EXHIBIT 4.1
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WILMINGTON TRUST COMPANY, AS OWNER TRUSTEE OF THE
HOUSEHOLD CONSUMER LOAN MASTER NOTE TRUST I,
Issuer
and
▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
Indenture Trustee, Paying Agent and Securities Intermediary
MASTER INDENTURE
Dated as of September 30, 2002
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS .................................................................................. 2
Section 1.01. Definitions....................................................................... 2
Section 1.02. Other Definitional Provisions..................................................... 17
ARTICLE II THE NOTES ................................................................................... 19
Section 2.01. Form Generally.................................................................... 19
Section 2.02. Denominations..................................................................... 19
Section 2.03. Execution, Authentication and Delivery............................................ 19
Section 2.04. Authenticating Agent.............................................................. 20
Section 2.05. Registration of and Limitations on Transfer and Exchange of Notes................. 21
Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes........................................ 23
Section 2.07. Persons Deemed Owners............................................................. 24
Section 2.08. Appointment of Paying Agent....................................................... 24
Section 2.09. Access to List of Noteholders' Names and Addresses................................ 24
Section 2.10. Cancellation...................................................................... 25
Section 2.11. Release of Collateral............................................................. 25
Section 2.12. New Issuances..................................................................... 25
Section 2.13. Book-Entry Notes.................................................................. 27
Section 2.14. Notices to Clearing Agency or Foreign Clearing Agency............................. 28
Section 2.15. Definitive Notes.................................................................. 28
Section 2.16. Global Note; Euro-Note Exchange Date.............................................. 29
Section 2.17. Meetings of Noteholders........................................................... 29
Section 2.18. Uncertificated Classes............................................................ 30
ARTICLE III REPRESENTATIONS AND COVENANTS OF ISSUER..................................................... 30
Section 3.01. Payment of Principal and Interest................................................. 30
Section 3.02. Maintenance of Office or Agency................................................... 30
Section 3.03. Money for Note Payments to Be Held in Trust....................................... 31
Section 3.04. Existence......................................................................... 32
Section 3.05. Protection of Trust............................................................... 32
Section 3.06. Opinions as to Collateral......................................................... 33
Section 3.07. Performance of Obligations; Servicing of Receivables.............................. 33
Section 3.08. Negative Covenants................................................................ 35
Section 3.09. Statements as to Compliance....................................................... 36
Section 3.10. Issuer May Consolidate, Etc., Only on Certain Terms............................... 36
Section 3.11. Successor Substituted............................................................. 38
Section 3.12. No Other Business................................................................. 38
Section 3.13. No Borrowing...................................................................... 39
Section 3.14. Servicer's Obligations............................................................ 39
Section 3.15. Guarantees, Loans, Advances and Other Liabilities................................. 39
Section 3.16. Capital Expenditures.............................................................. 39
Section 3.17. Removal of Administrator.......................................................... 39
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Section 3.18. Restricted Payments............................................................... 39
Section 3.19. Notice of Events of Default....................................................... 40
Section 3.20. Further Instruments and Acts...................................................... 40
ARTICLE IV SATISFACTION AND DISCHARGE................................................................... 40
Section 4.01. Satisfaction and Discharge of this Indenture...................................... 40
Section 4.02. Application of Trust Money........................................................ 41
ARTICLE V AMORTIZATION EVENTS, DEFAULTS AND REMEDIES.................................................... 42
Section 5.01. Amortization Events............................................................... 42
Section 5.02. Events of Default................................................................. 42
Section 5.03. Acceleration of Maturity; Rescission and Annulment................................ 43
Section 5.04. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee......... 44
Section 5.05. Remedies; Priorities.............................................................. 46
Section 5.06. Optional Preservation of the Collateral........................................... 48
Section 5.07. Limitation on Suits............................................................... 49
Section 5.08. Unconditional Rights of Noteholders to Receive Principal and Interest............. 50
Section 5.09. Restoration of Rights and Remedies................................................ 50
Section 5.10. Rights and Remedies Cumulative.................................................... 50
Section 5.11. Delay or Omission Not Waiver...................................................... 50
Section 5.12. Rights of Noteholders to Direct Indenture Trustee................................. 50
Section 5.13. Waiver of Past Defaults........................................................... 51
Section 5.14. Undertaking for Costs............................................................. 51
Section 5.15. Waiver of Stay or Extension Laws.................................................. 52
Section 5.16. Sale of Receivables............................................................... 52
Section 5.17. Action on Notes................................................................... 52
ARTICLE VI THE INDENTURE TRUSTEE........................................................................ 53
Section 6.01. Duties of the Indenture Trustee................................................... 53
Section 6.02. Notice of Amortization Event or Event of Default.................................. 55
Section 6.03. Rights of Indenture Trustee....................................................... 55
Section 6.04. Not Responsible for Recitals or Issuance of Notes................................. 56
Section 6.05. May Hold Notes.................................................................... 56
Section 6.06. Money Held in Trust............................................................... 57
Section 6.07. Compensation, Reimbursement and Indemnification................................... 57
Section 6.08. Replacement of Indenture Trustee.................................................. 57
Section 6.09. Successor Indenture Trustee by Merger............................................. 59
Section 6.10. Appointment of Co-Indenture Trustee or Separate Indenture Trustee................. 59
Section 6.11. Eligibility; Disqualification..................................................... 60
Section 6.12. Preferential Collection of Claims Against......................................... 60
Section 6.13. Tax Returns....................................................................... 61
Section 6.14. Representations and Covenants of the Indenture Trustee............................ 61
Section 6.15. Custody of the Collateral......................................................... 61
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ARTICLE VII NOTEHOLDERS' LIST AND REPORTS BY INDENTURE TRUSTEE AND ISSUER............................... 62
Section 7.01. Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders............ 62
Section 7.02. Preservation of Information; Communications to Noteholders........................ 62
Section 7.03. Reports by Issuer................................................................. 63
Section 7.04. Reports by Indenture Trustee...................................................... 63
Section 7.05. Notices........................................................................... 63
ARTICLE VIII ALLOCATION AND APPLICATION OF COLLECTIONS.................................................. 64
Section 8.01. Collection of Money............................................................... 64
Section 8.02. Rights of Noteholders............................................................. 64
Section 8.03. Establishment of Collection Account and Special Funding Account................... 64
Section 8.04. Collections and Allocations....................................................... 67
Section 8.05. Shared Principal Collections and Shared Transferor Principal Collections.......... 69
Section 8.06. [Reserved]........................................................................ 70
Section 8.07. Allocation of Collateral to Pools................................................. 70
Section 8.08A. Reallocation Groups............................................................... 71
Section 8.08B. Shared Enhancement Groups......................................................... 71
Section 8.08C. Excess Finance Charge Sharing Groups.............................................. 71
Section 8.08. Release of Collateral; Eligible Loan Documents.................................... 71
ARTICLE IX DISTRIBUTIONS AND REPORTS TO NOTEHOLDERS..................................................... 72
ARTICLE X SUPPLEMENTAL INDENTURES....................................................................... 72
Section 10.01. Supplemental Indentures Without Consent of Noteholders............................ 72
Section 10.02. Supplemental Indentures With Consent of Noteholders............................... 75
Section 10.03. Execution of Supplemental Indentures.............................................. 76
Section 10.04. Effect of Supplemental Indenture.................................................. 77
Section 10.05. Conformity With Trust Indenture Act............................................... 77
Section 10.06. Reference in Notes to Supplemental Indentures..................................... 77
ARTICLE XI TERMINATION.................................................................................. 77
Section 11.01. Termination of Trust.............................................................. 77
Section 11.02. Final Distribution................................................................ 77
Section 11.03. Transferor's Termination Rights................................................... 78
Section 11.04. Defeasance........................................................................ 79
ARTICLE XII MISCELLANEOUS............................................................................... 80
Section 12.01. Compliance Certificates and Opinions etc.......................................... 80
Section 12.02. Form of Documents Delivered to Indenture Trustee and each Controlling Entity...... 82
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Section 12.03. Acts of Noteholders............................................................... 83
Section 12.04. Notices........................................................................... 83
Section 12.05. Notices to Noteholders; Waiver.................................................... 84
Section 12.06. Alternate Payment and Notice Provisions........................................... 85
Section 12.07. Conflict with Trust Indenture Act................................................. 85
Section 12.08. Effect of Headings and Table of Contents.......................................... 85
Section 12.09. Successors and Assigns............................................................ 86
Section 12.10. Separability...................................................................... 86
Section 12.11. Benefits of Indenture............................................................. 86
Section 12.12. Limitation on Voting Preferred Stock.............................................. 86
Section 12.13. Governing Law..................................................................... 86
Section 12.14. Counterparts...................................................................... 86
Section 12.15. Trust Obligation.................................................................. 86
Section 12.16. No Petition....................................................................... 87
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RECONCILIATION AND TIE BETWEEN TRUST INDENTURE
ACT OF 1939 AND INDENTURE PROVISIONS**
Trust Indenture
Act Section Indenture Section
-------------------- -----------------
310 (a)(1).......................................................... 6.11
(a)(2).......................................................... 6.11
(a)(3).......................................................... 6.10
(a)(4).......................................................... Not Applicable
(a)(5).......................................................... 6.11
(b)............................................................. 6.08, 6.11
(c)............................................................. Not Applicable
311 (a)............................................................. 6.12
(b)............................................................. 6.12
(c)............................................................. Not Applicable
312 (a)............................................................. 7.01, 7.02(a)
(b)............................................................. 7.02(b)
(c)............................................................. 7.02(c)
313 (a)............................................................. 7.04
(b)............................................................. 7.04
(c)............................................................. 7.03, 7.04
(d)............................................................. 7.04
314 (a)............................................................. 3.09, 7.03(a)
(b)............................................................. 3.06
(c)(1).......................................................... 2.11, 8.09C, 12.01(a)
(c)(2).......................................................... 2.11, 8.09C, 12.01(a)
(c)(3).......................................................... 2.11, 8.09C, 12.01(a)
(d)(1).......................................................... 2.11, 8.09C, 12.01(b)
(d)(2).......................................................... 12.01(b)
(d)(3).......................................................... Not Applicable
(e)............................................................. 12.01(a)
315 (a)............................................................. 6.01(b)
(b)............................................................. 6.02
(c)............................................................. 6.01(c)
(d)............................................................. 6.01(d)
(d)(1).......................................................... 6.01(d)
(d)(2).......................................................... 6.01(d)
(d)(3).......................................................... 6.01(d)
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* This reconciliation and tie shall not, for any purpose, be deemed to be
part of the within indenture.
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Trust Indenture
Act Section Indenture Section
-------------------- -----------------
(e)............................................................. 5.14
316 (a)(1)(A)....................................................... 5.12
316 (a)(1)(B)....................................................... 5.13
316 (a)(2).......................................................... Not Applicable
316 (b)............................................................. 5.08
317 (a)(1).......................................................... 5.04
317 (a)(2).......................................................... 5.04(d)
317 (b)............................................................. 5.04(a)
318 (a)............................................................. 12.07
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MASTER INDENTURE, dated as of September 30, 2002 (herein, as
amended, modified or supplemented from time to time as permitted hereby, called
the "INDENTURE"), between WILMINGTON TRUST COMPANY, not in its individual
capacity but solely as Owner Trustee on behalf of the Household Consumer Loan
Master Note Trust I, a Delaware common law trust (herein, together with its
permitted successors and assigns, called the "ISSUER" or the "TRUST"), and ▇▇▇▇▇
FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking association, as
indenture trustee (herein, together with its successors in the trusts hereunder,
called the "INDENTURE TRUSTEE"), Paying Agent and securities intermediary. This
Indenture may be supplemented at any time and from time to time by an Indenture
Supplement in accordance with Article X hereof (an "INDENTURE SUPPLEMENT", and
any Indenture Supplement together with this Indenture and amendments hereof
collectively referred to as the "AGREEMENT"). If a conflict exists between the
terms and provisions of this Indenture and any Indenture Supplement, the terms
and provisions of the Indenture Supplement shall be controlling with respect to
the related Series.
PRELIMINARY STATEMENT
The Issuer has duly authorized the execution and delivery of
this Indenture to provide for an issue of its asset backed notes (the "NOTES")
as provided in this Indenture. All covenants and agreements made by the Issuer
herein are for the benefit and security of the Noteholders. The Issuer is
entering into this Indenture, and the Indenture Trustee is accepting the trusts
created hereby, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged.
Simultaneously with the delivery of this Indenture, the Issuer
is entering into the Transfer and Servicing Agreement with Household Consumer
Loan Corporation II, a Delaware corporation, as Transferor (the "TRANSFEROR"),
and Household Finance Corporation, a Delaware corporation, as Servicer (in such
capacity, the "SERVICER"), pursuant to which (a) the Transferor will convey to
the Issuer all of its right, title and interest in, to and under the
Receivables, which the Transferor will have received from a Seller pursuant to a
Receivables Purchase Agreement and (b) the Servicer will agree to service the
Receivables and make collections thereon on behalf of the Noteholders.
Under the Receivables Purchase Agreement and the Transfer and
Servicing Agreement, Receivables arising in the Accounts from time to time will
automatically be conveyed thereunder to the Issuer without any further action by
the Sellers or Transferor being necessary.
GRANTING CLAUSES
The Owner Trustee on behalf of the Issuer hereby Grants to the
Indenture Trustee, for the benefit of the Holders of the Notes, all of its
right, title and interest, whether now owned or hereafter acquired, in, to and
under (a) the Receivables, (b) Recoveries related to and all money, instruments,
investment property and other property (together with all earnings, dividends,
distributions, income, issues, and profits relating
to) distributed or distributable in respect of the Receivables pursuant to the
terms of the Transfer and Servicing Agreement, this Indenture and any Indenture
Supplement, (c) all Eligible Investments and all money, investment property,
instruments and other property on deposit from time to time in, credited to or
related to the Collection Account, the Series Accounts and the Special Funding
Account (including any subaccounts of such account), and in all interest,
dividends, earnings, income and other distributions from time to time received,
receivable or otherwise distributed or distributable thereto or in respect
thereof (including any accrued discount realized on liquidation of any
investment purchased at a discount), (d) all rights, remedies, powers,
privileges and claims of the Owner Trustee or the Issuer under or with respect
to any Series Enhancement or the Transfer and Servicing Agreement (whether
arising pursuant to the terms of such Series Enhancement or the Transfer and
Servicing Agreement or otherwise available to the Owner Trustee or Issuer at law
or in equity), including, without limitation, the rights of the Owner Trustee on
behalf of the Issuer to enforce such Series Enhancement or the Transfer and
Servicing Agreement, and to give or withhold any and all consents, requests,
notices, directions, approvals, extensions or waivers under or with respect to
such Series Enhancement or the Transfer and Servicing Agreement to the same
extent as the Owner Trustee on behalf of the Issuer could but for the assignment
and security interest granted to the Indenture Trustee for the benefit of the
Noteholders, (e) all money, accounts, general intangibles, chattel paper,
instruments, documents, goods, investment property, deposit accounts,
certificates of deposit, letters of credit, and advices of credit belonging to
the Issuer or the Owner Trustee, not in its individual capacity, but solely as
owner trustee on behalf of the Issuer, (f) the Preferred Stock, (g) all other
property of the Issuer or the Owner Trustee, not in its individual capacity, but
solely as Owner Trustee on behalf of the Issuer, (h) all present and future
claims, demands, causes and chose in action in respect of any or all of the
foregoing and all payments on or under and all proceeds of every kind and nature
whatsoever in respect of any or all of the foregoing, including all proceeds,
products, rents, receipts or profits of the conversion, voluntary or
involuntary, into cash or other property, all cash and non-cash proceeds, and
other property consisting of, arising from or relating to all or any part of any
of the foregoing, and (i) any proceeds of the foregoing; in each case, excluding
the Transferor Amount and all amounts distributable to the Holders of the
Transferor Certificates pursuant to the terms of any Transaction Document
(collectively, the "COLLATERAL").
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.
Whenever used in this Agreement, the following words and
phrases shall have the following meanings, and the definitions of such terms are
applicable to the singular as well as the plural forms of such terms and to the
masculine as well as to the feminine and neuter genders of such terms.
"Accumulation Period" shall mean, with respect to any Series,
or any Class within a Series, a period following the Revolving Period during
which Collections
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of Principal Receivables are accumulated in an account for the benefit of the
Noteholders of such Series or Class within such Series, which shall be the
controlled accumulation period, the early accumulation period, the optional
accumulation period, the partial accumulation period or other accumulation
period, in each case as defined with respect to such Series in the related
Indenture Supplement.
"Act" shall have the meaning specified in subsection 12.03(a).
"Adjusted Pool Principal Balance" shall, with respect to any
Series, have the meaning specified in the applicable Indenture Supplement.
"Administration Agreement" shall mean the Administration
Agreement, dated as of September 30, 2002 among the Issuer and the
Administrator, as the same may be amended, supplemented or otherwise modified
from time to time.
"Administrator" shall mean Household Finance Corporation, or
its permitted successors and assigns, or any successor Administrator under the
Administration Agreement.
"Adverse Effect" shall have the meaning specified in the
Transfer and Servicing Agreement.
"Aggregate Investor Percentage" shall mean, with respect to
Principal Receivables, Finance Charge and Administrative Receivables and
Defaulted Receivables relating to a particular Pool, as the case may be, as of
any date of determination, the sum of such Investor Percentages (as such term is
defined in the related Indenture Supplements) of all Series of Notes relating to
such Pool issued and outstanding on such date of determination; provided,
however, that the Aggregate Investor Percentage shall not exceed 100%.
"Agreement" shall mean this Indenture, as the same may be
amended, supplemented or otherwise modified from time to time, including, with
respect to any Series or Class, the related Indenture Supplement.
"Amortization Event" shall mean, with respect to any Series, a
Trust Amortization Event or a Series Amortization Event.
"Amortization Period" shall mean, with respect to any Series,
or any Class within a Series, a period following the Revolving Period during
which Collections of Principal Receivables are distributed to Noteholders, which
shall be the controlled amortization period, the rapid amortization period, the
managed amortization period, the optional amortization period, the partial
amortization period or other amortization period, in each case as defined with
respect to such Series in the related Indenture Supplement.
"Applicants" shall have the meaning specified in Section 2.09.
3
"Authorized Officer" shall mean:
(a) with respect to the Issuer, any officer of the Owner
Trustee who is authorized to act for the Owner Trustee in matters
relating to the Issuer and who is identified on the list of Authorized
Officers, containing the specimen signature of each such Person,
delivered by the Owner Trustee to the Indenture Trustee on the Closing
Date (as such list may be modified or supplemented from time to time
thereafter) and any Vice President or more senior officer of the
Administrator who is authorized to act for the Administrator in matters
relating to the Issuer and to be acted upon by the Administrator
pursuant to the Administration Agreement and who is identified on the
list of Authorized Officers (containing the specimen signatures of such
officers) delivered by the Administrator to the Indenture Trustee on
the Closing Date (as such list may be modified or supplemented from
time to time thereafter).
(b) with respect to the Transferor, any officer of the
Transferor who is authorized to act for the Transferor in matters
relating to the Transferor and who is identified on the list of
Authorized Officers, containing the specimen signature of each such
Person, delivered by the Transferor to the Indenture Trustee on the
Closing Date (as such list may be modified or supplemented from time to
time thereafter)
(c) with respect to the Servicer, any officer of the
Servicer who is authorized to act for the Servicer in matters relating
to the Servicer and who is identified on the list of Authorized
Officers, containing the specimen signature of each such Person,
delivered by the Servicer to the Indenture Trustee on the Closing Date
(as such list may be modified or supplemented from time to time
thereafter)
"Bearer Notes" shall have the meaning specified in Section
2.01.
"Beneficial Owner" shall mean, with respect to a Book-Entry
Note, the Person who is the owner of such Book-Entry Note, as reflected on the
books of the Clearing Agency or Foreign Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency or Foreign Clearing
Agency (directly as a Clearing Agency Participant or as an Indirect Participant,
in accordance with the rules of such Clearing Agency or Foreign Clearing
Agency).
"Book-Entry Notes" shall mean beneficial interests in the
Notes, ownership and transfers of which shall be made through book entries by a
Clearing Agency or Foreign Clearing Agency as described in Section 2.13.
"Business Day" shall mean any day other than (a) a Saturday or
Sunday or (b) any other day on which national banking associations or state
banking institutions in New York City, New York, Delaware, Illinois, Indiana,
Nevada or any other State in which the principal executive offices of the
Servicer, the Owner Trustee, the Indenture Trustee or other Account Owner, as
the case may be, are located, are authorized or
4
obligated by law, executive order or governmental decree to be closed or (c) for
purposes of any particular Series, any other day specified in the related
Indenture Supplement.
"Class" shall mean, with respect to any Series, any one of the
classes of Notes of that Series.
"Clearing Agency" shall mean an organization registered as a
"clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended, and serving as clearing agency for a Series or Class of
Book-Entry Notes.
"Clearing Agency Participant" shall mean a broker, dealer,
bank, other financial institution or other Person for whom from time to time a
Clearing Agency effects book-entry transfers and pledges of securities deposited
with the Clearing Agency.
"Clearstream" shall mean Clearstream Banking, societe anonyme,
a professional depository incorporated under the laws of Luxembourg, and its
successors.
"Closing Date" shall mean, with respect to any Series, the
closing date specified in the related Indenture Supplement.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Collateral" shall have the meaning specified in the Granting
Clause of this Indenture.
"Collection Account" shall have the meaning specified in
Section 8.03.
"Commission" shall mean the Securities and Exchange Commission
and its successors in interest.
"Controlling Entity" shall mean for this Indenture and any
Series, such Person, if any, as may be designated in the related Indenture
Supplement. To the extent no Controlling Entity is designated with respect to a
Series, provisions related to a Controlling Entity herein shall have no effect.
"Corporate Trust Office" means the office of the Indenture
Trustee at which at any particular time its corporate trust business shall be
administered, which office at date of the execution of this Agreement is located
at Sixth Street and Marquette Avenue, MAC N9311-161, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ or at such other address as the Indenture Trustee may designate from time
to time by notice to the Noteholders and the Transferor, or the principal
corporate trust office of any successor Indenture Trustee (the address of which
the successor Indenture Trustee will notify the Noteholders and the Transferor).
"Coupon" shall have the meaning specified in Section 2.01.
"Default" shall mean any occurrence that is, or with notice or
the lapse of time or both would become, an Event of Default.
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"Defeasance" shall have the meaning specified in subsection
11.04(a).
"Defeased Series" shall have the meaning specified in
subsection 11.04(a).
"Definitive Notes" shall mean Notes in definitive, fully
registered form.
"Deposit Date" shall mean each day on which the Servicer
deposits Collections in the Collection Account.
"Determination Date" shall mean, with respect to each
Distribution Date, unless otherwise specified in the Indenture Supplement for a
particular Series, the earlier of the third Business Day and the fifth calendar
day (or if the fifth calendar day is not a Business Day, then the preceding
Business Day) preceding such Distribution Date.
"Distribution Date" shall mean, with respect to any Series,
the date specified in the applicable Indenture Supplement.
"Dollars", "$" or "U.S. $" shall mean United States dollars.
"DTC" shall mean The Depository Trust Company.
"Due Period" shall mean, with respect to each Distribution
Date, unless otherwise provided in an Indenture Supplement, the period from and
including the first day of the preceding calendar month to and including the
last day of such calendar month.
"Eligible Institution" shall mean any depository institution
(which may be the Owner Trustee or the Indenture Trustee) organized under the
laws of the United States or any one of the states thereof, including the
District of Columbia (or any domestic branch of a foreign bank), which
depository institution at all times (a) is a member of the FDIC and (b) has (i)
a long-term unsecured debt rating in the highest rating category of Standard &
Poor's, Moody's and, if rated by Fitch, of Fitch, or such other rating
acceptable to the Rating Agency and each Controlling Entity or (ii) a short-term
rating in the highest rating category of Standard & Poor's, Moody's, and if
rated by Fitch, of Fitch, or such other rating acceptable to the Rating Agency
and each Controlling Entity. Notwithstanding the previous sentence any
institution the appointment of which satisfies the Rating Agency Condition shall
be considered an Eligible Institution.
"Eligible Investments" shall mean instruments, investment
property or other property with respect to any of the following:
(a) direct obligations of, or obligations fully
guaranteed as to timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of
deposit (having original maturities of no more than 365 days) of
depository institutions or trust companies incorporated under the laws
of the United States of America or any state thereof, including the
District of Columbia (or domestic branches of foreign
6
banks) and subject to supervision and examination by federal or state
banking or depository institution authorities; provided that at the
time of the Trust's investment or contractual commitment to invest
therein, the short-term debt rating of such depository institution or
trust company shall be in the highest rating category of Standard &
Poor's, Moody's and, if rated by Fitch, of Fitch, or such other rating
category acceptable to the Rating Agency;
(c) commercial paper (having original or remaining
maturities of no more than 30 days) having, at the time of the Trust's
investment or contractual commitment to invest therein, a rating in the
highest rating category of Standard & Poor's, Moody's and, if rated by
Fitch, of Fitch, or such other rating category acceptable to the Rating
Agency;
(d) demand deposits, time deposits and certificates of
deposit which are fully insured by the FDIC having, at the time of the
Trust's investment therein, a rating in the highest rating category of
Standard & Poor's, Moody's and, if rated by Fitch, of Fitch, or such
other rating category acceptable to the Rating Agency;
(e) bankers' acceptances (having original maturities of
no more than 365 days) issued by any depository institution or trust
company referred to in clause (b) above;
(f) money market funds having, at the time of the Trust's
investment therein, a rating in the highest rating category of Standard
& Poor's, Moody's and, if rated by Fitch, of Fitch, or such other
rating category acceptable to the Rating Agency (including funds for
which the Indenture Trustee or any of its Affiliates is investment
manager or advisor);
(g) time deposits (having maturities not later than the
succeeding Distribution Date) other than as referred to in clause (d)
above, with a Person the commercial paper of which has a credit rating
acceptable to Standard & Poor's, Moody's and, if rated by Fitch, to
Fitch; or
(h) any other investment of a type or rating that
satisfies the Rating Agency Condition.
