OH&S DRAFT
12/15/00
EXHIBIT 4.1
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CONSECO PRIVATE LABEL CREDIT CARD MASTER NOTE TRUST,
Issuer
and
U.S. BANK TRUST NATIONAL ASSOCIATION,
Indenture Trustee and Securities Intermediary
FORM OF
MASTER INDENTURE
Dated as of __________, 2001
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.......................................................................... 2
Section 1.02. Other Definitional Provisions........................................................ 14
ARTICLE II
THE NOTES
Section 2.01. Form Generally....................................................................... 15
Section 2.02. Denominations........................................................................ 15
Section 2.03. Execution, Authentication And Delivery............................................... 15
Section 2.04. Authenticating Agent................................................................. 16
Section 2.05. Registration Of And Limitations On Transfer And Exchange Of Notes................... 17
Section 2.06. Mutilated, Destroyed, Lost Or Stolen Notes........................................... 18
Section 2.07. Persons Deemed Owners................................................................ 19
Section 2.08. Appointment Of Paying Agent.......................................................... 19
Section 2.09. Access To List Of Noteholders' Names And Addresses................................... 19
Section 2.10. Cancellation......................................................................... 20
Section 2.11. Release Of Collateral................................................................ 20
Section 2.12. New Issuances........................................................................ 20
Section 2.13. Book-Entry Notes..................................................................... 22
Section 2.14. Notices To Clearing Agency Or Foreign Clearing Agency................................ 23
Section 2.15. Definitive Notes..................................................................... 23
Section 2.16. Global Note; Euro-Note Exchange Date................................................. 23
Section 2.17. Meetings Of Noteholders.............................................................. 24
Section 2.18. Uncertificated Classes............................................................... 24
ARTICLE III
REPRESENTATIONS AND COVENANTS OF ISSUER
Section 3.01. Payment Of Principal And Interest.................................................... 24
Section 3.02. Maintenance Of Office Or Agency...................................................... 24
Section 3.03. Money For Note Payments To Be Held In Trust.......................................... 24
Section 3.04. Existence............................................................................ 26
Section 3.05. Protection Of Trust.................................................................. 26
Section 3.06. Opinions As To Collateral............................................................ 26
Section 3.07. Performance Of Obligations; Servicing Of Receivables................................. 27
i
TABLE OF CONTENTS (cont'd.)
Section 3.08. Negative Covenants................................................................... 28
Section 3.09. Statements As To Compliance.......................................................... 29
Section 3.10. Issuer May Consolidate, Etc., Only On Certain Terms.................................. 29
Section 3.11. Successor Substituted................................................................ 31
Section 3.12. No Other Business.................................................................... 31
Section 3.13. No Borrowing......................................................................... 31
Section 3.14. Servicer's Obligations............................................................... 31
Section 3.15. Guarantees, Loans, Advances And Other Liabilities.................................... 31
Section 3.16. Capital Expenditures................................................................. 31
Section 3.17. Removal Of Administrator............................................................. 31
Section 3.18. Restricted Payments.................................................................. 32
Section 3.19. Notice Of Events Of Default.......................................................... 32
Section 3.20. Further Instruments And Acts......................................................... 32
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction And Discharge Of This Indenture......................................... 32
Section 4.02. Application Of Trust Money........................................................... 33
ARTICLE V
AMORTIZATION EVENTS, DEFAULTS AND REMEDIES
Section 5.01. Amortization Events.................................................................. 34
Section 5.02. Events Of Default.................................................................... 34
Section 5.03. Acceleration Of Maturity; Rescission And Annulment................................... 35
Section 5.04. Collection Of Indebtedness And Suits For Enforcement By Indenture Trustee............ 36
Section 5.05. Remedies; Priorities................................................................. 37
Section 5.06. Optional Preservation Of The Collateral.............................................. 39
Section 5.07. Limitation On Suits.................................................................. 39
Section 5.08. Unconditional Rights Of Noteholders To Receive Principal And Interest................ 40
Section 5.09. Restoration Of Rights And Remedies................................................... 40
Section 5.10. Rights And Remedies Cumulative....................................................... 40
Section 5.11. Delay Or Omission Not Waiver......................................................... 41
Section 5.12. Rights Of Noteholders To Direct Indenture Trustee.................................... 41
Section 5.13. Waiver Of Past Defaults.............................................................. 41
Section 5.14. Undertaking For Costs................................................................ 41
ii
TABLE OF CONTENTS (cont'd.)
