date, the calendar month immediately preceding the Payment Date or Report
Date.
"Collections Account" means the lock box account created and maintained
by a Servicer in the Company's name and designated as such pursuant to
the Servicing Agreement.
2
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person replaces it pursuant to the applicable
provisions of this Indenture, and thereafter "Company" means such successor
Person.
"Company Order" or "Company Request" means a written order or request
signed in the name of the Company by its Chairman, President or a Vice
President, Treasurer, Assistant Treasurer, Controller, Assistant Controller,
Secretary or an Assistant Secretary, and delivered to the Trustee.
"Contract" means each retail installment sales or lease contract (or
other obligation) and security agreement which has been executed by an
Obligor and pursuant to which such Obligor purchased or leased the Financed
Vehicle described therein, agreed to pay the remaining unpaid portion of the
purchase price or the lease payments, as therein provided in connection with
such purchase or lease, granted a security interest in such Financed Vehicle,
and undertook to perform certain other obligations as specified in such
Contract and which is granted to the Trustee pursuant to this Indenture as
security for the Notes.
"Contract Documents" means with respect to each Contract, (i) the
original Contract; (ii) either the original Title Document for the related
Financed Vehicle showing the Obligor (or the originating dealer, in the case
of a lease) as the owner and the Servicer or the Company as first lienholder
or an official receipt from the responsible state or local governmental
authority showing that an application has been made (and the required fees
have been paid) for registration of the Title Documents for such Financed
Vehicle in the names of the Obligor (or the originating dealer, in the case
of a lease) as owner and the Servicer or the Company as first lienholder (or
such other evidence of perfection of the security interest in the related
Financed Vehicle granted by such Contract, as determined by the Company to be
permitted or required to perfect such security interest under the laws of the
applicable jurisdiction, or a guarantee from the dealer selling such Financed
Vehicle that the Title Document for such Financed Vehicle showing the
Servicer or the Company as first lienholder has been applied for); (iii) the
related Assignment; and (iv) any agreement(s) modifying the Contract
(including, without limitation, any extension agreement(s)).
"Defaulted Contract" means with respect to any Collection Period, a
Contract (a) whose Obligor, at the end of such Collection Period, (i) in the
case of Contracts requiring biweekly or semi-monthly installments, is past
due with respect to at least three consecutive scheduled installments and has
failed for 30 days to remit any sums against the obligations under the
Contract, or (ii) in the case of Contracts requiring monthly installments, is
past due with respect to two scheduled installments and has failed for 60
days to remit any sums against the obligations under the Contract, or (b)
with respect to which the related Financed Vehicle has been repossessed and,
in the case of either (a) or (b), in respect of which Liquidation Proceeds,
which, in the Servicer's judgment, would constitute the final amounts
recoverable in respect of such Contract, have not yet been collected as of
the end of such Collection Period.
3
"Eligible Account" means an account that is either (i) maintained with a
depository institution subject to supervision or examination by federal or state
authority and having a combined capital and surplus of at least $15,000,000,
(ii) an account or accounts the deposits in which are fully insured by the
Federal Deposit Insurance Corporation, or (iii) maintained with the Trustee or
its successor.
"Eligible Contract" means a Contract hereafter acquired by the Company
that, as of the date of such acquisition, satisfies the representations and
warranties contained in the Servicing Agreement.
"Eligible Investments" means any one or more of the following obligations
or securities:
(i) United States Obligations;
(ii) demand and time deposits in, certificates of deposit of, banker's
acceptances issued by, or federal funds sold by any depository institution
or trust company (including the Trustee) incorporated under the laws of the
United States of America or any state thereof and subject to supervision
and examination by federal and/or state banking authorities, so long as
such institution or company has a combined capital and surplus of at least
$15,000,000;
(iii) repurchase obligations with respect to any security described in
clause (i) entered into with a depository institution or trust company
(including the Trustee), acting as principal, whose obligations having the
same maturity as that of the repurchase agreement and would be Eligible
Investments under clause(ii) above;
(iv) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America or
any state thereof which at the time of such investment have long-term,
unsecured debt rated by Standard & Poor's as "AA-" or better; provided,
however, that securities issued by any particular corporation will not be
Eligible Investments to the extent that investment therein will cause the
then outstanding principal amount of securities issued by such corporation
to exceed 10% of the aggregate outstanding balances and amounts of all
Contracts and Eligible Investments;
(v) commercial paper given the highest rating by Standard & Poor's at
the time of such investment; and
(vi) pooled or common trust funds of the Trustee or of any publicly
traded money market mutual fund that are invested in the above-mentioned
Eligible Investments.
4
"Event of Default" shall have the meaning provided in Section 6.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Financed Vehicle" means as to any Contract, the automobile or light-duty
truck that constitutes security for the obligations of the Obligor thereunder.
"Holder" means a Person in whose name a Note is registered on the
Registrar's books.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof.
"Insurance Expenses" means, with respect to a Financed Vehicle, any
expenses incurred by a Servicer and recoverable out of the Insurance Proceeds
from the related insurance policy and any portion of such Insurance Proceeds
applied to the repair of such Financed Vehicle or required to be released to the
related Obligor.
"Insurance Proceeds" means the proceeds paid by any insurer pursuant to any
Physical Damage Insurance Policy, any credit or life insurance policy covering
payments owing under any Contract, or any other insurance policy for damage or
repair of a Financed Vehicle or for liability for confiscated, converted or
"skipped" Financed Vehicles.
"Legal Holiday" shall have the meaning provided in Section 11.6.
5
"Liquidation Expenses" means the reasonable out-of-pocket expenses incurred
by a Servicer in connection with the liquidation of any Contract (including
the attempted liquidation of a Contract which is brought current and is no
longer in default during such attempted liquidation), the repossession,
holding and repair of any Financed Vehicle related thereto and the sale of any
repossessed or returned Financed Vehicle related thereto, which expenses may
include Insurance Expenses.
"Liquidation Proceeds" means the amounts received by a Servicer (before
reimbursement for Liquidation Expenses) in connection with the liquidation of
any Defaulted Contract and the sale of any repossessed or returned Financed
Vehicle related thereto, whether through repurchase by the motor vehicle dealer
who originated the Contract, receipt of Insurance Proceeds, repossession, sale
or otherwise.
"Majority Holders" means the Holders of Notes representing more than 50% of
the aggregate principal amount of Notes which are then Outstanding Notes.
"Note Register" means the register for the Notes maintained by the
Registrar pursuant to Section 2.5.
"Notes" means up to $4,000,000 principal amount of the Class A-1 Notes of
the Company, with an interest rate of 9 1/2% and maturing one year from
issuance, and up to $16,000,000 principal amount of the Class A-2 of the
Company, with an interest rate of 12% and maturing five years from issuance,
as such Notes may be amended or supplemented from time to time, that are
issued under this Indenture. The Class A-1 Notes and Class A-2 Notes are
equal to one another in all respects other than interest rate and maturity.
6
"Obligor" means each Person who is indebted under a Contract or who has
acquired or leased a Financed Vehicle subject to a Contract.
"Offering Amount" shall mean the $20,000,000 in aggregate principal amount
of the Notes that may be issued under this Indenture.
"Offering Expenses" shall mean the fees, commissions and expenses that the
Company will pay from the proceeds of the sale of the Notes, as disclosed in the
final prospectus relating to the offering of the Notes filed with the SEC
pursuant to which the Notes are offered and sold on behalf of the Company.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer, the Secretary or the Controller of any Person.
"Officer's Certificate" when used with respect to any Person, means a
certificate signed by the Chairman of the Board, President, any Vice President,
the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary
of such Person, or any other officer of such Person customarily performing
functions similar to those performed by any of the above designated officers.
"Operating Account" means the commercial bank account created and
maintained by the Company and denominated as such pursuant to Section 4.1.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Outstanding Notes" means, with respect to the Notes, as of the date of
determination, all the Notes theretofore authenticated and delivered under this
Indenture except:
(i) the Notes theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(ii) the Notes or portions thereof for whose payment or redemption
money in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent in trust for the Holders of such Notes;
provided that, if such Notes or portions thereof are to be redeemed, notice
of such redemption has been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee has been made; and
7
(iii) Notes in exchange for or in lieu of which other Notes have been
authenticated and delivered pursuant to this Indenture unless proof
satisfactory to the Trustee is presented that any such Notes are held by a
holder in due course;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of the Outstanding Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Notes owned by
the Company or any Affiliates of the Company shall be disregarded and deemed not
to be Outstanding Notes, except that, in determining whether the Trustee shall
be protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Notes with respect to which the Trustee has
received written notice of such ownership or otherwise has actual knowledge of
such ownership shall be so disregarded. Notes so owned which have been pledged
in good faith may be regarded as Outstanding Notes if the pledgee establishes to
the satisfaction of the Trustee the pledgee's right so to act with respect to
such Notes and that the pledgee is not the Company or any other obligor upon the
Notes or any Affiliates of the Company or such other obligor.
"Paying Agent" means the Trustee or any other Person that meets the
eligibility standards for the Trustee specified in Section 7.10 and is
authorized by the Company to pay the principal or any interest which may become
payable on any Notes on behalf of the Company.
"Payment Date", with respect to any Note, means the (i) 15th day of each
calendar month (unless such day is not a Business Day in which event the next
succeeding Business Day) commencing with the second calendar month following the
month in which the Note is issued, and (ii) the Stated Maturity for such Note.
"Person" means any individual, any corporation, partnership, joint venture,
trust or other entity, any unincorporated organization or any government or
agency or political subdivision thereof.
"Physical Damage Insurance Policy" means with respect to a Financed
Vehicle, any policy of physical damage, comprehensive or collision insurance
covering the Financed Vehicle pursuant to which a Servicer may obtain
recoveries for loss or damage to the Financed Vehicle.
"Purchasing Agreement" means the Master Contract Purchase Agreement,
dated as of the date hereof, by and between the Company and TFC as the
purchaser, providing among other things, for the purchasing of the Contracts,
as said agreement may be amended or supplemented from time to time as
permitted thereby.
"Record Date" for the interest and any principal payable on any Payment
Date means the first day (whether or not a Business Day) of the month in which
such Payment Date occurs.
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"Redemption Date" has the meaning set forth in Section 3.1(a).