"Eligible Servicer" shall mean the Indenture Trustee or, if
the Indenture Trustee is not acting as Servicer, an entity acceptable to each
Controlling Entity which, at the time of its appointment as Servicer, (a) is
servicing a portfolio of consumer loan accounts, (b) is legally qualified and
has the capacity to service the Accounts, (c) in the sole determination of the
Indenture Trustee, which determination shall be conclusive and binding, has
demonstrated the ability to service professionally and competently a portfolio
of similar accounts in accordance with high standards of skill and care, (d) is
qualified to use the software that is then being used to service the Accounts or
obtains the right to use or has its own software which is adequate to perform
its duties under this
7
Agreement and (e) has a net worth of at least $50,000,000 as of the end of its
most recent fiscal quarter.
"Enhancement Agreement" shall mean any agreement, instrument
or document governing the terms of any Series Enhancement or pursuant to which
any Series Enhancement is issued or outstanding.
"Euroclear Operator" shall mean Euroclear Bank S.A./N.V., a
bank organized under the laws of Belgium, as operator of the Euroclear System or
its successor as operator of such system or any system that is a successor to
such system.
"Event of Default" shall have the meaning specified in Section
5.02.
"Excess Finance Charge and Administrative Collections" shall
have the meaning specified in Section 8.08C.
"Excess Finance Charge Sharing Group" shall mean all Excess
Finance Charge Sharing Series that have the same Excess Finance Charge Sharing
Group designation.
"Excess Finance Charge Sharing Series" shall mean a Series
that, pursuant to the Indenture Supplement therefor, is entitled to receive
certain excess Collections of Finance Charge and Administrative Receivables from
other Series in the same Excess Finance Charge Sharing Group, as more
specifically set forth in such Indenture Supplement.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Finance Charge Shortfalls" shall have the meaning specified
in Section 8.08C.
"Foreclosure Remedy" shall have the meaning specified in
Sections 5.05(a)(iii) and (iv).
"Foreign Clearing Agency" shall mean Clearstream and the
Euroclear Operator.
"Global Note" shall have the meaning specified in Section
2.16.
"Grant" means to mortgage, pledge, bargain, warrant, alienate,
remise, release, convey, assign, transfer, create, and ▇▇▇▇▇ ▇ ▇▇▇▇ upon and a
security interest in and right of set-off against, deposit, set over and confirm
pursuant to this Indenture. A Grant of the Collateral or of any other agreement
or instrument shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of the Collateral and all other moneys payable
thereunder, to give and receive notices and other communications, to
8
make waivers or other agreements, to exercise all rights and options, to bring
Proceedings in the name of the Granting party or otherwise and generally to do
and receive anything that the Granting party is or may be entitled to do or
receive thereunder or with respect thereto.
"Group" shall mean, with respect to any Series, a group or
groups of Series (including any Reallocation Group, Excess Finance Charge
Sharing Group, Principal Sharing Group, Shared Enhancement Group or any other
Group established by an Indenture Supplement) in which the Indenture Supplement
for each such Series specifies such Series is to be included for the purpose of
sharing certain collections of Finance Charge and Administrative Receivables
and/or Principal Receivables. A particular Series may be included in more than
one Group if the Indenture Supplement for such Series so provides.
"Household Finance Corporation" shall mean Household Finance
Corporation, a Delaware corporation, and its successors and permitted assigns.
"Indenture" shall mean this Master Indenture, dated as of
September 30, 2002 between the Issuer and the Indenture Trustee, as the same may
be amended, supplemented or otherwise modified from time to time.
"Indenture Supplement" shall mean, with respect to any Series,
a supplement to the Indenture, executed and delivered in connection with the
original issuance of the Notes of such Series pursuant to Section 10.01, and an
amendment to the Indenture executed pursuant to Sections 10.01 or 10.02, and, in
either case, including all amendments thereof and supplements thereto.
"Indenture Trustee" shall mean ▇▇▇▇▇ Fargo Bank Minnesota,
National Association, in its capacity as trustee under the Indenture, its
successors in interest and any successor indenture trustee under the Indenture.
"Independent" shall mean, when used with respect to any
specified Person, that the Person (a) is in fact independent of the Issuer, any
other obligor upon the Notes, the Transferor and any Affiliate of any of the
foregoing Persons, (b) does not have any direct financial interest or any
material indirect financial interest in the Issuer, any such other obligor, the
Transferor or any Affiliate of any of the foregoing Persons and (c) is not
connected with the Issuer, any such other obligor, the Transferor or any
Affiliate of any of the foregoing Persons as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
"Independent Certificate" shall mean a certificate or opinion
to be delivered to the Indenture Trustee under the circumstances described in,
and otherwise complying with, the applicable requirements of Section 12.01, made
by an Independent appraiser or other expert appointed by an Issuer Order, and
such opinion or certificate shall state that the signer has read the definition
of "Independent" in this Indenture and that the signer is Independent within the
meaning thereof.
9
"Indirect Participant" shall mean other Persons such as
securities brokers and dealers, banks and trust companies that clear or maintain
a custodial relationship with a participant of DTC, either directly or
indirectly.
"Invested Amount" shall mean, with respect to any Series and
for any date, an amount equal to the invested amount, unless the term "adjusted
invested amount" is applicable to such Series, specified in the related
Indenture Supplement.
"Investment Company Act" shall mean the Investment Company Act
of 1940, as amended.
"Issuer" shall mean the Trust.
"Issuer Order" and "Issuer Request" shall mean a written order
or request signed in the name of the Issuer by any one of its Authorized
Officers and delivered to the Indenture Trustee.
"New Issuance" shall have the meaning specified in Section
2.12.
"Note Interest Rate" shall mean, as of any particular date of
determination and with respect to any Series or Class, the interest rate as of
such date specified therefor in the related Indenture Supplement.
"Note Owner" shall mean, with respect to a Book-Entry Note,
the Person who is the owner of such Book-Entry Note, as reflected on the books
of the Clearing Agency, or on the books of a Person maintaining an account with
such Clearing Agency (directly as a Clearing Agency Participant or as an
indirect participant, in accordance with the rules of such Clearing Agency).
"Note Register" shall have the meaning specified in Section
2.05.
"Noteholder" or "Holder" shall mean the Person in whose name a
Note is registered on the Note Register and, if applicable, the holder of any
Bearer Note, Global Note, or Coupon, as the case may be, or such other Person
deemed to be a "NOTEHOLDER" or "HOLDER" in any related Indenture Supplement. The
holder of an uncertificated instrument issued by the Issuer shall be deemed to
be a Noteholder for all purposes hereof.
"Notes" shall mean all Series of Notes issued by the Trust
pursuant to the Indenture and the applicable Indenture Supplement.
"Officer's Certificate" shall mean, unless otherwise specified
in this Agreement, a certificate delivered to the Indenture Trustee signed by
any Authorized Officer of the Issuer, Transferor, or Servicer, as applicable,
under the circumstances described in, and otherwise complying with, the
applicable requirements of Section 12.01.
10
"Opinion of Counsel" shall mean a written opinion of counsel,
who may be counsel for, or an employee of, the Person providing the opinion and
who shall be reasonably acceptable to the Indenture Trustee; provided, that a
Tax Opinion shall be an opinion of nationally recognized tax counsel.
"Outstanding" shall mean, as of the date of determination, all
Notes theretofore issued under this Indenture except:
(a) Notes theretofore cancelled by the Registrar or
delivered to the Registrar for cancellation;
(b) Notes or portions thereof the payment for which money
in the necessary amount has been theretofore deposited with the
Indenture Trustee or any Paying Agent in trust for the Holders of such
Notes (provided, however, that if such Notes are to be redeemed, notice
of such redemption has been duly given pursuant to this Indenture or
provision therefor, satisfactory to the Indenture Trustee, has been
made);
(c) Notes deemed to be satisfied and discharged pursuant
to Sections 4.01 or 11.04; and
(d) Notes in exchange for or in lieu of other Notes which
have been issued pursuant to this Indenture unless proof satisfactory
to the Indenture Trustee is presented that any such Notes are held by a
bona fide purchaser;
provided that in determining whether the Holders of the requisite Outstanding
Amount of the Notes have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Notes owned by the Issuer, any other
obligor upon the Notes, the Transferor, the Servicer or any Affiliate of any of
the foregoing Persons shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Indenture Trustee shall be protected in
relying upon any such request, demand, authorization, direction, notice, consent
or waiver, only Notes that a Responsible Officer of the Indenture Trustee
actually knows to be so owned shall be so disregarded. Notes so owned that have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Indenture Trustee the pledgee's right so
to act with respect to such Notes and that the pledgee is not the Issuer, any
other obligor upon the Notes, the Transferor, the Servicer or any Affiliate of
any of the foregoing Persons. In making any such determination, the Indenture
Trustee may rely on the representations of the pledgee and shall not be required
to undertake any independent investigation.
"Outstanding Amount" means the aggregate principal amount of
all Notes Outstanding at the date of determination.
"Owner Trustee" shall mean Wilmington Trust Company, in its
capacity as owner trustee under the Trust Agreement, its successors in interest
and any successor owner trustee under the Trust Agreement.
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"Paired Series" shall mean (a) each Series which has been
paired with another Series (which Series may be prefunded or partially
prefunded), such that the reduction of the Invested Amount or Adjusted Invested
Amount of such Series results in the increase of the Invested Amount of such
other Series, as described in the related Indenture Supplements, and (b) such
other Series.
"Paying Agent" shall mean any paying agent appointed pursuant
to Section 2.08 that meets the eligibility standards for the Indenture Trustee
specified in Section 6.11 and shall initially be the Indenture Trustee;
provided, that if the Indenture Supplement for a Series so provides, a different
or additional Paying Agent may be appointed with respect to such Series.
"Pool" shall mean the pool of Receivables, as to which the
Series that relate to such Pool (as designated in the Indenture Supplement for
such Series) primarily looks to for support in respect of payments, proceeds,
Recoveries and Collections; and specifically shall mean, (a) with respect to any
Receivables conveyed to the Trust pursuant to Section 2.01 of the Transfer and
Servicing Agreement listed from time to time on Schedule 1, Pool One, and (b)
with respect to any other Receivables conveyed to the Trust pursuant to Section
2.09 of the Transfer and Servicing Agreement, the Pool as specified by the
Transferor in the notice delivered pursuant to Section 2.09(c)(i) of the
Transfer and Servicing Agreement, with respect to such Receivables shall be
reflected in an appropriate related schedule which shall be created or amended
to reflect the current composition of such Pool.
"Portfolio Yield" shall mean with respect to any Pool and,
with respect to any Due Period, unless otherwise specified in an Indenture
Supplement related to such Pool, the annualized percentage equivalent of a
fraction (a) the numerator of which is equal to the Collections of Finance
Charge and Administrative Receivables during such Due Period calculated on a
cash basis, after subtracting therefrom the Defaulted Amount with respect to
such Due Period and (b) the denominator of which is the sum of (i) total amount
of Principal Receivables related to such Pool plus (ii) the Special Funding
Amount related to such Pool, each as of the last day of the immediately
preceding Due Period.
"Principal Sharing Group" shall mean all Principal Sharing
Series that have the same Principal Sharing Group designation.
"Principal Sharing Series" shall mean a Series that, pursuant
to the Indenture Supplement therefor, is entitled to receive Shared Principal
Collections within a specified Principal Sharing Group from other Series in the
same Principal Sharing Group, as more specifically set forth in such Indenture
Supplement.
"Principal Shortfalls" shall have the meaning specified in
Section 8.05.
"Principal Terms" shall mean, with respect to any Series, (a)
the name or designation; (b) the initial principal amount (or method for
calculating such amount) and the Invested Amount, (c) the Note Interest Rate for
each Class of Notes of such Series (or
12
method for the determination thereof); (d) the payment date or dates and the
date or dates from which interest shall accrue; (e) the Distribution Date; (f)
the method for allocating Collections to Noteholders; (g) the designation of any
Series Accounts and the terms governing the operation of any such Series
Accounts; (h) the Servicing Fee; (i) the issuer and terms of any form of Series
Enhancements with respect thereto; (j) the terms on which the Notes of such
Series may be exchanged for Notes of another Series, repurchased by the
Transferor or remarketed to other investors; (k) the Series Final Maturity Date;
(l) the number of Classes of Notes of such Series and, if more than one Class,
the rights and priorities of each such Class; (m) the extent to which the Notes
of such Series will be issuable in temporary or permanent global form (and, in
such case, the depositary for such global note or notes, the terms and
conditions, if any, upon which such global note may be exchanged, in whole or in
part, for Definitive Notes, and the manner in which any interest payable on a
temporary or global note will be paid); (n) whether the Notes of such Series may
be issued in bearer form and any limitations imposed thereon; (o) the priority
of such Series with respect to any other Series; (p) its Pool designation; (q)
and whether such Series will be part of a Reallocation Group and, if so, its
Reallocation Group designation; (r) whether such Series will be a Principal
Sharing Series and, if so, its Principal Sharing Group designation; (s) whether
such Series is entitled to share Shared Transferor Principal Collections; (t)
whether such Series will be an Excess Finance Charge Sharing Series, and, if so,
its Excess Finance Charge Sharing Group designation; (u) whether such Series or
subseries within such Series will be part of a Shared Enhancement Group and, if
so, its Shared Enhancement Group designation; (v) whether such Series will or
may be a Paired Series and the Series with which it will be paired; and (w) any
other terms of such Series.
"Proceeding" shall mean any suit in equity, action at law or
other judicial or administrative proceeding.
"Qualified Account" shall mean either (a) a segregated account
with an Eligible Institution, (b) a segregated trust account with the corporate
trust department of the Securities Intermediary, or (c) a segregated securities
account with the Securities Intermediary.
"Rating Agency" shall mean, with respect to any Outstanding
Series or Class, each rating agency, as specified in the Indenture Supplement
applicable to such Outstanding Series or Class, selected by the Transferor to
rate the Notes of such Series or Class.
"Rating Agency Condition" shall mean, with respect to any
action, that each Rating Agency shall have notified the Transferor, the
Servicer, the Owner Trustee and the Indenture Trustee in writing that such
action will not result in a reduction or withdrawal of the then existing rating
of any Outstanding Series or Class with respect to which it is a Rating Agency.
"Reallocation Group" shall mean a group of one or more Series
as specified in the related Indenture Supplement, if any, with respect to which
reallocation of certain Collections of Finance Charge and Administrative
Receivables and other
13
similar amounts are to be made among such Series, where applicable, for certain
specified purposes as specified in the Agreement or any related Indenture
Supplement, including, to the extent so specified, pooling amounts available to
all Series in the particular Reallocation Group prior to any application for
individual Series requirements and sharing such amounts among such Series on the
basis of the relative requirements for each such Series.
"Record Date" shall mean, with respect to any Distribution
Date, the last day of the calendar month immediately preceding such Distribution
Date unless otherwise specified for a Series in the related Indenture
Supplement.
"Redemption Date" shall mean, with respect to any Series, the
date or dates specified in the related Indenture Supplement.
"Registered Notes" shall have the meaning specified in Section
2.01.
"Registrar" shall have the meaning specified in Section 2.05.
"Reinvestment Event" shall mean, if applicable with respect to
any Series, any Reinvestment Event specified in the related Indenture
Supplement.
"Required Minimum Principal Balance" shall mean, unless
otherwise provided in an Indenture Supplement relating to a Series having a
Paired Series, with respect to any date and any Pool (a) the sum of the Series
Adjusted Invested Amounts for each Series outstanding on such date in such Pool
plus the Required Transferor Amount on such date, minus (b) the Special Funding
Amount.
"Required Transferor Amount" shall mean, with respect to any
date and the related Pool, the product of the Required Transferor Percentage for
such Pool and the aggregate Series Adjusted Invested Amounts (as defined in the
related Indenture Supplement) of all Series which relate to such Pool.
"Required Transferor Percentage" shall, with respect to any
Series, have the meaning set forth in the related Indenture Supplement.
"Responsible Officer" shall mean, when used with respect to
the Indenture Trustee, any officer within the Corporate Trust Office of the
Indenture Trustee including any vice president, assistant vice president,
assistant treasurer, assistant secretary, trust officer or any other officer of
the Indenture Trustee customarily performing functions similar to those
performed by the persons who at the time shall be such officers or to whom any
corporate trust matter is referred at the Corporate Trust Office because of such
officer's knowledge of and familiarity with the particular subject.
"Revolving Period" shall have, with respect to each Series,
the meaning specified in the related Indenture Supplement.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
14
"Securities Intermediary" shall mean ▇▇▇▇▇ Fargo Bank
Minnesota, National Association, in its capacity as securities intermediary
pursuant to Section 6.15, its successors in interest and any successor
securities intermediary.
"Seller" shall mean the Person or Persons identified as a
seller under a Receivables Purchase Agreement.
"Series" shall mean any series or subseries of Notes issued
pursuant to this Agreement and the related Indenture Supplement.
"Series Account" shall mean any deposit, trust, securities
escrow or similar account maintained for the benefit of the Noteholders of any
Series or Class, as specified in any Indenture Supplement.
"Series Adjusted Invested Amount" shall have the meaning
specified in the related Indenture Supplement.
"Series Amortization Event" shall have, with respect to any
Series, the meaning specified pursuant to the related Indenture Supplement.
"Series Enhancement" shall mean the rights and benefits
provided to the Trust or the Noteholders of any Series or Class pursuant to any
subordination, collateral interest, insurance policy, cash collateral guaranty
or account, swap arrangements, interest rate cap agreement, letter of credit,
surety bond, spread account, reserve account, guaranteed rate agreement, tax
protection agreement or other similar arrangement. The subordination of any
Series or Class to another Series or Class shall be deemed to be a Series
Enhancement.
"Series Enhancer" shall mean the Person or Persons providing
any Series Enhancement, other than (except to the extent otherwise provided with
respect to any Series in the Indenture Supplement for such Series) the
Noteholders of any Series or Class which is subordinated to another Series or
Class.
"Series Final Maturity Date" shall mean, with respect to any
Series, the final maturity date for such Series specified in the related
Indenture Supplement.
"Series Issuance Date" shall mean, with respect to any Series,
the date on which the Notes of such Series are to be originally issued in
accordance with Section 2.12 and the related Indenture Supplement.
"Servicer" shall have the meaning specified in the Transfer
and Servicing Agreement.
"Shared Enhancement Group" shall mean a group of one or more
Series as specified in the related Indenture Supplement, if any, with respect to
which credit enhancement, including subordination of a particular Class or
Classes or Series, and collections are shared among such Series.
15
"Shared Principal Collections" shall have the meaning
specified in Section 8.05(a).
"Shared Transferor Principal Collections" shall have the
meaning set forth in Section 8.05(b).
"Special Funding Account" shall have the meaning set forth in
Section 8.03.
"Special Funding Amount" shall mean the amount on deposit in a
Special Funding Account.
"Tax Opinion" shall mean, with respect to any action, an
Opinion of Counsel to the effect that, for federal income tax purposes, (a) such
action will not adversely affect the tax characterization as indebtedness of the
Notes of any Outstanding Series or Class that were characterized as indebtedness
at the time of their issuance, and (b) such action will not cause the Trust to
be deemed to be an association (or publicly traded partnership) taxable as a
corporation.
"Transaction Documents" shall mean, with respect to any Series
of Notes, the Trust Agreement, the Receivables Purchase Agreement, the Transfer
and Servicing Agreement, this Indenture, the related Indenture Supplement, the
Administration Agreement and such other documents and certificates delivered in
connection therewith.
"Transfer Agent" shall have the meaning specified in Section
2.05.
"Transfer and Servicing Agreement" shall mean the Transfer and
Servicing Agreement, dated as of September 30, 2002 among the Transferor, the
Servicer and the Issuer, as the same may be amended, supplemented or otherwise
modified from time to time.
"Transfer Date" shall mean with respect to each Distribution
Date, the Business Day immediately preceding such Distribution Date.
"Transferor" shall have the meaning specified in the Transfer
and Servicing Agreement.
"Transferor Amount" shall mean with respect to any Pool, on
any date of determination an amount equal to the difference between (a) the sum
of (i) the total amount of Principal Receivables at the end of the day
immediately prior to such date of determination plus (ii) the related Special
Funding Amount at the end of the day immediately prior to such date of
determination minus (b) the aggregated Series Adjusted Invested Amounts of all
Series of Notes related to such Pool issued and outstanding on such date of
determination.
"Transferor Percentage" shall mean, on any date of
determination, when used with respect to Principal Receivables, Finance Charge
and Administrative Receivables and Defaulted Receivables in a Pool, a percentage
equal to 100% minus the
16
Aggregate Investor Percentage for Series related to such Pool with respect to
such category of Receivables, minus, where applicable, the percentage interest
of certain credit enhancement providers, as specified in the related Indenture
Supplement.
"Transfer Restriction Event" shall mean any event in which any
Transferor is unable for any reason to transfer Receivables to the Trust in
accordance with the provisions of the Transfer and Servicing Agreement or any
order of any governmental authority.
"Trust" shall mean the Household Consumer Loan Master Note
Trust I, acting by and through Wilmington Trust Company, not in its individual
capacity but solely as Owner Trustee.
"Trust Agreement" shall mean the Trust Agreement relating to
the Trust, dated as of September 30, 2002, between Household Consumer Loan
Corporation II and the Owner Trustee, as the same may be amended, supplemented
or otherwise modified from time to time.
"Trust Amortization Event" shall have, with respect to each
Series, the meaning specified in Section 5.01.
"Trust Indenture Act" or "TIA" shall mean the Trust Indenture
Act of 1939, as amended.
"Trustee Officer" shall mean, with respect to the Indenture
Trustee any officer assigned to the Corporate Trust Office, including any
managing director, vice president, assistant vice president, assistant
treasurer, assistant secretary or any other officer of the Indenture Trustee
customarily performing functions similar to those performed by any of the above
designated officers and having direct responsibility for the administration of
the applicable Transaction Documents, and also, with respect to a particular
matter, any other officer, to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject.
"Trust Termination Date" shall have the meaning specified in
the Trust Agreement.
"UCC" shall have the meaning specified in the Transfer and
Servicing Agreement.
Section 1.02. Other Definitional Provisions.
(a) With respect to any Series, all terms used herein and
not otherwise defined herein shall have meanings ascribed to them in the Trust
Agreement, the Transfer and Servicing Agreement or the related Indenture
Supplement, as applicable.
(b) All terms defined in this Agreement shall have the
defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.
17
(c) As used in this Agreement and in any certificate or
other document made or delivered pursuant hereto or thereto, accounting terms
not defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate or
other document to the extent not defined, shall have the respective meanings
given to them under generally accepted accounting principles or regulatory
accounting principles, as applicable and as in effect on the date of this
Agreement. To the extent that the definitions of accounting terms in this
Agreement or in any such certificate or other document are inconsistent with the
meanings of such terms under generally accepted accounting principles or
regulatory accounting principles in the United States, the definitions contained
in this Agreement or in any such certificate or other document shall control.
(d) Any reference to each Rating Agency shall only apply
to any specific rating agency if such rating agency is then rating any
Outstanding Series.
(e) Unless otherwise specified, references to any amount
as on deposit or outstanding on any particular date shall mean such amount at
the close of business on such day.
(f) The words "HEREOF", "HEREIN" and "HEREUNDER" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement;
references to any subsection, Section, Schedule or Exhibit are references to
subsections, Sections, Schedules and Exhibits in or to this Agreement unless
otherwise specified; and the term "INCLUDING" means "INCLUDING WITHOUT
LIMITATION."
(g) Whenever this Indenture refers to a provision of the
TIA, the provision is incorporated by reference in and made a part of this
Indenture. The following TIA terms used in this Indenture have the following
meanings:
"INDENTURE SECURITIES" means the Notes.
"INDENTURE SECURITY HOLDER" means a Noteholder.
"INDENTURE TO BE QUALIFIED" means this Indenture.
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the
Indenture Trustee.
"OBLIGOR" on the indenture securities means the Issuer and any
other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by Commission
rule have the meaning assigned to them by such definitions.
18
ARTICLE II
THE NOTES
Section 2.01. Form Generally.
Any Series or Class of Notes, together with the Indenture
Trustee's certificate of authentication related thereto, may be issued in bearer
form (the "BEARER NOTES") with attached interest coupons and a special coupon
(collectively, the "COUPONS") or in fully registered form (the "REGISTERED
NOTES") and shall be in substantially the form of an exhibit to the related
Indenture Supplement with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture or such
Indenture Supplement, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon, as may,
consistently herewith, be determined by the officers executing such Notes, as
evidenced by their execution of such Notes. Any portion of the text of any Note
may be set forth on the reverse thereof, with an appropriate reference thereto
on the face of the Note. The terms of any Notes set forth in an exhibit to the
related Indenture Supplement are part of the terms of this Indenture, as
applicable.