Section 5.15. Waiver Of Stay Or Extension Laws..................................................... 42
Section 5.16. Sale Of Receivables.................................................................. 42
Section 5.17. Action On Notes...................................................................... 42
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.01. Duties Of The Indenture Trustee...................................................... 43
Section 6.02. Notice Of Amortization Event Or Event Of Default..................................... 44
Section 6.03. Rights Of Indenture Trustee.......................................................... 45
Section 6.04. Not Responsible For Recitals Or Issuance Of Notes.................................... 46
Section 6.05. May Hold Notes....................................................................... 46
Section 6.06. Money Held In Trust.................................................................. 46
Section 6.07. Compensation, Reimbursement And Indemnification...................................... 46
Section 6.08. Replacement Of Indenture Trustee..................................................... 47
Section 6.09. Successor Indenture Trustee By Merger................................................ 47
Section 6.10. Appointment Of Co-Indenture Trustee Or Separate Indenture Trustee.................... 48
Section 6.11. Eligibility; Disqualification........................................................ 49
Section 6.12. Preferential Collection Of Claims Against............................................ 49
Section 6.13. Tax Returns.......................................................................... 49
Section 6.14. Representations And Covenants Of The Indenture Trustee............................... 49
Section 6.15. Custody of the Collateral............................................................ 50
ARTICLE VII
NOTEHOLDERS' LIST AND REPORTS BY INDENTURE TRUSTEE AND ISSUER
Section 7.01. Issuer To Furnish Indenture Trustee Names And Addresses Of Noteholders............... 50
Section 7.02. Preservation Of Information; Communications To Noteholders........................... 50
Section 7.03. Reports By Issuer.................................................................... 51
Section 7.04. Reports By Indenture Trustee......................................................... 51
Section 7.05. Notices.............................................................................. 51
ARTICLE VII
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 8.01. Collection Of Money.................................................................. 51
Section 8.02. Rights Of Noteholders................................................................ 52
Section 8.03. Establishment Of Collection Account And Special Funding Account...................... 52
Section 8.04. Collections And Allocations.......................................................... 54
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TABLE OF CONTENTS (cont'd.)
Section 8.05. Shared Principal Collections And Shared Transferor Principal Collections............. 56
Section 8.06. Additional Withdrawals From The Collection Account................................... 57
Section 8.07. Allocation Of Collateral To Pools.................................................... 57
Section 8.08a. Reallocation Groups.................................................................. 57
Section 8.08b. Shared Enhancement Groups............................................................ 57
Section 8.08c. Excess Finance Charge Sharing Groups................................................. 58
Section 8.09. Release Of Collateral................................................................ 58
Section 8.10. Opinion Of Counsel................................................................... 59
ARTICLE IX
DISTRIBUTIONS AND REPORTS TO NOTEHOLDERS............................................. 59
ARTICLE X
SUPPLEMENTAL INDENTURES
Section 10.01. Supplemental Indentures Without Consent Of Noteholders............................... 59
Section 10.02. Supplemental Indentures With Consent Of Noteholders.................................. 61
Section 10.03. Execution Of Supplemental Indentures................................................. 62
Section 10.04. Effect Of Supplemental Indenture..................................................... 62
Section 10.05. Conformity With Trust Indenture Act.................................................. 62
Section 10.06. Reference In Notes To Supplemental Indentures........................................ 62
ARTICLE XI
TERMINATION
Section 11.01. Termination Of Trust................................................................. 63
Section 11.02. Final Distribution................................................................... 63
Section 11.03. Transferor's Termination Rights...................................................... 64
Section 11.04. Defeasance........................................................................... 64
ARTICLE XII
MISCELLANEOUS
Section 12.01. Compliance Certificates And Opinions Etc............................................. 65
Section 12.02. Form Of Documents Delivered To Indenture Trustee..................................... 67
Section 12.03. Acts Of Noteholders.................................................................. 67
Section 12.04. Notices, Etc. To Trustee And Issuer.................................................. 68
Section 12.05. Notices To Noteholders; Waiver....................................................... 68
Section 12.06. Alternate Payment And Notice Provisions.............................................. 69
Section 12.07. Conflict With Trust Indenture Act.................................................... 69
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TABLE OF CONTENTS (cont'd.)
Section 12.08. Effect Of Headings And Table Of Contents............................................. 69
Section 12.09. Successors And Assigns............................................................... 69
Section 12.10. Separability......................................................................... 69
Section 12.11. Benefits Of Indenture................................................................ 69
Section 12.12. Limitation on Voting Preferred Stock................................................. 69
Section 12.13. Governing Law........................................................................ 70
Section 12.14. Counterparts......................................................................... 70
Section 12.15. Trust Obligation..................................................................... 70
Section 12.16. No Petition.......................................................................... 70
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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, 8.09(c), 12.01(a)
(c)(2)...................................................... 2.11, 8.09(c), 12.01(a)
(c)(3)...................................................... 2.11, 8.09(c), 12.01(a)
(d)(1)...................................................... 2.11, 8.09(c), 12.01(b)
(d)(2)...................................................... Not Applicable
(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)
(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
_____________________
* This reconciliation and tie shall not, for any purpose, be deemed to be part
of the within indenture.