"Redemption Price" has the meaning set forth in Section 3.1(a).
"Registrar" means the office or agency of the Company or its designee where
the Notes may be presented for registration of transfer or exchange, as
established under Section 2.5.
"Registrar of Titles" means the agency, department or office having the
responsibility for maintaining records of titles to motor vehicles and issuing
documents evidencing such titles in the jurisdiction in which a particular
Financed Vehicle is registered.
"Report Date" means the 20th day (or the Business Day next succeeding such
day if such day is not a Business Day) of each month during the existence of
this Indenture.
"Responsible Officer" when used with respect to the Trustee means the
Chairman or Vice Chairman of the Board of Directors or Trustees, the Chairman or
Vice Chairman of the Executive Committee of the Board of Directors or Trustees,
the President, any Vice President, any Assistant Vice President, any Trust
Officer or Assistant Trust Officer, the Secretary, any Assistant Secretary, the
Treasurer, any Assistant Treasurer, or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his or her
knowledge of an familiarity with the particular subject.
"SEC" means the Securities and Exchange Commission.
"Servicers" means the various servicers performing servicing and
collection functions with respect to the Company's Contracts under the
Servicing Agreements, and their permitted successors and assigns.
"Servicing Agreements" means the various Servicing Agreements by and
between the Company and the various Servicers, providing among other things,
for the collecting and servicing of the Contracts, as said agreements may be
amended or supplemented from time to time as permitted thereby. Such term
shall also include any servicing agreements entered into with successor
servicers for the servicing of Contracts.
"Servicing Fee" means the servicing fees payable by the Company to the
Servicer under the Servicing Agreeements.
9
"Special Record Date" means the date determined pursuant to Section 2.11.
"Stated Maturity" means the stated maturity date of a Note or series of
Notes issued under the Indenture.
"TFC" means Tamarack Funding Corporation as purchaser under the
Purchasing Agreement, and its permitted successors and assigns.
"TIA" means the Trust Indenture Act of 1939, as amended.
"Title Document" means with respect to any Financed Vehicle, the
certificate of title for, or other evidence of ownership of, such Financed
Vehicle issued by the Registrar of Titles in the jurisdiction in which such
Financed Vehicle is registered.
"Trust Account" means the trust account controlled by the Trustee and
designated as such pursuant to Section 4.1, which account may be a sub-account
(for accounting purposes) of a general account maintained by the Trustee.
"Trust Officer" means any Responsible Officer assigned by the Trustee to
administer its corporate trust matters.
"Trustee" means the party named as such in this Indenture until a successor
replaces it and thereafter means the successor.
"UCC" means the Uniform Commercial Code as in effect in the relevant
jurisdiction.
"United States Obligations" means direct obligations of the United States
of America or any agency or instrumentality of the United States of America, or
other obligations the principal of and interest on which are unconditionally
guaranteed or insured by Unites States of America.
Section 1.2 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, such provision is
incorporated by reference in and made a part of this Indenture. If this
Indenture is qualified under the TIA, any provision that is required by the TIA
to be incorporated herein shall be so incorporated and shall supersede any
conflicting provision hereof. The following TIA terms have the following
meanings in this Indenture:
"Commission" means the SEC.
"indenture securities" means the Notes.
"indenture security holder" means a Holder.
10
"indenture to be qualified" means this Indenture.
"indenture trustee" or institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company (or any other
obligor on the Notes).
All other TIA terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule have the meanings
assigned to them.
Section 1.3 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to
it in accordance with generally accepted accounting principals as of the date of
this Indenture;
(3) "or" is not exclusive; and
(4) words in the singular include the plural, and in the plural include
the singular.
ARTICLE TWO
THE SECURITIES
Section 2.1. Issuance in Series.
The aggregate principal amount of Notes which may be authenticated and
delivered under this Indenture is $20,000,000.
The Notes issued hereunder may be issued in one or more series. The Notes
of each series may bear such designations, which may or may not include the term
"Note", and may have such terms, respectively (including, without limitation,
additional covenants and changes in or eliminations of covenants set forth in
this Indenture), as shall be approved prior to the authentication thereof by or
pursuant to a Board Resolution; provided, however, that no Notes of any series
shall be senior in right of payment to any Notes of any other series.
With respect to any Notes to be authenticated and delivered hereunder,
there shall be established in or pursuant to a Board Resolution and, subject to
Section 2.14, set forth, or determined in the manner provided, in an Officers'
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Notes of any series,
11
(1) the title of the Notes of the series (which shall distinguish the Notes
of the series from Notes of any other series);
(2) any limit upon the aggregate principal amount of the Notes of the
series which may be authenticated and delivered under this Indenture (except for
Notes authenticated and delivered upon registration or transfer of, or in
exchange for, or in lieu of, other Notes of such series and except for any Notes
which are deemed never to have been authenticated and delivered hereunder);
(3) the Person to whom any interest on a Note of the series shall be
payable, if other than the Person in whose name that Note (or one or more
predecessor Notes) is registered at the close of business on the Record Date for
such interest;
(4) the date or dates, or the method or methods, if any, by which such date
or dates shall be determined, on which the principal of such Notes is payable;
(5) the rate or rates at which any Notes of the series shall bear interest,
if any, or the method or methods, if any, by which such rate or rates are to be
determined, the date or dates, if any, from which such interest shall accrue or
the method or methods, if any, by which such date or dates are to be determined,
the Interest Payment Dates, if any, on which such interest shall be payable and
the Record Date, if any, for the interest payable on any Interest Payment Date,
and the basis upon which interest shall be calculated if other than that of a
360-day year of twelve 30-day months;
(6) the place or places where the principal of (and premium, if any) and
interest on Notes of the series shall be payable, any Notes of the series may be
surrendered for registration of transfer or exchange and notices and demands to
or upon the Company with respect to the Notes of the series and this Indenture
may be served;
(7) whether any of such Notes are to be redeemable at the option of the
Company and, if so, the period or periods within which, the price or prices at
which and the terms and conditions upon which any Notes of the series may be
redeemed, in whole or in part, at the option of the Company, and, if other than
by a Board Resolution, the manner in which any election by the Company to redeem
the Notes shall be evidenced;
(8) whether the Company is obligated to redeem, purchase or repay any Notes
of the series pursuant to any sinking fund or analogous provisions or at the
option of the Holder thereof and, if so, the period or periods within which, the
price or prices at which and the terms and conditions upon which any Notes of
the series shall be redeemed, purchased or repaid, in whole or in part, pursuant
to such obligation and any provisions for the remarketing of any Notes of the
series so redeemed or purchased;
(9) the denominations in which any Notes of the series shall be issuable if
other than denominations of $1,000 and any integral multiple thereof;
12
(10) any deletions from, modifications of or additions to the Events of
Default or covenants of the Company with respect to any Notes of the series,
whether or not such Events of Default or covenants are consistent with the
Events of Default or covenants set forth herein; and
(11) any other terms of any Notes of the series which the Company may
establish in accordance with the terms of this Indenture.
All Notes of any one series shall be substantially identical except as to
the rate or rates of interest, if any, and Maturity, the date from which
interest, if any, shall accrue and except as may otherwise be provided by the
Company in or pursuant to the Board Resolution and set forth in the Officers'
Certificate or in any indenture or indentures supplemental hereto pertaining
to such series of Notes. All Notes of any one series need not be issued at
the same time and, unless otherwise so provided by the Company, a series may
be reopened for issuances of additional Notes of such series or to establish
additional terms of such series of Notes, provided that such additional terms
do not have a material adverse effect on the interests of the Holders of
Notes of such Series.
Section 2.2 Forms Generally.
Each series of the Notes and the Trustee's certificate of authentication
shall be in substantially the forms set forth in this Article, with such
appropriate insertions, omissions, substitutions and other variations as are
required by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange on which the
Notes may be listed, or as may, consistently herewith, be determined by the
officers executing such Notes, as evidenced by their execution thereof. Any
portion of the text of any Note may be set forth on the reverse thereof, in
which case the following reference to the portion of the text appearing on
the reverse of the Notes shall be inserted on the face of the Notes,
immediately prior to the paragraph stating that the certificate of
authentication on the Note must be executed by manual signature of the
Trustee as a condition to the validity of such Note:
"Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof which provisions shall for all purposes have
the same effect as if set forth at this place."
The definitive Notes shall be printed, lithographed or engraved or produced
by any commercially reasonable manner, all as determined by the officers
executing such Notes, as evidenced by their execution thereof.
Section 2.3 Form of Note.
(a) The form of Note is as follows:
13
TAMARACK LENDERS CORPORATION
CLASS A-__ NOTE
$ No.
----------------- -----------------
Tamarack Lenders Corporation, a corporation duly organized and existing
under the laws of the State of Texas (herein referred to as the "Company"), for
value received, hereby promises to pay to _____________________________ or
registered assigns, the principal sum of _____________________________ dollars,
and to pay interest (computed on the basis of a 360-day year consisting of 12
months of 30 days each) on the unpaid portion of said principal sum outstanding
from time to time from the date of issue, until the principal amount of this
Note is paid in full, at the rate of ______ per annum, which interest shall
be due and payable upon the 15th day of each calendar month (for such
interest accruing through the last day of the prior calendar month) during
the term of this Note commencing with the second calendar month following the
calendar month in which this Note is issued (each a "Payment Date"). The
principal sum hereof shall be due and payable on _____________ (the "Stated
Maturity"), at which time all then unpaid principal and accrued interest
hereunder shall be due and payable.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Company with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of
this Note. This Note represents a general obligation of the Company.
This Note is one of a duly authorized issue of Notes of the Company,
designated as its Class A-1 and Class A-2 Notes (herein called the "Notes"),
all issued and to be issued under an Indenture dated as of _____________,
1998 (herein called the "Indenture"), between the Company and Sterling Trust
Company (the "Trustee", which term includes any successor Trustee under the
Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights thereunder
of the Company, the Trustee and the Holders of the Notes, and the terms upon
which the Notes are, and are to be, authenticated and delivered. All
capitalized terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
Payment of the outstanding principal of and accrued interest on this Note
at the Stated Maturity, or of the Redemption Price payable on any Redemption
Date as of which this Note has been called for redemption, shall be made upon
presentation of this Note to the Paying Agent appointed by the Company for
such purpose. Payments of all installments of interest and principal due and
payable on any Payment Date (other than the Stated Maturity) shall be made by
check mailed to the Person whose name appears as the Holder of this Note on
the Note
14
Register as of the first day of the month in which such Payment Date occurs
(the "Record Date") without requiring that this Note be submitted for
notation of payment. Checks returned undelivered will be held for payment to
the Person entitled thereto, subject to the terms of the Indenture, at the
office or agency in the United States of America designated by the Company
for such purpose pursuant to the Indenture.