The Definitive Notes shall be typewritten, printed,
lithographed or engraved or produced by any combination of these methods, all as
determined by the officers executing such Notes, as evidenced by its execution
of such Notes.
Each Global Note will be dated the Closing Date and each
Definitive Note will be dated as of the date of its authentication.
Section 2.02. Denominations.
Except as otherwise specified in the related Indenture
Supplement and the Notes, each class of Notes of each Series shall be issued in
fully registered form in minimum amounts of $1,000 and in integral multiples of
$1,000 in excess thereof (except that one Note of each Class may be issued in a
different amount, so long as such amount exceeds the applicable minimum
denomination for such Class), and shall be issued upon initial issuance as one
or more Notes in an aggregate original principal amount equal to the applicable
Invested Amount for such Class or Series.
Section 2.03. Execution, Authentication and Delivery.
Each Note shall be executed by manual or facsimile signature
on behalf of the Issuer by an Authorized Officer.
Notes bearing the manual or facsimile signature of an
individual who was, at the time when such signature was affixed, authorized to
sign on behalf of the Issuer shall not be rendered invalid, notwithstanding the
fact that such individual ceased to be so authorized prior to the authentication
and delivery of such Notes or does not hold such office at the date of issuance
of such Notes.
19
At any time and from time to time after the execution and
delivery of this Indenture, the Issuer may deliver Notes executed by the Issuer
to the Indenture Trustee for authentication and delivery, and the Indenture
Trustee shall authenticate and deliver such Notes as provided in this Indenture
or the related Indenture Supplement and not otherwise.
No Note shall be entitled to any benefit under this Indenture
or the applicable Indenture Supplement or be valid or obligatory for any
purpose, unless there appears on such Note a certificate of authentication
substantially in the form provided for herein or in the related Indenture
Supplement executed by or on behalf of the Indenture Trustee by the manual
signature of a duly authorized signatory, and such certificate upon any Note
shall be conclusive evidence, and the only evidence, that such Note has been
duly authenticated and delivered hereunder.
Section 2.04. Authenticating Agent.
(a) The Indenture Trustee may appoint one or more
authenticating agents with respect to the Notes which shall be authorized to act
on behalf of the Indenture Trustee in authenticating the Notes in connection
with the issuance, delivery, registration of transfer, exchange or repayment of
the Notes. Whenever reference is made in this Indenture to the authentication of
Notes by the Indenture Trustee or the Indenture Trustee's certificate of
authentication, such reference shall be deemed to include authentication on
behalf of the Indenture Trustee by an authenticating agent and a certificate of
authentication executed on behalf of the Indenture Trustee by an authenticating
agent. Each authenticating agent must be acceptable to the Issuer and the
Servicer.
(b) Any institution succeeding to the corporate agency
business of an authenticating agent shall continue to be an authenticating agent
without the execution or filing of any power or any further act on the part of
the Indenture Trustee or such authenticating agent.
(c) An authenticating agent may at any time resign by
giving written notice of resignation to the Indenture Trustee, the Issuer and
the Servicer. The Indenture Trustee may at any time terminate the agency of an
authenticating agent by giving notice of termination to such authenticating
agent and to the Issuer and the Servicer. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time an authenticating
agent shall cease to be acceptable to the Indenture Trustee or the Issuer and
the Servicer, the Indenture Trustee may promptly appoint a successor
authenticating agent. Any successor authenticating agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
authenticating agent. No successor authenticating agent shall be appointed
unless acceptable to the Issuer and the Servicer.
(d) The Issuer agrees to pay to each authenticating agent
from time to time reasonable compensation for its services under this Section.
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(e) The provisions of Sections 6.01 and 6.04 shall be
applicable to any authenticating agent.
(f) Pursuant to an appointment made under this Section,
the Notes may have endorsed thereon, in lieu of or in addition to the Indenture
Trustee's certificate of authentication, an alternative certificate of
authentication in substantially the following form:
"This is one of the Notes described in the within-mentioned
Agreement.
____________________________________
____________________________________
as Authenticating Agent
for the Indenture Trustee
By:__________________________________
Authorized Signatory"
Section 2.05. Registration of and Limitations on Transfer and
Exchange of Notes.
The Issuer shall cause to be kept a register (the "NOTE
REGISTER") in which the Issuer shall provide for the registration of Notes and
the registration of transfers of Notes. The Indenture Trustee initially shall be
the transfer agent and registrar (in such capacity, the "TRANSFER AGENT" and
"REGISTRAR") for the purpose of registering Notes and transfers of Notes as
herein provided. Upon any resignation of any Transfer Agent and Registrar, the
Issuer shall promptly appoint a successor or, if it elects not to make such an
appointment, assume the duties of Transfer Agent and Registrar.
If a Person other than the Indenture Trustee is appointed by
the Issuer as Transfer Agent and Registrar, the Issuer will give the Indenture
Trustee prompt written notice of the appointment of a Transfer Agent and
Registrar and of the location, and any change in the location, of the Transfer
Agent and Note Register. The Indenture Trustee shall have the right to inspect
the Note Register at all reasonable times and to obtain copies thereof, and the
Indenture Trustee shall have the right to rely upon a certificate executed on
behalf of the Transfer Agent and Registrar by an officer thereof as to the names
and addresses of the Noteholders and the principal amounts and numbers of such
Notes.
Upon surrender for registration of transfer of any Note at the
office or agency of the Transfer Agent and Registrar, to be maintained as
provided in Section 3.02, if the requirements of Section 8-401(a) of the UCC are
met, the Issuer shall execute, and upon receipt of such surrendered Note the
Indenture Trustee shall authenticate and deliver to the Noteholder, in the name
of the designated transferee or transferees, one or more new Notes (of the same
Series and Class) in any authorized denominations of like aggregate principal
amount.
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At the option of a Noteholder, Notes may be exchanged for
other Notes (of the same Series and Class) in any authorized denominations and
of like aggregate principal amount, upon surrender of such Notes to be exchanged
at the office or agency of the Transfer Agent and Registrar. Whenever any Notes
are so surrendered for exchange, if the requirements of Section 8-401(a) of the
UCC are met, the Issuer shall execute, and upon receipt of such surrendered Note
the Indenture Trustee shall authenticate and deliver to the Noteholder, the
Notes which the Noteholder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange
of Notes shall evidence the same obligations, evidence the same debt, and be
entitled to the same rights and privileges under this Indenture, as the Notes
surrendered upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of
transfer or exchange shall be duly endorsed by, or be accompanied by a written
instrument of transfer in a form satisfactory to the Indenture Trustee duly
executed by, the Noteholder thereof or his attorney-in-fact duly authorized in
writing, and by such other documents as the Indenture Trustee may reasonably
require.
The registration of transfer of any Note shall be subject to
the additional requirements, if any, set forth in the related Indenture
Supplement.
No service charge shall be made for any registration of
transfer or exchange of Notes, but the Issuer and Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of such
Notes.
All Notes surrendered for registration of transfer and
exchange shall be cancelled by the Issuer and delivered to the Indenture Trustee
for subsequent destruction without liability on the part of either. The
Indenture Trustee shall destroy the Global Note upon its exchange in full for
Definitive Notes and shall deliver a certificate of destruction to the Issuer.
Such certificate shall also state that a certificate or certificates of each
Foreign Clearing Agency to the effect referred to in Section 2.16 was received
with respect to each portion of the Global Note exchanged for Definitive Notes.
The preceding provisions of this section notwithstanding, the
Issuer shall not be required to make, and the Registrar need not register,
transfers or exchanges of Notes for a period of 20 days preceding the due date
for any payment with respect to the Note.
If and so long as any Series of Notes are listed on a stock
exchange and such exchange shall so require, the Indenture Trustee shall appoint
a co-transfer agent and co-registrar in accordance with the rules of such
exchange. Any reference in this Agreement to the Transfer Agent and Registrar
shall include any co-transfer agent and co-registrar unless the context
otherwise requires. The Indenture Trustee will enter into any appropriate agency
agreement with any co-transfer agent and co-registrar not a party
22
to this Indenture, which will implement the provisions of this Indenture that
relate to such agent.
Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes.
If (a) any mutilated Note is surrendered to the Indenture
Trustee, or the Indenture Trustee receives evidence to its reasonable
satisfaction of the destruction, loss or theft of any Note, and (b) there is
delivered to the Indenture Trustee such security or indemnity as may be required
by it to hold the Issuer, the Noteholders and the Indenture Trustee harmless,
then, in the absence of notice to the Issuer, the Transfer Agent and Registrar
or the Indenture Trustee that such Note has been acquired by a bona fide
purchaser, the Issuer shall execute, and the Indenture Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a replacement Note of like tenor (including the
same date of issuance) and principal amount, bearing a number not
contemporaneously outstanding; provided, however, that if any such mutilated,
destroyed, lost or stolen Note shall have become or within seven days shall be
due and payable, or shall have been selected or called for redemption, instead
of issuing a replacement Note, the Issuer may pay such Note without surrender
thereof, except that any mutilated Note shall be surrendered. If, after the
delivery of such replacement Note or payment of a destroyed, lost or stolen Note
pursuant to the proviso to the preceding sentence, a bona fide purchaser of the
original Note in lieu of which such replacement Note was issued presents for
payment such original Note, the Issuer and the Indenture Trustee shall be
entitled to recover such replacement Note (or such payment) from the Person to
whom it was delivered or any Person taking such replacement Note from such
Person to whom such replacement Note was delivered or any assignee of such
Person, except a bona fide purchaser, and shall be entitled to recover upon the
security or indemnity provided therefor to the extent of any loss, damage, cost
or expense incurred by the Issuer or the Indenture Trustee in connection
therewith.
Upon the issuance of any replacement Note under this Section,
the Issuer may require the payment by the Holder of such Note of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other reasonable expenses (including the fees and
expenses of the Indenture Trustee or the Transfer Agent and Registrar) connected
therewith.
Every replacement Note issued pursuant to this Section in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute
complete and indefeasible evidence of an obligation of the Trust, as if
originally issued, whether or not the mutilated, destroyed, lost or stolen Note
shall be found at any time, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Notes duly issued
hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Notes.
23
Section 2.07. Persons Deemed Owners.
Prior to due presentment for registration of transfer of any
Note, the Issuer, the Indenture Trustee and any agent of the Transferor, the
Issuer, the Indenture Trustee or any Controlling Entity shall treat the Person
in whose name any Note is registered as the owner of such Note for the purpose
of receiving distributions pursuant to the terms of the applicable Indenture
Supplement and for all other purposes whatsoever, whether or not such Note is
overdue, and neither the Transferor, the Issuer, the Indenture Trustee nor any
agent of the Transferor, the Issuer, the Indenture Trustee or any Controlling
Entity shall be affected by any notice to the contrary.
Section 2.08. Appointment of Paying Agent.
(a) The Issuer reserves the right at any time to vary or
terminate the appointment of a Paying Agent for the Notes, and to appoint
additional or other Paying Agents; provided that it will at all times maintain
the Indenture Trustee as a Paying Agent.
If and so long as any Series of Notes are listed on a stock
exchange and such exchange shall so require, the Indenture Trustee will appoint
a co-paying agent in accordance with the rules of such exchange. The Indenture
Trustee will enter into any appropriate agency agreement with any co-paying
agent not a party to this Indenture, which will implement the provisions of this
Indenture that relate to such agent.
Notice of all changes in the identity or specified office of a
Paying Agent will be delivered promptly to the Noteholders by the Indenture
Trustee.
(b) The Indenture Trustee shall cause the Paying Agent
(other than itself) to execute and deliver to the Indenture Trustee an
instrument in which such Paying Agent shall agree with the Indenture Trustee
that such Paying Agent will hold all sums, if any, held by it for payment to the
Noteholders in trust for the benefit of the Noteholders entitled thereto until
such sums shall be paid to such Noteholders and shall agree, and if the
Indenture Trustee is the Paying Agent it hereby agrees, that it shall comply
with all requirements of the Code regarding the withholding by the Indenture
Trustee of payments in respect of federal income taxes due from the Beneficial
Owners.
Section 2.09. Access to List of Noteholders' Names and
Addresses.
(a) The Issuer will furnish or cause to be furnished to
the Indenture Trustee, the Servicer, any Noteholder or the Paying Agent, within
five Business Days after receipt by the Issuer of a written request therefor
from the Indenture Trustee, the Servicer, such Noteholder or the Paying Agent,
respectively, a list of the names and addresses of the Noteholders. Unless
otherwise provided in the related Indenture Supplement, holders of 10% of the
Outstanding Amount of the Notes of any Series (the "APPLICANTS") may apply in
writing to the Indenture Trustee, and if such application states that the
Applicants desire to communicate with other Noteholders of any Series with
respect to their rights under this Agreement or under the Notes and is
accompanied by a copy of the communication which such Applicants propose to
transmit, then the
24
Indenture Trustee, after having been adequately indemnified by such Applicants
for its costs and expenses, shall afford or shall cause the Transfer Agent and
Registrar to afford such Applicants access during normal business hours to the
most recent list of Noteholders held by the Indenture Trustee and shall give the
Servicer notice that such request has been made, within five Business Days after
the receipt of such application. Such list shall be as of a date no more than 45
days prior to the date of receipt of such Applicants' request.
(b) Every Noteholder, by receiving and holding a Note,
agrees that none of the Issuer, the Indenture Trustee, the Transfer Agent and
Registrar and the Servicer nor any of their respective agents and employees
shall be held accountable by reason of the disclosure of any such information as
to the names and addresses of the Noteholders hereunder, regardless of the
sources from which such information was derived.
Section 2.10. Cancellation.
All Notes surrendered for payment, registration of transfer,
exchange or redemption shall, if surrendered to any Person other than the
Indenture Trustee, be delivered to the Indenture Trustee and shall be promptly
cancelled by it. The Issuer may at any time deliver to the Indenture Trustee for
cancellation any Notes previously authenticated and delivered hereunder which
the Issuer may have acquired in any lawful manner whatsoever, and all Notes so
delivered shall be promptly cancelled by the Indenture Trustee. No Notes shall
be authenticated in lieu of or in exchange for any Notes cancelled as provided
in this Section, except as expressly permitted by this Indenture. All cancelled
Notes held by the Indenture Trustee shall be destroyed unless the Issuer shall
direct by a timely order that they be returned to it.
Section 2.11. Release of Collateral.
Subject to Section 12.01, the Indenture Trustee shall release
property from the lien of this Indenture only upon receipt of an Issuer Request
meeting the removal criteria as set forth under the Transfer and Servicing
Agreement and accompanied by an Officer's Certificate, an Opinion of Counsel
and, to the extent required in accordance with TIA Sections 314(c) and 314(d),
Independent Certificates.
Section 2.12. New Issuances.
(a) The Transferor may from time to time direct the Owner
Trustee, on behalf of the Issuer, to issue one or more new Series of Notes (each
such issuance a "NEW ISSUANCE") pursuant to one or more Indenture Supplements.
The Notes of all Outstanding Series shall be equally and ratably entitled as
provided herein to the benefits of this Indenture without preference, priority
or distinction, all in accordance with the terms and provisions of this
Indenture and the applicable Indenture Supplement except, with respect to any
Series or Class, as provided in the related Indenture Supplement. Interest on
the Notes of all Outstanding Series shall be paid on the dates specified in or
pursuant to the Indenture Supplement relating to such Outstanding Series.
Principal of
25
the Notes of each Outstanding Series shall be paid as specified in or pursuant
to the Indenture Supplement relating to such Outstanding Series.
(b) On or before the Series Issuance Date relating to any
new Series of Notes, the parties hereto will execute and deliver an Indenture
Supplement which will specify the Principal Terms of such Series. The terms of
such Indenture Supplement may modify or amend the terms of this Indenture solely
as applied to such new Series. The obligation of the Indenture Trustee to
authenticate and deliver the Notes of any Series (other than any Series issued
pursuant to an Indenture Supplement dated as of the date hereof) and to execute
and deliver the related Indenture Supplement is subject to the satisfaction of
the following conditions:
(i) on or before the fifth day immediately preceding the
Series Issuance Date the Transferor shall have given the Indenture
Trustee, the Owner Trustee, the Servicer and each Rating Agency notice
(unless such notice requirement is otherwise waived) of such issuance
and the Series Issuance Date;
(ii) the Transferor shall have delivered to the Indenture
Trustee and the Owner Trustee any related Indenture Supplement, in form
satisfactory to the Indenture Trustee and the Owner Trustee, executed
by each party hereto (other than the Indenture Trustee);
(iii) the Transferor shall have delivered to the Indenture
Trustee and the Owner Trustee any related Enhancement Agreement
executed by each of the parties thereto, other than the Indenture
Trustee and the Owner Trustee;
(iv) the Rating Agency Condition shall have been satisfied
with respect to such issuance;
(v) such issuance will not result in any Adverse Effect
and the Transferor shall have delivered to the Indenture Trustee and
the Owner Trustee an Officer's Certificate, dated the Series Issuance
Date, to the effect that the Transferor reasonably believes that such
issuance will not, based on the facts known to such officer at the time
of such certification, have an Adverse Effect;
(vi) the Transferor shall have delivered to the Indenture
Trustee and the Owner Trustee (with a copy to each Rating Agency) a Tax
Opinion, dated the Series Issuance Date with respect to such issuance;
(vii) the aggregate amount of Principal Receivables in the
related Pool shall be greater than the Required Minimum Principal
Balance as of the Series Issuance Date and after giving effect to such
issuance; and
(viii) the principal amount of Receivables owned by the
Trust which are secured in whole or in part by an interest in real
property shall not exceed forty five percent (45%) of the aggregate
principal amount of Receivables owned by the Trust on the Series
Issuance Date.
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Any Note held by the Transferor at any time after the date of its initial
issuance may be transferred or exchanged only upon the delivery to the Indenture
Trustee of a Tax Opinion dated as of the date of such transfer or exchange, as
the case may be, with respect to such transfer or exchange.
(c) Any Indenture Supplement providing for the issuance
of subseries of Notes within the Series subject to such Indenture Supplement may
specify conditions, in addition to the conditions applicable to each such
subseries as a Series hereunder, for issuance of such subseries, which
conditions shall be consistent with the conditions for issuance of the related
Series.
(d) Upon satisfaction of the above conditions, pursuant
to Section 2.03, the Owner Trustee, on behalf of the Issuer, shall execute and
the Indenture Trustee shall authenticate and deliver the Notes of such Series as
provided in this Indenture and the applicable Indenture Supplement.
Notwithstanding the provisions of this Section, prior to the execution of any
Indenture Supplement, the Indenture Trustee shall be entitled to receive and
rely upon an Opinion of Counsel stating that the execution of such Indenture
Supplement is authorized or permitted by this Indenture and any Indenture
Supplement related to any Outstanding Series. The Indenture Trustee may, but
shall not be obligated to, enter into any such Indenture Supplement which
adversely affects the Indenture Trustee's own rights, duties or immunities under
this Indenture.
(e) The Issuer may direct the Indenture Trustee in
writing to deposit the net proceeds from any New Issuance in the Special Funding
Account with respect to the related Pool. The Issuer may also specify that on
any Transfer Date the proceeds from the sale of any new Series which is a
Principal Sharing Series may be withdrawn from the Special Funding Account for
the related Pool and treated as Shared Principal Collections with respect to the
same Principal Sharing Group.
Section 2.13. Book-Entry Notes.
Unless otherwise provided in any related Indenture Supplement,
the Notes, upon original issuance, shall be issued in the form of typewritten
Notes representing the Book-Entry Notes to be delivered to the depository
specified in such Indenture Supplement which shall be the Clearing Agency or
Foreign Clearing Agency, by or on behalf of such Series.
The Notes of each Series shall, unless otherwise provided in
the related Indenture Supplement, initially be registered in the Note Register
in the name of the nominee of the Clearing Agency or Foreign Clearing Agency for
such Book-Entry Notes and shall be delivered to the Indenture Trustee or,
pursuant to such Clearing Agency's or Foreign Clearing Agency's instructions
held by the Indenture Trustee's agent as custodian for the Clearing Agency or
Foreign Clearing Agency.
Unless and until Definitive Notes are issued under the limited
circumstances described in Section 2.15, no Beneficial Owner shall be entitled
to receive a Definitive Note representing such Beneficial Owner's interest in
such Note. Unless and
27
until Definitive Notes have been issued to the Beneficial Owners pursuant to
Section 2.15:
(a) the provisions of this Section shall be in full force
and effect with respect to each such Series;
(b) the Indenture Trustee shall be entitled to deal with
the Clearing Agency or Foreign Clearing Agency and the Clearing Agency
Participants for all purposes of this Indenture (including the payment of
principal of and interest on the Notes of each such Series) as the authorized
representatives of the Beneficial Owners;
(c) to the extent that the provisions of this Section
conflict with any other provisions of this Indenture, the provisions of this
Section shall control with respect to each such Series;
(d) the rights of Beneficial Owners of each such Series
shall be exercised only through the Clearing Agency or Foreign Clearing Agency
and the applicable Clearing Agency Participants and shall be limited to those
established by law and agreements between such Beneficial Owners and the
Clearing Agency or Foreign Clearing Agency and/or the Clearing Agency
Participants. Pursuant to the depository agreement applicable to a Series,
unless and until Definitive Notes of such Series are issued pursuant to Section
2.15, the initial Clearing Agency shall make book-entry transfers among the
Clearing Agency Participants and receive and transmit distributions of principal
and interest on the Notes to such Clearing Agency Participants; and
(e) whenever this Indenture requires or permits actions
to be taken based upon instructions or directions of the Holders of Notes
evidencing a specified percentage of the Outstanding Amount of the Notes, the
Clearing Agency or Foreign Clearing Agency shall be deemed to represent such
percentage only to the extent that they have received instructions to such
effect from the Beneficial Owners and/or Clearing Agency Participants owning or
representing, respectively, such required percentage of the beneficial interest
in the Notes and has delivered such instructions to the Indenture Trustee.
Section 2.14. Notices to Clearing Agency or Foreign Clearing
Agency.
Whenever a notice or other communication to the Noteholders is
required under this Indenture, unless and until Definitive Notes shall have been
issued to Beneficial Owners pursuant to Section 2.15, the Indenture Trustee
shall give all such notices and communications specified herein to be given to
Noteholders to the Clearing Agency or Foreign Clearing Agency, as applicable,
and shall have no obligation to the Beneficial Owners.
Section 2.15. Definitive Notes.
If (i) (a) the Administrator advises the Indenture Trustee in
writing that the Clearing Agency or Foreign Clearing Agency is no longer willing
or able to properly discharge its responsibilities as Clearing Agency or Foreign
Clearing Agency with
28
respect to the Book-Entry Notes of a given Class and (b) the Administrator is
unable to locate and reach an agreement on satisfactory terms with a qualified
successor, (ii) the Administrator, at its option, advises the Indenture Trustee
in writing that it elects to terminate the book-entry system through the
Clearing Agency or Foreign Clearing Agency with respect to such Class or (iii)
after the occurrence of a Servicer Default or an Event of Default, Beneficial
Owners aggregating a majority of the Outstanding Amount of the Notes of such
Class advise the Indenture Trustee and the applicable Clearing Agency or Foreign
Clearing Agency through the applicable Clearing Agency Participants in writing
that the continuation of a book-entry system is no longer in the best interests
of the Beneficial Owners of such Class, the Indenture Trustee shall notify all
Beneficial Owners of such Class of the occurrence of such event and of the
availability of Definitive Notes to Beneficial Owners of such Class requesting
the same. Upon surrender to the Indenture Trustee of the Notes of such Class,
accompanied by registration instructions from the applicable Clearing Agency,
the Issuer shall execute and the Indenture Trustee shall authenticate Definitive
Notes of such Class and shall recognize the registered holders of such
Definitive Notes as Noteholders under this Indenture. Neither the Issuer nor the
Indenture Trustee shall be liable for any delay in delivery of such
instructions, and the Issuer and the Indenture Trustee may conclusively rely on,
and shall be protected in relying on, such instructions. Upon the issuance of
Definitive Notes of such Series, all references herein to obligations imposed
upon or to be performed by the applicable Clearing Agency or Foreign Clearing
Agency shall be deemed to be imposed upon and performed by the Indenture
Trustee, to the extent applicable with respect to such Definitive Notes, and the
Indenture Trustee shall recognize the registered holders of the Definitive Notes
of such Series as Noteholders of such Series hereunder. Definitive Notes will be
transferable and exchangeable at the offices of the Transfer Agent and
Registrar.
Section 2.16. Global Note; Euro-Note Exchange Date.
If specified in the related Indenture Supplement for any
Series, Notes may be initially issued in the form of a single temporary Global
Note (the "GLOBAL NOTE") in bearer form, without interest coupons, in the
denomination of the Initial Invested Amount and substantially in the form
attached to the related Indenture Supplement. Unless otherwise specified in the
related Indenture Supplement, the provisions of this Section shall apply to such
Global Note. The Global Note will be authenticated by the Indenture Trustee upon
the same conditions, in substantially the same manner and with the same effect
as the Definitive Notes. The Global Note may be exchanged in the manner
described in the related Indenture Supplement for Registered Notes or Bearer
Notes in definitive form. Except as otherwise specifically provided in the
Indenture Supplement, any Notes that are issued in bearer form pursuant to this
Indenture shall be issued in accordance with the requirements of Code section
163(f)(2).