This MASTER INDENTURE, dated as of __________, 2001 (herein,
as amended, modified or supplemented from time to time as permitted hereby,
called the "Indenture"), between [OWNER TRUSTEE BANK], not in its individual
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capacity but solely as Owner Trustee on behalf of the CONSECO PRIVATE LABEL
CREDIT CARD MASTER NOTE TRUST, a business trust organized under the laws of
Delaware (herein, together with its permitted successors and assigns, called the
"Issuer" or the "Trust"), and U.S. BANK TRUST NATIONAL ASSOCIATION, a national
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banking association, as indenture trustee (herein, together with its successors
in the trusts hereunder, called the "Indenture Trustee") and securities
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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
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a conflict exists between the terms and provisions of this Indenture and any
Indenture Supplement, the terms and provisions of the Indenture Supplement shall
be controlling with respect to the related Series.
PRELIMINARY STATEMENT
The Issuer has duly authorized the execution and delivery of this
Indenture to provide for the issuance of its asset backed notes (the "Notes") as
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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 Conseco Bank Inc., a
Utah industrial loan corporation (the "Bank"), and Conseco Finance Credit Card
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Funding Corp., a Minnesota corporation, as Transferors (in such capacity, the
"Transferors"), and Conseco Bank Inc., as Servicer (in such capacity, the
"Servicer"), pursuant to which (a) the Transferors will convey to the Issuer all
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of their right, title and interest in, to and under the Receivables and (b) the
Servicer will agree to service the Receivables and make collections thereon on
behalf of the Noteholders.
Under the Receivables Purchase Agreements 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 Transferors 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 Owner Trustee or the Issuer, (f)
the Preferred Stock, (g) all other property of the Owner Trustee or 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").
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ARTICLE I
DEFINITIONS
Section 1.01. Definitions.
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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
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Class within a Series, a period following the Revolving Period during which
Collections 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).
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"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 __________, 2001 among the Issuer and the Administrator, as the same
may be amended, supplemented or otherwise modified from time to time.
"Administrator" shall mean Conseco Bank Inc., or its permitted
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successors and assigns, or any successor Administrator under the Administration
Agreement.
"Adverse Effect" shall have the meaning specified in the Transfer and
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Servicing Agreement.
"Aggregate Investor Percentage" shall mean, with respect to Principal
-----------------------------
Receivables, Finance Charge Receivables and Defaulted Receivables relating to a
particular Pool, as the case may be,
2
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
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.
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"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 a Transferor, any officer of such 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 such
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)
"Bank" shall mean Conseco Bank, Inc., and its successors and permitted
----
assigns.
"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
3
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.
------------
"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
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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
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successors in interest.
"Corporate Trust Office" means the principal 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 ________________________, __________, _________, Attention:
______________________ (facsimile no. (___) ___-____) or at such other address
as the Indenture Trustee may designate from time to time by notice to the
Noteholders and the Transferors, 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 Transferors).
"Coupon" shall have the meaning specified in Section 2.01.
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"Default" shall mean any occurrence that is, or with notice or the
-------
lapse of time or both would become, an Event of Default.
"Defeasance" shall have the meaning specified in subsection 11.04(a).
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"Defeased Series" shall have the meaning specified in subsection
--------------- ----------
11.04(a).
--------
"Definitive Notes" shall mean Notes in definitive, fully registered
----------------
form.
4
"Deposit Date" shall mean each day on which the Servicer deposits
------------
Collections in the Collection Account.
"Determination Date" shall mean, 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 the fifteenth day of each
calendar month.
"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 acceptable to the Rating Agency or (ii) a certificate of
deposit rating acceptable to the Rating Agency. Notwithstanding the previous
sentence any institution the appointment of which satisfies the Rating Agency
Condition shall be considered an Eligible Institution. If so qualified, the
Servicer may be considered an Eligible Institution for the purposes of this
definition.
"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 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 and Moody's;
(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 and Moody's;
(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 and
Moody's;
5
(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 the Standard & Poor's
and Moody's (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 satisfactory to
Standard & Poor's and Moody's; or
(h) any other investment of a type or rating that satisfies the
Rating Agency Condition.
"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 ▇▇▇▇▇▇ Guaranty Trust Company of New
------------------
York, Brussels office, 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 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 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.
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"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 make
waivers or other agreements, to exercise all
6
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 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.
"Indenture" shall mean this Master Indenture, dated as of __________,
---------
2001, 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 U.S. Bank Trust National Association, a
-----------------
national banking 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 Transferors 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
Transferors or any Affiliate of any of the foregoing Persons and (c) is not
connected with the Issuer, any such other obligor, the Transferors 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.
"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 initial principal amount of the notes of that
Series less any principal payments made on or prior to such date.]
"Investment Company Act" shall mean the Investment Company Act of
----------------------
1940, as amended.
"Issuer" shall mean the Trust.
------
7
"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.
---------- ------
"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, a Transferor, or Servicer, as applicable,
under the circumstances described in, and otherwise complying with, the
applicable requirements of Section 12.01.
-------------
"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 authenticated and delivered 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
authenticated and delivered pursuant to this Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Notes are
held by a bona fide purchaser;
8
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, a 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, a 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 __________________, a _______________, in
-------------
its capacity as owner trustee under the Trust Agreement, its successors in
interest and any successor owner trustee under the Trust Agreement.
"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.