If an Event of Default shall occur and be continuing with respect to the
Notes, the Notes, and all principal and unpaid accrued interest, may be
declared due and payable in the manner and with the effect provided in the
Indenture.
The Notes are redeemable, at any time, at the option of the Company on any
Payment Date, in whole or in part, at 100% of the unpaid principal amount
thereof, together with accrued interest thereon; provided, however, that the
Paying Agent shall be required to redeem the Notes at such time only to the
extent that the Company has theretofore deposited with the Paying Agent money
sufficient to effect such redemption. At least ten days prior to the Redemption
Date, the Company is required to mail a notice of redemption to the registered
owner of this Note specifying the Redemption Date, the Redemption Price, the
name and address of the Paying Agent, that this Note must be delivered to the
Paying Agent and that interest on this Note ceases to accrue on and after the
Redemption Date.
If provision is made for the redemption and payment of this Note in
accordance with the Indenture, this Note shall thereupon cease to bear
interest from and after the Redemption Date.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note may be registered on the Note Register
of the Company, upon surrender of this Note for registration of transfer at
the office or agency designated by the Company pursuant to the Indenture,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
hereof or such Holder's attorney duly authorized in writing, and thereupon
one or more new Notes of authorized denominations and for the same aggregate
principal amount will be issued to the designated transferee or transferees.
The Company may charge a reasonable fee for the registration of such
transfer, or for any change of address of a Holder (or of any other Person to
whom the Holder directs that payments under this Note are to be made).
Prior to the due presentment for registration of transfer of this Note,
the Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name this Note is registered as the owner hereof
for all purposes, whether or not this Note be overdue, and neither the
Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Notes under the Indenture at any
time by the Company with the consent of the Majority Holders. The Indenture
also contains provisions permitting the Majority Holders, on
15
behalf of the Holders of all the Notes, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder
of this Note shall be conclusive and binding upon such Holder and upon all
future holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not
notation of such consent or waiver is made upon this Note. The Indenture
also permits the Trustee to amend or waive certain terms and conditions set
forth in the Indenture without the consent of Holders of the Note issued
thereunder.
The Notes are issuable only in registered form in denominations as
provided in the Indenture and subject to certain limitations therein set
forth. The Notes are exchangeable for a like aggregate principal amount of a
different authorized denomination, as requested by the Holder surrendering
same. The Company may charge a reasonable fee for such exchange.
This Note and the Indenture shall be construed in accordance with, and
governed by, the laws of the State of Texas applicable to agreements made and
to be performed therein.
The Indenture and this Note are hereby expressly limited so that in no
contingency or event, whether by reason of acceleration of the maturity of
this Note or otherwise, shall the amount paid, or agreed to be paid by the
Company for the use, forbearance, or detention of the money loaned under this
Note or otherwise or for the payment or performance of any covenant or
obligation contained herein or the Indenture or in any other document
evidencing, securing or pertaining hereto, exceed the maximum amount
permissible under applicable law, as now or as hereafter amended. If from
any circumstances whatsoever fulfillment of any provision hereof or any of
such other documents, at the time performance of such provision shall be due,
shall involve transcending the limit of validity prescribed by law, then IPSO
FACTO, the obligation to be fulfilled shall be reduced to the limit of such
validity, and if from any such circumstances the Holder of this Note shall
ever receive interest or anything which might be deemed interest under
applicable law which should exceed the highest lawful rate, such amount which
would be excessive interest shall be applied to the reduction of the
principal of this Note and not to the payment of interest, or if such
excessive interest exceeds the unpaid balance of principal of this Note such
excess shall be refunded to the Company. All sums paid or agreed to be paid
to the Holder of this Note for the use, forbearance or detention of the
indebtedness of the Company to the Holder of this Note shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full term of such indebtedness until payment in full so that
the actual rate of interest on account of such indebtedness is uniform, or
does not exceed the maximum rate permitted by applicable law as now or
hereafter amended, throughout the term thereof. The terms and provisions of
this paragraph shall control and supersede every other provision of this Note
and the Indenture. The Company hereby waives, to the extent permitted by
applicable law, all of its rights or projections afforded by any applicable
usury or interest limitation law.
16
Unless the certificate of authentication hereon has been executed by the
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, Tamarack Lenders Corporation has caused this
instrument to be duly executed under its corporate seal.
Dated: , 1998
----------------
TAMARACK LENDERS CORPORATION
By:
-------------------------------
(Authorized Officer)
(SEAL)
Attest:
-------------------------------
(Authorized Officer)
(b) The form of the Trustee's certificate of authentication is as follows:
This is one of the Notes referred to in the within mentioned Indenture.
STERLING TRUST COMPANY, as Trustee, Paying
Agent and Registrar
By:
-------------------------------
Authorized Signatory
Section 2.4 Denominations.
The Notes shall be issuable only in registered form. The Notes shall be
issuable in any denomination, with no minimum denomination.
17
Section 2.5 Execution and Authentication.
(a) The Notes shall be executed on behalf of the Company by its Chairman
of the Board, President or any Vice President of the Company and attested to
by an Officer of the Company other than an Officer who has executed the
Notes. The signature of any of such individuals on the Notes may be manual
or facsimile.
(b) Notes bearing the manual or facsimile signatures of individuals who
at any time held one or more of the offices set forth in subsection (a) above
shall bind the Company, notwithstanding that such individuals or any of them
have ceased to be such prior to the authentication and delivery of such Notes.
(c) A Note shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Note on
behalf of the Trustee. The signature shall be conclusive evidence that the
Note has been authenticated under this Indenture.
(d) The Trustee shall authenticate Notes from time to time for original
issue up to the aggregate Offering Amount upon a Company Order; provided,
however, Trustee shall not be required to so authenticate more often than
once in a calendar month.
Section 2.6 Registrar and Paying Agent.
(a) The Company shall maintain or cause to be maintained an office or
agency where Notes may be presented for registration of transfer or for
exchange (the "Registrar"). The Registrar shall keep a register of the Notes
and of their transfer and exchange (the "Note Register"). The Company may
have one or more co-registrars.
(b) Subject to the provisions of Section 5.2, the Company may designate
one or more Paying Agents, within the United States of America, at which
Notes may be presented or surrendered for payment or which may make payments
of accrued interest on the Notes on behalf of the Company.
(c) The Company shall notify the Trustee of the name and address of any
such Registrar or Paying Agent and may appoint successors thereof.
(d) The Company initially appoints the Trustee as Registrar and Paying
Agent.
Section 2.7 Holder Lists.
The Trustee shall preserve a list of the names and addresses of Holders
in as current a form as is reasonably practicable. If the Trustee is not the
Registrar, the Company shall cause the Registrar to furnish to the Trustee on
or before June 30 and December 31 of each year during the term of the Notes
and at such other times as the Trustee may request in writing a list
18
in such form and as of such date as the Trustee may reasonably require of the
names and addresses of Holders.
Section 2.8 Transfer and Exchange.
Where a Note is presented to the Company or the Registrar with a request
to register a transfer of such Note, the Company shall cause the Registrar to
register the transfer as requested if the requirements for a transfer
pursuant to the Uniform Commercial Code, as enacted in the State of Texas,
are met. Where a Note is presented to the Company or the Registrar with a
request to exchange it for an equal principal amount of Notes of other
denominations, the Company shall cause the Registrar to make the exchange as
requested if the same requirements are met. To permit transfers and
exchanges, the Trustee shall authenticate Notes upon Company Request or upon
request of the Registrar. The Company may charge its expenses to the Holder
for any transfer or exchange other than an exchange pursuant to Section 2.9
or 9.5, and may charge a reasonable fee to the Holder for any change of
address.
Section 2.9 Replacement Notes.
If a Holder claims that a Note has been lost, destroyed or wrongfully
taken, the Company shall issue and the Trustee shall authenticate a
replacement Note if the requirements for the issuance of replacement
securities pursuant to the Uniform Commercial Code, as enacted in the State
of Texas, are met. An indemnity bond must be sufficient in the judgment of
the Company and the Trustee to protect the Company, the Trustee, the Paying
Agent and the Registrar from any loss which any of them may suffer if a Note
is replaced. The Company may charge for its expenses in replacing a Note.
Section 2.10 Temporary Notes.
Until definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that
the Company considers appropriate for temporary Notes. Without unreasonable
delay, the Company shall prepare and the Trustee shall authenticate
definitive Notes in exchange for temporary Notes.
Section 2.11 Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar, the Paying Agent and the Company shall forward
to the Trustee any Notes surrendered to them for transfer, exchange or
payment. The Trustee and no one else shall cancel all Notes surrendered for
transfer, exchange, payment or cancellation and shall dispose of cancelled
Notes as the Company directs. The Company may not issue new Notes to replace
Notes it has paid or delivered to the Trustee for cancellation.
19
Section 2.12 Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it shall
pay the defaulted interest and, to the extent permitted by law, interest on
defaulted interest at the rate of 11% per annum. Such interest shall be paid
to Holders of record as of a subsequent date designated as a "Special Record
Date" for such payment. The Trustee shall establish the Special Record Date
if and when funds for the payment of such interest have been received by the
Paying Agent from the Company. At least 15 days before the Special Record
Date, the Trustee shall mail to each Holder a notice that states the Special
Record Date, the payment date for such interest, and the amount of such
interest (including any permitted interest thereon) to be paid.
Section 2.13 Persons Deemed Owners.
Prior to due presentment for registration of transfer of any Note, the
Company, the Trustee, and Paying Agent, the Registrar and any agent of the
Company or of the Trustee may treat the Person in whose name a Note is
registered on the Note Register as the owner of such Note for the purpose of
receiving payments of the principal of and interest on such Note and for all
other purposes whatsoever, whether or not such Note be in default, and
neither the Company, the Trustee, nor any agent of the Company shall be
affected by notice to the contrary.