Section 2.17. Meetings of Noteholders.
To the extent provided by the Indenture Supplement for any
Series issued in whole or in part in Bearer Notes, the Servicer or the Indenture
Trustee may at any time call a meeting of the Noteholders of such Series, to be
held at such time and at such place
29
as the Servicer or the Indenture Trustee, as the case may be, shall determine,
for the purpose of approving a modification of or amendment to, or obtaining a
waiver of, any covenant or condition set forth in this Agreement with respect to
such Series or in the Notes of such Series, subject to Article X.
Section 2.18. Uncertificated Classes.
Notwithstanding anything to the contrary contained in this
Article II or in Article XI, unless otherwise specified in any Indenture
Supplement, any provisions contained in this Article II and in Article XI
relating to the registration, form, execution, authentication, delivery,
presentation, cancellation and surrender of Notes shall not be applicable to any
uncertificated Notes; provided, however, that, except as otherwise specifically
provided in the Indenture Supplement, any such uncertificated Notes shall be
issued in "registered form" within the meaning of Code section 163(f)(1).
ARTICLE III
REPRESENTATIONS AND COVENANTS OF ISSUER
Section 3.01. Payment of Principal and Interest.
(a) The Issuer will duly and punctually pay principal and
interest in accordance with the terms of the Notes as specified in the relevant
Indenture Supplement.
(b) The Noteholders of a Series as of the Record Date in
respect of a Distribution Date shall be entitled to the interest accrued and
payable and principal payable on such Distribution Date as specified in the
related Indenture Supplement. All payment obligations under a Note are
discharged to the extent such payments are made to the Noteholder of record.
Section 3.02. Maintenance of Office or Agency.
The Issuer will maintain an office or agency where Notes may
be presented or surrendered for payment, where Notes may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Issuer in respect of the Notes and this Indenture may be served. The Issuer
hereby initially appoints ▇▇▇▇▇ Fargo Bank Minnesota, National Association
currently located at Sixth Street and Marquette Avenue, MAC N9311-161,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Department, to serve as
its agent for the foregoing purposes. The Issuer will give prompt written notice
to the Indenture Trustee, any Controlling Entity and the Noteholders of the
location, and of any change in the location, of any such office or agency. If at
any time the Issuer shall fail to maintain any such office or agency or shall
fail to furnish the Indenture Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office, and the Issuer hereby appoints the Indenture Trustee at
its Corporate Trust Office as its agent to receive all such presentations,
surrenders, notices and demands.
30
Section 3.03. Money for Note Payments to Be Held in Trust.
As specified in Section 8.03 herein and in the related
Indenture Supplement, all payments of amounts due and payable with respect to
the Notes which are to be made from amounts withdrawn from the Collection
Account and the Special Funding Account shall be made on behalf of the Issuer by
the Indenture Trustee or by the Paying Agent, and no amounts so withdrawn from
the Collection Account or the Special Funding Account shall be paid over to or
at the direction of the Issuer except as provided in this Section and in the
related Indenture Supplement.
On or before each Distribution Date, in accordance with
Section 8.04 the Issuer shall deposit or cause to be deposited in the Series
Account, specified in the related Indenture Supplement, of each Outstanding
Series an aggregate sum sufficient to pay the amounts then becoming due under
the Notes of such Outstanding Series, such sum to be held in trust for the
benefit of the Persons entitled thereto, and (unless the Paying Agent is the
Indenture Trustee) shall promptly notify the Indenture Trustee in writing of its
action or failure so to act.
Whenever the Issuer shall have a Paying Agent in addition to
the Indenture Trustee, it will, on or before the Business Day next preceding
each Distribution Date, direct the Indenture Trustee to deposit with such Paying
Agent on or before such Distribution Date an aggregate sum sufficient to pay the
amounts then becoming due, such sum to be (i) held in trust for the benefit of
Persons entitled thereto and (ii) invested, pursuant to an Issuer Order, by the
Paying Agent in an Eligible Investment in accordance with the terms of the
related Indenture Supplement. For all investments made by a Paying Agent under
this Section, such Paying Agent shall be entitled to all of the rights and
obligations of the Indenture Trustee under the related Indenture Supplement,
such rights and obligations being incorporated in this paragraph by this
reference.
The Issuer will cause each Paying Agent other than the
Indenture Trustee to execute and deliver to the Indenture Trustee an instrument
in which such Paying Agent shall agree with the Indenture Trustee (and if the
Indenture Trustee acts as Paying Agent, it hereby so agrees), subject to the
provisions of this Section, that such Paying Agent, in acting as Paying Agent,
is an express agent of the Issuer and, further, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts
due with respect to the Notes in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided;
(ii) give the Indenture Trustee notice of any default by
the Issuer (or any other obligor upon the Notes) of which it has actual
knowledge in the making of any payment required to be made with respect
to the Notes;
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(iii) at any time during the continuance of any such
default, upon the written request of the Indenture Trustee, forthwith
pay to the Indenture Trustee all sums so held in trust by such Paying
Agent;
(iv) immediately resign as a Paying Agent and forthwith
pay to the Indenture Trustee all sums held by it by in trust for the
payment of Notes if at any time it ceases to meet the standards
required to be met by a Paying Agent at the time of its appointment;
and
(v) comply with all requirements of the Code with respect
to the withholding from any payments made by it on any Notes of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the satisfaction and
discharge of this Indenture or for any other purpose, by Issuer Order direct any
Paying Agent to pay to the Indenture Trustee all sums held in trust by such
Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts
as those upon which such sums were held by such Paying Agent; and upon such
payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
Section 3.04. Existence.
The Issuer will keep in full effect its existence, rights and
franchises as a common law trust under the laws of the State of Delaware (unless
it becomes, or any successor Issuer hereunder is or becomes, organized under the
laws of any other state or of the United States of America, in which case the
Issuer will keep in full effect its existence, rights and franchises under the
laws of such other jurisdiction) and will obtain and preserve its qualification
to do business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Indenture, the
Notes, the Collateral and each other related instrument or agreement.
Section 3.05. Protection of Trust.
The Issuer will from time to time prepare, or cause to be
prepared, execute and deliver all such supplements and amendments hereto and all
such financing statements, continuation statements, instruments of further
assurance and other instruments, and will take such other action necessary or
advisable to:
(a) Grant more effectively all or any portion of the
Collateral as security for the Notes;
(b) maintain or preserve the lien (and the priority
thereof) of this Indenture or to carry out more effectively the
purposes hereof;
(c) perfect, publish notice of, or protect the validity
of any Grant made or to be made by this Indenture;
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(d) enforce any of the Collateral; or
(e) preserve and defend title to the Collateral securing
the Notes and the rights therein of the Indenture Trustee and the
Noteholders secured thereby against the claims of all Persons and
parties.
The Issuer hereby designates the Indenture Trustee its agent
and attorney-in-fact to execute any financing statement, continuation statement
or other instrument required pursuant to this Section.
The Issuer shall pay or cause to be paid any taxes levied on
all or any part of Receivables securing the Notes.
Section 3.06. Opinions as to Collateral.
(a) On the Series Issuance Date relating to any new
Series of Notes, the Issuer shall furnish to the Indenture Trustee and each
Controlling Entity an Opinion of Counsel either stating that, in the opinion of
such counsel, such action has been taken to perfect the lien and security
interest of this Indenture, including, without limitation, with respect to the
recording and filing of this Indenture, any indentures supplemental hereto, and
any other requisite documents, and with respect to the execution and filing of
any financing statements and continuation statements, as are so necessary and
reciting the details of such action, or stating that, in the opinion of such
counsel, no such action is necessary to maintain the perfection of such lien and
security interest.
(b) On or before April 30 in each calendar year,
beginning in 2003, the Issuer shall furnish to the Indenture Trustee and each
Controlling Entity an Opinion of Counsel either stating that, in the opinion of
such counsel, such action has been taken to perfect the lien and security
interest of this Indenture, including, without limitation, with respect to the
recording, filing, re-recording and refiling of this Indenture, any indentures
supplemental hereto and any other requisite documents and with respect to the
execution and filing of any financing statements and continuation statements as
is so necessary and reciting the details of such action or stating that in the
opinion of such counsel no such action is necessary to maintain the perfection
of such lien and security interest. Such Opinion of Counsel shall also describe
the recording, filing, re-recording and refiling of this Indenture, any
indentures supplemental hereto and any other requisite documents and the
execution and filing of any financing statements and continuation statements
that will, in the opinion of such counsel, be required to maintain the
perfection of the lien and security interest of this Indenture until April 30 in
the following calendar year.
Section 3.07. Performance of Obligations; Servicing of
Receivables.
(a) The Issuer will not take any action and will use its
best efforts not to permit any action to be taken by others that would release
any Person from any of such Person's material covenants or obligations under any
instrument or agreement included in the Collateral or that would result in the
amendment, hypothecation, subordination, termination or discharge of, or impair
the validity or effectiveness of, any such instrument or agreement, except as
expressly provided in this Indenture, the Transfer and
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Servicing Agreement, the Receivables Purchase Agreement, the Trust Agreement or
such other instrument or agreement.
(b) The Issuer may contract with other Persons to assist
it in performing its duties under this Indenture and any performance of such
duties by a Person identified to the Indenture Trustee in an Officer's
Certificate of the Issuer shall be deemed to be action taken by the Issuer.
Initially, the Issuer has contracted with the Administrator to assist the Issuer
in performing its duties under this Indenture.
(c) The Issuer will punctually perform and observe all of
its obligations and agreements contained in this Indenture, the other
Transaction Documents and in the instruments and agreements relating to the
Collateral, including, but not limited to, filing or causing to be filed all UCC
financing statements and continuation statements required to be filed by the
terms of this Indenture and the Transfer and Servicing Agreement in accordance
with and within the time periods provided in the Transaction Documents. Except
as otherwise expressly provided herein or therein, the Issuer shall not waive,
amend, modify, supplement or terminate any Transaction Document or any provision
thereof without the consent of the Holders of a majority of the Outstanding
Amount of the Notes and any Controlling Entity of each adversely affected
Series.
(d) If the Issuer shall have knowledge of the occurrence
of a Servicer Default under the Transfer and Servicing Agreement, the Issuer
shall cause the Indenture Trustee to promptly notify each Controlling Entity and
the Rating Agencies thereof, and shall cause the Indenture Trustee to specify in
such notice the action, if any, being taken with respect to such default. If a
Servicer Default shall arise from the failure of the Servicer to perform any of
its duties or obligations under the Transfer and Servicing Agreement with
respect to the Receivables, the Issuer shall take all reasonable steps available
to it to remedy such failure.
(e) On and after the receipt by the Servicer of a
Termination Notice pursuant to Section 7.01 of the Transfer and Servicing
Agreement (a "TERMINATION NOTICE"), the Servicer shall continue to perform all
servicing functions under the Transfer and Servicing Agreement until the date
specified in the Termination Notice or otherwise specified by the Indenture
Trustee or until a date mutually agreed upon by the Servicer, the Indenture
Trustee and each Controlling Entity. As promptly as possible after the giving of
a Termination Notice to the Servicer, the Indenture Trustee with the consent of
each Controlling Entity shall appoint a successor servicer (the "SUCCESSOR
SERVICER"), and such Successor Servicer shall accept its appointment by a
written assumption in a form acceptable to the Indenture Trustee. In the event
that a Successor Servicer has not been appointed and accepted its appointment at
the time when the Servicer ceases to act as Servicer, the Indenture Trustee
without further action shall automatically be appointed the Successor Servicer.
The Indenture Trustee may delegate any of its servicing obligations to an
Affiliate or agent in accordance with subsection 3.01(b) and Section 5.07 of the
Transfer and Servicing Agreement. Notwithstanding the foregoing, the Indenture
Trustee shall, if it is legally unable so to act, petition at the expense of the
Servicer a court of competent jurisdiction to appoint any established
institution qualifying
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as an Eligible Servicer as the Successor Servicer hereunder. The Indenture
Trustee shall give prompt notice to each Rating Agency and each Series Enhancer
upon the appointment of a Successor Servicer. Upon its appointment, the
Successor Servicer shall be the successor in all respects to the Servicer with
respect to servicing functions under the Transfer and Servicing Agreement and
shall be subject to all the responsibilities, duties and liabilities relating
thereto placed on the Servicer by the terms and provisions thereof, and all
references in this Indenture to the Servicer shall be deemed to refer to the
Successor Servicer. In connection with any Termination Notice, the Indenture
Trustee will review any bids which it obtains from Eligible Servicers and shall
be permitted with the consent of each Controlling Entity to appoint any Eligible
Servicer submitting such a bid as a Successor Servicer for servicing
compensation, subject to the limitations set forth in Section 7.02 of the
Transfer and Servicing Agreement.
(f) Without derogating from the absolute nature of the
assignment granted to the Indenture Trustee under this Indenture or the rights
of the Indenture Trustee hereunder, the Issuer agrees (i) that it will not,
without the prior written consent of the Indenture Trustee, each Controlling
Entity and the Holders of a majority of the Outstanding Amount of the Notes,
amend, modify, waive, supplement, terminate or surrender, or agree to any
amendment, modification, supplement, termination, waiver or surrender of, the
terms of any Collateral (except to the extent otherwise provided in the Transfer
and Servicing Agreement) or the Transaction Documents (except to the extent
otherwise provided in the Transaction Documents), or waive timely performance or
observance by the Servicer or the Transferor under the Transfer and Servicing
Agreement; and (ii) except to the extent otherwise provided in the Transaction
Documents, that any such amendment shall not without the consent of the Holders
of all the Outstanding Notes (A) increase or reduce in any manner the amount of,
or accelerate or delay the timing of, collections of payments on the Receivables
or distributions that are required to be made for the benefit of the Noteholders
or (B) reduce the aforesaid percentage of the Notes that is required to consent
to any such amendment, without the consent of each Noteholder. If any such
amendment, modification, supplement or waiver shall be so consented to by the
Indenture Trustee, each Controlling Entity and such Noteholders, the Issuer
agrees, promptly following a request by the Indenture Trustee to do so, to
execute and deliver, in its own name and at its own expense, such agreements,
instruments, consents and other documents as the Indenture Trustee may deem
necessary or appropriate in the circumstances.
Section 3.08. Negative Covenants.
So long as any Notes are Outstanding, the Issuer will not:
(a) sell, transfer, exchange, pledge or otherwise dispose
of any part of the Collateral except as expressly permitted by the
Indenture and any Indenture Supplement, the Trust Agreement or the
Transfer and Servicing Agreement;
(b) claim any credit on, or make any deduction from, the
principal and interest payable in respect of the Notes (other than
amounts properly withheld from such payments under the Code or
applicable state law) or assert any claim
35
against any present or former Noteholder by reason of the payment of
any taxes levied or assessed upon any part of the Collateral;
(c) incur, assume or guarantee any direct or contingent
indebtedness other than incurred pursuant to the Transaction Documents;
(d) (i) permit the validity or effectiveness of this
Indenture to be impaired, or permit the lien of this Indenture to be
amended, hypothecated, subordinated, terminated or discharged, or
permit any Person to be released from any covenants or obligations with
respect to the Notes under this Indenture except as may be expressly
permitted hereby, (ii) permit any lien, charge, excise, claim, security
interest, mortgage or other encumbrance (other than the lien of this
Indenture) to be created on or extend to or otherwise arise upon or
burden the Collateral or any part thereof or any interest therein or
the proceeds thereof or (iii) permit the lien of this Indenture not to
constitute a valid first priority security interest in the Collateral;
or
(e) voluntarily dissolve or liquidate in whole or in
part.
Section 3.09. Statements as to Compliance.
The Issuer will deliver to the Indenture Trustee and each
Controlling Entity, within 120 days after the end of each fiscal year of the
Issuer (commencing within 120 days after the end of the fiscal year 2002), an
Officer's Certificate stating, as to the Authorized Officer signing such
Officer's Certificate, that
(a) a review of the activities of the Issuer during the
12-month period ending at the end of such fiscal year (or in the case
of the fiscal year ending December 31, 2002, the period from the
initial Closing Date to December 31, 2002) and of performance under
this Indenture has been made under such Authorized Officer's
supervisions, and
(b) to the best of such Authorized Officer's knowledge,
based on such review, the Issuer has complied with all conditions and
covenants under this Indenture throughout such year, or, if there has
been a default in the compliance of any such condition or covenant,
specifying each such default known to such Authorized Officer and the
nature and status thereof.
Section 3.10. Issuer May Consolidate, Etc., Only on Certain
Terms.
(a) The Issuer shall not consolidate, merge with or into
any other Person, unless:
(1) the Person (if other than the Issuer) formed
by or surviving such consolidation or merger shall be a Person (i)
organized and existing under the laws of the United States of America
or any state or the District of Columbia and (ii) shall expressly
assume, by an indenture supplemental hereto, executed and delivered to
the Indenture Trustee and each Controlling Entity, in a form
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satisfactory to the Indenture Trustee and each Controlling Entity, the
due and punctual payment of the principal of and interest on all Notes
and the performance of every covenant of this Indenture on the part of
the Issuer to be performed or observed;
(2) the Person is not subject to regulation as
an "investment company" under the Investment Company Act of 1940, as
amended;
(3) immediately after giving effect to such
transaction, no Event of Default or Amortization Event shall have
occurred and be continuing;
(4) the Issuer shall have delivered to the
Indenture Trustee and each Controlling Entity an Officer's Certificate
and an Opinion of Counsel each stating that (i) such consolidation or
merger and such supplemental indenture comply with this Section, (ii)
all conditions precedent in this Section relating to such transaction
have been complied with (including any filing required by the Exchange
Act), and (iii) such supplemental indenture is duly authorized,
executed and delivered and is valid, binding and enforceable against
such person;
(5) the Rating Agency Condition shall have been
satisfied with respect to such transaction;
(6) the Issuer shall have received a Tax Opinion
and an Opinion of Counsel dated the date of such consolidation or
merger (and shall have delivered copies thereof to the Indenture
Trustee and each Controlling Entity) to the effect that such
transaction will not have any material adverse tax consequence to any
Noteholder; and
(7) any action that is necessary to maintain the
lien and security interest created by this Indenture shall have been
taken.
(b) The Issuer shall not convey or transfer any of its
properties or assets, including those included in the Collateral, substantially
as an entirety to any Person, unless:
(1) the Person that acquires by conveyance or
transfer the properties and assets of the Issuer the conveyance or
transfer of which is hereby restricted shall (A) be a United States
citizen or a Person organized and existing under the laws of the United
States of America or any state, or the District of Columbia, (B)
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Indenture Trustee and each Controlling Entity, in form
satisfactory to the Indenture Trustee and each Controlling Entity, the
due and punctual payment of the principal of and interest on all Notes
and the performance or observance of every agreement and covenant of
this Indenture on the part of the Issuer to be performed or observed,
all as provided herein, (C) expressly agree by means of such
supplemental indenture that all right, title and interest so conveyed
or transferred shall be subject and subordinate to the rights of
Holders of the Notes, (D) unless otherwise provided in such
supplemental
37
indenture, expressly agree to indemnify, defend and hold harmless the
Issuer against and from any loss, liability or expense arising under or
related to this Indenture and the Notes and (E) expressly agree by
means of such supplemental indenture that such Person (or if a group of
Persons, then one specified Person) shall make all filings with the
Commission (and any other appropriate Person) required by the Exchange
Act in connection with the Notes;
(2) immediately after giving effect to such
transaction, no Event of Default or Amortization Event shall have
occurred and be continuing;
(3) the Rating Agency Condition shall have been
satisfied with respect to such transaction;
(4) the Issuer shall have received a Tax Opinion
and an Opinion of Counsel (and shall have delivered copies thereof to
the Indenture Trustee and each Controlling Entity) to the effect that
such transaction will not have any material adverse tax consequence to
any Noteholder;
(5) any action that is necessary to maintain the
lien and security interest created by this Indenture shall have been
taken; and
(6) the Issuer shall have delivered to the
Indenture Trustee and each Controlling Entity an Officer's Certificate
and an Opinion of Counsel each stating that such conveyance or transfer
and such supplemental indenture comply with this Section and that all
conditions precedent herein provided for relating to such transaction
have been complied with (including any filing required by the Exchange
Act).
Section 3.11. Successor Substituted.
Upon any consolidation or merger, or any conveyance or
transfer of the properties and assets of the Issuer substantially as an entirety
in accordance with Section 3.10 hereof, the Person formed by or surviving such
consolidation or merger (if other than the Issuer) or the Person to which such
conveyance or transfer is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Issuer under this Indenture with the same
effect as if such Person had been named as the Issuer herein. In the event of
any such conveyance or transfer, the Person named as the Issuer in the first
paragraph of this Indenture or any successor which shall theretofore have become
such in the manner prescribed in this Section shall be released from its
obligations under this Indenture as issued immediately upon the effectiveness of
such conveyance or transfer, provided that the Issuer shall not be released from
any obligations or liabilities to the Indenture Trustee, each Controlling Entity
or the Noteholders arising prior to such effectiveness.
Section 3.12. No Other Business.
The Issuer shall not engage in any business other than
financing, purchasing, owning and selling and managing the payment obligations
in the manner
38
contemplated by this Indenture and the other Transaction Documents and all
activities incidental thereto.
Section 3.13. No Borrowing.
The Issuer shall not issue, incur, assume, guarantee or
otherwise become liable, directly or indirectly, for any indebtedness except as
expressly provided for pursuant to the terms of the Transaction Documents and
the Notes.
Section 3.14. Servicer's Obligations.
The Issuer shall cause the Servicer to comply with all of its
obligations under the Transaction Documents.
Section 3.15. Guarantees, Loans, Advances and Other
Liabilities.
Except as contemplated by this Indenture or the Transfer and
Servicing Agreement, the Issuer shall not make any loan or advance or credit to,
or guarantee (directly or indirectly or by an instrument having the effect of
assuring another's payment or performance on any obligation or capability of so
doing or otherwise), endorse or otherwise become contingently liable, directly
or indirectly, in connection with the obligations, stocks or dividends of, or
own, purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person.
Section 3.16. Capital Expenditures.
The Issuer shall not make any expenditure (by long-term or
operating lease or otherwise) for capital assets (either realty or personalty).
Section 3.17. Removal of Administrator.
So long as any Notes are outstanding, the Issuer shall not
remove the Administrator without cause unless the Rating Agency Condition shall
have been satisfied in connection with such removal.
Section 3.18. Restricted Payments.
The Issuer shall not, directly or indirectly, (a) pay any
dividend or make any distribution (by reduction of capital or otherwise),
whether in cash, property, securities or a combination thereof, to the Owner
Trustee or any owner of a beneficial interest in the Issuer or otherwise with
respect to any ownership or equity interest or security in or of the Issuer or
to the Servicer, (b) redeem, purchase, retire or otherwise acquire for value any
such ownership or equity interest or security or (c) set aside or otherwise
segregate any amounts for any such purpose; provided, however, that the Issuer
may make, or cause to be made, (i) distributions as contemplated by, and to the
extent funds are available for such purpose under, the Transfer and Servicing
Agreement or the Trust Agreement and (ii) payments to the Indenture Trustee
pursuant to Section 6.07
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hereof. The Issuer will not, directly or indirectly, make payments to or
distributions from the Collection Account except in accordance with the
Transaction Documents.
Section 3.19. Notice of Events of Default.
The Issuer agrees to give the Indenture Trustee, the
Controlling Entities and the Rating Agencies prompt written notice of each Event
of Default hereunder and, immediately after obtaining knowledge of any of the
following occurrences, written notice of each default on the part of the
Servicer or the Transferor of its obligations under the Transfer and Servicing
Agreement and each default on the part of a Seller of its obligations under the
Receivables Purchase Agreement.
Section 3.20. Further Instruments and Acts.
Upon request of the Indenture Trustee or a Controlling Entity,
the Issuer will execute and deliver such further instruments and do such further
acts as may be reasonably necessary or proper to carry out more effectively the
purpose of this Indenture.
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of this Indenture.