"Permitted Assignee" shall mean any Person who, if it were to purchase
------------------
Receivables (or interests therein) in connection with a sale thereof pursuant to
Section 5.05 would not cause the Trust to be taxable as a publicly traded
------------
partnership for federal income tax purposes.
"Pool" shall mean the pool of Receivables having the same pool
----
designation as listed on the Schedule, and as to which the Series that relate to
such Pool (as designated in the Indenture Supplement for such Series) primarily
look 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 Transferors 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 Pool One and, with
---------------
respect to any Due Period, the annualized percentage equivalent of a fraction
(a) the numerator of which is equal to the Collections of Finance Charge
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 Pool One Principal
Receivables plus (ii) the Special Funding Amount each as of the last day of the
immediately preceding Due Period.
9
"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 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 Transferors 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 applicable Indenture Supplement,
selected by the Transferors 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 Transferors, 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 or, with respect to any
outstanding Series or Class not rated by any Rating Agency, the written consent
of such Series or Class as specified in the Indenture Supplement for such
Series.
10
"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 Receivables and other
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 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.
--------------
"Securities Intermediary" shall mean U.S. Bank Trust 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 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.
11
"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 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.
"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 debt of the Notes of any
outstanding Series or Class that were characterized as debt at the time of their
issuance, (b) such action will not cause the Trust to be deemed to be an
association (or publicly traded partnership) taxable as a corporation and (c)
such action will not cause or constitute an event in which gain or loss would be
recognized by any Noteholder.
"Transaction Documents" shall mean, with respect to any Series of
---------------------
Notes, the Certificate of Trust, the Trust Agreement, the Receivables Purchase
Agreements, the Transfer and Servicing
12
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 __________, 2001, among the Transferors, 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.
"Transferors" shall have the meaning specified in the Transfer and
-----------
Servicing Agreement.
"Transferors 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 Receivables and
Defaulted Receivables in a Pool, a percentage equal to 100% minus the 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.
"Trust" shall mean the Conseco Private Label Credit Card Master Note
-----
Trust, acting by and through ____________________, not in its individual
capacity but solely as Owner Trustee.
"Trust Agreement" shall mean the Trust Agreement relating to the
---------------
Trust, dated as of __________, 2001, between the Transferors 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.
"UCC" shall have the meaning specified in the Transfer and Servicing
---
Agreement.
13
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.
(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.
14
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 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.
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
15
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.
(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
16
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.
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.
17
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 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.
18
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
Section 2.07. Persons Deemed Owners.
---------------------
Prior to due presentment for registration of transfer of any Note, the
Issuer, the Indenture Trustee and any agent of the Transferors, the Issuer or
the Indenture Trustee shall treat the Person in whose name any Note is
registered as the owner of such Note for the purpose of receiving distributions
pursuant to the terms of the applicable Indenture Supplement and for all other
purposes whatsoever, whether or not such Note is overdue, and neither the
Transferors, the Issuer, the Indenture Trustee nor any agent of the Transferors,
the Issuer or the Indenture Trustee 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 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
19
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
accompanied by an Officer's Certificate, an Opinion of Counsel and Independent
Certificates in accordance with TIA ss.ss.314(c) and 314(d) or an Opinion of
Counsel in lieu of such Independent Certificates to the effect that the TIA does
not require any such Independent Certificates.
Section 2.12. New Issuances.
-------------
(a) Pursuant to one or more Indenture Supplements, the Transferors
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"). 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 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 Transferors shall have given the Indenture Trustee, the
Owner Trustee, the Servicer and each
20
Rating Agency notice (unless such notice requirement is otherwise waived)
of such issuance and the Series Issuance Date;
(ii) the Transferors 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 Transferors 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
Transferors 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 Transferors 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; and
(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.
Any Note held by the Transferors 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 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
21
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 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.
22
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 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).
23
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 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 _________________________________, currently located
at _________________________________, Attention: ______________________
(facsimile no. (___) ___-____), to serve as its agent for the foregoing
purposes. The Issuer will give prompt written notice to the Indenture Trustee
and the Noteholders of the location, and of any change in the location, of any
such office or agency. If at any time the Issuer shall fail to maintain any such
office or agency or shall fail to furnish the Indenture Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office, and the Issuer hereby appoints the
Indenture Trustee at its Corporate Trust Office as its agent to receive all such
presentations, surrenders, notices and demands.
Section 3.03. Money for Note Payments to Be Held in Trust.
-------------------------------------------
As specified in Section 8.03(a) and (b) herein and in the related
--------------- ---
Indenture Supplement, all payments of amounts due and payable with respect to
the Notes which are to be made from amounts
24
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;
(iii) at any time during the continuance of any such default, upon
the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of Notes if
at any time it ceases to meet the standards required to be met by a Paying
Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the satisfaction and
discharge of this Indenture or for any other purpose, by Issuer Order direct any
Paying Agent to pay to the Indenture Trustee all sums
25
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 business trust under the laws of the State of Delaware (unless
it becomes, or any successor Issuer hereunder is or becomes, organized under the
laws of any other state or of the United States of America, in which case the
Issuer will keep in full effect its existence, rights and franchises under the
laws of such other jurisdiction) and will obtain and preserve its qualification
to do business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Indenture, the
Notes, the Collateral and each other related instrument or agreement.