Section 2.14. Documents Required for Issuance of Series of Notes.
At any time, or from time to time after the execution and delivery of
this Indenture, Notes may be executed by the Company and delivered to the
Trustee for authentication upon original issue, and shall be authenticated by
the Trustee and delivered by it as provided in the Company Order referred to
below, upon receipt by the Trustee of the following:
(a) a Company Order,
(b) a Board Resolution authorizing the execution, authentication and
delivery of Notes, and specifying the series, maturity or (if Notes of such
series are of serial maturities) maturities, and principal amount of such
Notes to be authenticated and delivered,
(c) in case the Notes to be authenticated and delivered are of a series
none of the Notes of which has been previously authenticated by the Trustee,
the Board Resolution by or pursuant to which the terms and the form of the
Notes of such series shall have been approved,
(d) either (i) a certificate or other official document evidencing the
due authorization, approval or consent of any governmental body or bodies at
the time having jurisdiction in the premises, if any, or (ii) an Officers'
Certificate that no authorization, approval or consent of any governmental
body is required, and
(e) an Officers' Certificate stating that the Company is not in default
under this Indenture and that the issuance of the additional Notes applied
for will not result in any breach of any of the terms, conditions or
provisions of, or constitute a default under, the Company's articles of
incorporation or by-laws or any indenture, mortgage, deed of trust or other
agreement or
20
instrument to which the Company is a party or by which it is bound, or any
order of any court or administrative agency entered in any proceeding to
which the Company is a party or by which it may be bound or to which it may
be subject; and that all conditions precedent provided for in this Indenture
relating to the authentication and delivery of such Notes have been complied
with.
Any separate request by the Company that the Trustee authenticate Notes,
of a series previously designated, for original issue will be deemed to be a
certification by the Company that all conditions precedent provided for in
this Indenture relating to authentication and delivery of such Notes continue
to have been complied with.
The Trustee shall not be required to authenticate or to cause an
Authenticating Agent to authenticate any Notes if the issue of such Notes
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Notes and this Indenture or otherwise in a manner which
is not reasonably acceptable to the Trustee or if the Trustee, being advised
by counsel, determines that such action may not lawfully be taken.
ARTICLE THREE
REDEMPTION
Section 3.1 General.
(a) On any Payment Date, the Notes may be called for redemption, in
whole or in part, at the option of the Company at a price equal to 100% of
the unpaid principal amount of such Notes together with accrued and unpaid
interest on the unpaid principal amount thereof to the applicable Redemption
Date (the "Redemption Price") for such Notes. If the Company elects to
redeem the Notes, it shall, not later than 30 days prior to the Payment Date
selected for redemption (the "Redemption Date"), deliver notice of such
election to the Trustee, together with a Company Order directing the Trustee
to effect such redemption. Any such redemption shall be without premium or
penalty.
(b) If the Company wishes to credit Notes it has not previously
delivered to the Trustee for cancellation against the principal amount of
Notes to be redeemed, it shall so notify the Trustee and it shall deliver the
Notes duly endorsed with the notice.
Section 3.2 Notice of Redemption.
(a) At least ten days but not more than 60 days before the Redemption
Date, the Company shall mail a notice of redemption by first-class mail to
each Holder of Notes, with a copy thereof to the Trustee.
(b) The notice shall identify the Notes to be redeemed and shall state:
(i) the Redemption Date;
21
(ii) the Redemption Price;
(iii) the name and address of the Paying Agent;
(iv) that the Notes must be delivered to the Paying Agent at the
address stated in the notice for the Holder to receive the
Redemption Price; and
(v) that interest on the Notes ceases to accrue on and after the
Redemption Date.
(c) At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. Failure to
give notice of redemption, or any defect therein, to any Holder shall not
impair or affect the validity of the redemption of any Note.
Section 3.3 Effect of Notice of Redemption.
Once notice of redemption has been given, the Notes shall be redeemed on
the designated Redemption Date. Upon surrender to the Paying Agent, such
Notes shall be paid at the Redemption Price. Unless the Company shall fail
to deposit the Redemption Price as provided in Section 3.4, no interest shall
accrue on the Notes for any period after the Redemption Date.
Section 3.4 Deposit of Redemption Amount.
Prior to the Redemption Date, the Company shall deposit with the Paying
Agent money sufficient to pay the Redemption Price on the Notes on that date.
Such moneys shall be segregated by the Paying Agent for the purpose of
application to such redemption on the Redemption Date. If such deposit shall
be made, the amount payable on the Notes shall be limited to the Redemption
Price therefor, without any premium or penalty, and no interest shall accrue
on the Notes to be redeemed or the Redemption Price thereof for any period
after the Redemption Date.
ARTICLE FOUR
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 4.1 Trust Account; Operating Account.
(a) Prior to the initial authentication and delivery of any Notes, the
Trustee shall open, at one or more depository institutions (which may be the
Trustee), a trust account which shall have a sub-account denominated "Trust
Account--Sterling Trust Company, as trustee in respect of Notes" (such sub-
account is hereinafter referred to as the "Trust Account"). The Trust Account
shall be an Eligible Account, and funds in the Trust
22
Account shall not be commingled with any other moneys of the Company. The
Company shall also open, at one or more depository institutions, an account
in its own name for use in holding the Company's funds and in paying the
Company's expenditures (the "Operating Account"). The Trust Account and the
Operating Account are sometimes collectively referred to as the "Accounts" or
individually as an "Account". The Company shall give the Trustee at least
five Business Days' written notice of any change in the location of the
Operating Account and any related account identification information.
(b) The Company shall direct or cause to be directed all Obligors to
remit all collections and payments on the Contracts directly to the
Collections Account. The Company agrees that all cash, money orders, checks,
notes, drafts and other items which it otherwise receives and which are
attributable to the Contracts shall be promptly deposited into the
Collections Account. The Company shall likewise deposit or cause to be
deposited in the Collections Account within two Business Days of receipt all
Liquidation Proceeds and Insurance Proceeds.
(c) The Company shall cause the Servicers to transfer to the Operating
Account, at least weekly, all funds (except any minimum sum necessary to
avoid bank service charges) in the Collections Account that are attributable
to the Contracts.
(d) The Company agrees that it shall not draw any funds from the
Operating Account except for an investment, transfer or payment of such funds
in accordance with the provisions of this Section 4.1.
(e) Except as otherwise permitted by this Indenture with respect to
purchases of Contracts and payments of Allowed Expenses and Offering
Expenses, the Company may invest the funds in the Operating Account but only
in Eligible Investments and only if sufficient funds are available in the
Operating Account, through maturations of Eligible Investments or otherwise,
on the Business Day next preceding the next Payment Date to pay the interest
to be paid on such Payment Date on the Notes.
(f) Provided that the Notes have not been declared due and payable
pursuant to Section 6.2, the Company shall have the right to cause the funds
in the Operating Account to be withdrawn or applied, to the extent necessary
and in the amounts required, for the following purposes in the following
order of priority:
FIRST, to the transfer to the Trust Account of the amount that,
together with any amounts held in the Trust Account, is sufficient for the
payment, PRO RATA, of all interest due on the Outstanding Notes on each
Payment Date;
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SECOND, to the transfer to the Trust Account of the amount that
together with any amounts held in the Trust Account is sufficient for the
payment, PRO RATA, of all principal due on the Notes on the Stated Maturity
of any Notes; and
THIRD, to the payment to the Trustee of any unpaid amount due the
Trustee pursuant to Section 7.7;
FOURTH, except during the continuance of an Event of Default, to
general corporate funds, including for the purchase of Eligible Contracts.
All of the foregoing applications of the funds in the Operating Account that
have higher priority must be fully satisfied before any of the foregoing
applications having lower priority may be satisfied with such funds.
(g) On or prior to the Business Day next preceding each Payment Date
occurring during the term of any outstanding Notes, the Company shall cause
to be transferred from the Operating Account to the Trust Account in
immediately available funds an amount which, together with any funds then
held in the Trust Account, is sufficient to pay the accrued interest due on
such Outstanding Notes on such Payment Date. Commencing on or prior to the
Business Day next preceding the Stated Maturity of any Outstanding Notes, the
Company shall cause to be transferred from the Operating Account to the Trust
Account an amount which, together with any funds then held in the Trust
Account, is sufficient to pay the accrued interest due, and principal owing,
on such Outstanding Notes on such date.
(h) During the continuance of an Event of Default, upon the written
request of a Trust Officer from time to time but in any event not less often
than the Business Day next preceding each Payment Date, the Company shall
cause to be transferred from the Operating Account to the Trust Account all
of the funds in the Operating Account, less any amounts due the Trustee under
Section 7.7.
(i) All payments of principal or accrued interest with respect to the
Notes shall be made from amounts held in the Trust Account. All payments to
be made from time to time to the Holders of Notes out of funds in the Trust
Account pursuant to this Indenture shall be made by the Trustee as the Paying
Agent of the Company or by any other Paying Agent appointed by the Company,
subject to Section 5.2. No amounts contained in the Trust Account shall be
paid over to or at the direction of the Company, except as otherwise provided
by the provisions of this Indenture.
(j) So long as no Event of Default shall have occurred and be
continuing, any funds in the Trust Account shall be invested and reinvested
by the Trustee at the Company's direction in one or more Eligible
Investments. All income or other gain from investment of moneys deposited in
the Trust Account shall be deposited therein immediately upon receipt, and
any loss resulting from such investment shall be charged to such Account.
(k) Notwithstanding any other provision of this Indenture, the Company
may elect, in its sole discretion, to deposit the proceeds from the sale of
Notes into the Operating Account.
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Section 4.2 General Provisions Regarding Trust Account
(a) The Company shall not direct the Trustee to make any investment of
any funds in the Trust Account or to sell any investment held in the Trust
Account except under the following terms and conditions: (i) (A) each such
investment shall be made in the name of the Trustee (in its capacity as such)
or its nominee (or, if applicable law provides for perfection of pledges of
an investment not evidenced by a certificate or other instrument through
registration of such pledge on books maintained by or on behalf of the issuer
of such investment, such pledge may be so registered), (B) the Trustee shall
have sole investment control over such investment, the income thereon and the
proceeds thereof, and (C) any instrument evidencing such investment shall be
delivered directly to the Trustee or its agent; and (ii) the proceeds of each
sale of such investment shall be remitted by the purchaser thereof directly
to the Trustee for deposit in the Trust Account.