This Indenture shall cease to be of further effect with
respect to the Notes of any Series except as to (a) rights of registration of
transfer and exchange, (b) substitution of mutilated, destroyed, lost or stolen
Notes, (c) the rights of Noteholders to receive payments of principal thereof
and interest thereon, (d) Sections 3.03, 3.07, 3.08, 3.11, 3.12 and 12.16, (e)
the rights and immunities of the Indenture Trustee hereunder, including the
rights of the Indenture Trustee under Section 6.07, and the obligations of the
Indenture Trustee under Section 4.02, and (f) the rights of Noteholders as
beneficiaries hereof with respect to the property so deposited with the
Indenture Trustee and payable to all or any of them, and the Indenture Trustee,
on demand of and at the expense of the Issuer, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture with respect to such
Notes when:
(i) either
(A) all Notes of such Series theretofore
authenticated and delivered (other than (1) Notes which have
been destroyed, lost or stolen and which have been replaced,
or paid as provided in Section 2.06, and (2) Notes for whose
full payment money has theretofore been deposited in trust or
segregated and held in trust by the Indenture Trustee
thereafter repaid to the Issuer or discharged from such trust,
as provided in Section 3.03) have been delivered to the
Indenture Trustee for cancellation; or
40
(B) all Notes of such Series not theretofore
delivered to the Indenture Trustee for cancellation:
(1) have become due and payable;
(2) will become due and payable at the
Series Final Maturity Date for such Class or Series
of Notes; or
(3) are to be called for redemption
within one year under arrangements satisfactory to
the Indenture Trustee for the giving of notice of
redemption by the Indenture Trustee in the name, and
at the expense, of the Issuer;
and the Issuer, in the case of (1), (2) or (3) above, has
irrevocably deposited or caused to be irrevocably deposited
with the Indenture Trustee cash or direct obligations of or
obligations guaranteed by the United States of America (which
will mature prior to the date such amounts are payable), in
trust for such purpose, in an amount sufficient to pay and
discharge the entire indebtedness on such Notes not
theretofore delivered to the Indenture Trustee for
cancellation when due at the Series Final Maturity Date for
such Class or Series of Notes or the Redemption Date (if Notes
shall have been called for redemption pursuant to the related
Indenture Supplement), as the case may be;
(ii) the Issuer has paid or caused to be paid all other
sums payable hereunder by the Issuer; and
(iii) the Issuer has delivered to the Indenture Trustee an
Officer's Certificate, an Opinion of Counsel and (if required by the
TIA or the Indenture Trustee) an Independent Certificate from a firm of
certified public accountants, each meeting the applicable requirements
of Section 12.01(a) and each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Issuer to the Indenture Trustee under Section
6.07 and of the Indenture Trustee to the Noteholders under Section 4.02 shall
survive.
Section 4.02. Application of Trust Money.
All monies deposited with the Indenture Trustee pursuant to
Section 4.01 hereof shall be held in trust and applied by it, in accordance with
the provisions of the Notes, this Indenture and the applicable Indenture
Supplement, to make payments, either directly or through any Paying Agent, as
the Indenture Trustee may determine, to the Noteholders and for the payment in
respect of which such monies have been deposited with the Indenture Trustee, of
all sums due and to become due thereon for principal and interest; but such
monies need not be segregated from other funds except to the extent required
herein or in the Transfer and Servicing Agreement or required by law.
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ARTICLE V
AMORTIZATION EVENTS, DEFAULTS AND REMEDIES
Section 5.01. Amortization Events.
If any one of the following events (each, a "TRUST
AMORTIZATION EVENT") shall occur:
(a) the occurrence of an Insolvency Event as defined in
Section 6.01 of the Transfer and Servicing Agreement relating to the
Transferor or, unless the Rating Agency Condition is satisfied with
respect to the deletion of a Seller or other Account Owner from this
subsection, the occurrence of an Insolvency Event relating to a Seller
or other Account Owner;
(b) a Transfer Restriction Event shall occur; or
(c) the Trust shall become subject to regulation by the
Securities and Exchange Commission as an "investment company" within
the meaning of the Investment Company Act;
then an Amortization Event with respect to all Series of Notes shall occur
without any notice or other action on the part of the Indenture Trustee, any
Controlling Entity or the Noteholders immediately upon the occurrence of such
event.
Upon the occurrence of an Amortization Event, an Amortization
Period or, if so specified on the related Indenture Supplement, an Accumulation
Period shall commence and payment on the Notes of each Series will be made in
accordance with the terms of the related Indenture Supplement.
Section 5.02. Events of Default.
"EVENT OF DEFAULT," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(a) default in the payment of the principal of any Note,
if and to the extent not previously paid, when the same becomes due and
payable on its Series Final Maturity Date; or
(b) default in the payment of any interest on any Note
when the same becomes due and payable, and such default shall continue
for a period of 35 days; or
(c) the filing of a decree or order for relief by a court
having jurisdiction in the premises in respect of the Issuer in an
involuntary case under
42
any applicable federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, or appointing a receiver, conservator,
liquidator, assignee, custodian, trustee, sequestrator or similar
official for the Issuer or ordering the winding-up or liquidation of
the Issuer's affairs, and such decree or order shall remain unstayed
and in effect for a period of 60 or more consecutive days; or
(d) the commencement by the Issuer of a voluntary case
under any applicable federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or the consent by the Issuer to
the entry of an order for relief in an involuntary case under any such
law, or the consent by the Issuer to the appointment of or the taking
possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator, conservator or similar official of the Issuer, or the
making by the Issuer of any general assignment for the benefit of
creditors, or the failure by the Issuer generally to pay, or the
admission in writing by the Issuer of its inability to pay, its debts
as such debts become due, or the taking of action by the Issuer in
furtherance of any of the foregoing; or
(e) default in the observance or performance of any
covenant or agreement of the Issuer made in this Indenture (other than
a covenant, or agreement, a default in the observance or performance of
which is elsewhere in this Section specifically dealt with), and such
default shall continue or not be cured for a period of 60 days after
there shall have been given, by registered or certified mail, to the
Issuer by the Indenture Trustee or to the Issuer and the Indenture
Trustee by the Holders of at least 25% of the Outstanding Amount of the
Notes of such affected Series, a written notice specifying such default
and requiring it to be remedied and stating that such notice is a
"NOTICE OF DEFAULT" hereunder; or
(f) any other Events of Default described in the related
Indenture Supplement.
The Issuer shall deliver to the Indenture Trustee and any
Controlling Entity, within five days after the occurrence thereof, written
notice in the form of an Officer's Certificate of any event which with the
giving of notice and the lapse of time would become an Event of Default, its
status and what action the Issuer is taking or proposes to take with respect
thereto.
Section 5.03. Acceleration of Maturity; Rescission and
Annulment.
If an Event of Default described in (i) subsections 5.02(a),
(b), (e) or (f) should occur and be continuing, then the Indenture Trustee or
the Holders representing not less than a majority of the Outstanding Amount of
the Notes of each affected Series, may declare, by a notice in writing to the
Issuer (and to the Indenture Trustee and each Controlling Entity), and (ii)
subsections 5.02(c) or (d) should occur and be continuing the Indenture Trustee
shall be deemed to have automatically declared, all the Notes of such Series to
be immediately due and payable, and upon any such declaration the Revolving
Period (or, if applicable, any other period of principal payment or accumulation
other
43
than an Early Amortization Period (as such term is defined in the related
Indenture Supplements)) with respect to such Series shall terminate, an Early
Amortization Period (as such term is defined in the related Indenture
Supplements) will commence and the unpaid principal amount of such Notes,
together with accrued and unpaid interest thereon through the date of
acceleration, shall become immediately due and payable. The Indenture Trustee
shall provide written notice to the Issuer of the declarations of an Event of
Default under clause (ii) hereof promptly thereafter, but any failure to provide
such notice shall not affect such declaration or its validity.
At any time after such declaration of acceleration of maturity
has been made and before a judgment or decree for payment of the money due has
been obtained by the Indenture Trustee as hereinafter in this Article V
provided, the Holders of Notes representing not less than a majority of the
Outstanding Amount of the Notes of such Series, by written notice to the Issuer
and the Indenture Trustee, may rescind and annul such declaration and its
consequences with respect to such Series.
No such rescission shall affect any subsequent default or
impair any right consequent thereto.
Section 5.04. Collection of Indebtedness and Suits for
Enforcement by Indenture Trustee.
(a) The Issuer covenants that if (i) default is made in
the payment of any interest on any Note when the same becomes due and payable,
and such default continues for a period of 35 days following the date on which
such interest became due and payable, or (ii) default is made in the payment of
principal of any Note, if and to the extent not previously paid, when the same
becomes due and payable on its Series Final Maturity Date, the Issuer will, upon
demand of the Indenture Trustee, pay to it, for the benefit of the Holders of
the Notes of the affected Series, the whole amount then due and payable on such
Notes for principal and interest, with interest upon the overdue principal, and,
to the extent payment at such rate of interest shall be legally enforceable,
interest upon overdue installments of interest, at the applicable Note Interest
Rate borne by the Notes of such Series, and in addition thereto will pay such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee and its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such
amounts upon such demand, the Indenture Trustee, in its own name and as trustee
of an express trust, may institute a Proceeding for the collection of the sums
so due and unpaid, and may prosecute such Proceeding to judgment or final
decree, and may enforce the same against the Issuer or other obligor upon such
Notes and collect in the manner provided by law out of the property of the
Issuer or other obligor upon such Notes, wherever situated, the moneys adjudged
or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the
Indenture Trustee may, as more particularly provided in Section 5.05, in its
discretion, proceed to
44
protect and enforce its rights and the rights of the Noteholders of the affected
Series, by such appropriate Proceedings as the Indenture Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy or
legal or equitable right vested in the Indenture Trustee by this Indenture or by
law.
(d) In case there shall be pending, relative to the
Issuer or any other obligor upon the Notes of the affected Series, or any Person
having or claiming an ownership interest in the Collateral, Proceedings under
Title 11 of the United States Code or any other applicable federal or state
bankruptcy, insolvency or other similar law, or in case a receiver, conservator,
assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator,
custodian or similar official shall have been appointed for or taken possession
of the Issuer or its property or such other obligor or Person, or in case of any
other comparable judicial Proceedings relative to the Issuer or other obligor
upon the Notes of such Series, or to the creditors or property of the Issuer or
such other obligor, the Indenture Trustee, irrespective of whether the principal
of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section 5.04, shall be
entitled and empowered, by intervention in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole
amount of principal and interest owing and unpaid in respect of the
Notes of such Series and to file such other papers or documents as may
be necessary or advisable in order to have the claims of the Indenture
Trustee (including any claim for reasonable compensation to the
Indenture Trustee and each predecessor Indenture Trustee, and their
respective agents, attorneys and counsel, and for reimbursement of all
expenses and liabilities incurred, and all advances made, by the
Indenture Trustee and each predecessor Indenture Trustee, except as a
result of negligence or bad faith) and of the Noteholders of such
Series allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations,
to vote on behalf of the Holders of Notes of such Series in any
election of a trustee, a standby trustee or Person performing similar
functions in any such Proceedings;
(iii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute all amounts
received with respect to the claims of the Noteholders of such Series
and of the Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims
of the Indenture Trustee or the Holders of Notes of such Series allowed
in any judicial Proceedings relative to the Issuer, its creditors and
its property;
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and any trustee, receiver, conservator, liquidator, custodian, assignee,
sequestrator or other similar official in any such Proceeding is hereby
authorized by each of such Noteholders to make payments to the Indenture
Trustee, and, in the event that the Indenture Trustee shall consent to the
making of payments directly to such Noteholders, to pay to the Indenture Trustee
such amounts as shall be sufficient to cover reasonable compensation to the
Indenture Trustee, each predecessor Indenture Trustee and their respective
agents, attorneys and counsel, and all other expenses and liabilities incurred,
and all advances made, by the Indenture Trustee and each predecessor Indenture
Trustee except as a result of negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize
the Indenture Trustee to authorize or consent to or vote for or accept or adopt
on behalf of any Noteholder any plan of reorganization, arrangement, adjustment
or composition affecting the Notes or the rights of any Holder thereof or any
Controlling Entity or to authorize the Indenture Trustee to vote in respect of
the claim of any Noteholder in any such proceeding except, as aforesaid, to vote
for the election of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under
this Indenture, or under any of the Notes, may be enforced by the Indenture
Trustee without the possession of any of the Notes or the production thereof in
any trial or other Proceedings relative thereto, and any such action or
Proceedings instituted by the Indenture Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment, subject to the
payment of the expenses, disbursements and compensation of the Indenture
Trustee, each predecessor Indenture Trustee and their respective agents and
attorneys, shall be for the benefit of the Holders of the Notes of the affected
Series as provided herein.
(g) In any Proceedings brought by the Indenture Trustee
(and also any Proceedings involving the interpretation of any provision of this
Indenture to which the Indenture Trustee shall be a party), the Indenture
Trustee shall be held to represent all the Holders of the Notes of the affected
Series, and it shall not be necessary to make any such Noteholder a party to any
such Proceedings.
Section 5.05. Remedies; Priorities.
(a) If an Event of Default shall have occurred and be
continuing, the Indenture Trustee may do one or more of the following:
(i) institute Proceedings in its own name and as trustee
of an express trust for the collection of all amounts then payable on
the Notes of the affected Series or under this Indenture with respect
thereto, whether by declaration or otherwise, enforce any judgment
obtained, and collect from the Issuer and any other obligor upon such
Notes moneys adjudged due;
46
(ii) take any other appropriate action to protect and
enforce the rights and remedies of the Indenture Trustee and the
Holders of the Notes of the affected Series;
(iii) at its own election or at the direction of not less
than 66-2/3% of the Outstanding Amount of each Class of the Notes of
such Series, institute foreclosure Proceedings from time to time with
respect to the portion of the Collateral which secures such Notes by
causing the Trust to sell Principal Receivables from the related Pool
in an amount equal to the Invested Amount with respect to the
accelerated Series of Notes and the related Finance Charge and
Administrative Receivables in accordance with Section 5.16 hereof, but
only if the Indenture Trustee determines that the proceeds of such sale
will be sufficient to pay principal of and interest on such Notes in
full;
(iv) at the direction of not less than 66-2/3% of the
Outstanding Amount of each Class of the Notes of such Series, institute
foreclosure Proceedings from time to time with respect to the portion
of the Collateral which secures such Notes, regardless of the
sufficiency of the proceeds thereof, by causing the Trust to sell
Principal Receivables from the related Pool in an amount equal to the
Invested Amount with respect to the accelerated Series of Notes and the
related Finance Charge and Administrative Receivables in accordance
with Section 5.16 hereof (each of the actions described in clauses
(iii) and (iv) a "FORECLOSURE REMEDY");
In determining such sufficiency or insufficiency with respect
to clause (iii) and (iv), the Indenture Trustee may, but need not, obtain and
rely upon an opinion of an Independent investment banking or accounting firm of
national reputation as to the feasibility of such proposed action and as to the
sufficiency of the Collateral for such purpose.
(b) If the Indenture Trustee collects any money or property
pursuant to this Article V following the acceleration of the maturities of the
Notes of the affected Series pursuant to Section 5.03 (so long as such
declaration shall not have been rescinded or annulled), it shall pay out the
money or property in the following order:
FIRST: to the Indenture Trustee for amounts due pursuant to
Section 6.07;
SECOND: if Household Finance Corporation or an Affiliate of
Household Finance Corporation is no longer the Servicer, to the Servicer for
amounts due and unpaid to such Servicer with respect to the Servicing Fee;
THIRD: to Holders of the Notes of such Series for amounts
due and unpaid on such Notes for interest, ratably, without preference or
priority of any kind (except to the extent different priorities are established
for a Series in the applicable Indenture Supplement), according to the amounts
due and payable on such Notes for interest;
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FOURTH: to Holders of the Notes of such Series for amounts
due and unpaid on such Notes for principal, ratably, without preference or
priority of any kind (except to the extent different priorities are established
for a Series in the applicable Indenture Supplement), according to the amounts
due and payable on such Notes for principal;
FIFTH: to the Series Enhancer, if any, for such Series for
payment of any amounts due to such Series Enhancement;
SIXTH: if Household Finance Corporation or an Affiliate of
Household Finance Corporation is the Servicer, to the Servicer for amounts due
and unpaid to such Servicer with respect to the Servicing Fee and then to the
Administrator for amounts due and unpaid to the Administrator with respect to
the Administration Fee; and
SEVENTH: to the Owner Trustee for distribution pursuant to
subsection 2.11 of the Trust Agreement.
(c) The Indenture Trustee may, upon notification to the
Issuer, fix a record date and payment date for any payment to Noteholders of the
affected Series pursuant to this Section. At least fifteen (15) days before such
record date, the Indenture Trustee shall mail or send by facsimile to each such
Noteholder a notice that states the record date, the payment date and the amount
to be paid.
(d) In addition to the application of money or property
referred to in subsection 5.05(b) for an accelerated Series, amounts then held
in the Collection Account, Special Funding Account or any Series Accounts for
such Series and any amounts available under the Series Enhancement for such
Series shall be used to make payments to the Holders of the Notes of such Series
and the Series Enhancer for such Series in accordance with the terms of this
Indenture, the related Indenture Supplement and the Series Enhancement for such
Series. Following the sale of the Collateral (or portion thereof) for a Series
and the application of the proceeds of such sale to such Series and the
application of the amounts then held in the Collection Account, the Special
Funding Account and any Series Accounts for such Series as are allocated to such
Series and any amounts available under the Series Enhancement for such Series,
such Series shall no longer be entitled to any allocation of Collections or
other property constituting the Collateral under this Indenture, and the Notes
of such Series shall no longer be Outstanding.
Section 5.06. Optional Preservation of the Collateral.
If the Notes of any Series have been declared to be due and
payable under Section 5.03 following an Event of Default and such declaration
and its consequences have not been rescinded and annulled, and the Indenture
Trustee has not received direction from the Noteholders pursuant to Section
5.12, the Indenture Trustee may, but need not, elect to maintain possession of
the Collateral. It is the desire of the parties hereto and the Noteholders that
there be at all times sufficient funds for the payment of
48
principal of and interest on the Notes, and the Indenture Trustee shall take
such desire into account when determining whether or not to maintain possession
of the Collateral. In determining whether to maintain possession of the
Collateral, the Indenture Trustee may, but need not, obtain and rely upon an
opinion of an Independent investment banking or accounting firm of national
reputation as to the feasibility of such proposed action and as to the
sufficiency of the Collateral for such purpose.
Section 5.07. Limitation on Suits.
No Noteholder shall have any right to institute any
Proceedings, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless:
(a) subject to the provisions of Section 5.05(a)(iv) and
5.12 hereof, the Holders of not less than 25% of the Outstanding Amount
of each affected Series of Notes have made written request to the
Indenture Trustee to institute such proceeding in its own name as
indenture trustee;
(b) such Noteholder or Noteholders have previously given
written notice to the Indenture Trustee of a continuing Event of
Default;
(c) such Noteholder or Noteholders have offered to the
Indenture Trustee reasonable indemnity against the costs, expenses and
liabilities to be incurred in compliance with such request;
(d) the Indenture Trustee for 60 days after its receipt
of such notice, request and offer of indemnity has failed to institute
any such Proceeding; and
(e) no direction inconsistent with such written request
has been given to the Indenture Trustee during such 60-day period by
such Noteholder or Noteholders of such Series;
it being understood and intended that no one or more Noteholders of the affected
Series shall have any right in any manner whatever by virtue of, or by availing
of, any provision of this Indenture to affect, disturb or prejudice the rights
of any other Noteholders of such Series or to obtain or to seek to obtain
priority or preference over any other Noteholders of such Series or to enforce
any right under this Indenture, except in the manner herein provided and for the
equal and ratable benefit of all the Noteholders of such Series.
In the event the Indenture Trustee shall receive conflicting
or inconsistent requests and indemnity from two or more groups of Noteholders of
such affected Series, each representing less than a majority of the Outstanding
Amount of such Notes, the Indenture Trustee in its sole discretion may determine
what action, if any, shall be taken notwithstanding any other provisions of this
Indenture.
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Section 5.08. Unconditional Rights of Noteholders to Receive
Principal and Interest.
Notwithstanding any other provision in this Indenture, each
Noteholder shall have the right which is absolute and unconditional to receive
payment of the principal of and interest in respect of such Note as such
principal and interest becomes due and payable and to institute suit for the
enforcement of any such payment, and such right shall not be impaired without
the consent of such Noteholder.
Section 5.09. Restoration of Rights and Remedies.
If the Indenture Trustee or any Noteholder has instituted any
Proceeding to enforce any right or remedy under this Indenture and such
Proceeding has been discontinued or abandoned, or has been determined adversely
to the Indenture Trustee or such Noteholder, then and in every such case the
Issuer, the Indenture Trustee and the Noteholder shall, subject to any
determination in such Proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Indenture Trustee and the Noteholders shall continue as though no such
Proceeding had been instituted.
Section 5.10. Rights and Remedies Cumulative.
No right, remedy, power or privilege herein conferred upon or
reserved to the Indenture Trustee or to the Noteholders is intended to be
exclusive of any other right, remedy, power or privilege, and every right,
remedy, power or privilege shall, to the extent permitted by law, be cumulative
and in addition to every other right, remedy, power or privilege given hereunder
or now or hereafter existing at law or in equity or otherwise. The assertion or
exercise of any right or remedy shall not preclude any other further assertion
or the exercise of any other appropriate right or remedy.
Section 5.11. Delay or Omission Not Waiver.
No failure to exercise and no delay in exercising, on the part
of the Indenture Trustee or of any Noteholder or other Person, any right or
remedy occurring hereunder upon any Event of Default shall impair any such right
or remedy or constitute a waiver thereof of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article V or by law
to the Indenture Trustee or the Noteholders may be exercised from time to time,
and as often as may be deemed expedient, by the Indenture Trustee or the
Noteholders, as the case may be.
Section 5.12. Rights of Noteholders to Direct Indenture
Trustee.
Subject to the provisions of Section 5.05(a)(iv), the Holders
of a majority of the Outstanding Amount of any Outstanding Series of Notes,
shall have the right to direct the time, method and place of conducting any
Proceeding for any remedy available to the Indenture Trustee with respect to the
Notes or exercising any trust or power conferred on the Indenture Trustee with
respect to the Notes; provided, however, that subject to Section 6.01:
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(a) the Indenture Trustee shall have the right to decline
any such direction if the Indenture Trustee, after being advised by
counsel, determines that the action so directed is in conflict with any
rule of law or with this Indenture, and
(b) the Indenture Trustee shall have the right to decline
any such direction if the Indenture Trustee in good faith shall, by a
Responsible Officer of the Indenture Trustee, determine that the
Proceedings so directed would be illegal or involve the Indenture
Trustee in personal liability or be unjustly prejudicial to the
Noteholders not parties to such direction.
Section 5.13. Waiver of Past Defaults.
Prior to the declaration of the acceleration of the maturity
of the Notes of the affected Series as provided in Section 5.03, the Holders of
a majority of the Outstanding Amount of the Notes of such Series, may, on behalf
of all related Noteholders waive in writing any past default with respect to
such Notes and its consequences, except a default:
(a) in the payment of the principal or interest in
respect of any Note of such Series, or
(b) in respect of a covenant or provision hereof that
under Section 10.02 hereof cannot be modified or amended without the
consent of the Noteholder of each Outstanding Note affected.
Upon any such written waiver, such default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Indenture; but no such waiver shall extend to
any subsequent or other default or impair any right consequent thereon. After a
declaration of acceleration, only waivers pursuant to Section 5.03 are
permitted.
Section 5.14. Undertaking for Costs.
All parties to this Indenture agree, and each Noteholder by
its acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Indenture Trustee for any action
taken, suffered or omitted by it as Indenture Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to any suit instituted by the
Indenture Trustee, or to any suit instituted by any Noteholder, or group of
Noteholders, (in compliance with Section 5.08 hereof), holding in the aggregate
more than 10% of the Outstanding Amount of the Notes of the affected Series, or
to any suit instituted by any Noteholder for the enforcement of the payment of
the principal or interest in respect of any Note on or after the Distribution
Date on which any of such amounts was due (or, in the case of redemption, on or
after the applicable Redemption Date).
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Section 5.15. Waiver of Stay or Extension Laws.
The Issuer covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force, which may adversely
affect the covenants or the performance of this Indenture; and the Issuer (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Indenture Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
Section 5.16. Sale of Receivables.
(a) The method, manner, time, place and terms of any sale
of Receivables (or interest therein) pursuant to Section 5.05(a) shall be
commercially reasonable. The Indenture Trustee may from time to time postpone
any sale by public announcement made at the time and place of such sale. The
Indenture Trustee hereby expressly waives its right to any amount fixed by law
as compensation for any sale.
(b) The Indenture Trustee is hereby irrevocably appointed
the agent and attorney-in-fact of the Issuer in connection with any sale of
Receivables pursuant to Section 5.05(a)(iii) and (iv). No purchaser or
transferee at any such sale shall be bound to ascertain the Indenture Trustee's
authority, inquire into the satisfaction of any conditions precedent or see to
the application of any monies.
(c) In its exercise of the Foreclosure Remedy pursuant to
Section 5.05(a), the Indenture Trustee shall solicit bids for the sale of
Principal Receivables in an amount equal to the Invested Amount with respect to
the affected Series of Notes at the time of sale and the related Finance Charge
and Administrative Receivables (or interests therein). The Transferor or any of
its Affiliates shall be entitled to participate in such bidding process;
provided, however, to the extent that the Transferor or any of its Affiliates
retains an interest in the Transferor Amount, neither the Transferor nor any
such Affiliates shall be entitled to participate in the bidding of such sale.
The Indenture Trustee shall sell such Receivables (or interests therein) to the
bidder with the highest cash purchase offer. The proceeds of any such sale shall
be applied in accordance with Section 5.05(b).
Section 5.17. Action on Notes.
The Indenture Trustee's right to seek and recover judgment on
the Notes or under this Indenture shall not be affected by the seeking or
obtaining of or application for any other relief under or with respect to this
Indenture. Neither the lien of this Indenture nor any rights or remedies of the
Indenture Trustee or the Noteholders shall be impaired by the recovery of any
judgment by the Indenture Trustee against the Issuer or by the levy of any
execution under such judgment upon any portion of the Collateral or
52
upon any of the assets of the Issuer. Any money or property collected by the
Indenture Trustee shall be applied as specified in the applicable Indenture
Supplement.
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.01. Duties of the Indenture Trustee.