Section 3.05. 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;
(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 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
26
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 2001,
the Issuer shall furnish to the Indenture Trustee 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 Servicing Agreement or
such other instrument or agreement.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee in an Officer's Certificate of
the Issuer shall be deemed to be action taken by the Issuer. Initially, the
Issuer has contracted with the Administrator to assist the Issuer in performing
its duties under this Indenture.
(c) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the other Transaction
Documents and in the instruments and agreements relating to the Collateral,
including but not limited to filing or causing to be filed all UCC financing
statements and continuation statements required to be filed by the terms of this
Indenture and the Transfer and Servicing Agreement in accordance with and within
the time periods provided for herein and therein. 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 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 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, the Servicer
------------
shall continue to perform all servicing functions under the Transfer and
Servicing Agreement until the date specified in the Termination Notice
27
or otherwise specified by the Indenture Trustee or until a date mutually agreed
upon by the Servicer and the Indenture Trustee. As promptly as possible after
the giving of a Termination Notice to the Servicer, the Indenture Trustee shall
appoint a Successor Servicer, and such Successor Servicer shall accept its
appointment by a written assumption in a form acceptable to the Indenture
Trustee. In the event that a Successor Servicer has not been appointed and
accepted its appointment at the time when the Servicer ceases to act as
Servicer, the Indenture Trustee 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 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
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 and a majority in Outstanding
Amount of the Notes, amend, modify, waive, supplement, terminate or surrender,
or agree to any amendment, modification, supplement, termination, waiver or
surrender of, the terms of any Collateral (except to the extent otherwise
provided in the 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 Transferors under the
Transfer and Servicing Agreement; and (ii) that any such amendment shall not (A)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on the Receivables 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 the Holders of all the Outstanding Notes. If
any such amendment, modification, supplement or waiver shall be so consented to
by the Indenture Trustee and such Noteholders, the Issuer agrees, promptly
following a request by the Indenture Trustee to do so, to execute and deliver,
in its own name and at its own expense, such agreements, instruments, consents
and other documents as the Indenture Trustee may deem necessary or appropriate
in the circumstances.
Section 3.08. 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 against any present or former Noteholder by reason of the
payment of any taxes levied or assessed upon any part of the Collateral;
28
(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, within 120 days
after the end of each fiscal year of the Issuer (commencing within 120 days
after the end of the fiscal year 2001), 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 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 or merge with or into any other
Person, unless:
(1) the Person (if other than the Issuer) formed by or surviving
such consolidation or merger 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, in a form
satisfactory to the Indenture Trustee, 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) immediately after giving effect to such transaction, no
Event of Default or Amortization Event shall have occurred and be
continuing;
(3) the Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that (i) such
consolidation or merger and such supplemental indenture comply with this
Section, (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;
29
(4) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(5) 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) to the effect that such
transaction will not have any material adverse tax consequence to any
Noteholder; and
(6) 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, in form satisfactory to the Indenture Trustee, the due and
punctual payment of the principal of and interest on all Notes and the
performance or observance of every agreement and covenant of this Indenture
on the part of the Issuer to be performed or observed, all as provided
herein, (C) expressly 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 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) 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 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).
30
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 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 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.
31
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 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 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 Transferors of
their 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, 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
32
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
(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.
33
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 Transferors
----
[or, unless the Rating Agency Condition is satisfied with respect to the
deletion of the Bank or other Account Owner from this subsection, the
occurrence of an Insolvency Event relating to the Bank 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 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 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 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
34
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 any 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, 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
---
of Notes representing not less than a majority of the Outstanding Amount of each
affected Series of the Notes may and (ii) subsections 5.02(c) or (d) should
------------------- ---
occur and be continuing the Indenture Trustee shall declare all the Notes of
such Series to be immediately due and payable, by a notice in writing to the
Issuer (and to the Indenture Trustee if declared by Noteholders), and upon any
such declaration the Revolving Period (or, if applicable, any other period of
principal payment or accumulation other 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.
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.
35
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 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
36
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;
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 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
37
Indenture with respect thereto, whether by declaration or otherwise,
enforce any judgment obtained, and collect from the Issuer and any other
obligor upon such Notes moneys adjudged due;
(ii) 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 the Holders of a
majority of the Outstanding Amount of the Notes of any affected 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 to a Permitted Assignee 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 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 to a Permitted Assignee
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 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: Conseco Bank Inc. or an Affiliate of Conseco Bank Inc. 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;
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;
38
FIFTH: 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
SIXTH: 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 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) 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 has previously given written
notice to the Indenture Trustee of a continuing Event of Default;
39
(c) such Noteholder or Noteholders has 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 a majority of
the Outstanding Amount of the Notes 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.