(b) If any amounts are needed for disbursement from the Trust Account
and sufficient uninvested funds are not available to make such disbursement,
in the absence of a Company Order for the liquidation of investments in an
amount sufficient to provide the required funds, the Trustee may cause to be
sold or otherwise converted to cash a sufficient amount of the investments in
the Trust Account.
(c) The Trustee shall not in any way be held liable by reason of any
insufficiency in the Trust Account resulting from any loss on any Eligible
Investment included therein except that Trustee shall remain liable on
Eligible Investments which are obligations of the Trustee in its commercial
capacity.
(d) All investments of funds in the Trust Account and all sales of
Eligible Investments held in the Trust Account shall, except as otherwise
expressly provided in this Indenture, be made by the Trustee in accordance
with a Company Order. Such Company Order may specify actions (including,
without limitation, that such funds shall not be invested, in which case such
funds shall remain deposited in the Trust Account) or may be a general,
standing order authorizing the Trustee to act within certain general
parameters or to act on written, telegraphic or telephonic instructions of
specified personnel or agents of the Company. In order to insure that the
Trustee can invest funds in the Trust Account or sell any investment in the
Trust Account, the Company Order with respect thereto must be received by the
Trustee no later than 9:00 a.m. on the date specified in the Company Order
for effecting such transaction.
(e) In the event that the Company shall have failed to give investment
directions to the Trustee by 9:00 a.m. Dallas, Texas Time on any Business Day
authorizing the Trustee to invest the funds then in the Trust Account, the
Trustee may invest and reinvest the funds then in the Trust Account to the
fullest extent practicable, in such manner as the Trustee shall from time to
time determine, but only in one or more Eligible Investments. All
investments made pursuant to this subsection shall mature on the next
Business Day following the date of such investment.
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Section 4.3 Reports by Trustee.
The Trustee shall report and account to the Company with respect to the
Trust Account and the identity of the investments included therein on a
monthly basis and more frequently as the Company may from time to time
reasonably request, including accountings of deposits into and payments from
the Trust Account.
ARTICLE FIVE
COVENANTS
Section 5.1 Payment of Principal and Interest.
(a) Interest and any principal payable on any Note shall be paid to the
Person in whose name such Note (or one or more predecessor Notes) is
registered at the close of business on the Record Date for the applicable
Payment Date by check mailed to such Person's address as it appears in the
Note Register on such Record Date, except for the final payment of principal
of and interest on a Note, which shall be payable only upon presentation and
surrender as provided in subsection (b) of this Section 5.1. For payments
made on any Note prior to the final payment of principal and interest, such
Note need not be submitted for notation of payment. Checks returned
undelivered will be held by the Paying Agent for payment to the Person
entitled thereto, subject to the terms of Section 5.2. Payments made on any
Payment Date shall be binding upon all future Holders of such Notes and of
any Notes issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, whether or not noted thereon.
(b) Each installment of interest on any series of the Notes is due and
payable as specified on the form of Note set forth in Section 2.2. Any
installment of interest which is not paid when and as due shall bear interest
at the rate of 11% per annum from the date due to the date of payment
thereof. Unless such Note becomes due and payable at an earlier date by
declaration of acceleration, call for redemption or otherwise, the principal
of each Note of any series shall be due and payable as provided in the Board
Resolution designating such series, and any remaining unpaid principal shall
be due and payable at the Stated Maturity for such series; provided, however,
the final payment of principal of and interest on each Note (or the
Redemption Price thereof if the Notes called for redemption) shall be payable
only upon presentation and surrender thereof to the Paying Agent. The
Trustee shall notify the Person in whose name a Note is registered at the
Record Date for the Payment Date next preceding the Payment Date on which the
Company expects that the final payment of principal and interest on such Note
will be paid. Such notice shall be mailed no earlier than the 60th day, and
no later than the 20th day, prior to such Payment Date and shall specify that
such final payment will be payable only upon presentation and surrender of
such Notes and shall specify the name and address of the Paying Agent where
such Notes may be presented and surrendered for payment of such final
payment. Notices in connection with redemptions of Notes shall be mailed to
Holders as provided in Section 3.2.
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(c) All computations of interest due with respect to any Notes shall be
based on a 360-day year consisting of 12 months of 30 days each and on the
amount of principal outstanding on the Notes from time to time.
(d) On or prior to each Report Date, the Company shall transmit to the
Trustee a monthly report which shall set forth, with respect to the next
three succeeding Payment Dates, the amount of interest and any principal
payable on such Payment Dates on each Outstanding Note. Computations of
interest by the Company shall be made in conformity with the requirements of
this Indenture. Notwithstanding the foregoing, the Trustee may rely on its
own calculations for purposes of paying interest on the Notes.
(e) The Company at any time may terminate, by written notice to the
Trustee, its obligation to pay an installment of interest if it deposits with
the Trustee, or the Trustee holds in the Trust Account as of the related
Payment Date, money sufficient to pay the installment when due.
(f) Subject to the foregoing provisions of this Section 5.1, each Note
delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Note shall carry the rights to unpaid
principal and interest, if any, that were carried by such other Note.
Section 5.2 Money for Note Payments to be Held in Trust.
(a) Whenever the Company shall have a Paying Agent other than the
Trustee, it will, by Company Order delivered on or before the Business Day
next preceding each Payment Date, direct the Trustee to deposit with such
Paying Agent on or before such Payment Date a sum sufficient to pay the
amounts then becoming due, and the Trustee shall, to the extent it has
received such amount from the Company, deposit such amount with the Paying
Agent as directed. Such sum shall be held in trust for the benefit of the
Persons entitled to such payments.
(b) The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent, in acting as Paying Agent, will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed
of as herein provided, and pay such sums to such Persons as herein
provided;
(ii) give the Trustee notice of any default by the Company (or any
other obligor upon the Notes) in the making of any payment required to be
made with respect to the Notes; and
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(iii) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by such Paying Agent.
(c) For the purpose of obtaining the satisfaction and discharge of this
Indenture or for any other purpose, the Company may at any time direct by
Company Order any Paying Agent to pay to the Trustee all sums held in trust
by such Paying Agent, such sums to be held by the 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 Trustee, such Paying Agent shall
be released from all further liability with respect to such money.
Section 5.3 Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged
before the same shall become delinquent (1) all taxes, assessments and
governmental charges levied or imposed upon the Company, and (2) all lawful
claims for labor, materials and supplies which, if unpaid, might by law
become a lien upon the property of the Company; provided, however, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings; and provided further, that the Company shall not be required to
cause to be paid or discharged any such tax, assessment, charge or claim if
the Company shall determine such payment is not advantageous to the conduct
of the business of the Company and that the failure so to pay or discharge is
not disadvantageous in any material respect to the Holders.
Section 5.4 Limitation on Investment Activities.
The Company will not register as, or conduct its business or take any
action which shall cause it to become, or to be deemed to be, an "investment
company" as defined under the provisions of and subject to registration under
the Investment Company Act of 1940, as amended.
Section 5.5 Compliance Certificates.
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(a) The Company will deliver to the Trustee an Officer's Certificate
stating whether or not the signee knows of any default by the Company in
performing its covenants under this Indenture within 15 days of a written
request by the Trustee. The Company will perform, execute, acknowledge and
deliver all such further acts, instruments, and assurances in this regard as
may reasonably be requested by the Trustee. The certificates required under
this Section shall comply with Section 11.4(b).
(b) The Company will deliver to the Trustee within 15 days after the
occurrence thereof written notice of the occurrence of any Event of Default.
Section 5.6 Reporting.
(a) Commencing with fiscal year ending December 31, 1997, the Company
shall file with the Trustee copies of any annual reports and other
information, documents, and statements (or copies of such portions of any of
the foregoing as the SEC may by rules and regulations prescribe) which the
Company may be required to file with the SEC pursuant to Section 13 or 15(d)
of the Securities Exchange Act, which filing shall be made within 15 days
after the Company makes such filing with the SEC. The Company also shall
comply with the other provisions of TIA Section 314(a).
(b) If the Company is not subject to Section 13 or 15(d) of the Exchange
Act, then the Company shall file with the Trustee such of the supplementary
and periodic information, documents and reports which would be required under
Section 13 of the Exchange Act if the Notes were listed or registered on a
national securities exchange, which filing shall be made within 15 days after
the Company would otherwise have been required to make such filing with the
SEC.
(c) To the extent reasonably requested by the Trustee, the Company shall
provide to the Trustee information in the Company's possession to assist the
Trustee in complying with its reporting duties specified in Section 7.6.
(d) On or before 120 days after the end of each fiscal year of the
Company, the Company shall deliver to the Trustee a report, prepared by a
firm of independent accountants selected by the Company, that they have
examined the balance sheet of the Company as of the last day of said fiscal
year and the related statements of operations, retained earnings and changes
in financial position for such fiscal year and have issued an opinion
thereon, specifying the date thereof.
Section 5.7 Performance of Obligations; Servicing Agreement.
(a) The Company will punctually perform and observe all of its
obligations and agreements contained in the Servicing Agreement.
(b) The Company will not take any action or permit any action to be
taken by others which would release any Person from any of such Person's
covenants or obligations under any
29
of the Contract Documents, or which would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any of the Contract Documents or any such
instrument, except as expressly provided in this Indenture, the Servicing
Agreement or such Contract Document or other instrument.
Section 5.8 Negative Covenants.