(a) If an Event of Default has occurred and is continuing
and a Trustee Officer shall have actual knowledge or written notice of such
Event of Default, the Indenture Trustee shall, prior to the receipt of
directions, if any, from the Holders of not less than a majority of the
Outstanding Amount of the Notes or as otherwise provided herein in the case of
certain directions, exercise the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such
duties and only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read into
this Indenture against the Indenture Trustee; and
(ii) in the absence of bad faith or negligence on its
part, the Indenture Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein,
upon certificates or opinions furnished to the Indenture Trustee and
conforming to the requirements of this Indenture; provided, however,
the Indenture Trustee, upon receipt of any resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments
furnished to the Indenture Trustee which are specifically required to
be furnished pursuant to any provision of this Indenture or any
Indenture Supplement, shall examine them to determine whether they
substantially conform to the requirements of this Indenture or any
Indenture Supplement. The Indenture Trustee shall give prompt written
notice to the Noteholders and each Rating Agency of any material lack
of conformity of any such instrument to the applicable requirements of
this Indenture or any Indenture Supplement discovered by the Indenture
Trustee.
(c) In case an Amortization Event has occurred and is
continuing and a Trustee Officer shall have actual knowledge or written notice
of such Amortization Event, the Indenture Trustee shall, prior to the receipt of
directions, if any, from a majority of the Outstanding Amount of the Notes,
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
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(d) No provision of this Indenture shall be construed to
relieve the Indenture Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
(i) this subsection shall not be construed to limit the
effect of subsection (a) of this Section;
(ii) the Indenture Trustee shall not be liable for any
error of judgment made in good faith by a Trustee Officer, unless it
shall be proved that the Indenture Trustee was negligent in
ascertaining the pertinent facts; and
(iii) the Indenture Trustee shall not be liable with
respect to any action taken, suffered or omitted to be taken by it in
good faith in accordance with the Indenture and/or the direction of the
Holders of a majority of the Outstanding Amount of the Notes of each
Outstanding Series of Notes relating to the time, method and place of
conducting any proceeding for any remedy available to the Indenture
Trustee, or for exercising any trust or power conferred upon the
Indenture Trustee, under this Indenture. The Indenture Trustee shall
not be liable for any action taken, suffered or omitted to be taken by
it in good faith in accordance with the direction of the Servicer, the
Transferor or the Trust in compliance with the terms of this Agreement.
(e) No provision of this Indenture shall require the
Indenture Trustee 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.
(f) Every provision of this Indenture that in any way
relates to the Indenture Trustee is subject to subsections (a), (b), (c) and (d)
of this Section.
(g) Except as expressly provided in this Indenture and
the Transfer and Servicing Agreement, the Indenture Trustee shall have no power
to vary the Collateral, including, without limitation, by (i) accepting any
substitute payment obligation for a Receivable initially transferred to the
Trust under the Transfer and Servicing Agreement, (ii) adding any other
investment, obligation or security to the Trust or (iii) withdrawing from the
Trust any Receivable.
(h) The Indenture Trustee shall have no responsibility or
liability for investment losses on Eligible Investments.
(i) The Indenture Trustee shall notify each Rating Agency
(i) of any change in any rating of the Notes by any other Rating Agency of which
a Trust Officer of the Indenture Trustee has actual knowledge, (ii) immediately
of the occurrence of any actual or potential Event of Default or Amortization
Event of which a Trust Officer of the Indenture Trustee has actual knowledge or
has actual notice from the Servicer and (iii) monthly that no Event of Default
has occurred and are continuing.
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(j) For all purposes under this Indenture, the Indenture
Trustee shall not be deemed to have notice or knowledge of any Event of Default,
Amortization Event or Servicer Default unless a Trustee Officer assigned to and
working in the Corporate Trust Office of the Indenture Trustee has actual
knowledge thereof or has received written notice thereof. For purposes of
determining the Indenture Trustee's responsibility and liability hereunder, any
reference to an Event of Default, Amortization Event or Servicer Default shall
be construed to refer only to such event of which the Indenture Trustee is
deemed to have notice as described in this Section.
Section 6.02. Notice of Amortization Event or Event of
Default.
Upon the occurrence of any Amortization Event or Event of
Default of which a Trustee Officer has actual knowledge or has received notice
thereof, the Indenture Trustee shall transmit by mail to all Noteholders as
their names and addresses appear on the Note Register and each Controlling
Entity and the Rating Agencies, notice of such Amortization Event or Event of
Default hereunder known to the Indenture Trustee within 30 days after it occurs
or within ten Business Days after it receives such notice or obtains actual
notice, if later.
Section 6.03. Rights of Indenture Trustee.
Except as otherwise provided in Section 6.01 hereof:
(a) the Indenture Trustee may conclusively rely and shall
be fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, note or other paper or document reasonably believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
(b) whenever in the administration of this Indenture the
Indenture Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the Indenture
Trustee (unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, rely upon an Officer's Certificate of the
Issuer. The Issuer shall provide a copy of such Officer's Certificate to the
Noteholders at or prior to the time the Indenture Trustee receives such
Officer's Certificate;
(c) as a condition to the taking, suffering or omitting
of any action by it hereunder, the Indenture Trustee may consult with counsel
and the advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in-good faith and in reliance thereon;
(d) the Indenture Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Indenture or to honor
the request or direction of any of the Noteholders pursuant to this Indenture,
unless such Noteholders shall have offered to the Indenture Trustee reasonable
security or indemnity against the costs,
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expenses and liabilities which might be incurred by it in compliance with such
request or direction;
(e) the Indenture Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, note or other paper or document, but the Indenture Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Indenture Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Issuer and the Servicer, personally or by
agent or attorney;
(f) the Indenture Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by or
through agents, attorneys, custodians or nominees and the Indenture Trustee
shall not be responsible for (i) any misconduct or negligence on the part of any
agent, attorney, custodians or nominees appointed with due care by it hereunder
or (ii) the supervision of such agents, attorneys, custodians or nominees after
such appointment with due care;
(g) the Indenture Trustee shall not be liable for any
actions taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights conferred upon the Indenture
Trustee by this Indenture; and
(h) in the event that the Indenture Trustee is also
acting as Paying Agent and Transfer Agent and Registrar, the rights and
protections afforded to the Indenture Trustee pursuant to this Article VI shall
also be afforded to such Paying Agent and Transfer Agent and Registrar.
Section 6.04. Not Responsible for Recitals or Issuance of
Notes.
The recitals contained herein and in the Notes, except the
certificate of authentication of the Indenture Trustee, shall be taken as the
statements of the Issuer, and the Indenture Trustee assumes no responsibility
for their correctness. The Indenture Trustee makes no representation as to the
validity or sufficiency of the Agreement, the Notes, or any related document.
The Indenture Trustee shall not be accountable for the use or application by the
Issuer of the proceeds from the Notes.
Section 6.05. May Hold Notes.
The Indenture Trustee, any Paying Agent, Transfer Agent and
Registrar or any other agent of the Issuer, in its individual or any other
capacity, may become the owner or pledgee of Notes and may otherwise deal with
the Issuer with the same rights it would have if it were not Indenture Trustee,
Paying Agent, Transfer Agent and Registrar or such other agent.
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Section 6.06. Money Held in Trust.
Money held by the Indenture Trustee in trust hereunder need
not be segregated from other funds held by the Indenture Trustee in trust
hereunder except to the extent required herein or required by law. The Indenture
Trustee shall be under no liability for interest on any money received by it
hereunder except as otherwise agreed upon in writing by the Indenture Trustee
and the Issuer.
Section 6.07. Compensation, Reimbursement and Indemnification.
Pursuant to the Transfer and Servicing Agreement, the Issuer
shall direct the Servicer to pay and the Servicer shall pay to the Indenture
Trustee from time to time reasonable compensation for its services. The
Indenture Trustee's compensation shall not be limited by any law on compensation
of a trustee of an express trust. Pursuant to the Transfer and Servicing
Agreement, the Servicer shall reimburse the Indenture Trustee for all reasonable
out-of-pocket expenses incurred or made by it, including costs of collection, in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation and expenses, disbursements and advances of the
Indenture Trustee's agents, counsel, accountants and experts. Pursuant to the
Transfer and Servicing Agreement, the Issuer shall direct the Servicer to
indemnify and the Servicer shall indemnify the Indenture Trustee against any and
all loss, liability or expense (including the fees of either in-house counsel or
outside counsel (which the Indenture Trustee shall determine), but not both)
incurred by it in connection with the administration of this trust and the
performance of its duties hereunder. The Indenture Trustee shall notify the
Issuer and the Servicer promptly of any claim for which it may seek indemnity.
Failure by the Indenture Trustee to so notify the Issuer and the Servicer shall
not relieve the Issuer or the Servicer of its obligations hereunder unless such
loss, liability or expense could have been avoided with such prompt notification
and then only to the extent of such loss, expense or liability which could have
been so avoided. Pursuant to the Transfer and Servicing Agreement, the Servicer
shall defend any claim against the Indenture Trustee, the Indenture Trustee may
have separate counsel and, if it does, the Servicer shall pay the fees and
expenses of such counsel. Neither the Issuer nor the Servicer need reimburse any
expense or indemnify against any loss, liability or expense incurred by the
Indenture Trustee through the Indenture Trustee's own willful misconduct,
negligence or bad faith.
The Servicer's payment obligations to the Indenture Trustee
pursuant to this Section shall survive the discharge of this Indenture. When the
Indenture Trustee incurs expenses after the occurrence of a Default specified in
Section 5.02(c) or (d) with respect to the Issuer, the expenses are intended to
constitute expenses of administration under Title 11 of the United States Code
or any other applicable federal or state bankruptcy, insolvency or similar law.
Section 6.08. Replacement of Indenture Trustee.
No resignation or removal of the Indenture Trustee and no
appointment of a successor Indenture Trustee shall become effective until the
acceptance of appointment
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by the successor Indenture Trustee pursuant to this Section. The Indenture
Trustee may resign at any time by giving 30 days' written notice to the Issuer
and each Controlling Entity. The Holders of a majority of the Outstanding Amount
of the Notes may remove the Indenture Trustee with the consent of each
Controlling Entity by so notifying the Indenture Trustee and may appoint a
successor Indenture Trustee. The Owner Trustee at the direction of the
Transferor or any Controlling Entity shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) the Indenture Trustee is adjudged a bankrupt or
insolvent;
(iii) a receiver of the Indenture Trustee or of its
property shall be appointed, or any public officer takes charge of the
Indenture Trustee or its property or its affairs for the purpose of
rehabilitation, conservation or liquidation; or
(iv) the Indenture Trustee otherwise becomes legally
unable to act.
If the Indenture Trustee resigns or is removed or if a vacancy exists in the
office of Indenture Trustee for any reason (the Indenture Trustee in such event
being referred to herein as the retiring Indenture Trustee), the Owner Trustee
at the direction of the Transferor and with the consent of each Controlling
Entity shall promptly appoint a successor Indenture Trustee.
A successor Indenture Trustee shall deliver a written
acceptance of its appointment to the retiring Indenture Trustee, the Issuer,
each Controlling Entity and to the Administrator. Thereupon the resignation or
removal of the retiring Indenture Trustee shall become effective, and the
successor Indenture Trustee shall have all the rights, powers and duties of the
Indenture Trustee under this Indenture. The successor Indenture Trustee shall
mail a notice of its succession to Noteholders. The retiring Indenture Trustee
shall promptly transfer all property held by it as Indenture Trustee to the
successor Indenture Trustee.
If a successor Indenture Trustee does not take office within
60 days after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer, any Controlling Entity or the Noteholders
representing a majority of the Outstanding Amount of the Notes may petition any
court of competent jurisdiction for the appointment of a successor Indenture
Trustee.
If the Indenture Trustee fails to comply with Section 6.11,
any Noteholder or any Controlling Entity may petition any court of competent
jurisdiction for the removal of the Indenture Trustee and the appointment of a
successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee
pursuant to this Section, the Issuer's obligations under Section 6.07 shall
continue for the benefit of the retiring Indenture Trustee.
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Section 6.09. Successor Indenture Trustee by Merger.
If the Indenture Trustee consolidates with, merges or converts
into, or transfers all or substantially all its corporate trust business or
assets to, another corporation or banking association, the resulting, surviving
or transferee corporation or banking association without any further act shall
be the successor Indenture Trustee; provided, that such corporation or banking
association shall be otherwise qualified and eligible under Section 6.11. The
Indenture Trustee shall provide the Rating Agencies and each Controlling Entity
written notice of any such transaction promptly after such transaction.
In case at the time such successor or successors by merger,
conversion, consolidation or transfer to the Indenture Trustee shall succeed to
the trusts created by this Indenture any of the Notes shall have been
authenticated but not delivered, any such successor to the Indenture Trustee may
adopt the certificate of authentication of any predecessor Indenture Trustee and
deliver such Notes so authenticated; and in case at that time any of the Notes
shall not have been authenticated, any successor to the Indenture Trustee may
authenticate such Notes in the name of the successor to the Indenture Trustee;
and in all such cases such certificates shall have the full force which it is
anywhere in the Notes or in this Indenture provided that the certificate of the
Indenture Trustee shall have.
Section 6.10. Appointment of Co-Indenture Trustee or Separate
Indenture Trustee.
(a) Notwithstanding any other provisions of this
Indenture, at any time, for the purpose of meeting any legal requirement of any
jurisdiction in which any part of the Collateral may at the time be located, the
Indenture Trustee shall have the power and may execute and deliver all
instruments to appoint one or more Persons to act as a co-trustee or
co-trustees, or separate trustee or separate trustees, of all or any part of the
Collateral, and to vest in such Person or Persons, in such capacity and for the
benefit of the Noteholders, such title to the Collateral, or any part hereof,
and, subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Indenture Trustee may consider necessary
or desirable. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 6.11, and no
notice to Noteholders of the appointment of any co-trustee or separate trustee
shall be required under Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the
extent permitted by law, be appointed and act subject to the following
provisions and conditions:
(i) all rights, powers, duties and obligations conferred
or imposed upon the Indenture Trustee shall be conferred or imposed
upon and exercised or performed by the Indenture Trustee and such
separate trustee or co-trustee jointly (it being understood that such
separate trustee or co-trustee is not authorized to act separately
without the Indenture Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any particular
act or acts are to be
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performed the Indenture Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties
and obligations (including the holding of title to the Collateral or
any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the
Indenture Trustee shall be deemed to have been given to each of the then
separate trustees and co-trustees, as effectively as if given to each of them.
Every instrument appointing any separate trustee or co-trustee shall refer to
this Indenture and the conditions of this Article VI. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Indenture Trustee or separately, as may be provided therein,
subject to all the provisions of this Indenture, specifically including every
provision of this Indenture relating to the conduct of, affecting the liability
of, or affording protection to, the Indenture Trustee. Every such instrument
shall be filed with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time
constitute the Indenture Trustee, its agent or attorney-in-fact with full power
and authority, to the extent not prohibited by law, to do any lawful act under
or in respect of this Indenture on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall vest
in and be exercised by the Indenture Trustee, to the extent permitted by law,
without the appointment of a new or successor trustee.
Section 6.11. Eligibility; Disqualification.
The Indenture Trustee shall at all times satisfy the
requirements of TIA Section 310(a). The Indenture Trustee shall have a combined
capital and surplus of at least $50,000,000 as set forth in its most recent
published annual report of condition and its long-term unsecured debt shall be
rated at least Baa3 by Moody's, BBB- by Standard & Poor's and BBB- by Fitch. The
Indenture Trustee shall comply with TIA Section 310(b), including the optional
provision permitted by the second sentence of TIA Section 310(b)(9); provided,
however, that there shall be excluded from the operation of TIA Section
310(b)(1) any indenture or indentures under which other securities of the Issuer
are outstanding if the requirements for such exclusion set forth in TIA Section
310(b)(1) are met.
Section 6.12. Preferential Collection of Claims Against.
The Indenture Trustee shall comply with TIA Section 311(a),
excluding any creditor relationship listed in TIA Section 311(b). An Indenture
Trustee who has resigned or been removed shall be subject to TIA Section 311(a)
to the extent indicated.
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Section 6.13. Tax Returns.
In the event the Trust shall be required to file tax returns,
the Servicer shall prepare or shall cause to be prepared such tax returns and
shall provide such tax returns to the Owner Trustee for signature at least five
days before such tax returns are due to be filed. The Servicer, in accordance
with the terms of each Indenture Supplement, shall also prepare or shall cause
to be prepared all tax information required by law to be distributed to
Noteholders and shall deliver such information to the Owner Trustee at least
five days prior to the date it is required by law to be distributed to
Noteholders. The Owner Trustee, upon request, will furnish the Servicer with all
such information known to the Owner Trustee as may be reasonably required in
connection with the preparation of all tax returns of the Trust, and shall, upon
request, execute such returns. In no event shall the Owner Trustee be liable for
any liabilities, costs or expenses of the Trust or any Noteholder arising under
any tax law, including, without limitation, federal, state or local income or
excise taxes or any other tax imposed on or measured by income (or any interest
or penalty with respect thereto arising from a failure to comply therewith).
Section 6.14. Representations and Covenants of the Indenture
Trustee.
The Indenture Trustee represents, warrants and covenants that:
(a) The Indenture Trustee is a national banking
association duly organized and validly existing under the laws of the United
States;
(b) The Indenture Trustee has full power and authority to
deliver and perform this Indenture and has taken all necessary action to
authorize the execution, delivery and performance by it of this Indenture and
other Transaction Documents to which it is a party; and
(c) Each of this Indenture and other Transaction
Documents to which it is a party has been duly executed and delivered by the
Indenture Trustee and constitutes its legal, valid and binding obligation in
accordance with its terms.
Section 6.15. Custody of the Collateral.
The Indenture Trustee shall hold such of the Collateral as
consists of instruments, deposit accounts, negotiable documents, money, goods,
letters of credit, and advices of credit in the State of Minnesota. The
Indenture Trustee shall hold such of the Collateral as constitutes investment
property through the Securities Intermediary, and ▇▇▇▇▇ Fargo Bank Minnesota,
National Association, as the initial Securities Intermediary hereby agrees (and
any successor Securities Intermediary before being appointed as Securities
Intermediary shall agree) with the Indenture Trustee that (a) such investment
property shall at all times be credited to a securities account of the Indenture
Trustee, (b) such Securities Intermediary shall treat the Indenture Trustee as
entitled to exercise the rights that comprise each financial asset credited to
such securities account, (c) all property credited to such securities account
shall be treated as financial assets, (d) such Securities Intermediary shall
comply with entitlement orders originated by the Indenture
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Trustee without the further consent of any other person or entity, (e) such
Securities Intermediary will not agree with any person or entity other than the
Indenture Trustee to comply with entitlement orders originated by such other
person or entity, (f) such securities accounts and the property credited thereto
shall not be subject to any lien, security interest, or right of set-off in
favor of such Securities Intermediary or anyone claiming through it (other than
the Indenture Trustee), and (g) such agreement (including this agreement by
▇▇▇▇▇ Fargo Bank Minnesota, National Association as the initial Securities
Intermediary) shall be governed by the laws of the State of New York. Terms used
in this Section that are defined in the Minnesota UCC or the New York UCC, as
applicable, and not otherwise defined herein shall have the meaning set forth in
the Minnesota UCC or the New York UCC, as applicable. Except as permitted by
this Section 6.15, the Indenture Trustee shall not hold any part of the
Collateral through an agent or nominee.
ARTICLE VII
NOTEHOLDERS' LIST AND REPORTS BY INDENTURE TRUSTEE AND ISSUER
Section 7.01. Issuer to Furnish Indenture Trustee Names and
Addresses of Noteholders.
The Issuer will furnish or cause to be furnished to the
Indenture Trustee (a) upon each transfer of a Note, a list, in such form as the
Indenture Trustee may reasonably require, of the names, addresses and taxpayer
identification numbers of the Noteholders as they appear on the Note Register as
of the most recent Record Date, and (b) at such other times, as the Indenture
Trustee may request in writing, within 10 days after receipt by the Issuer of
any such request, a list of similar form and content as of a date not more than
10 days prior to the time such list is furnished; provided, however, that for so
long as the Indenture Trustee is the Transfer Agent and Registrar, no such list
should be required to be furnished.
Section 7.02. Preservation of Information; Communications to
Noteholders.
(a) The Indenture Trustee shall preserve, in as current a
form as is reasonably practicable, the names and addresses of the Noteholders
contained in the most recent list furnished to the Indenture Trustee as provided
in Section 7.01 and the names, addresses and taxpayer identification numbers of
the Noteholders received by the Indenture Trustee in its capacity as Transfer
Agent and Registrar. The Indenture Trustee may destroy any list furnished to it
as provided in Section 7.01 upon receipt of a new list so furnished.
(b) Noteholders may communicate, pursuant to TIA
Section 312(b), with other Noteholders with respect to their rights under this
Indenture or under the Notes.
(c) The Issuer, the Indenture Trustee and the Transfer
Agent and Registrar shall have the protection of TIA Section 312(c).
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Section 7.03. Reports by Issuer.
(a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after
the Issuer is required to file the same with the Commission, copies of
the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission
may from time to time by rules and regulations prescribe) which the
Issuer may be required to file with the Commission pursuant to Section
13 or 15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the Commission in
accordance with rules and regulations prescribed from time to time by
the Commission such additional information, documents and reports with
respect to compliance by the Issuer with the conditions and covenants
of this Indenture as may be required from time to time by such rules
and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture
Trustee shall transmit by mail to all Noteholders described in TIA
Section 313(c)) such summaries of any information, documents and
reports required to be filed by the Issuer pursuant to clauses (i) and
(ii) of this Section as may be required by rules and regulations
prescribed from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal
year of the Issuer shall end on December 31 of each year.
Section 7.04. Reports by Indenture Trustee.
If required by TIA Section 313(a), within 60 days after each
March 31 beginning with March 31, 2003, the Indenture Trustee shall mail to each
Noteholder as required by TIA Section 313(c) a brief report dated as of such
date that complies with TIA Section 313(a). The Indenture Trustee also shall
comply with TIA Section 313(b).
A copy of each report at the time of its mailing to
Noteholders shall be filed by the Indenture Trustee with the Commission and each
stock exchange, if any, on which the Notes are listed. The Issuer shall notify
the Indenture Trustee if and when the Notes are listed on any stock exchange.
Section 7.05. Notices.
All notices required to be given to the Noteholders shall be
given by publication at least once, if any Notes are listed on a stock exchange
and the rules of such stock exchange shall so require, in a publication meeting
the requirements of such stock exchange.
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ARTICLE VIII
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 8.01. Collection of Money.
Except as otherwise expressly provided herein and in the
related Indenture Supplement, the Indenture Trustee may demand payment or
delivery of, and shall receive and collect, directly and without intervention or
assistance of any fiscal agent or other intermediary, all money and other
property payable to or receivable by the Indenture Trustee pursuant to this
Indenture. The Indenture Trustee shall hold all such money and property received
by it in trust for the Noteholders and shall apply it as provided in this
Indenture. Except as otherwise expressly provided in this Indenture, if any
default occurs in the making of any payment or performance under the Transfer
and Servicing Agreement or any other Transaction Document, the Indenture Trustee
may, with the consent of each Controlling Entity, and shall, at the request of
the Holders of a majority of the Outstanding Amount of the Notes, take such
action as may be appropriate to enforce such payment or performance, including
the institution and prosecution of appropriate proceedings. Any such action
shall be without prejudice to any right to claim a Amortization Event or a
Default or Event of Default under this Indenture and to proceed thereafter as
provided in Article V hereof.
Section 8.02. Rights of Noteholders.
The Collateral shall secure the obligations of the Trust to
pay to the Holders of the Notes of each Series principal and interest and other
amounts payable pursuant to this Indenture and the related Indenture Supplement.
Except as specifically set forth in the Indenture Supplement with respect
thereto, the Notes of any Series or Class shall not have the right to payment
from any Series Account or Series Enhancement allocated for the benefit of any
other Series or Class.
Section 8.03. Establishment of Collection Account and Special
Funding Account.
The Servicer, for the benefit of the Noteholders, shall
establish and maintain for each Pool with the Indenture Trustee or its nominee
in the name of the Indenture Trustee, on behalf of the Trust, a Qualified
Account (including any subaccount thereof) bearing a designation clearly
indicating that the funds and other property credited thereto are held for the
benefit of the Noteholders relating to such Pool (the "COLLECTION ACCOUNT").
Where the Indenture or any Indenture Supplement employs the term "Collection
Account" such reference shall implicitly refer to the "Collection Account" of
the related Pool, unless explicitly otherwise provided. The Indenture Trustee
shall possess all right, title and interest in all monies, instruments,
investment property, documents, certificates of deposit and other property
credited from time to time to the Collection Account and in all proceeds,
earnings, income, revenue, dividends and distributions thereof for the benefit
of the Noteholders.