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 to such Noteholder, then and in every such case the
Issuer, the Indenture Trustee and the Noteholder shall, subject to any
determination in such Proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Indenture Trustee and the Noteholders shall continue as though no such
Proceeding had been instituted.
Section 5.10. Rights and Remedies Cumulative.
------------------------------
No right, remedy, power or privilege herein conferred upon or reserved
to the Indenture Trustee or to the Noteholders is intended to be exclusive of
any other right, remedy, power or privilege, and every right, remedy, power or
privilege shall, to the extent permitted by law, be cumulative and in addition
to every 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.
40
Section 5.11. Delay or Omission Not Waiver.
----------------------------
No failure to exercise and no delay in exercising, on the part of the
Indenture Trustee or of any Noteholder or other Person, any right or remedy
occurring hereunder upon any Event of Default shall impair any such right or
remedy or constitute a waiver thereof of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article V or by law
to the Indenture Trustee or to the Noteholders may be exercised from time to
time, and as often as may be deemed expedient, by the Indenture Trustee or by
the Noteholders, as the case may be.
Section 5.12. Rights of Noteholders to Direct Indenture Trustee.
-------------------------------------------------
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:
------------
(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, a majority of the
------------
Outstanding Amount of such Notes may, on behalf of all such 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,
41
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, 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).
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 from Permitted Assignees 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 Receivables (or interests therein). The Transferors or any of
their affiliates (other than Conseco Finance Corp. ) who are Permitted Assignees
shall be entitled to participate in, and to receive from the Indenture Trustee a
copy of each other bid submitted in connection with, such bidding process;
provided that (a) at least one participant other than the Transferors and any of
their affiliates must submit a bona fide offer, and (b) the Transferors and any
of their affiliates are prohibited from bidding an amount which exceeds fair
value for the transferred assets. 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
42
Collateral or upon any of the assets of the Issuer. Any money or property
collected by the Indenture Trustee shall be applied as specified in 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 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 which would entitle a majority of the Outstanding
Amount of the Notes to take any action pursuant to this Indenture or any
Indenture Supplement.
(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.
(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;
--------------
43
(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 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 Transferors 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, 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 (except as otherwise provided in the
Transfer and Servicing Agreement).
(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, and (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 Events of Default have
occurred and are continuing.
(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 the Rating Agencies, notice of such
Amortization Event or Event of Default hereunder known to the Indenture Trustee
within
44
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 fully be
protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, note or other paper or document reasonably believed by it to be
genuine and to have been signed or presented by the proper party or parties;
(b) 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, 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.
45
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.
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.
46
Section 6.08. Replacement of Indenture Trustee.
--------------------------------
No resignation or removal of the Indenture Trustee and no appointment
of a successor Indenture Trustee shall become effective until the acceptance of
appointment by the successor Indenture Trustee pursuant to this Section. The
Indenture Trustee may resign at any time by giving 30 days' written notice to
the Issuer. A majority of the Outstanding Amount of the Notes may remove the
Indenture Trustee by so notifying the Indenture Trustee and may appoint a
successor Indenture Trustee. The Owner Trustee at the direction of the
Transferors 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 Transferors 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 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 or the Holders of 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 may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section, the Issuer's obligations under Section 6.07 shall continue for the
------------
benefit of the retiring Indenture Trustee.
Section 6.09. Successor Indenture Trustee by Merger.
-------------------------------------
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 written notice of any such
transaction promptly after such transaction.
47
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 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.
48
(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 (S)310(a). The Indenture Trustee shall have a combined capital and surplus
of at least $50,000,000 as set forth in its most recent published annual report
of condition and 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 (S)310(b), including the optional provision permitted by
the second sentence of TIA (S)310(b)(9); provided, however, that there shall be
excluded from the operation of TIA (S)310(b)(1) any indenture or indentures
under which other securities of the Issuer are outstanding if the requirements
for such exclusion set forth in TIA (S)310(b)(1) are met.
Section 6.12. Preferential Collection of Claims Against. The
-----------------------------------------
Indenture Trustee shall comply with TIA (S)311(a), excluding any creditor
relationship listed in TIA (S)311(b). An Indenture Trustee who has resigned or
been removed shall be subject to TIA (S)311(a) to the extent indicated.
Section 6.13. Tax Returns.
-----------
In the event the Trust shall be required to file tax returns, the
Issuer shall cause the Servicer to prepare or cause to be prepared such tax
returns and the Issuer shall cause the Servicer to provide such tax returns to
the Owner Trustee for signature at least five days before such tax returns are
due to be filed. The Issuer shall also cause the Servicer, in accordance with
the terms of each Indenture Supplement, to prepare or 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 of
America;
(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
49
(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 U.S. Bank Trust 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 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 U.S. Bank Trust 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.
------------
50
(b) Noteholders may communicate, pursuant to TIA (S)312(b), with
other Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Indenture Trustee and the Transfer Agent and
Registrar shall have the protection of TIA (S)312(c).