The Company will not:
(i) engage in any business or activity other than in connection with
the purchase, collection and servicing of retail installment sales or lease
contracts and consumer obligations secured by motor vehicles, the
repossession and resale of motor vehicles, the dealing in all respects with
such Contracts and obligations and their motor vehicle collateral, and the
raising of capital, both debt and equity, and any other incidental
businesses or activities;
(ii) create, incur, assume or in any manner become liable in
respect of any indebtedness other than (1) the Notes, (2) any Allowed
Expenses, and (3) any other amounts incurred in the ordinary course of
the Company's business;
(iii) dissolve or liquidate in whole or in part;
(iv) merge or consolidate with any corporation, partnership or other
entity other than an Affiliate of the Company. Any such merger or
consolidation with an Affiliate of the Company shall be subject to the
following conditions:
(1) the surviving or resulting entity shall be a corporation
organized under the laws of the United States or any state thereof
whose business and activities shall be limited as set forth in
paragraph (i) above,
(2) the surviving or resulting corporation (if other than the
Company) shall expressly assume by an indenture supplemental hereto
all of the Company's obligations hereunder,
(3) the surviving or resulting corporation shall have the same
fiscal year as the Company, and
30
(4) immediately after consummation of the merger or
consolidation no Event of Default shall exist with respect the Notes;
(v) (to the extent that it may lawfully so covenant and to the extent
that such covenant is lawfully enforceable) institute any bankruptcy,
insolvency or receivership proceedings with respect to itself or its
properties; or
(vi) permit the validity or effectiveness of this Indenture to be
impaired, or permit any Person to be released from any covenants or
obligations under this Indenture, except as may be expressly permitted
hereby.
ARTICLE SIX
DEFAULTS AND REMEDIES
Section 6.1 Events of Default.
An "Event of Default" shall occur if:
(1) the Company defaults in the payment of interest on any Note when the
same becomes due and payable and the default continues for a period of
30 days;
(2) the Company defaults in the payment of the principal of any Note when
the same becomes due and payable and the default continues for a
period of 30 days;
(3) the Company fails to comply with any of its other agreements in the
Notes or this Indenture (other than a covenant or warranty, a default
in the observance of which is elsewhere in this section specifically
dealt with) and the default continues for a period of 30 days after
receipt by the Company of written notice of such default from the
Trustee specifying such default and requiring it to be remedied
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and stating that such notice is a "Notice of Default" hereunder or
after receipt by the Company and the Trustee of such notice from the
Holders of Notes representing at least 40% of the aggregate principal
amount of the Notes which are then Outstanding Notes;
(4) if any representation or warranty of the Company made in this
Indenture or in any certificate or other writing delivered pursuant
hereto or in connection herewith shall prove to be incorrect in any
material respect as of the time when the same shall have been made
and, within 30 days after receipt by the Company of written notice
from the Trustee specifying such inaccuracy and requiring it to be
remedied and stating that such notice is a "Notice of Default"
hereunder or after receipt by the Company and the Trustee of such
notice from the Holders of Notes representing at least 40% of the
aggregate principal amount of the Notes which are then Outstanding
Notes, the circumstance or condition in respect of which such
representation or warranty was incorrect shall not have been
eliminated or otherwise cured;
(5) if the validity or effectiveness of this Indenture shall be impaired,
or this Indenture shall be amended, hypothecated, subordinated,
terminated or discharged, or any Person shall be released from any
covenants or obligations under this Indenture or the Servicing
Agreement, in each case except as may be expressly permitted hereby
and thereby;
(6) the Company, pursuant to or within the meaning of title 11, U.S. Code
or any similar Federal or State law for the relief of debtors (the
"Bankruptcy Law"):
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in an
involuntary case;
(C) consents to the appointment of a receiver, trustee, assignee,
liquidator or similar official of it or for all or substantially
all of its property; or
(D) makes a general assignment for the benefit of its creditors; or
(7) a court of competent jurisdiction enters an order or decree, which
remains unstayed and in effect for 60 days, under any Bankruptcy Law
against the Company:
(A) for relief in an involuntary case;
32
(B) appointing a receiver, trustee, assignee, liquidator or similar
official for all or substantially all of its property; or
(C) ordering its liquidation.
Section 6.2 Acceleration.
If an Event of Default occurs and is continuing, the Trustee may, and at
the direction of the Holders of Notes representing at least 40% of the
aggregate principal amount of Notes which are then Outstanding Notes shall,
by written notice to the Company, declare the principal amount of all the
Notes together with accrued interest thereon to be due and payable
immediately. The Majority Holders may, by written notice to the Trustee,
rescind an acceleration and its consequences.
Section 6.3 Remedies.
(a) If an Event of Default shall have occurred and be continuing, the
Trustee may, subject to Section 6.2, make demand and institute judicial
proceedings in equity or law for the collection of all amounts then payable
on the Notes, or under this Indenture, whether by declaration or otherwise,
enforce all judgments obtained, and collect from the Company moneys adjudged
due.
(b) The Trustee may maintain a proceeding even if it does not possess
any of the Notes or does not produce any of them in the proceedings. A delay
or omission by the Trustee or any Holder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or an acquiescence in the Event of Default. No remedy
is exclusive of any other remedy. All available remedies are cumulative.
(c) Upon the institution of legal proceedings by the Trustee pursuant to
subsection (a) above, then, in addition to any and all other amounts due
hereunder, the Company shall be liable for any and all costs and expenses of
collection, including the reasonable expenses, disbursements and advances of
the Trustee, its agents and counsel.
Section 6.4 Waiver of Past Defaults.
Subject to Section 9.2, the Majority Holders may, by written notice to
the Trustee, waive a continuing Event of Default and its consequences. When
an Event of Default is waived in accordance herewith, it is cured and shall
no longer be considered continuing.
Section 6.5 Control by Majority.
The Majority Holders may direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any
trust or power conferred on it. However, the Trustee may refuse to follow
any direction that conflicts with law or this
33
Indenture, that is unduly prejudicial to the rights of Holders not joining in
such direction, or that would involve the Trustee in personal liability.
Section 6.6 Limitation on Suits.
(a) A Holder may not pursue any remedy with respect to this Indenture or
the Notes unless:
(i) an Event of Default has occurred and is continuing, and the
Holder gives to the Trustee written notice of such continuing Event of
Default;
(ii) the Majority Holders have made a written request to the Trustee
to pursue the remedy;
(iii) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expenses;
(iv) the Trustee does not comply with the request within 60 days after
receipt of the request;
(v) the Event of Default has not been waived or cured; and
(vi) the Trustee has received no contrary direction from the Majority
Holders during such 60-day period.
(b) A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder.
Section 6.7 Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal and interest on the Note, on or
after the respective due dates, or to bring suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of the Holder.
Section 6.8 Collection Suit by Trustee.
If an Event of Default specified in Section 6.1(1) or (2) occurs and is
continuing, the Trustee may recover judgment in its own name and as trustee of
an express trust against the Company for the whole amount of principal and
interest remaining unpaid.
34
Section 6.9 Trustee may File Proofs of Claim.
(a) The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee and the Holders allowed in any judicial proceedings relative to the
Company, its creditors or its property.
(b) Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the Notes
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 6.10 Priorities.
If the Trustee collects any money pursuant to this Article, it shall pay
out the money in the following order:
FIRST, to the Trustee for the amounts due under Section 7.7;
SECOND, to Holders for amounts due and unpaid on the Notes for
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for principal
and interest, respectively;
THIRD, to TFC for any unpaid Allowed Expenses incurred by it with
respect to the Contracts or otherwise on behalf of the Company; and
FOURTH, to the Company.
The Trustee may fix a record date and payment date for any payment to Holders.
Section 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted
by it as Trustee, a court in its discretion may require the filing by any
party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having
due regard to the merits and good faith of the claims or defenses made by the
party litigant. This Section does not apply to a suit by the Trustee, or a
suit by the Majority Holders.
Section 6.12 Stay, Extension or Usury Laws.
The Company agrees (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, and will resist any and all efforts to be compelled to take the
benefits or advantage of any stay or extension law or any usury or other
35
law, wherever enacted, now or at any time hereafter in force, which would
prohibit or forgive the Company from paying all or any portion of the
principal of and/or interest on the Notes as contemplated herein, or which
may affect the covenants or performance of this Indenture, and the Company
(to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law and agrees that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of any such power as though no such law
has been enacted.
ARTICLE SEVEN
TRUSTEE
Section 7.1 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture
and use the same degree of care and skill in the exercise of such rights and
powers as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
(b) Except during the continuance of an Event of Default known to the
Trustee:
(i) the Trustee need perform only those duties that are specifically
set forth in this Indenture and no implied covenants or obligations shall
be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct,
except that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a written
direction received by it from the Majority Holders relating to the time,
method, and place of conducting any proceeding
36
for any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Indenture; and
(iv) the Trustee shall not be required to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured
to it.
(d) Each provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree with the Company. Money held in trust
by the Trustee need not be segregated from other funds except to the extent
required by law.
(f) The Trustee shall not be liable for any action or omission taken by
or not taken by a Servicer or TFC of any kind or nature.
Section 7.2 Rights of Trustee.
(a) The Trustee may rely and shall be protected in acting or refraining
from acting upon any document reasonably believed by it to be genuine and to
have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officer's Certificate or an Opinion of Counsel or both. The Trustee shall
not be liable for any action it takes or omits to take in reliance on such
Certificate or Opinion, in the absence of bad faith on its part.
(c) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders of Notes, unless such Holders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities that might be incurred by it in compliance with such request or
direction.
(e) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters at it may see fit.
37
(f) The permissive right of the Trustee to do things enumerated in this
Indenture shall not be construed as a duty.
Section 7.3 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Notes and may otherwise deal with the Company or its Affiliates
with the same rights it would have if it were not Trustee. Any Paying Agent,
Registrar or co-registrar may do the same with like rights. However, the
Trustee must comply with Sections 7.10 and 7.11.
Section 7.4 Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation as
to the validity or adequacy of this Indenture or the Notes. It shall not be
accountable for the Company's use of the proceeds from the sale of the Notes
and shall not be responsible for any statement (i) in the Notes, other than
its certificate of authentication, or (ii) in any prospectus used in the sale
of the Notes, other than statements provided in writing by the Trustee for
use in such prospectus.
Section 7.5 Notice of Default.
If an Event of Default occurs and is continuing and if it is known to the
Trustee, the Trustee shall mail to each Holder notice of the Event of Default
within 90 days after it obtains actual knowledge thereof. Except in the case
of an Event of Default resulting from the failure to pay principal or
interest on any Note, the Trustee may withhold the notice if and so long as
the Board of Directors, the executive committee or a trust committee of the
directors and/or Responsible Officers of the Trustee in good faith determines
that withholding notice is in the interests of Holders.
Section 7.6 Reports by Trustee to Holders.
(a) Within 60 days after each December 31 beginning with December 31,
1997, the Trustee shall, to the extent required by TIA Section 313(a), mail
to each Holder a brief report dated as of such December 31 that complies with
TIA Section 313(a). The Trustee shall also, to the extent required by TIA
Section 313(b), comply with TIA Section 313(b)(1) and (2).
(b) If this Indenture is qualified with the SEC under the TIA, a copy of
each report at the time of its mailing to the Holders shall be filed with the
SEC and each national securities exchange on which the Notes are listed, to the
extent required by the TIA. The Company shall notify the Trustee if and when
the Notes are listed on any national securities exchange (as defined in the
Exchange Act) or quoted on the National Association of Securities Dealers
Automated Quotation system.
(c) Within 60 days after each December 31 beginning with December 31,
1998, the Trustee shall provide a report to the Noteholders which indicates
whether the Trustee has fulfilled its obligations under this Indenture and
whether there have been any known uncured defaults hereunder.
38
Section 7.7 Compensation and Indemnity.
(a) (i) The Company shall pay to the Trustee from time to time as
compensation for its services the amounts set forth on the Trustee's Fee
Schedule attached hereto as EXHIBIT B, as may be agreed upon from time to
time by the Trustee and the Company. In addition, the Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket
expenses incurred by it, as set forth in EXHIBIT B. Such expenses may
include the reasonable compensation and expenses of the Trustee's agents
and counsel.
(ii) The Company shall indemnify and hold harmless the Trustee and
its successors and their respective officers, directors, employees, agents
and attorneys against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, costs (including the
costs and expenses of defending itself), expenses and disbursements of any
kind or nature whatsoever which may be imposed on, incurred by or asserted
against the Trustee and such other Persons, in connection with the
performance by the Trustee of its duties hereunder. The Trustee and such
other Persons shall notify the Company promptly of any claim for which it
or they may seek indemnity, but failure to so notify the Company shall not
relieve the Company of their obligations hereunder. The Company shall not
be required to pay for any settlement made without its consent, such
consent not to be unreasonably withheld. The Company shall not be required
to reimburse any expense or indemnify against any loss or liability
incurred by the Trustee or any such other Person through the Trustee's or
such other Person's gross negligence, bad faith, breach of contract or
misconduct.
(b) The obligations set forth in this Section 7.7 shall survive the
satisfaction and discharge of this Indenture.
(c) When the Trustee incurs expenses or renders services after the
occurrence of an Event of Default specified in Section 6.1(6) or (7), the
expenses and the compensation for the services are intended to constitute
expenses of administration under any Bankruptcy Law.
Section 7.8 Replacement of Trustee.
(a) The Trustee may resign at any time upon 30 days prior written notice
to the Company. The Majority Holders may remove the Trustee at any time upon
30 days prior written notice to the removed Trustee and may appoint a
successor Trustee with the Company's consent. The Company shall remove the
Trustee if:
(i) the Trustee fails to comply with Section 7.10;
(ii) the Trustee is adjudged a bankrupt or an insolvent; or
(iii) a receiver or other public officer takes charge of the
Trustee or its property.
39
(b) If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. The resignation or removal of the Trustee shall not be
effective until a successor Trustee has been appointed and has assumed the
responsibilities of Trustee hereunder.
(c) A successor Trustee shall deliver a written acceptance of this
appointment to the retiring Trustee and to the Company. Immediately
thereafter, the retiring Trustee shall transfer all property held by it as
Trustee to the successor Trustee. Upon delivery of such written acceptance,
the resignation or removal of the retiring Trustee shall become effective and
the retiring Trustee shall cease to be Trustee hereunder and shall be
discharged from any responsibility or obligations for actions taken by any
successor Trustee. The successor Trustee shall have all the rights, powers
and duties of the Trustee under this Indenture. A successor Trustee shall
mail notice of its succession to each Holder.
(d) If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Majority Holders may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(e) If the Trustee fails to comply with Section 7.10, any Holder who has
been a bona fide Holder for at least six months may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of
a successor Trustee.
Section 7.9 Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all of its corporate trust assets to, another Person,
the resulting, surviving or transferee Person without any further act shall
be the successor Trustee.
Section 7.10 Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA Section 310(a)(1) and (5). The Trustee shall have a combined capital
and surplus of at least $1 million as set forth in its most recent published
annual report of condition. The Trustee shall comply with TIA Section 310(b).
Section 7.11 Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated.
40
Section 7.12 Withholding Taxes.
Whenever it is acting as a Paying Agent for the Notes, the Trustee shall
comply with all requirements of the Internal Revenue Code of 1986, as amended
(or any successor or amendatory statutes), and all regulations thereunder,
with respect to the withholding from any payments made on such Notes of any
withholding taxes imposed thereon and with respect to any reporting
requirements in connection therewith.
ARTICLE EIGHT
DISCHARGE OF INDENTURE
Section 8.1 Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect, except as to
surviving rights of transfer or exchange of Notes herein expressly provided
for, and the Trustee, on demand of and at the expense of the Company, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture, when
(1) either
(A) all Notes theretofore authenticated and delivered (other than
Notes which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 2.9) have been delivered to the
Trustee for cancellation; or
(B) all such Notes not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within
one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of (i), (ii) or (iii) above, has deposited or
caused to be deposited with the Trustee as trust funds in trust for such
purpose an amount sufficient to pay and discharge the entire indebtedness
on such Notes not theretofore delivered to the Trustee for cancellation,
the principal at Stated Maturity of such Notes, or the applicable
Redemption Price with respect thereto upon redemption;
41
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officer's Certificate
and an Opinion of Counsel, 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 Company under Sections 7.7 and 8.3 shall survive.
Section 8.2 Application of Trust Money.
All money deposited with the Trustee pursuant to Section 8.1 shall be
held in trust and applied by it, in accordance with the provisions of the
Notes and this Indenture, to the payment, either directly or through any
Paying Agent as the Trustee shall be directed by Company Order, to the
Persons entitled thereto, of the principal at Stated Maturity, or the
Redemption Price, of the Notes for whose payment such money has been
deposited with the Trustee; but such money need not be segregated from other
funds except to the extent required by law.
Section 8.3 Repayment to Company.
The Trustee and the Paying Agent shall promptly pay to the Company upon
request any money or securities held by them at any time in excess of the
amounts needed to pay and discharge the Notes in full. The Trustee and the
Paying Agent shall pay the Company upon request for any money or securities
held by them for the payment of principal or interest that remains unclaimed
for two years. After such payment to the Company, Holders entitled to such
funds must look to the Company for the payment of such unclaimed principal or
interest.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.1 Without Consent of Holders.
(a) The Company and the Trustee may amend or supplement this Indenture
or the Notes without notice to or consent of any Holder:
(i) to cure any ambiguity, defect or inconsistency in this Indenture
or the Notes;
(ii) to effect a merger or consolidation in conformance with Section
5.8(iii);
42
(iii) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(iv) to make any change that does not materially adversely affect the
rights of any Holder; or
(v) to modify or add to the provisions of this Indenture to the
extent necessary to qualify it under the TIA or under any similar federal
statute hereafter enacted.
(b) The Trustee may waive compliance by the Company with any provisions
of this Indenture or the Notes without notice to or consent of any Holder if
the waiver does not materially adversely affect the rights of any Holder.
Section 9.2 With Consent of Holders.
(a) The Company and the Trustee may amend or supplement this Indenture
or the Notes without notice to any Holder but with the written consent of the
Majority Holders. The Majority Holders may waive compliance by the Company
with any provision of this Indenture or the Notes without notice to any
Holder. However, without the consent of each Holder adversely affected, an
amendment, supplement or waiver, including a waiver pursuant to Section 6.4,
may not:
(i) reduce the amount of Notes whose Holders must consent to an
amendment, supplement or waiver;
(ii) reduce the rate of or extend the time for payment of interest on
any Note;
(iii) reduce the principal of or extend the Stated Maturity of any
Note; or
(iv) make any Note payable in money other than that stated in the
Note.
(b) After an amendment under this Section becomes effective, the Company
shall mail to Holders a notice briefly describing the amendment. The Trustee
may in its discretion determine whether or not any Notes would be adversely
affected, materially or otherwise, 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 Trustee
shall not be liable for any such determination made in good faith.
Section 9.3 Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the Notes shall
comply with the TIA as then in effect so long as this Indenture shall then be
qualified under the TIA.
43
Section 9.4 Revocation and Effect of Consents.
(a) A consent to an amendment, supplement or waiver by a Holder shall
bind the Holder and every subsequent Holder of a Note or portion of a Note
that evidences the same debt as the consenting Holder's Note, even if
notation of the consent is not made on any Note. However, any such Holder or
subsequent Holder may revoke the consent as to such Holder's Note or portion
of a Note. The Trustee must receive the notice of revocation before the date
the amendment, supplement or waiver becomes effective.
(b) After an amendment, supplement or waiver becomes effective, it shall
bind every Holder unless it makes a change described in clause (ii), (iii),
(iv) or (v) of Section 9.2(a). In that case the amendment, supplement or
waiver shall bind each Holder who has consented to it and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder's Note.
Section 9.5 Notation on or Exchange of Notes.
If an amendment, supplement or waiver changes the terms of a Note, the
Trustee may require the Holder to deliver it to the Trustee. The Trustee may
place an appropriate notation on the Note concerning the changed terms and
return it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Note shall issue, and the Trustee
shall authenticate, a new Note that reflects the changed terms.
Section 9.6 Trustee to Sign Amendments, etc.
The Trustee shall sign any amendment, supplement or waiver authorized
pursuant to this Article if the amendment, supplement or waiver does not
adversely affect the rights of the Trustee. If it does, the Trustee may but
need not sign it. The Company may not sign an amendment or supplement until
such amendment or supplement is approved by the Chairman of the Board,
President or any Vice President of the Company or any other officer of the
Company customarily performing functions similar to those performed by any of
the above designated officers, and such approval shall evidence the Company's
determination that such amendment, supplement or waiver is authorized
pursuant to this Article.
ARTICLE TEN
MEETINGS OF HOLDERS
Section 10.1 Purposes for Which Meetings may be Called.
A meeting of Holders may be called for the following purposes:
44
(a) to give any notice to the Company or to the Trustee, or to give any
direction to the Trustee, or to waive or to consent to the waiving of any
Event of Default hereunder and its consequences;
(b) to remove the Trustee, appoint a successor Trustee or apply to a
court for a successor Trustee;
(c) to consent to the execution of a supplemental indenture; or
(d) to take any other action (i) authorized to be taken by or on behalf
of the Holders of any specified aggregate principal amount of the Notes under
this Indenture, or authorized or permitted by law, or (ii) which the Trustee
deems necessary or appropriate in connection with the administration of the
Indenture.
Section 10.2 Manner of Calling Meetings.
(a) The Trustee may call a meeting of Holders to take any action
specified in Section 10.1. Notice setting forth the time and place of, and
the action proposed to be taken at, such meeting shall be mailed by the
Trustee to the Company and to the Holders not less than ten or more than 60
days prior to the date fixed for the meeting.
(b) Any meeting shall be valid without notice if the Holders of all
Notes are present in person or by proxy, or if notice is waived before or
after the meeting by the Holders of all Notes, and if the Company and the
Trustee are either present and not objected to holding the meeting without
notice or have, before or after the meeting, waived notice.
Section 10.3 Call of Meetings by Company or Holders.
In case at any time the Company or the Holders of not less than 10% in
aggregate principal amount of the Outstanding Notes shall have requested in
writing that the Trustee call a meeting of Holders to take any action
specified in Section 10.1, and the Trustee shall not have mailed the notice
of such meeting within 20 days after receipt of such request, then the
Company or the Holders of Notes in the amount above specified may determine
the time and place for such meeting and may call such meeting by mailing
notice thereof.
Section 10.4 Who may Attend and Vote at Meetings.
To be entitled to vote at any meetings of Holders, a person shall (a) be
a Holder, or (b) be a person appointed by an instrument in writing as proxy
for a Holder. The only persons who shall be entitled to be present or to
speak at any meeting of Holders shall be the persons entitled to vote at such
meeting and their counsel and any representatives of the Trustee and the
Company and their counsel.
45
Section 10.5 Regulations may be Made by Trustee; Conduct of the Meeting;
Voting Rights.
(a) The Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Holders, to prove the registered holding of
Notes, the appointment of proxies, and other evidence of the right to vote,
to fix a record date and to provide for such other matters concerning the
conduct of the meeting as it shall deem appropriate.
(b) At any meeting each Holder or proxy thereof shall be entitled to one
vote for each $1,000 principal amount of Notes registered in such Holder's
name; provided, however, that the Company shall not be entitled to vote with
respect to any Notes held of record by it. At any meeting of Holders, the
presence of persons holding or representing any number of Notes shall be
sufficient for a quorum.
Section 10.6 Exercise of Rights of Trustee or Holders may not be Hindered or
Delayed by Call of Meeting.
Nothing in this Article shall be deemed or construed to authorize or
permit, by reason of any call of a meeting of Holders or any rights expressly
or impliedly conferred hereunder to make such call, any hindrance or delay in
the exercise of any rights conferred upon or reserved to the Trustee or to
the Holders by this Indenture or the Notes.
Section 10.7 Evidence of Actions by Holders.
Whenever the Holders of a specified percentage in aggregate principal
amount of the Notes may take any action, the fact that the Holders of such
percentage have acted may be evidenced by (a) instruments of similar tenor
executed by Holders in person or by attorney or written proxy, or (b) the
Holders voting in favor thereof at any meeting of Holders called and held in
accordance with the provisions of this Article, or (c) by a combination
thereof. The Trustee may require proof of any matter concerning the execution
of any instrument by a Holder or the Holder's attorney or proxy as it shall
deem necessary.
ARTICLE ELEVEN
MISCELLANEOUS
Section 11.1 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies, or conflicts with
the duties imposed on any Person by Sections 310 through 317, inclusive, of
the TIA, the duties imposed under such Sections of the TIA shall control.
46
Section 11.2 Notices.
(a) Any notice or communication shall be sufficiently given if in writing
and delivered in person or mailed by first class mail addressed as follows:
if to the Company: Tamarack Lenders Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇, President
if to the Trustee: Sterling Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
if to TFC: Tamarack Funding Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇, President
(b) The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
(c) Any notice or communication mailed to a Holder shall be mailed first
class, postage prepaid to such Person at such Person's address as it appears on
the Note Register of the Registrar and shall be sufficiently given to such
Person if so mailed within the time prescribed. If the Company mails a notice
or communication to Holders, it shall mail a copy to the Trustee at the same
time.
(d) Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. If a notice
or communication is mailed in the manner provided above, it is duly given,
whether or not the addressee receives it.
Section 11.3 Communication by Holders with Other Holders.
Holders may communicate pursuant to TIA Section 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company,
the Trustee, the Registrar and anyone else shall have the protection of TIA
Section 312(c).
47
Section 11.4 Certificate and Opinion as to Conditions Precedent.
(a) Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(i) an Officer's Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(ii) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
(b) Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include (i) a
statement that the person making such certificate or opinion has read such
covenant or condition; (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
such person, he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and (iv) a statement as to whether or not, in
the opinion of such person, such condition or covenant has been complied with.
Section 11.5 Rules by Paying Agent and Registrar.
The Paying Agent or Registrar may make reasonable rules for its functions.
Section 11.6 Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday, or a day on which banking
institutions are not required to be open in the State of Texas. If a Payment
Date is a Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday.
Section 11.7 Governing Law.
The laws of the State of Texas shall govern this Indenture and the Notes.
Section 11.8 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or an Affiliate of the Company. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
48
Section 11.9 No Recourse Against Others.
No recourse may be taken, directly or indirectly, against any
incorporator, subscriber to the capital stock, stockholder, officer,
director, agent or employee of the Company, TFC, or any Servicer or of any
predecessor or successor of the Company, TFC, or any Servicer with respect to
the obligations of the Company, TFC, or any Servicer with respect to the
Contracts, the Notes, or under this Indenture or any certificate or other
writing delivered in connection herewith or therewith, and all such liability
is waived and released by the Trustee and all Holders.
Section 11.10 Successors.
All agreements of the Company and TFC in this Indenture and the Notes
shall bind their respective successors. All agreements of the Trustee in
this Indenture shall bind its successor.
Section 11.11 Duplicate Originals.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
Section 11.12 Severability.
If any provision of this Indenture is held to be illegal, invalid, or
unenforceable under the present or future laws effective during the term of this
Indenture, such provision shall be fully severable; this Indenture shall be
construed and enforced as if such illegal, invalid, or unenforceable provision
had never comprised a part of this Indenture; and the remaining provisions of
this Indenture shall remain in full force and effect and shall not be affected
by the illegal, invalid, or unenforceable provision or by its severance from
this Indenture. Furthermore, in lieu of such illegal, invalid, or unenforceable
provision, there shall be added automatically as a part of this Indenture a
provision as similar in terms to such illegal, invalid, or unenforceable
provision as may be possible and still be legal, valid, and enforceable.
Section 11.13 Headings.
The headings contained herein are for purposes of convenience only, and
shall not be deemed to constitute a part of this Indenture or to affect the
meaning or interpretation of this Indenture in any way.
49
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, as of the day and year first above written.
STERLING TRUST COMPANY,
as Trustee
By:
------------------------------------
, President
-------------------------
Attest:
---------------------------------
, Secretary
----------------------
TAMARACK LENDERS CORPORATION
By:
------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇, President
Attest:
---------------------------------
, Secretary
----------------------
50
The undersigned Tamarack Funding Corporation joins in this Indenture for
the sole purpose of evidencing its agreement to the covenants,
representations and warranties pertaining to it that are set forth in this
Indenture and not for the purpose of guarantying or otherwise covenanting to
pay the Notes or to perform any of the Company's obligations.
TAMARACK FUNDING CORPORATION
By:
------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇, President
Attest:
------------------------------
, Secretary
-------------------
STATE OF TEXAS )
) ss:
COUNTY OF MCLENNAN )
BEFORE ME, the undersigned authority, on this day personally appeared
_____________________, President of Sterling Trust Company, a Texas
corporation, known to me to be the person and officer whose name is
subscribed to the foregoing instrument, and acknowledged to me that he or she
executed the same for the purposes and consideration therein expressed, in
the capacity therein stated and as the act and deed of said corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the ____ day of
______________, 1998.
[SEAL]
-----------------------------------
Notary Public in and for the
State of Texas
Print Name:
------------------------
My Commission Expires:
-------------
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇ )
) ss:
COUNTY OF MCLENNAN )
BEFORE ME, the undersigned authority, on this day personally appeared
▇▇▇▇▇ ▇▇▇▇▇▇, President of Tamarack Lenders Corporation, a Texas corporation,
known to me to be the person and officer whose name is subscribed to the
foregoing instrument, and acknowledged to me that he or she executed the same
for the purposes and consideration therein expressed, in the capacity therein
stated and as the act and deed of said corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the ____ day of
______________, 1998.
[SEAL]
-----------------------------------
Notary Public in and for the
State of Texas
Print Name:
------------------------
My Commission Expires:
-------------
STATE OF TEXAS )
) ss:
COUNTY OF MCLENNAN )
BEFORE ME, the undersigned authority, on this day personally appeared
▇▇▇▇▇ ▇▇▇▇▇▇, President of Tamarack Funding Corporation, a Texas corporation,
known to me to be the person and officer whose name is subscribed to the
foregoing instrument, and acknowledged to me that he or she executed the same
for the purposes and consideration therein expressed, in the capacity therein
stated and as the act and deed of said corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the ____ day of
______________, 1998.
52
EXHIBIT A
TRUSTEE'S FEES
--------------
Tamarack Lenders Corporation
Acceptance Fee (payable upon execution
of Indenture) $
-----------
Annual Administration Fee
(billed quarterly) $
------------
Paying Agent/Registrar Services $ per year per Note
----------
Interest Checks $ per month per Note
----------
Note Register Revisions, Transfers,
Exchanges and Replacement Notes $ each
--------
Expedited Deliveries (per delivery, in
addition to out-of-pocket) $ each
--------
All out-of-pocket expenses such as postage, overnight mail costs, etc. will
be billed at cost to the Company. The Trustee understands that the closing
of the Note issuance will be completed in Dallas and there will not be any
travel expenses charged to the Company. If Trustee's duties are modified
beyond a DE MINIMUS extent, Trustee reserves the right to reevaluate its fees.
A-1