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Each Collection Account shall be under the sole dominion and
control of the Indenture Trustee for the benefit of the Noteholders relating to
such Pool. Except as expressly provided in this Indenture and the Transfer and
Servicing Agreement, the Servicer agrees that it shall have no right of setoff
or banker's lien against, and no right to otherwise deduct from, any funds held
in the Collection Account for any amount owed to it by the Indenture Trustee,
the Trust, any Noteholder or any Series Enhancer. If, at any time, the
Collection Account ceases to be a Qualified Account, the Indenture Trustee (or
the Servicer on its behalf) shall within 10 Business Days (or such longer
period, not to exceed 30 calendar days, as to which each Rating Agency may
consent) establish a new Collection Account meeting the conditions specified
above, transfer any monies, documents, instruments, investment property,
certificates of deposit and other property to such new Collection Account and
from the date such new Collection Account is established, it shall be the
"Collection Account." Pursuant to the authority granted to the Servicer in
subsection 3.01(b) of the Transfer and Servicing Agreement, the Servicer shall
have the power to instruct the Indenture Trustee to make withdrawals and
payments from the Collection Account for the purposes of carrying out the
Servicer's or the Indenture Trustee's duties hereunder and under the Transfer
and Servicing Agreement, as applicable. The Servicer shall reduce deposits into
the Collection Account payable by the Transferor on any Deposit Date to the
extent the Transferor is entitled to receive funds from the Collection Account
on such Deposit Date, but only to the extent such reduction would not reduce the
Transferor Amount to an amount less than the Required Transferor Amount.
Funds on deposit in the Collection Account (other than
investment earnings and amounts deposited pursuant to Sections 2.06, 6.01, or
7.01 of the Transfer and Servicing Agreement or Section 11.02 of this Agreement)
shall at the written direction of the Servicer be invested by the Indenture
Trustee in Eligible Investments selected by the Servicer. All such Eligible
Investments shall be held by the Indenture Trustee for the benefit of the
Noteholders pursuant to Section 6.15. Investments of funds representing
Collections collected during any Due Period shall be invested in Eligible
Investments that will mature so that such funds will be available no later than
the close of business on each monthly Transfer Date following such Due Period in
amounts sufficient to the extent of such funds to make the required
distributions on the following Distribution Date. No such Eligible Investment
shall be disposed of prior to its maturity; provided, however, that the
Indenture Trustee may sell, liquidate or dispose of any such Eligible Investment
before its maturity, at the written direction of the Servicer, if such sale,
liquidation or disposal would not result in a loss of all or part of the
principal portion of such Eligible Investment or if, prior to the maturity of
such Eligible Investment, a default occurs in the payment of principal, interest
or any other amount with respect to such Eligible Investment. On each
Distribution Date, all interest and other investment earnings (net of losses and
investment expenses) on funds on deposit in the Collection Account shall be paid
to the Transferor, except as otherwise specified in any Indenture Supplement.
The Indenture Trustee shall bear no responsibility or liability for any losses
resulting from investment or reinvestment of any funds in accordance with this
Section nor for the selection of Eligible Investments in accordance with the
provisions of this Indenture and any Indenture Supplement.
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The Servicer, for the benefit of the Noteholders with respect
to a particular Pool, shall establish and maintain with the Indenture Trustee or
its nominee in the name of the Indenture Trustee, on behalf of the Trust, a
Qualified Account (including any subaccounts thereof) bearing a designation
clearly indicating that the funds and other property credited thereto are held
for the benefit of the Noteholders relating to such Pool (the "SPECIAL FUNDING
ACCOUNT"). The Indenture Trustee shall possess all right, title and interest in
all monies, instruments, investment property, documents, certificates of deposit
and other property credited from time to time to the Special Funding Account and
in all proceeds, dividends distributions, earnings, income and revenue thereof
for the benefit of the Noteholders. The Special Funding Account with respect to
a Pool shall be under the sole dominion and control of the Indenture Trustee for
the benefit of the Noteholders relating to such Pool. Except as expressly
provided in this Indenture and the Transfer and Servicing Agreement, the
Servicer shall have no right of setoff or banker's lien against, and no right to
otherwise deduct from, any funds and other property held in the Special Funding
Account for any amount owed to it by the Indenture Trustee, the Trust, any
Noteholder or any Series Enhancer. If, at any time, the Special Funding Account
ceases to be a Qualified Account, the Indenture Trustee (or the Servicer on its
behalf) shall within 10 Business Days (or such longer period, not to exceed 30
calendar days, as to which each Rating Agency may consent) establish a new
Special Funding Account meeting the conditions specified above, transfer any
monies, documents, instruments, investment property, certificates of deposit and
other property to such new Special Funding Account and from the date such new
Special Funding Account is established, it shall be the "Special Funding
Account." Where this Indenture or any Indenture Supplement employs the term
"Special Funding Account" such reference shall implicitly refer to the "Special
Funding Account" of the related Pool, unless explicitly otherwise provided. Upon
deposit of funds into the Special Funding Account, the Servicer shall provide
written notice of the allocation of any funds deposited to the Special Funding
Account to a particular Pool.
Funds on deposit in the Special Funding Account shall at the
written direction of the Servicer be invested by the Indenture Trustee in
Eligible Investments selected by the Servicer. All such Eligible Investments
shall be held by the Indenture Trustee for the benefit of the Noteholders
pursuant to Section 6.15. Funds on deposit in the Special Funding Account on any
Distribution Date will be invested in Eligible Investments that will mature so
that such funds will be available no later than the close of business on the
Transfer Date following such Due Period. No such Eligible Investment shall be
disposed of prior to its maturity; provided, however, that the Indenture Trustee
may sell, liquidate or dispose of an Eligible Investment before its maturity, at
the written direction of the Servicer, if such sale, liquidation or disposal
would not result in a loss of all or part of the principal portion of such
Eligible Investment or if, prior to the maturity of such Eligible Investment, a
default occurs in the payment of principal, interest or any other amount with
respect to such Eligible Investment. Funds deposited in the Special Funding
Account on a Transfer Date with respect to the immediately succeeding
Distribution Date are not required to be invested overnight. On each
Distribution Date, all interest and other investment earnings (net of losses and
investment expenses) on funds on deposit in the Special Funding Account shall be
treated as Collections of Finance Charge and Administrative Receivables of the
related Pool with respect to the
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last day of the related Due Period except as otherwise specified in the related
Indenture Supplement. On each Business Day on which funds are on deposit in the
Special Funding Account and on which no Series with respect to the related Pool
is in an Accumulation Period or Amortization Period, the Servicer shall
determine the amount (if any) by which the Transferor Amount with respect to
such Pool exceeds the Required Transferor Amount with respect to such Pool on
such date and shall instruct the Indenture Trustee to withdraw any such excess
from the Special Funding Account and pay such amount to the holders of the
Transferor Certificates. If (i) an Accumulation Period or Amortization Period
has commenced and is continuing with respect to one or more Outstanding Series
with respect to the related Pool, any funds on deposit in the Special Funding
Account shall be treated as Shared Principal Collections with respect to such
Pool and shall be allocated and distributed in accordance with Section 8.05 and
the terms of each Indenture Supplement and (ii) the Servicer determines, based
upon the yield of Special Funding Account investments during the previous Due
Period, that by decreasing the amount on deposit in the Special Funding Account,
any Series relating to such Pool then outstanding which is issued pursuant to an
Indenture Supplement which permits partial amortization as provided in this
Section 8.03 may be prevented from experiencing an Amortization Event based upon
insufficiency of yield, the Servicer shall on the next succeeding Distribution
Date instruct the Indenture Trustee in writing to apply funds on deposit in the
Special Funding Account as "PARTIAL AMORTIZATION SFA AMOUNTS" to such Series
(and if more than one such Series, to each on a pro rata basis according to each
such Invested Amount) in an amount such that the Special Funding Account is
reduced to an amount which, based on the then current investment yield, would
not cause a yield insufficiency Amortization Event for any such Series then
outstanding. In addition, the Servicer shall instruct the Indenture Trustee in
writing to apply funds on deposit in the Special Funding Account to each such
Series on such pro rata basis as Partial Amortization SFA Amounts on any
Distribution Date to the extent the Seller so determines in written instructions
provided to the Servicer on or prior to the Determination Date preceding such
Distribution Date.
Section 8.04. Collections and Allocations.
(a) The Servicer will instruct the Indenture Trustee in
writing to apply all funds on deposit in the Collection Account as described in
this Article VIII and in each Indenture Supplement. Except as otherwise provided
below, the Servicer shall deposit Collections received with respect to a
particular Pool into the Collection Account for such Pool as promptly as
possible after the Date of Processing of such Collections, but in no event later
than the second Business Day following the Date of Processing. Subject to the
express terms of any Indenture Supplement, but notwithstanding anything else in
this Indenture or the Transfer and Servicing Agreement to the contrary, for so
long as any of the following conditions are satisfied: (i) Household Finance
Corporation remains the Servicer and maintains a commercial paper rating of not
less than A-1 by Standard & Poor's, P-1 by ▇▇▇▇▇'▇ and F1 by Fitch, (ii)
Household Finance Corporation remains the Servicer, no Amortization Event,
Reinvestment Event or Event of Default shall have occurred, the ultimate parent
of Household Finance Corporation maintains a commercial paper rating of not less
than A-1 by Standard & Poor's, P-1 by ▇▇▇▇▇'▇ and F1 by Fitch, and, in the event
that there is any material change in the financing
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relationship between Household Finance Corporation and its parent corporation,
(A) Household Finance Corporation shall have notified each Rating Agency and (B)
the Rating Agency Condition shall be satisfied with respect to such material
change, or (iii) any other arrangements are made such that the Rating Agency
Condition is satisfied with respect thereto, and for five Business Days
following any reduction of any such rating or change in ownership, the Servicer
need not make the daily deposits of Collections into the Collection Account as
provided in the preceding sentence, but may make a single deposit in the
Collection Account in immediately available funds not later than 11:00 a.m., New
York City time, on the Transfer Date following the Due Period with respect to
which such deposit relates. Subject to the first proviso in Section 8.05, but
notwithstanding anything else in this Indenture or the Transfer and Servicing
Agreement to the contrary, with respect to any Due Period, whether the Servicer
is required to make deposits of Collections pursuant to the first or the second
preceding sentence, (i) the Servicer will only be required to deposit
Collections into the Collection Account up to the aggregate amount of
Collections required to be deposited into any Series Account or, without
duplication, distributed on or prior to the related Distribution Date to
Noteholders or to any Series Enhancer pursuant to the terms of any Indenture
Supplement or Enhancement Agreement and (ii) if at any time prior to such
Distribution Date the amount of Collections deposited in the Collection Account
exceeds the amount required to be deposited pursuant to clause (i) above, the
Servicer will be permitted to direct the Indenture Trustee to withdraw the
excess from the Collection Account and pay such amount pursuant to the terms of
the Transaction Documents. Subject to the immediately preceding sentence, the
Servicer may retain its Servicing Fee with respect to a Series and shall not be
required to deposit it in the Collection Account.
(b) Collections of Finance Charge and Administrative
Receivables, Principal Receivables and Defaulted Receivables will be allocated
to each Series of Notes and to the Owner Trustee for distribution to the holders
of the Transferor Certificates (pursuant to the Trust Agreement) in accordance
with this Article VIII and each Indenture Supplement, and amounts so allocated
to any Series will not, except as specified in the related Indenture Supplement,
be available to the Noteholders of any other Series. Allocations of the
foregoing amounts between the Holders of the Notes and the Holders of the
Transferor Certificates, among the Series and among the Classes in any Series,
shall be set forth in the related Indenture Supplement or Indenture Supplements.
On each Determination Date, after the amounts of all
allocations have been determined (i) with respect to all Outstanding Series and
(ii) as provided for in any applicable Indenture Supplement, the Servicer may,
with the consent of each Transferor, allocate any excess Collections which would
otherwise be payable to the Transferor at such Transferor's direction to one or
more of the Outstanding Series subject to the following conditions:
(i) on or before the fifth Business Day immediately
preceding such allocation, the Servicer shall have given the Indenture
Trustee, each Controlling Entity and each Rating Agency notice of such
allocation;
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(ii) the Rating Agency Condition shall have been satisfied
with respect to such allocation; and
(iii) the Servicer shall have delivered to the Indenture
Trustee an Officer's Certificate, dated the date of such allocation, to
the effect that the Servicer reasonably believes that such allocation
will not have an Adverse Effect.
Section 8.05. Shared Principal Collections and Shared
Transferor Principal Collections.
(a) On each Distribution Date, (i) the Servicer shall
allocate Shared Principal Collections (as described below) to each Principal
Sharing Series within a particular Principal Sharing Group, pro rata, in
proportion to the Principal Shortfalls, if any, with respect to each such Series
and (ii) the Servicer shall withdraw from the Collection Account and pay to the
Owner Trustee for distribution to the holders of the Transferor Certificates in
accordance with the Trust Agreement an amount equal to the excess, if any, of
(x) the aggregate amount for all Outstanding Series in such Principal Sharing
Group of Collections of Principal Receivables which the related Indenture
Supplements specify are to be treated as "SHARED PRINCIPAL COLLECTIONS"
(including the net proceeds from any New Issuance as provided in Section
2.12(e)) for such Distribution Date over (y) the aggregate amount for all
Outstanding Series in such Principal Sharing Group which the related Indenture
Supplements specify are "PRINCIPAL SHORTFALLS" for such Series and for such
Distribution Date; provided, however, that if the Transferor Amount for the
related Pool as of such Distribution Date (determined after giving effect to the
Principal Receivables transferred to and in the Trust on such date) is less than
the Required Transferor Amount, the Servicer will not distribute to the Owner
Trustee for distribution to the holders of the Transferor Certificates in
accordance with the Trust Agreement any such amounts that otherwise would be
distributed to the Owner Trustee for distribution to the holders of the
Transferor Certificates in accordance with the Trust Agreement, but shall
deposit such funds in the Special Funding Account with respect to such Pool. The
Transferor may, at its option, instruct the Indenture Trustee to deposit Shared
Principal Collections which are otherwise payable to the Owner Trustee for
distribution to the holders of the Transferor Certificates in accordance with
the Trust Agreement pursuant to the provisions set forth above into such Special
Funding Account.
(b) The Servicer will determine the amount of Collections
of Principal Receivables for any Due Period allocated to the Holders of the
Transferor Certificates with respect to any Pool but not due to the Holder of
any Supplemental Certificate and other amounts payable to the Transferor with
respect to Collections of Principal Receivables with respect to such Pool,
regardless of whether such Collections were initially allocated to the
Transferor or any Series ("SHARED TRANSFEROR PRINCIPAL COLLECTIONS"). The
Servicer will allocate the Shared Transferor Principal Collections to cover any
Principal Shortfalls for Series with respect to such Pool that have not been
covered out of the Shared Principal Collections allocated to each such Series
that has been designated in the applicable Indenture Supplement as being
entitled to receive Shared Transferor Principal Collections, and the remaining
Shared Transferor Principal Collections will be paid to the Holders of the
Transferor Certificates. If Principal
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Shortfalls remaining after the application of Shared Principal Collections
exceed related Shared Transferor Principal Collections for any Due Period, such
Shared Transferor Principal Collections will be allocated pro rata among each
such Series which in accordance with the Indenture Supplement for such Series;
provided, however, the sharing of Shared Transferor Principal Collections among
Series will commence only upon the delivery by the Transferor to the Indenture
Trustee of an Officer's Certificate to the affect that, in the reasonable
judgment of the Transferor, the sharing of Shared Transferor Principal
Collections would not have adverse regulatory implications with respect to the
Transferor or any Affiliate thereof and such sharing will continue only until
such time, if any, at which the Transferor shall deliver to the Indenture
Trustee an Officer's Certificate to the effect that, in the reasonable belief of
the Transferor, the continued sharing of Shared Transferor Principal Collections
among Series would have adverse regulatory implications with respect to the
Transferor or any Affiliate thereof. Following the delivery by the Transferor of
such an Officer's Certificate to the Indenture Trustee, there will not be any
further sharing of Shared Transferor Principal Collections among Series.
Section 8.06. [Reserved].
Section 8.07. Allocation of Collateral to Pools.
To the extent so provided in the Indenture Supplement for any
Series or in an Indenture Supplement otherwise executed pursuant to Section
10.01, Receivables conveyed to the Trust pursuant to Section 2.01 of the
Transfer and Servicing Agreement and Receivables or Participation Interests
conveyed to the Trust pursuant to Section 2.09 of the Transfer and Servicing
Agreement or any Participation Interest Supplement, and all Collections received
with respect thereto may be allocated or applied in whole or in part to one or
more Pools as may be provided in such Indenture Supplement; provided, however,
that any such allocation or application shall be effective only upon
satisfaction of the following conditions:
(i) on or before the fifth Business Day immediately
preceding such allocation, the Servicer shall have given the Indenture
Trustee, each Controlling Entity and each Rating Agency written notice
of such allocation;
(ii) the Rating Agency Condition shall have been satisfied
with respect to such allocation; and
(iii) the Servicer shall have delivered to the Indenture
Trustee an Officer's Certificate, dated the date of such allocation, to
the effect that the Servicer reasonably believes that such allocation
will not have an Adverse Effect.
Any such Indenture Supplement may provide that (i) such
allocation to one or more particular Pools may terminate upon the occurrence of
certain events specified therein and (ii) that upon the occurrence of any such
event, such assets and any Collections with respect thereto, shall be
reallocated to other Pools or to all Series, all as shall be provided in such
Indenture Supplement.
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Section 8.08A. Reallocation Groups.
Collections of Finance Charge and Administrative Receivables
and other amounts specified in the Indenture Supplement for each Series in a
Reallocation Group shall be reallocated to cover interest and expenses related
to each Series in such Group as specified in such Indenture Supplement. The
reallocation provisions of the Indenture Supplement for each Series in the same
Reallocation Group are required to be identical in all material respects.
Section 8.08B. Shared Enhancement Groups.
More than one Series in a particular Shared Enhancement Group
may share collections of Finance Charge and Administrative Receivables and
certain other amounts and share in the same credit enhancement as shall be
specified in the Indenture Supplement for each Series in such Group, or, if the
sharing is between subseries in the same Series, as shall be specified in the
Indenture Supplement for the Series containing each such subseries. Such sharing
may take the form, among others, of Classes of Notes of one or more Series in a
particular Shared Enhancement Group issued from time to time which are
subordinate to other Classes issued at the same or at different times in the
same or in different Series in such Group.
Section 8.08C. Excess Finance Charge Sharing Groups.
On each Distribution Date, (a) the Servicer shall allocate
Excess Finance Charge and Administrative Collections to each Excess Finance
Charge Sharing Series in a particular Excess Finance Charge Sharing Group pro
rata, in proportion to the Finance Charge Shortfalls, if any, with respect to
each such Series and (b) the Servicer shall withdraw from the collection account
and pay to the Transferor an amount equal to the excess, if any, of (i) the
aggregate amount for all such Outstanding Series of Collections of Finance
Charge and Administrative Receivables which the related Indenture Supplements
specify are to be treated as "EXCESS FINANCE CHARGE AND ADMINISTRATIVE
COLLECTIONS" for such Distribution Date over (ii) the aggregate amount for all
Outstanding Series in such group which the related Indenture Supplements specify
are "FINANCE CHARGE SHORTFALLS" for such Series and such Distribution Date;
provided, however, that the sharing of Excess Finance Charge and Administrative
Collections among Series will continue only until such time, if any, at which
the Transferor shall deliver to the Indenture Trustee an Officer's Certificate
to the effect that, in the reasonable belief of the Transferor, the continued
sharing of Excess Finance Charge and Administrative Collections among Series
would have adverse regulatory implications with respect to the Transferor.
Following the delivery by the Transferor of such an Officer's Certificate to the
Indenture Trustee there will not be any further sharing of Excess Finance Charge
and Administrative Collections among Series.
Section 8.09. Release of Collateral; Eligible Loan Documents.
(a) Subject to the payment of its fees and expenses, the
Indenture Trustee may and when required by the provisions of this Indenture
shall, execute
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instruments to release property from the lien of this Indenture, or convey the
Indenture Trustee's interest in the same, in a manner and under circumstances
which are not inconsistent with the provisions of this Indenture. No party
relying upon an instrument executed by the Indenture Trustee as provided in this
Article VIII shall be bound to ascertain the Indenture Trustee's authority,
inquire into the satisfaction of any conditions precedent or see to the
application of any monies.
(b) In order to facilitate the servicing of the
Receivables by the Servicer, the Indenture Trustee upon Issuer Order shall
authorize the Servicer to execute in the name and on behalf of the Indenture
Trustee instruments of satisfaction or cancellation, or of partial or full
release or discharge, and other comparable instruments with respect to the
Receivables (and the Indenture Trustee shall execute any such documents on
request of the Servicer), subject to the obligations of the Servicer under the
Transfer and Servicing Agreement.
(c) The Indenture Trustee shall, at such time as there
are no Notes outstanding, release and transfer, without recourse, all of the
Collateral that secured the Notes (other than any cash held for the payment of
the Notes pursuant to Section 4.02). The Indenture Trustee shall release
property from the lien of this Indenture pursuant to this Section only upon
receipt of an Issuer Order accompanied by an Officer's Certificate, an Opinion
of Counsel and (if required by the TIA) Independent Certificates in accordance
with TIA Sections 314(c) and 314(d)(1) meeting the applicable requirements of
Section 12.01.
(d) Notwithstanding anything to the contrary in this
Indenture, the Transfer and Servicing Agreement and the Trust Agreement,
immediately prior to the release of any portion of the Collateral or any funds
on deposit in the Series Accounts pursuant to this Indenture, the Indenture
Trustee shall remit to the Transferor for its own account any funds that, upon
such release, would otherwise be remitted to the Issuer.
ARTICLE IX
DISTRIBUTIONS AND REPORTS TO NOTEHOLDERS
Distributions shall be made to, and reports shall be provided
to, Noteholders as set forth in the applicable Indenture Supplement. The
identity of the Noteholders with respect to distributions and reports shall be
determined according to the immediately preceding Record Date.
ARTICLE X
SUPPLEMENTAL INDENTURES
Section 10.01. Supplemental Indentures Without Consent of
Noteholders.
(a) Without the consent of the Holders of any Notes but
with prior notice to the Rating Agencies and upon satisfaction of the Rating
Agency Condition with
72
respect to the Notes of all Series, the Issuer and the Indenture Trustee, when
authorized by an Issuer Order, at any time and from time to time, may enter into
one or more indentures supplemental hereto (which shall conform to the
provisions of the TIA as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property
at any time subject to the lien of this Indenture, or better to assure,
convey and confirm unto the Indenture Trustee any property subject or
required to be subjected to the lien of this Indenture, or to subject
to the lien of this Indenture additional property;
(ii) to evidence the succession, in compliance with
Section 3.11 hereof, of another person to the Issuer, and the
assumption by any such successor of the covenants of the Issuer herein
and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the
benefit of the Holders of the Notes, or to surrender any right or power
herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee;
(v) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to the Notes
and to add to or change any of the provisions of this Indenture as
shall be necessary to facilitate the administration of the trusts
hereunder by more than one trustee, pursuant to the requirements of
Article VI;
(vi) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary, as evidenced by an
Opinion of Counsel, to effect the qualification of this Indenture under
the TIA or under any similar federal statute hereafter enacted and to
add to this Indenture such other provisions as may be expressly
required by the TIA;
(vii) to provide for the issuance of one or more new Series
of Notes, in accordance with the provisions of Section 2.12 hereof; or
(viii) to provide for the termination of any interest rate
swap agreement or other form of credit enhancement in accordance with
the provisions of the related Indenture Supplement;
provided, however, the Issuer and the Indenture Trustee, when authorized by an
Issuer Order at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the TIA
as in force at the date of the execution thereof), in form satisfactory to the
Indenture Trustee, without the consent of the Holders of any Notes or prior
notice to the Rating Agencies (provided that a final supplemental indenture
signed by the parties thereto shall be delivered to each Rating Agency within 10
days of its execution) in order to (A) cure any ambiguity, to correct or
supplement any provision herein or in any supplemental indenture that may be
73
inconsistent with any other provision herein or in any supplemental indenture,
(B) make any other provisions with respect to matters or questions arising under
this Indenture or in any supplemental indenture and (C) qualify for sale
treatment under generally accepted accounting principles; provided, that such
action shall not have an Adverse Effect and, in the case of clause (C), the
Transferor shall have delivered a Tax Opinion to the Indenture Trustee with
respect to such supplemental indenture.
The Indenture Trustee is hereby authorized to join in the
execution of any such supplemental indenture and to make any further appropriate
agreements and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized
by an Issuer Order, may, also without the consent of any Noteholders and any
Series Enhancers of any Series then Outstanding but with prior notice to the
Rating Agencies and upon satisfaction of the Rating Agency Condition with
respect to the Notes of all Series, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Holders of the Notes under this
Indenture; provided, however, that (i) the Transferor shall have delivered to
the Indenture Trustee an Officer's Certificate, dated the date of any such
action, stating that the Transferor reasonably believes that such action will
not have an Adverse Effect and (ii) a Tax Opinion shall have been delivered to
the Indenture Trustee. Additionally, notwithstanding the preceding sentence, the
Issuer and the Indenture Trustee, when authorized by an Issuer Order, may, also
without the consent of any Noteholders and any Series Enhancers of any Series
then Outstanding, enter into an indenture or indentures supplemental hereto to
add, modify or eliminate such provisions as may be necessary or advisable in
order to enable all or a portion of the Trust (i) to qualify as, and to permit
an election to be made to cause the Trust to be treated as, a "financial asset
securitization investment trust" as described in the provisions of Section 860L
of the Code, and (ii) to avoid the imposition of state or local income or
franchise taxes imposed on the Trust's property or its income; provided,
however, that (i) the Transferor delivers to the Indenture Trustee and the Owner
Trustee an Officer's Certificate to the effect that the proposed amendments meet
the requirements set forth in this subsection, (ii) each Rating Agency will have
notified the Transferor, the Servicer, the Indenture Trustee, each Controlling
Entity and the Owner Trustee in writing that the amendment will not result in a
reduction or withdrawal of the rating of any Outstanding Series or Class as to
which it is a Rating Agency and (iii) such amendment does not affect the rights,
duties or obligations of the Indenture Trustee or the Owner Trustee hereunder.