Section 7.03. 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 (S)313(c)) such
summaries of any information, documents and reports required to be filed by
the Issuer pursuant to clauses (i) and (ii) of this Section 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 (S)313(a), within 60 days after each March 31
beginning with March 31, 2001, the Indenture Trustee shall mail to each
Noteholder as required by TIA (S)313(c) a brief report dated as of such date
that complies with TIA (S)313(a). The Indenture Trustee also shall comply with
TIA (S)313(b).
A copy of each report at the time of its mailing to Noteholders shall
be filed by the Indenture Trustee with the Commission and each stock exchange,
if any, on which 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.
51
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, and upon the
request of the Holders of a majority of the Outstanding Amount of the Notes
shall, 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 an
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.
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
------------------
52
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 Transferors on any
Deposit Date to the extent the Transferors are 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. Unless directed by the Servicer, funds deposited in
the Collection 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 Collection Account shall be paid
to the Transferors, 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.
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,
53
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. Unless directed by the Servicer, 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 Receivables of
the related Pool with respect to the 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 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
54
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) Conseco Bank Inc. remains the Servicer and
maintains a commercial paper rating of not less than A-1 by Standard & Poor's
and P-1 by Moody's, (ii) Conseco Bank Inc. remains the Servicer, no Amortization
Event, Reinvestment Event or Event of Default shall have occurred, Conseco
Finance Corp., maintains a commercial paper rating of not less than A-1 by
Standard & Poor's and P-1 by Moody's, Conseco Bank Inc. remains a wholly-owned
subsidiary of Conseco Finance Corp. (directly or indirectly) and, in the event
that there is any material change in the financing relationship between Conseco
Bank Inc. and Conseco Finance Corp., (A) Conseco Bank Inc. 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 1:00 p.m.,
New York City time, on the Distribution 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 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 Transferors 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 and each
Rating Agency notice of such allocation;
(ii) the Rating Agency Condition shall have been satisfied with
respect to such allocation; and
55
(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, (a) 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 (b) 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 Transferors may, at their 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 Transferors with
respect to Collections of Principal Receivables with respect to such Pool,
regardless of whether such Collections were initially allocated to the
Transferors 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 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 each Transferor to the Indenture Trustee of an Officer's Certificate
to the affect that, in the reasonable judgment of such Transferor, the sharing
of Shared Transferor Principal Collections would not have adverse regulatory
implications with respect to such Transferor or any Affiliate thereof and such
sharing will continue only until such time, if any, at which each Transferor
shall deliver to the Indenture Trustee an Officer's Certificate to the effect
that, in the reasonable belief of such Transferor, the continued sharing of
Shared Transferor Principal Collections among Series would have adverse
regulatory implications with respect to such Transferor or any Affiliate
thereof. Following
56
the delivery by each 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. Additional Withdrawals from the Collection Account.
--------------------------------------------------
On or before the Determination Date with respect to any Due Period,
the Servicer shall determine the amounts payable to the Bank or any other
Transferor with respect to such Due Period under the applicable Transfer and
Servicing Agreement in respect of amounts credited to the Collection Account
that were not transferred to the Trust hereunder, and the Servicer shall
withdraw such amounts from the Collection Account and pay such amount to the
Bank or any other Transferor, as applicable.
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 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.
Section 8.08a. Reallocation Groups. Collections of Finance Charge
-------------------
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
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
57
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 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 Transferors
an amount equal to the excess, if any, of (i) the aggregate amount for all such
outstanding Series of Collections of Finance Charge Receivables which the
related Indenture Supplements specify are to be treated as "Excess Finance
--------------
Charge 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 Collections
among Series will continue only until such time, if any, at which each
Transferor shall deliver to the Indenture Trustee an Officer's Certificate to
the effect that, in the reasonable belief of such Transferor, the continued
sharing of Excess Finance Charge and Administrative Collections among Series
would have adverse regulatory implications with respect to such Transferor.
Following the delivery by each Transferor of such an Officer's Certificate to
the Indenture Trustee there will not be any further sharing of Excess Finance
Charge Collections among Series.
Section 8.09. Release of Collateral.
---------------------
(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 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
(S)(S)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
each Transferor for its own account any funds that, upon such release, would
otherwise be remitted to the Issuer.
58
Section 8.10. Opinion of Counsel.
------------------
The Indenture Trustee shall receive at least seven days' notice when
requested by the Issuer to take any action pursuant to Section 8.09(a),
---------------
accompanied by copies of any instruments involved, and the Indenture Trustee
shall also require, as a condition to such action, an Opinion of Counsel, in
form and substance reasonably satisfactory to the Indenture Trustee, stating the
legal effect of any such action, outlining the steps required to complete the
same, and concluding that all conditions precedent to the taking of such action
have been complied with and such action will not materially and adversely impair
the security for the Notes or the rights of the Noteholders in contravention of
the provisions of this Indenture; provided, however, that such Opinion of
Counsel shall not be required to express an opinion as to the fair value of the
Collateral. The Indenture Trustee and counsel rendering any such opinion may
rely, without independent investigation, on the accuracy and validity of any
certificate or other instrument delivered to the Indenture Trustee in connection
with any such action.