The amendments which the Transferor may make without the consent of Noteholders
and Series Enhancers pursuant to the preceding sentence may include, without
limitation, the addition of a sale of Receivables.
(c) Notwithstanding anything to the contrary in this
Section 10.01, no supplemental indenture or modification or amendment to this
Indenture which has the effect of (i) materially increasing the obligations or
duties of the Servicer hereunder, (ii) materially decreasing the compensation or
rights of the Servicer hereunder, or (iii)
74
materially and adversely effecting the Servicer shall become effective without
prior consent of the Servicer.
Section 10.02. Supplemental Indentures With Consent of
Noteholders.
(a) The Issuer and the Indenture Trustee, when authorized
by an Issuer Order, also may, with prior notice to the Rating Agencies and with
the consent of any related Controlling Entity or, if none, the Holders of not
less than 66-2/3% of the Outstanding Amount of the Notes of each adversely
affected Series of Notes, except no such consent is needed with respect to an
Indenture Supplement in connection with a New Issuance, by Act of such
Controlling Entity or Holders, as applicable, delivered to the Issuer, each
Controlling Entity and the Indenture Trustee, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to,
changing in any manner or eliminating any of the provisions of this Indenture or
of modifying in any manner the rights of such Noteholders under this Indenture;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Note affected thereby:
(i) change the due date of any installment of principal
of or interest on any Note, or reduce the principal amount thereof, the
interest rate specified thereon or the redemption price with respect
thereto or change any place of payment where, or the coin or currency
in which, any Note or any interest thereon is payable;
(ii) impair the right to institute suit for the
enforcement of the provisions of this Indenture requiring the
application of funds available therefor, as provided in Article V, to
the payment of any such amount due on the Notes on or after the
respective due dates thereof (or, in the case of redemption, on or
after the Redemption Date);
(iii) reduce the percentage which constitutes a majority of
the Outstanding Amount of the Notes of any Series outstanding the
consent of the Holders of which is required for any such supplemental
indenture, or the consent of the Holders of which is required for any
waiver of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences as provided for in
this Indenture;
(iv) reduce the percentage of the Outstanding Amount of
any Notes, the consent of the Holders of which is required to direct
the Indenture Trustee to sell or liquidate the Collateral if the
proceeds of such sale would be insufficient to pay the principal amount
and accrued but unpaid interest on the Outstanding Notes of such
Series;
(v) decrease the percentage of the Outstanding Amount of
the Notes required to amend the sections of this Indenture which
specify the applicable percentage of the aggregate principal amount of
the Notes of such Series
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necessary to amend the Indenture or any Transaction Documents which
require such consent;
(vi) modify or alter the provisions of this Indenture
regarding the voting of Notes held by the Trust, any other obligor on
the Notes, a Seller or any affiliate thereof; or
(vii) permit the creation of any Lien ranking prior to or
on a parity with the lien of this Indenture with respect to any part of
the Collateral for any Notes or, except as otherwise permitted or
contemplated herein, terminate the lien of this Indenture on any such
Collateral at any time subject hereto or deprive the Holder of any Note
of the security provided by the lien of this Indenture.
(b) The Indenture Trustee may in its discretion determine
whether or not any Notes would be affected by any supplemental indenture and any
such determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The Indenture
Trustee shall not be liable for any such determination made in good faith.
(c) It shall not be necessary for any Act of Noteholders
under this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
(d) Promptly after the execution by the Issuer and the
Indenture Trustee of any Supplement Indenture pursuant to this Section, the
Indenture Trustee shall mail to the Holders of the Notes and each Controlling
Entity to which such amendment or supplemental indenture relates written notice
setting forth in general terms the substance of such supplemental indenture. Any
failure of the Indenture Trustee to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
supplemental indenture.
(e) Notwithstanding anything to the contrary in this
Section 10.02, no supplemental indenture or modification or amendment to this
Indenture which has the effect of (i) materially increasing the obligations or
duties of the Servicer hereunder, (ii) materially decreasing the compensation or
rights of the Servicer hereunder, or (iii) materially and adversely affecting
the Servicer shall become effective without prior consent of the Servicer.
Section 10.03. Execution of Supplemental Indentures.
In executing, or permitting the additional trusts created by,
any supplemental indenture permitted by this Article X or the modification
thereby of the trusts created by this Indenture, the Indenture Trustee shall be
entitled to receive, and subject to Sections 6.01 and 6.02, shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture. The
Indenture Trustee may, but shall not be obligated to, enter into any such
supplemental indenture that affects the Indenture Trustee's own rights, duties,
liabilities or immunities under this Indenture or otherwise.
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Section 10.04. Effect of Supplemental Indenture.
Upon the execution of any supplemental indenture under this
Article X, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes, and
every Holder of Notes theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
Section 10.05. Conformity With Trust Indenture Act.
Every amendment of this Indenture and every supplemental
indenture executed pursuant to this Article X shall conform to the requirements
of the TIA as then in effect so long as this Indenture shall then be qualified
under the TIA.
Section 10.06. Reference in Notes to Supplemental Indentures.
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article X may, and if required by the
Indenture Trustee shall, bear a notation in form approved by the Indenture
Trustee as to any matter provided for in such supplemental indenture. If the
Issuer shall so determine, new Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for the Outstanding Notes.
ARTICLE XI
TERMINATION
Section 11.01. Termination of Trust.
The Trust and the respective obligations and responsibilities
of the Indenture Trustee created hereby (other than the obligation of the
Indenture Trustee to make payments to Noteholders as hereinafter set forth)
shall terminate, except with respect to the duties described in subsection
11.02(b), on the Trust Termination Date.
Section 11.02. Final Distribution.
(a) The Servicer shall give the Indenture Trustee and
each Controlling Entity at least 30 days' prior notice of the Distribution Date
on which the Noteholders of any Series or Class may surrender their Notes for
payment of the final distribution on and cancellation of such Notes (or, in the
event of a final distribution resulting from the application of Section 2.06,
6.01 or 7.01 of the Transfer and Servicing Agreement, notice of such
Distribution Date promptly after the Servicer has determined that a final
distribution will occur, if such determination is made less than 30 days prior
to such Distribution Date). Such notice shall be accompanied by an Officer's
Certificate setting forth the information specified in Section 3.05 of the
Transfer and Servicing Agreement covering the period during the then-current
calendar year through the date of such notice. Not later than the fifth day of
the month in which the final distribution in respect of such Series or Class is
payable to Noteholders, the Indenture Trustee shall provide notice to
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Noteholders of such Series or Class specifying (i) the date upon which final
payment of such Series or Class will be made upon presentation and surrender of
Notes of such Series or Class at the office or offices therein designated, (ii)
the amount of any such final payment and (iii) that the Record Date otherwise
applicable to such payment date is not applicable, payments being made only upon
presentation and surrender of such Notes at the office or offices therein
specified (which, in the case of Bearer Notes, shall be outside the United
States). The Indenture Trustee shall give such notice to the Transfer Agent and
Registrar and the Paying Agent at the time such notice is given to Noteholders.
(b) Notwithstanding a final distribution to the
Noteholders of any Series or Class (or the termination of the Trust), except as
otherwise provided in this paragraph, all funds then on deposit in the
Collection Account and any Series Account allocated to such Noteholders shall
continue to be held in trust for the benefit of such Noteholders, and the Paying
Agent or the Indenture Trustee shall pay such funds to such Noteholders upon
surrender of their Notes, if certificated (and any excess shall be paid in
accordance with the terms of any Enhancement Agreement). In the event that all
such Noteholders shall not surrender their Notes for cancellation within six
months after the date specified in the notice from the Indenture Trustee
described in paragraph (a), the Indenture Trustee shall give a second notice to
the remaining such Noteholders to surrender their Notes for cancellation and
receive the final distribution with respect thereto (which surrender and
payment, in the case of Bearer Notes, shall be outside the United States). If
within one year after the second notice all such Notes shall not have been
surrendered for cancellation, the Indenture Trustee may take appropriate steps,
or may appoint an agent to take appropriate steps, to contact the remaining such
Noteholders concerning surrender of their Notes, and the cost thereof shall be
paid out of the funds in the Collection Account or any Series Account held for
the benefit of such Noteholders. The Indenture Trustee and the Paying Agent
shall pay to the Transferor any monies held by them for the payment of principal
or interest that remains unclaimed for two years. After payment to the
Transferor, Noteholders entitled to the money must look to the Transferor for
payment as general creditors unless an applicable abandoned property law
designates another Person.
Section 11.03. Transferor's Termination Rights.
Upon the termination of the Trust pursuant to Section 11.01
and the surrender of such Transferor Certificates, the Indenture Trustee shall
assign and convey to the Holders of the Transferor Certificates or any of their
designees, without recourse, representation or warranty, all right, title and
interest of the Trust in the Receivables, whether then existing or thereafter
created, all Recoveries related thereto, all monies due or to become due and all
amounts received or receivable with respect thereto (including all moneys then
held in the Collection Account or any Series Account) and all proceeds thereof,
except for amounts held by the Indenture Trustee pursuant to subsection
11.02(b). The Indenture Trustee shall execute and deliver such instruments of
transfer and assignment, in each case without recourse, as shall be prepared and
reasonably requested by the Transferor to vest in the Holders of the Transferor
Certificates or any of their designees all right, title and interest which the
Indenture Trustee had in the Collateral and such other property.
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Section 11.04. Defeasance.
Notwithstanding anything to the contrary in this Indenture or
any Indenture Supplement:
(a) The Issuer may at its option be discharged from its
obligations hereunder with respect to any Series or all Outstanding Series
(each, a "DEFEASED SERIES") on the date the applicable conditions set forth in
subsection 11.04(c) are satisfied (a "DEFEASANCE"); provided, however, that the
following rights, obligations, powers, duties and immunities shall survive with
respect to each Defeased Series until otherwise terminated or discharged
hereunder: (i) the rights of the Holders of Notes of the Defeased Series to
receive, solely from the trust funds provided for in subsection 11.04(c),
payments in respect of interest on and principal of such Notes when such
payments are due; (ii) the Issuer's obligations with respect to such Notes under
Sections 2.05 and 2.06; (iii) the rights, powers, trusts, duties, and immunities
of the Indenture Trustee, the Paying Agent and the Registrar hereunder; and (iv)
this Section and Section 12.16.
(b) Subject to subsection 11.04(c), the Issuer at its
option may cause Collections allocated to each Defeased Series and available to
purchase additional Receivables to be applied to purchase Eligible Investments
rather than additional Receivables.
(c) The following shall be the conditions precedent to
any Defeasance under subsection 11.04(a):
(i) the Issuer irrevocably shall have deposited or caused
to be deposited with the Indenture Trustee (such deposit to be made
from other than the Transferor's or any Affiliate of the Issuer's
funds), under the terms of an irrevocable trust agreement in form and
substance satisfactory to the Indenture Trustee, as trust funds in
trust for making the payments described below, (A) Dollars in an amount
equal to, or (B) Eligible Investments which through the scheduled
payment of principal and interest in respect thereof will provide, not
later than the due date of payment thereon, money in an amount equal
to, or (C) a combination thereof, in each case sufficient to pay and
discharge (without relying on income or gain from reinvestment of such
amount), and which shall be applied by the Indenture Trustee to pay and
discharge, all remaining scheduled interest and principal payments on
all Outstanding Notes of each Defeased Series on the dates scheduled
for such payments in this Indenture and the applicable Indenture
Supplements and all amounts owing to the Series Enhancers with respect
to each Defeased Series;
(ii) a statement from a firm of nationally recognized
independent public accountants (who may also render other services to
the Issuer) to the effect that such deposit is sufficient to pay the
amounts specified in clause (i) above;
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(iii) prior to its first exercise of its right pursuant to
this Section with respect to a Defeased Series to substitute money or
Eligible Investments for Receivables, the Issuer shall have delivered
to the Indenture Trustee an Opinion of Counsel to the effect
contemplated by clause (b) of the definition in Section 1.01, of the
term "TAX OPINION" (the preparation and delivery of which shall not be
at the expense of the Indenture Trustee) with respect to such deposit
and termination of obligations, and an Opinion of Counsel to the effect
that such deposit and termination of obligations will not result in the
Trust being required to register as an "investment company" within the
meaning of the Investment Company Act;
(iv) the Issuer shall have delivered to the Indenture
Trustee an Officer's Certificate of the Transferor stating that the
Transferor reasonably believes that such deposit and termination of
obligations will not, based on the facts known to such officer at the
time of such certification, then cause an Amortization Event with
respect to any Series or any event that, with the giving of notice or
the lapse of time, would result in the occurrence of an Amortization
Event with respect to any Series; and
(v) the Rating Agency Condition shall have been satisfied
and the Issuer shall have delivered copies of such written notice to
the Servicer and the Indenture Trustee.
ARTICLE XII
MISCELLANEOUS
Section 12.01. Compliance Certificates and Opinions etc.
(a) Upon any application or request by the Issuer to the
Indenture Trustee to take any action under any provision of this Indenture, the
Issuer shall furnish to the Indenture Trustee and each Controlling Entity (i) an
Officer's Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with,
(ii) an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with and (iii) (if required by
the TIA) an Independent Certificate from a firm of certified public accountants
meeting the applicable requirements of this Section, except that, in the case of
any such application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate
or opinion has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
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(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such
signatory, such signatory has made such examination or investigation as
is necessary to enable such signatory to express an informed opinion as
to whether or not such covenant or condition has been complied with;
and
(iv) a statement as to whether, in the opinion of each
such signatory, such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Collateral or
other property or securities with the Indenture Trustee that is to be
made the basis for the release of any property or securities subject to
the lien of this Indenture, the Issuer shall, in addition to any
obligation imposed in subsection 12.01(a) or elsewhere in this
Indenture, furnish to the Indenture Trustee an Officer's Certificate
certifying or stating the opinion of each person signing such
certificate as to the fair value (within 90 days of such deposit) to
the Issuer of Collateral or other property or securities to be so
deposited.
(ii) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause (i)
above, the Issuer shall also deliver to the Indenture Trustee (if
required by the TIA) an Independent Certificate as to the same matters,
if the fair value to the Issuer of the securities to be so deposited
and of all other such securities made the basis of any such withdrawal
or release since the commencement of the then-current fiscal year of
the Issuer, as set forth in the certificates delivered pursuant to
clause (i) above and this clause (ii), is 10% or more of the
Outstanding Amount of the Notes, but such a certificate need not be
furnished with respect to any securities so deposited if the fair value
thereof to the Issuer as set forth in the related Officer's Certificate
is less than $25,000 or less than one percent of the Outstanding Amount
of the Notes.
(iii) Whenever any property or securities are to be
released from the lien of this Indenture, the Issuer shall also furnish
to the Indenture Trustee an Officer's Certificate certifying or stating
the opinion of each person signing such certificate as to the fair
value (within 90 days of such release) of the property or securities
proposed to be released and stating that in the opinion of such person
the proposed release will not impair the security under this Indenture
in contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause
(iii) above, the Issuer shall also furnish to the Indenture Trustee (if
required by the TIA) an Independent Certificate as to the same matters
if the fair value of the property or securities and of all other
property
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or securities released from the lien of this Indenture since the
commencement of the then current calendar year, as set forth in the
certificates required by clause (iii) above and this clause (iv),
equals 10% or more of the Outstanding Amount of the Notes, but such
certificate need not be furnished in the case of any release of
property or securities if the fair value thereof as set forth in the
related Officer's Certificate is less than $25,000 or less than one
percent of the then Outstanding Amount of the Notes.
(v) Notwithstanding Section 2.11 or any other provision
of this Section, the Issuer may (A) collect, liquidate, sell or
otherwise dispose of Receivables as and to the extent permitted or
required by the Transaction Documents and (B) make cash payments out of
the Series Accounts as and to the extent permitted or required by the
Transaction Documents.
Section 12.02. Form of Documents Delivered to Indenture
Trustee and each Controlling Entity.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of a Responsible Officer of the
Issuer may be based, insofar as it relates to legal matters, upon a certificate
or opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which such officer's
certificate or opinion is based are erroneous. Any such certificate of a
Responsible Officer or Opinion of Counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Servicer, the Seller, the Issuer or the
Administrator, stating that the information with respect to such factual matters
is in the possession of the Servicer, a Seller, the Issuer or the Administrator,
unless such Responsible Officer or Counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
Whenever in this Indenture, in connection with any application
or certificate or report to the Indenture Trustee and each Controlling Entity,
it is provided that the Issuer shall deliver any document as a condition of the
granting of such application, or as evidence of the Issuer's compliance with any
term hereof, it is intended that the truth and accuracy, at the time of the
granting of such application or at the
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effective date of such certificate or report (as the case may be), of the facts
and opinions stated in such document shall in such case be conditions precedent
to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's or each Controlling Entity's right
to rely upon the truth and accuracy of any statement or opinion contained in any
such document as provided in Article VI.
Section 12.03. Acts of Noteholders.
(a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Indenture to be given
or taken by Noteholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Noteholders in person
or by agent duly appointed in writing and satisfying any requisite percentages
as to minimum number or dollar value of outstanding principal amount represented
by such Noteholders; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Indenture Trustee and each Controlling Entity, and, where it is hereby
expressly required, to the Issuer. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "ACT" of the Noteholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and conclusive in favor of the
Indenture Trustee and the Issuer, if made in the manner provided in this Section
12.03.
(b) The fact and date of the execution by any Person of
any such instrument or writing may be proved in any manner which the Indenture
Trustee deems sufficient.
(c) The ownership of Notes shall be proved by the Note
Register.
(d) Any request, demand, authorization, direction,
notice, consent, waiver or other action by the Holder of any Notes shall bind
the Holder (and any transferee thereof) of every Note issued upon the
registration thereof in exchange therefor or in lieu thereof, in respect of
anything done, omitted or suffered to be done by the Indenture Trustee or the
Issuer in reliance thereon, whether or not notation of such action is made upon
such Note.
Section 12.04. Notices.
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Noteholders or other documents provided or permitted
by the Agreement to be made upon, given or furnished to, or filed with:
(a) the Indenture Trustee by any Noteholder, the Servicer
or by the Issuer shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to a Trustee Officer, by facsimile transmission,
electronic transmission, or by other means acceptable to the Indenture Trustee
to or with the Indenture Trustee at its Corporate Trust Office; or
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(b) the Issuer by the Indenture Trustee, the Servicer or
by any Noteholder or the Servicer shall be sufficient for every purpose
hereunder if in writing and (i) mailed, first-class postage prepaid, to the
Issuer addressed to it at Household Consumer Loan Master Note Trust I, ▇▇▇▇▇▇
Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ or at any other
address previously furnished in writing to the Indenture Trustee by the Issuer
or (ii) delivered electronically to the address previously furnished in writing
to the Indenture Trustee. A copy of each notice to the Issuer shall be sent in
writing and mailed, first-class postage prepaid, to Household Consumer Loan
Master Note Trust I, c/o Wilmington Trust Company, ▇▇▇▇▇▇ Square North, ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
(c) the Servicer by any other party hereto or any
Noteholder shall be sufficient for every purpose hereunder if in writing and
mailed, first-class postage prepaid, to Household Finance Corporation, ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
(d) Fitch by the Indenture Trustee, the Issuer or by any
Noteholder shall be sufficient for every purpose hereunder if in writing and
mailed, first-class postage prepaid, to Fitch addressed to it at Fitch, Inc.,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ABS Surveillance.
(e) Moody's by the Indenture Trustee, the Issuer or by
any Noteholder shall be sufficient for every purpose hereunder if in writing and
mailed, first-class postage prepaid, to Moody's addressed to it at ▇▇▇▇▇'▇
Investors Service Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ABS
Monitoring Group.
(f) Standard & Poor's by the Indenture Trustee, the
Issuer or by any Noteholder shall be sufficient for every purpose hereunder if
in writing and mailed, first-class postage prepaid, to Standard & Poor's
addressed to it at Standard & Poor's Ratings Group, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇.
(g) the related Controlling Entity to the address listed
in the related Indenture Supplement.
Section 12.05. Notices to Noteholders; Waiver.
Where the Indenture provides for notice to Noteholders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and (a) mailed by registered or certified mail
or first class postage prepaid or national overnight courier service or (b)
delivered electronically in a manner acceptable to the Servicer, the Owner
Trustee on behalf of the Issuer, each Controlling Entity and the Indenture
Trustee, to each Noteholder affected by such event, at its address as it appears
on the Note Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. In any case where
notice to Noteholders is given by mail, neither the failure to mail such notice,
nor any defect in any notice so mailed, to any particular Noteholder shall
affect the sufficiency of such notice with
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respect to other Noteholders, and any notice which is mailed in the manner
herein provided shall conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such
notice may be waived in writing by any Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In the event that, by reason of the suspension of regular mail
service as a result of a strike, work stoppage or similar activity, it shall be
impractical to mail notice of any event to Noteholders when such notice is
required to be given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be satisfactory to the Indenture Trustee
and each Controlling Entity shall be deemed to be a sufficient giving of such
notice.
Where this Indenture provides for notice to any Rating Agency,
failure to give such notice shall not affect any other rights or obligations
created hereunder and shall not under any circumstance constitute a Default or
Event of Default.
Section 12.06. Alternate Payment and Notice Provisions.
Notwithstanding any provision of this Indenture or any of the
Notes to the contrary, the Issuer, with the consent of the Indenture Trustee,
may enter into any agreement with any Holder of a Note providing for a method of
payment, or notice by the Indenture Trustee or any Paying Agent to such Holder,
that is different from the methods provided for in this Indenture for such
payments or notices. The Issuer will furnish to the Indenture Trustee a copy of
each such agreement and the Indenture Trustee will cause payments to be made and
notices to be given in accordance with such agreements.
Section 12.07. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with
another provision hereof that is required to be included in this Indenture by
any of the provisions of the TIA, such required provision shall control.
The provisions of TIA Sections 310 through 317 that impose
duties on any person (including the provisions automatically deemed included
herein unless expressly excluded by this Indenture) are a part of and govern
this Indenture, whether or not physically contained herein.
Section 12.08. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.
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Section 12.09. Successors and Assigns.
All covenants and agreements in this Indenture by the Issuer
shall bind its successors and assigns, whether so expressed or not.
Section 12.10. Separability.
In case any provision in this Indenture or in the Notes shall
be invalid, illegal or unenforceable, the validity, legality, and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
Section 12.11. Benefits of Indenture.
Nothing in this Indenture or in the Notes, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, and the Noteholders, any benefit.
Section 12.12. Limitation on Voting Preferred Stock.
The Indenture Trustee shall hold the Preferred Stock of the
Transferor in trust, for the benefit of the Noteholders and shall vote such
stock only pursuant to the written instructions of Noteholders holding 100% of
the Outstanding Amount of Notes of all Series. The Preferred Stock shall be
non-transferable except pursuant to the written instructions of Noteholders
holding 100% of the Outstanding Amount of all Series of Notes and if the Rating
Agency Condition has been satisfied with respect to such transfer.
Section 12.13. Governing Law.
The Indenture and each Note shall be construed in accordance
with and governed by the laws of the State of New York applicable to agreements
made and to be performed therein, without regard to the conflict of law
principles thereof.
Section 12.14. Counterparts.
This Indenture may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
Section 12.15. Trust Obligation.
No recourse may be taken, directly or indirectly, with respect
to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on
the Notes or under this Indenture or any certificate or other writing delivered
in connection herewith or therewith, against (i) the Indenture Trustee or the
Owner Trustee in its individual capacity, (ii) any owner of a beneficial
interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer,
director, employee or agent of the Indenture Trustee or the Owner Trustee in its
individual capacity, any holder of a beneficial interest in the Issuer, the
Owner Trustee or the Indenture Trustee or of any successor or assign of the
Indenture
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Trustee or the Owner Trustee in its individual capacity, except as any such
Person may have expressly agreed (it being understood that the Indenture Trustee
and the Owner Trustee have no such obligations in their individual capacity) and
except that any such partner, owner or beneficiary shall be fully liable, to the
extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or call owing to
such entity. For all purposes of this Indenture, in the performance of any
duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of
Articles V, VI and VII of the Trust Agreement.
Section 12.16. No Petition.
The Indenture Trustee, by entering into this Indenture, and
each Noteholder, by accepting a note, and any Series Enhancer hereby covenant,
and agree, that they will not at any time institute against the Issuer or the
Transferor, or join in any institution against the Issuer or the Transferor, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any United States federal or state bankruptcy or
similar law.
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IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have
caused this Indenture to be duly executed by their respective officers thereunto
duly authorized and attested, all as of the day and year first above written.
WILMINGTON TRUST COMPANY
not in its individual capacity, but
solely as Owner Trustee on behalf of the
HOUSEHOLD CONSUMER LOAN MASTER NOTE
TRUST I
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION,
not in its individual capacity, but
solely as Indenture Trustee and
Securities Intermediary
By: /s/ ▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: Assistant Vice President
88