ARTICLE IX
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 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;
59
(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
inconsistent with any other provision herein or in any supplemental indenture,
(B) to 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
Transferors 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 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) each Transferor shall have delivered to the Indenture Trustee an Officer's
Certificate, dated the date of any such action, stating that such 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 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) each Transferor delivers to the Indenture
Trustee and the Owner Trustee an Officer's Certificate to the effect
60
that the proposed amendments meet the requirements set forth in this subsection,
(ii) each Rating Agency will have notified the Transferors, the Servicer, the
Indenture Trustee 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 Transferors may make without the consent of
Noteholders pursuant to the preceding sentence may include, without limitation,
the addition of a sale of Receivables.
Section 10.02. Supplemental Indentures with Consent of Noteholders.
---------------------------------------------------
The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, also may, with prior notice to the Rating Agencies and with the consent
of the Holders of not less than a majority of the Outstanding Amount of the
Notes of each adversely affected Series of Notes, by Act of such Holders
delivered to the Issuer and the Indenture Trustee, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to,
changing in any manner or eliminating any of the provisions of this Indenture or
of modifying in any manner the rights of such Noteholders under this Indenture;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each outstanding Note affected thereby:
(a) change the due date of any installment of principal of or
interest on any Note, or reduce the principal amount thereof, the interest
rate specified thereon or the redemption price with respect thereto or
change any place of payment where, or the coin or currency in which, any
Note or any interest thereon is payable;
(b) impair the right to institute suit for the enforcement of
the provisions of this Indenture requiring the application of funds
available therefor, as provided in Article V, to the payment of any such
amount due on the Notes on or after the respective due dates thereof (or,
in the case of redemption, on or after the Redemption Date);
(c) reduce the percentage 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;
(d) 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;
(e) 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 necessary to amend the Indenture or any Transaction Documents
which require such consent;
(f) 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
(g) permit the creation of any Lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the
Collateral for any Notes or, except as otherwise permitted or contemplated
herein, terminate the lien of this Indenture on any such
61
Collateral at any time subject hereto or deprive the Holder of any Note of
the security provided by the lien of this Indenture.
The Indenture Trustee may in its discretion determine whether or not any Notes
would be affected by any supplemental indenture and any such determination shall
be conclusive upon the Holders of all Notes, whether theretofore or thereafter
authenticated and delivered hereunder. The Indenture Trustee shall not be liable
for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee
of any Supplement Indenture pursuant to this Section, the Indenture Trustee
shall mail to the Holders of the Notes to which such amendment or supplemental
indenture relates written notice setting forth in general terms the substance of
such supplemental indenture. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
Section 10.03. 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.
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.
62
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 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 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
Transferors any monies held by them for the payment of principal or interest
that remains unclaimed for two years. After payment to the Transferors,
Noteholders entitled to the money must look to the Transferors for payment as
general creditors unless an applicable abandoned property law designates another
Person.
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Section 11.03. Transferors' 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 Interchanges and 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 Transferors 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.
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 Transferors' 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;
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(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;
(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 each Transferor stating that such 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 a 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 a 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 (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;
(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;
65
(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 the Collateral or other
property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of any
signer thereof as to the matters described in clause (i) above, the Issuer
shall also deliver to the Indenture Trustee (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 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.
66
Section 12.02. Form of Documents Delivered to Indenture Trustee.
------------------------------------------------
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of 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, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.
Section 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, 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.
67
(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, Etc. to Trustee and Issuer.
-----------------------------------
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 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
(b) the Issuer by the Indenture Trustee or by any Noteholder shall be
sufficient for every purpose hereunder if in writing and (i) mailed, first-class
postage prepaid, to the Issuer addressed to it at Conseco Private Label Credit
Card Master Note Trust, _________________________________
_________________________________ 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 Conseco Private Label Credit Card Master
Note Trust, c/o _________________________________,
_________________________________.
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 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
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
68
giving such notice as shall be satisfactory to the Indenture Trustee shall be
deemed to be a sufficient giving of such notice.
Where this Indenture provides for notice to any Rating Agency, failure
to give such notice shall not affect any other rights or obligations created
hereunder and shall not under any circumstance constitute a Default or Event of
Default.
Section 12.06. 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 ss.ss.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.
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
Transferors in trust, for the benefit of the Noteholders and shall vote such
stock only pursuant to the written instructions of Noteholders holding more than
50% of the Outstanding Amount of Notes of all Series. The Preferred
69
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.
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 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, hereby covenant and agree that they will not at
any time institute against the Issuer or the Transferors, or join in any
institution against the Issuer or the Transferors, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar law.
70
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.
[OWNER TRUSTEE BANK], not
in its individual capacity
but solely as Owner Trustee
on behalf of the CONSECO
PRIVATE LABEL CREDIT CARD
MASTER NOTE TRUST
By: _____________________________
Name:
Title:
U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Indenture Trustee and
Securities Intermediary
By: _____________________________
Name:
Title: