Exhibit 10.11
CONN FUNDING II, L.P.,
as Issuer
and
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
as Trustee
----------
BASE INDENTURE
Dated as of September 1, 2002
----------
Asset Backed Notes
(Issuable in Series)
TABLE OF CONTENTS
Page
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE ....................................2
Section 1.1. Definitions .................................................2
Section 1.2. Incorporation by Reference of Trust Indenture Act ..........31
Section 1.3. Cross-References ...........................................32
Section 1.4. Accounting and Financial Determinations;
No Duplication .............................................32
Section 1.5. Rules of Construction ......................................32
Section 1.6. Other Definitional Provisions ..............................33
ARTICLE 2.
THE NOTES ....................................................................33
Section 2.1. Designation and Terms of Notes .............................33
Section 2.2. New Series Issuances .......................................34
Section 2.3. [Reserved] .................................................36
Section 2.4. Execution and Authentication ...............................36
Section 2.5. Authenticating Agent .......................................37
Section 2.6. Registration of Transfer and Exchange of Notes ............38
Section 2.7. Appointment of Paying Agent ................................41
Section 2.8. Paying Agent to Hold Money in Trust ........................42
Section 2.9. Private Placement Legend ...................................44
Section 2.10. Mutilated, Destroyed, Lost or Stolen Notes .................45
Section 2.11. Temporary Notes ............................................46
Section 2.12. Persons Deemed Owners ......................................46
Section 2.13. Cancellation ...............................................47
Section 2.14. Release of Trust Estate ....................................47
Section 2.15. Payment of Principal and Interest ..........................47
Section 2.16. Book-Entry Notes ...........................................48
Section 2.17. Notices to Clearing Agency .................................51
Section 2.18. Definitive Notes ...........................................51
Section 2.19. Global Note; Euro-Note Exchange Date .......................52
Section 2.20. Tax Treatment ..............................................53
ARTICLE 3.
[ARTICLE 3 IS RESERVED AND SHALL BE SPECIFIED IN ANY
SUPPLEMENT WITH RESPECT TO ANY SERIES OF NOTES] ..............................53
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ARTICLE 4.
NOTEHOLDER LISTS AND REPORTS .................................................53
Section 4.1. Issuer To Furnish To Trustee Names and Addresses of
Noteholders ................................................53
Section 4.2. Preservation of Information; Communications to
Noteholders ................................................53
Section 4.3. Reports by Issuer ..........................................54
Section 4.4. Reports by Trustee .........................................55
Section 4.5. Reports and Records for the Trustee and Instructions .......55
ARTICLE 5.
ALLOCATION AND APPLICATION OF COLLECTIONS ....................................55
Section 5.1. Rights of Noteholders ......................................55
Section 5.2. Collection of Money ........................................56
Section 5.3. Establishment of Accounts ..................................56
Section 5.4. Collections and Allocations ................................58
Section 5.5. Determination of Monthly Interest ..........................60
Section 5.6. Determination of Monthly Principal .........................60
Section 5.7. General Provisions Regarding Accounts ......................60
Section 5.8. Removed Receivables ........................................61
Section 5.9. [Reserved] .................................................61
Section 5.10. Servicer Letter of Credit ..................................61
ARTICLE 6.
[ARTICLE 6 IS RESERVED AND SHALL BE SPECIFIED IN ANY SUPPLEMENT WITH
RESPECT TO ANY SERIES] .......................................................64
ARTICLE 7.
[ARTICLE 7 IS RESERVED AND SHALL BE SPECIFIED IN ANY SUPPLEMENT WITH
RESPECT TO ANY SERIES] .......................................................64
ARTICLE 8.
COVENANTS ....................................................................65
Section 8.1. Money for Payments To Be Held in Trust .....................65
Section 8.2. Affirmative Covenants of Issuer ............................65
Section 8.3. Negative Covenants .........................................72
Section 8.4. Further Instruments and Acts ...............................74
Section 8.5. Appointment of Successor Servicer ..........................74
Section 8.6. Perfection Representations. ................................75
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ARTICLE 9.
PAY OUT EVENTS AND REMEDIES ..................................................75
Section 9.1. Pay Out Events .............................................75
ARTICLE 10.
REMEDIES .....................................................................76
Section 10.1. Events of Default ..........................................76
Section 10.2. Rights of the Trustee Upon Events of Default ...............77
Section 10.3. Collection of Indebtedness and Suits for Enforcement by
Trustee ....................................................78
Section 10.4. Remedies ...................................................80
Section 10.5. [Reserved] .................................................81
Section 10.6. Waiver of Past Events ......................................81
Section 10.7. Limitation on Suits ........................................81
Section 10.8. Unconditional Rights of Holders to Receive Payment;
Withholding Taxes ..........................................82
Section 10.9. Restoration of Rights and Remedies .........................82
Section 10.10. The Trustee May File Proofs of Claim .......................82
Section 10.11. Priorities .................................................83
Section 10.12. Undertaking for Costs ......................................83
Section 10.13. Rights and Remedies Cumulative .............................84
Section 10.14. Delay or Omission Not Waiver ...............................84
Section 10.15. Control by Noteholders .....................................84
Section 10.16. Waiver of Stay or Extension Laws ...........................84
Section 10.17. Action on Notes ............................................85
Section 10.18. Performance and Enforcement of Certain Obligations .........85
Section 10.19. Reassignment of Surplus ....................................85
ARTICLE 11.
THE TRUSTEE ..................................................................86
Section 11.1. Duties of the Trustee ......................................86
Section 11.2. Rights of the Trustee ......................................89
Section 11.3. Trustee Not Liable for Recitals in Notes ...................91
Section 11.4. Individual Rights of the Trustee ...........................91
Section 11.5. Notice of Defaults .........................................91
Section 11.6. Compensation ...............................................92
Section 11.7. Replacement of the Trustee .................................92
Section 11.8. Successor Trustee by Merger, etc ...........................93
Section 11.9. Eligibility: Disqualification ..............................94
Section 11.10. Appointment of Co-Trustee or Separate Trustee ..............94
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Section 11.11. Preferential Collection of Claims Against the Issuer .......96
Section 11.12. Tax Returns ................................................96
Section 11.13. Trustee May Enforce Claims Without Possession of Notes .....96
Section 11.14. Suits for Enforcement ......................................96
Section 11.15. Reports by Trustee to Holders ..............................97
Section 11.16. Representations and Warranties of Trustee ..................97
Section 11.17. The Issuer Indemnification of the Trustee ..................97
Section 11.18. Trustee's Application for Instructions from the Issuer .....98
Section 11.19. Rights of Noteholders to Direct Trustee ....................98
Section 11.20. Maintenance of Office or Agency ............................98
Section 11.21. Concerning the Rights of the Trustee .......................98
ARTICLE 12.
DISCHARGE OF INDENTURE .......................................................99
Section 12.1. Satisfaction and Discharge of Indenture ....................99
Section 12.2. Application of Issuer Money ................................99
Section 12.3. Repayment of Moneys Held by Paying Agent ..................100
Section 12.4. Cleanup Call ..............................................100
Section 12.5. Final Payment with Respect to Any Series ..................100
Section 12.6. Termination Rights of Issuer ..............................101
Section 12.7. Repayment to the Issuer ...................................102
ARTICLE 13.
AMENDMENTS ..................................................................102
Section 13.1. Without Consent of the Noteholders ........................102
Section 13.2. Supplemental Indentures with Consent of Noteholders .......103
Section 13.3. Execution of Supplemental Indentures ......................106
Section 13.4. Effect of Supplemental Indenture ..........................106
Section 13.5. Conformity With TIA .......................................106
Section 13.6. Reference in Notes to Supplemental Indentures .............106
Section 13.7. Series Supplements ........................................107
Section 13.8. Revocation and Effect of Consents .........................107
Section 13.9. Notation on or Exchange of Notes ..........................107
Section 13.10. The Trustee to Sign Amendments, etc .......................107
ARTICLE 14.
REDEMPTION AND REFINANCING OF NOTES .........................................107
Section 14.1. Redemption and Refinancing ................................107
Section 14.2. Form of Redemption Notice .................................108
Section 14.3. Notes Payable on Redemption Date ..........................108
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ARTICLE 15.
MISCELLANEOUS ...............................................................108
Section 15.1. Compliance Certificates and Opinions, etc. ................108
Section 15.2. Form of Documents Delivered to Trustee ....................110
Section 15.3. Acts of Noteholders .......................................111
Section 15.4. Notices ...................................................112
Section 15.5. Notices to Noteholders: Waiver ............................113
Section 15.6. Alternate Payment and Notice Provisions ...................113
Section 15.7. Conflict with TIA .........................................114
Section 15.8. Effect of Headings and Table of Contents ..................114
Section 15.9. Successors and Assigns ....................................114
Section 15.10. Separability of Provisions ................................114
Section 15.11. Benefits of Indenture .....................................114
Section 15.12. Legal Holidays ............................................114
Section 15.13. GOVERNING LAW; JURISDICTION ...............................114
Section 15.14. Counterparts ..............................................115
Section 15.15. Recording of Indenture ....................................115
Section 15.16. Issuer Obligation .........................................115
Section 15.17. No Bankruptcy Petition Against the Issuer .................115
Section 15.18. No Joint Venture ..........................................116
Section 15.19. Rule 144A Information .....................................116
Section 15.20. No Waiver; Cumulative Remedies ............................116
Section 15.21. Third-Party Beneficiaries .................................116
Section 15.22. Merger and Integration ....................................116
Section 15.23. Rules by the Trustee ......................................117
Section 15.24. Duplicate Originals .......................................117
Section 15.25. Waiver of Trial by Jury ...................................117
Exhibits:
Exhibit A: Form of Reconveyance of Trust Estate
Exhibit B: Form of Contract
Exhibit C: Form of Lien Release
Schedule 1 Perfection Representations, Warranties and Covenants
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BASE INDENTURE, dated as of September 1, 2002, between CONN FUNDING II,
L.P., a special purpose limited partnership established under the laws of Texas,
as issuer (the "Issuer") and ▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, a
banking association organized and existing under the laws of the United States
of America, as Trustee.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Issuer has duly executed and delivered this Indenture to
provide for the issuance from time to time of one or more series of Notes,
issuable as provided in this Indenture; and
WHEREAS, all things necessary to make this Indenture a legal, valid and
binding agreement of the Issuer, enforceable in accordance with its terms, have
been done, and the Issuer proposes to do all the things necessary to make the
Notes, when executed by the Issuer and authenticated and delivered by the
Trustee hereunder and duly issued by the Issuer, the legal, valid and binding
obligations of the Issuer as hereinafter provided;
NOW, THEREFORE, for and in consideration of the premises and the receipt of
the Notes by the Noteholders, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Noteholders and any Enhancement Provider,
if applicable, as follows:
GRANTING CLAUSE
The Issuer hereby grants to the Trustee at the Initial Closing Date, for
the benefit of the Trustee, the Noteholders, each Enhancement Provider, if any
(unless otherwise provided in the related Series Supplement), and any other
Person to which any Issuer Obligations are payable (the "Secured Parties"), to
secure the Issuer Obligations, a lien on and security interest in all of the
Issuer's right, title and interest in, to and under the following property
whether now owned or hereafter acquired, now existing or hereafter created and
wherever located (a) the Receivables existing on or after the Cut-Off Date that
have been or may from time to time be conveyed, sold and/or assigned to the
Issuer pursuant to the Purchase Agreement; (b) all Collections thereon received
on or after the Cut-Off Date; (c) all Related Security; (d) the Collection
Account, any Investor Account, any Series Account and any other account
maintained by the Trustee for the benefit of the Secured Parties of any Series
of Notes (each such account, a "Trust Account"), all monies from time to time
deposited therein and all investment property from time to time credited
thereto; (e) all certificates and instruments, if any, representing or
evidencing any or all of the Trust Accounts or the funds on deposit therein from
time to time; (f) all Permitted Investments made at any time and from time to
time with moneys in the Trust Accounts or any subaccount thereof (including
income on such investments, unless otherwise specified in a Series Supplement);
(g) to the extent set forth in the Series Supplement for a Series, any
Enhancement, including any Credit Enhancement; (h) all monies available under
the Servicer Letter of Credit and under any Enhancement, including any Credit
Enhancement, to be provided for any Series for payment to the Noteholders of
such Series; (i) the Issuer's rights, powers and benefits, but
none of its obligations or burdens, under the Servicing Agreement and the
Purchase Agreement; (j) all additional property that may from time to time
hereafter (pursuant to the terms of any Series Supplement or otherwise) be
subjected to the grant and pledge hereof by the Issuer or by anyone on its
behalf; and (k) all present and future claims, demands, causes and choses in
action and all payments on or under and all proceeds of every kind and nature
whatsoever in respect of any or all of the foregoing, including all proceeds of
all of the foregoing and the conversion thereof, voluntary or involuntary, into
cash or other liquid property, all cash proceeds, accounts, accounts receivable,
notes, drafts, acceptances, chattel paper, checks, deposit accounts, insurance
proceeds, investment property, rights to payment of any and every kind and other
forms of obligations and receivables, instruments and other property which at
any time constitute all or part of or are included in the proceeds of any of the
foregoing (collectively, the "Trust Estate").
The foregoing Grant is made in trust to secure the payment of principal of
and interest on, and any other amounts owing in respect of, the Issuer
Obligations, equally and ratably without prejudice, priority or distinction
except as set forth herein, and to secure compliance with the provisions of this
Indenture, all as provided in this Indenture.
The Trustee, for the benefit of the Secured Parties, hereby acknowledges
such Grant, accepts the trusts under this Indenture in accordance with the
provisions of this Indenture and the lien on and security interest in the Trust
Estate conveyed by the Issuer pursuant to the Grant, declares that it shall
maintain such right, title and interest, upon the trust set forth, for the
benefit of all Secured Parties, subject to Sections 11.1 and 11.2 and agrees to
perform its duties required in this Indenture to the best of its ability to the
end that the interests of the Secured Parties may be adequately and effectively
protected.
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions. Certain capitalized terms used herein
(including the preamble and the recitals hereto) shall have the following
meanings:
"Accumulation Period" means, with respect to any Series or any Class within
a Series if provided for in the applicable Series Supplement, a period following
the Revolving Period, which shall be the accumulation or other period in which
Collections of Principal Receivables are accumulated in an account for the
benefit of the Noteholders of such Series, or a Class within such Series, in
each case as may be defined with respect to such Series in the related Series
Supplement and can be either a Controlled Accumulation Period or Rapid
Accumulation Period.
"Adverse Claim" means a lien, security interest, charge or encumbrance, or
other right or claim in, of or on any Person's assets or properties in favor of
any other Person (including any UCC financing statement or any similar
instrument filed against such Person's assets or properties), other than a
Permitted Encumbrance.
2
"Affiliate" means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. A Person shall be deemed to control another Person if
the controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of voting stock, by contract or otherwise.
"Agent" means any Transfer Agent and Registrar or Paying Agent.
"Aggregate Investor Default Amount" has, with respect to any Series of
Notes, the meaning specified in the related Series Supplement.
"Aggregate Investor Interests" means, as of any date of determination, the
sum of the Investor Interests of all Series of Notes issued and outstanding on
such date of determination.
"Aggregate Investor Percentage" with respect to Principal Receivables,
Finance Charges and Defaulted Receivables, as the case may be, means, as of any
date of determination, the sum of the applicable Investor Percentages of all
Series of Notes issued and outstanding on such date of determination; provided,
however, that the Aggregate Investor Percentage shall not exceed 100%.
"Aggregate Net Investor Charge-Offs" means, on any date of determination,
the sum of the "Net Investor Charge-Offs" or similar amount for each Series.
"Amortization Commencement Date" means, with respect to a Series of Notes,
the date on which a Pay Out Event for such Series is deemed to have occurred
pursuant to Section 9.1 or the start of an Amortization Period.
"Amortization Period" means, with respect to any Series of Notes, or any
Class within a Series, the period following the Revolving Period (as defined in
any related Series Supplement) which shall be the Controlled Amortization
Period, Principal Amortization Period or the Rapid Amortization Period, each as
may be defined in the applicable Series Supplement.
"Applicants" has the meaning specified in subsection 4.2(b).
"Available Servicer Letter of Credit Amount" has the meaning specified in
the Servicer Letter of Credit and, if applicable, subsection 5.10(e).
"Back-Up Servicing Agreement" has the meaning specified in the Servicing
Agreement.
"Bankruptcy Code" means The Bankruptcy Reform Act of 1978, as amended from
time to time, and as codified as 11 U.S.C. Section 101 et seq.
3
"Base Indenture" means this Base Indenture, dated as of September 1, 2002,
between the Issuer and the Trustee, as amended, restated, modified or
supplemented from time to time, exclusive of Series Supplements.
"Bearer Notes" has the meaning specified in Section 2.1.
"Bearer Rules" means the provisions of the Code, in effect from time to
time, governing the treatment of bearer obligations, including without
limitation sections 163(f), 165(j), 871, 881, 1287(a), 1441, 1442 and 4701.
"Book-Entry Notes" means beneficial interests in the Notes, ownership and
transfers of which shall be evidenced or made through book entries by a Clearing
Agency or a Foreign Clearing Agency as described in Section 2.16; provided that
after the occurrence of a condition whereupon book-entry registration and
transfer are no longer permitted and Definitive Notes are issued to the Note
Owners, such Definitive Notes shall replace Book-Entry Notes.
"Business Day" unless otherwise specified in a Series Supplement, means any
day that DTC is open for business at its office in New York City and any day
other than a Saturday, Sunday or other day on which banking institutions or
trust companies in the State of New York generally, the City of New York,
Chicago, Illinois, Beaumont, Texas, Minneapolis, Minnesota or Atlanta, Georgia
are authorized or obligated by law, executive order or governmental decree to be
closed.
"Business Taxes" means any Federal, state or local income taxes or taxes
measured by income, property taxes, excise taxes, franchise taxes or similar
taxes.
"Capitalized Lease" of a Person means any lease of property by such Person
as lessee which would be capitalized on a balance sheet of such Person prepared
in accordance with GAAP.
"Certificated Security" means a "certificated security" within the meaning
of the applicable UCC.
"Charged-Off Receivable" means a Receivable which, consistent with the
Credit and Collection Policy, would be written off the Issuer's or any Seller's
books as uncollectible.
"Class" means, with respect to any Series, any one of the classes of Notes
of that Series as specified in the related Series Supplement.
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act or any successor provision thereto.
4
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency or
Foreign Clearing Agency effects book-entry transfers and pledges of securities
deposited with the Clearing Agency or Foreign Clearing Agency.
"Clearstream, Luxembourg" means Clearstream Banking, societe anonyme.
"Closing Date" means the Initial Closing Date or any New Series Issuance
Date.
"Code" means the Internal Revenue Code of 1986, as amended, and the rules
and regulations promulgated thereunder.
"Collateral Interests" has the meaning, if any, with respect to any Series,
specified in the related Series Supplement.
"Collection Account" has the meaning specified in subsection 5.3(a).
"Collections" means, with respect to any Receivable, all cash collections
and other cash proceeds of such Receivable, including, without limitation, all
Principal Receivables, Finance Charges and Recoveries, if any, and cash proceeds
of Related Security with respect to such Receivable and any Deemed Collections
in each case, received on or after the applicable Cut-Off Date; provided,
however, that, if not otherwise specified, the term "Collections" shall refer to
the Collections on all the Receivables collectively together with any Investment
Earnings and any other funds received with respect to the Trust Estate.
"Companion Series" means (i) each Series which has been paired with another
Series (which Series may be prefunded or partially prefunded), such that the
reduction of the outstanding principal balance of the Notes of such Series
results in the increase of the outstanding principal balance of the Notes of
such other Series, as described in the related Series Supplements, and (ii) such
other Series.
"Conn" means Conn Appliances, Inc., a Texas corporation.
"Conn Officer's Certificate" means a certificate signed by any Responsible
Officer of the Issuer, a Seller or the Servicer, as the case may be, and
delivered to the Trustee.
"Contract" means any Installment Contract or Revolving Charge Account
Agreement.
"Contractual Obligation" means, with respect to any Person, any provision
of any security issued by that Person or of any indenture, mortgage, deed of
trust, contract, undertaking, agreement or other instrument to which that Person
is a party or by which it or any of its properties is bound or to which it or
any of its properties is subject.
5
"Controlled Accumulation Period" means, with respect to any Series of
Notes, the period specified, if any, in the applicable Series Supplement.
"Controlled Amortization Period" means, with respect to any Series of
Notes, the period specified, if any, in the applicable Series Supplement.
"Controlled Distribution Amount" means, with respect to any Series of
Notes, the amount (or amounts), if any, specified in the applicable Series
Supplement.
"Corporate Trust Office" means the principal office of the Trustee at which
at any particular time its corporate trust business shall be administered, which
office at the date of the execution of this Base Indenture is located at MAC
N9311-161 6/th/ and Marquette, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Corporate Trust Services/Asset-Backed Administration; provided that for purposes
of Sections 5.2, 8.2, and 11.20, the address of any such office shall be in the
Borough of Manhattan of the City of New York.
"Coupon" has the meaning specified in Section 2.1.
"Coverage Test" has the meaning specified in subsection 5.4(c).
"Credit Adjustment" has the meaning specified in subsection 5.4(d).
"Credit and Collection Policy" means the Sellers' credit and collection
policy or policies relating to Contracts and Receivables existing on the Closing
Date and referred to in Exhibit C to the Servicing Agreement, as amended,
supplemented or otherwise modified and in effect from time to time in compliance
with subsection 2.12(c) of the Servicing Agreement.
"Credit Enhancement" means, with respect to any Series of Notes, the rights
and benefits provided to the Noteholders of such Series of Notes pursuant to
issuance of subordinated Notes, over-collateralization, a collateral interest,
an insurance policy, a cash collateral guaranty or account, a letter of credit,
a surety bond, a spread account, a cash reserve account or a yield enhancement
account principally for the benefit of the Noteholders of such Series (or
Noteholders of a Class within such Series) as designated in the applicable
Series Supplement.
"Cut-Off Date" shall mean (i) with respect to Receivables purchased under
the Purchase Agreement on the Initial Closing Date, September 11, 2002 and (ii)
with respect to Subsequently Purchased Receivables, the related Purchase Date.
"Daily Payment Event" means any of the following events:
(i) the termination of CAI, L.P. as Servicer;
(ii) a Servicer Default shall occur;
6
(iii) the Servicer shall have failed to make any deposit required by
it under the Transaction Documents;
(iv) 35 days (or five Business Days, if the Servicer Letter of
Credit Bank does not have letter of credit ratings equal to or higher than
P-2 (or the equivalent thereof) from ▇▇▇▇▇'▇ and, if rated by any other
Rating Agency, such Rating Agency) shall have passed from the date the
Servicer received notice pursuant to Section 5.10(b) of the downgrading of
the letter of credit rating of the Servicer Letter of Credit Bank below the
Required Rating and either (A) there shall not have been delivered to the
Trustee a substitute Servicer Letter of Credit in accordance with Section
5.10(c) or (B) the Servicer shall not have instructed the Trustee to make a
demand for a drawing under the Servicer Letter of Credit pursuant to
Section 5.10(b) and in accordance with Section 5.10(e); or
(v) five Business Days remain to the expiry or termination of the
Servicer Letter of Credit and there shall not have been delivered to the
Trustee a substitute Servicer Letter of Credit in accordance with Section
5.10(c).
"Deemed Collections" means in connection with any Receivable, all amounts
payable (without duplication) with respect to such Receivable, by (i) any Seller
pursuant to Section 2.4 of the Purchase Agreement, (ii) the Servicer pursuant to
Section 2.08 of the Servicing Agreement and/or (iii) the Issuer pursuant to
subsection 3.02(d) of the Servicing Agreement.
"Default" means any occurrence that is, or with notice or lapse of time or
both would become, an Event of Default.
"Defaulted Receivable" means any Receivable (i) which has been written off
as uncollectible by the Servicer in accordance with the Credit and Collection
Policies, (ii) as to which, at the end of any Monthly Period, any payment, or
part thereof, remains unpaid for two hundred ten (210) days or more past the due
date for such payment determined by reference to the contractual payment terms,
as amended, of such Receivable or (iii) as to which the Obligor thereon has
suffered an Event of Bankruptcy (without giving effect to any grace periods set
forth in the definition of "Event of Bankruptcy").
"Definitive Notes" has the meaning specified in subsection 2.16(f).
"Delinquent Receivable" means a Receivable (other than a Defaulted
Receivable) as to which all or any part of a scheduled payment remains unpaid
for thirty one (31) days or more from the due date for such payment.
"Depository" has the meaning specified in Section 2.16.
7
"Depository Agreement" means, with respect to each Series, the agreement
among the Issuer, the Trustee and the Clearing Agency or Foreign Clearing
Agency, or as otherwise provided in the related Series Supplement.
"Determination Date" means, unless otherwise specified in the related
Series Supplement, the third Business Day prior to each Series Transfer Date.
"Dollars" and the symbol "$" mean the lawful currency of the United States.
"DTC" means The Depository Trust Company.
"Eligible Installment Contract Receivable" means each Installment Contract
Receivable:
(a) which was originated in compliance with all applicable
requirements of law (including without limitation all laws, rules and
regulations relating to truth in lending, fair credit billing, fair credit
reporting, fair debt collection practices and privacy) and which complies with
all applicable requirements of law;
(b) with respect to which all consents, licenses, approvals or
authorizations of, or registrations or declarations with, any governmental
authority required to be obtained, effected or given by the Seller in connection
with the creation or the execution, delivery and performance of such Receivable,
have been duly obtained, effected or given and are in full force and effect;
(c) as to which, at the time of the sale of such Receivable to
Issuer, the Seller or the Initial Seller, as applicable, was the sole owner
thereof and had good and marketable title thereto free and clear of all Liens;
(d) which is the legal, valid and binding payment obligation of the
Obligor thereon enforceable against such Obligor in accordance with its terms
and is not subject to any right of rescission, setoff, counterclaim or defense
(including the defense of usury) or to any repurchase obligation or return
right;
(e) which constitutes an "account" or "chattel paper", in each case
under and as defined in Article 9 of the UCC of all applicable jurisdictions;
(f) which was established in accordance with the Credit and
Collection Policies in the regular and ordinary course of the business of the
Seller; provided that Installment Contract Receivables representing up to 5% of
the aggregate Outstanding Principal Balance of all Installment Contract
Receivables may not have been established in accordance with the Credit and
Collection Policies and shall be deemed to meet the requirements of this
paragraph (f) so long as the credit applications for such Installment Contract
Receivables were approved by a senior manager and the related Obligors shall
have made at least six consecutive payments by the due date therefor with
respect to such Installment Contract Receivables;
8
(g) which is denominated and payable in Dollars, is only payable in
the United States of America and each Obligor in respect of which resides in the
United States of America;
(h) other than a Receivable (A) (i) which is a Defaulted Receivable
or was, on the related Purchase Date, a Delinquent Receivable (unless such
Delinquent Receivable is a Special Receivable), or (ii) as to which, on the
related Purchase Date, all of the original Obligors obligated thereon are
deceased (unless such Receivable is a Special Receivable), or (iii) as to which,
on the related Purchase Date, the Seller or the Parent has received notice that
the Obligor thereon has "skipped" or cannot be located (unless such Receivable
is a Special Receivable), or (B) which, consistent with the Credit and
Collection Policies, has been or should have been written off as uncollectible;
(i) the terms of which have not been modified or waived except as
permitted under the Credit and Collection Policies or the Transaction Documents;
excluding, however, (i) the aggregate Outstanding Principal Balance of all
Eligible Installment Contract Receivables the original final maturity date of
which has been extended to the extent exceeding 20% of the Outstanding Principal
Balance of all Eligible Receivables, (ii) without duplication, the aggregate
Outstanding Principal Balance of all Eligible Installment Contract Receivables
the original final maturity date of which has been extended by more than six
months to the extent exceeding 2% of the Outstanding Principal Balance of all
Eligible Receivables and (iii) without duplication, the aggregate Outstanding
Principal Balance of all Eligible Installment Contract Receivables the original
final maturity date of which has been extended by more than twelve months;
(j) which was originated in connection with a sale of Merchandise by
a Seller;
(k) which has no Obligor thereon that is an officer, director or
Affiliate of the Seller, is a Governmental Authority or is an Opportunity
Customer; provided, that Receivables any Obligor of which is an Opportunity
Customer may be an Eligible Installment Contract Receivable notwithstanding this
clause (k) to the extent, and only to the extent, that the Outstanding Principal
Balance of all Receivables any Obligor of which is an Opportunity Customer does
not exceed 25% of the Outstanding Principal Balance of all Receivables at such
time;
(l) the original terms of which provide for (i) repayment in full of
the amount financed or the principal balance thereof in equal monthly
installments over a maximum term not to exceed 36 months and (ii) stated
interest on the principal balance thereof, or the payment of finance charges in
respect of the amount financed, at a rate per annum that is not less than 18%
(unless otherwise required by law); provided, that Receivables which provide for
no payment of principal, interest or finance charges in respect of the amount
financed, in each case solely for a period not to exceed twelve months from the
origination thereof, and Receivables which provide for interest or finance
charges at a rate per annum of less than 18%, may be Eligible Receivables
notwithstanding this clause (l) to the extent, and only to the extent, that the
Outstanding Principal
9
Balance of all Installment Contract Receivables and Revolving Charge Receivables
which do not require payment of principal, interest or finance charges for up to
twelve months or which provide for interest or finance charges at a rate per
annum of less than 18%, does not exceed 20% of the Outstanding Principal Balance
of all Eligible Receivables at such time;
(m) the assignment of which to Issuer does not contravene or conflict
with any law, rule or regulation or any contractual or other restriction,
limitation or encumbrance, and the sale or assignment of which does not require
the consent of the Obligor thereof; and
(n) which is substantially in the form of one of the contracts
attached as Exhibit B hereto (with such changes therein as may be necessary or
desirable from time to time in light of local statutes and regulations).
"Eligible Receivable" means an Eligible Revolving Charge Receivable or an
Eligible Installment Contract Receivable.
"Eligible Revolving Charge Receivable" means each Revolving Charge
Receivable:
(a) which was originated in compliance with all applicable
requirements of law (including without limitation all laws, rules and
regulations relating to truth in lending, fair credit billing, fair credit
reporting, fair debt collection practices and privacy) and which complies with
all applicable requirements of law;
(b) with respect to which all consents, licenses, approvals or
authorizations of, or registrations or declarations with, any governmental
authority required to be obtained, effected or given by the Seller in connection
with the creation or the execution, delivery and performance of such Receivable,
have been duly obtained, effected or given and are in full force and effect;
(c) as to which, at the time of the sale of such Receivable to
Issuer, the Seller or the Initial Seller, as applicable, was the sole owner
thereof and had good and marketable title thereto free and clear of all Liens;
(d) which is the legal, valid and binding payment obligation of the
Obligor thereon enforceable against such Obligor in accordance with its terms
and is not subject to any right of rescission, setoff, counterclaim or defense
(including the defense of usury) or to any repurchase obligation or return
right;
(e) which constitutes an "account" or "chattel paper", in each case
under and as defined in Article 9 of the UCC of all applicable jurisdictions;
(f) which was established in accordance with the Credit and
Collection Policies in the regular and ordinary course of the business of the
Seller; provided that Revolving Charge Receivables representing up to 5% of the
aggregate Outstanding Principal Balance of all
10
Revolving Charge Receivables may not have been established in accordance with
the Credit and Collection Policies and shall be deemed to meet the requirements
of this paragraph (f) so long as the credit applications for such Revolving
Charge Receivables were approved by a senior manager and the related Obligors
shall have made at least six consecutive payments by the due date therefor with
respect to such Revolving Charge Receivables;
(g) which is denominated and payable in Dollars, is only payable in
the United States of America and each Obligor in respect of which resides in the
United States of America;
(h) other than a Receivable (A) (i) which is a Defaulted Receivable
or was, on the related Purchase Date, a Delinquent Receivable (unless such
Delinquent Receivable is a Special Receivable), or (ii) as to which, on the
related Purchase Date, all of the original Obligors obligated thereon are
deceased (unless such Receivable is a Special Receivable), or (iii) as to which,
on the related Purchase Date, the Seller or the Parent has received notice that
the Obligor thereon has "skipped" or cannot be located (unless such Receivable
is a Special Receivable), or (B) which, consistent with the Credit and
Collection Policies, has been or should have been written off as uncollectible;
(i) the terms of which have not been modified or waived except as
permitted under the Credit and Collection Policies or the Transaction Documents;
excluding, however, (i) the aggregate Outstanding Principal Balance of all
Eligible Revolving Charge Receivables that provide for a minimum monthly payment
of less than 1/30 of the highest outstanding balance since the last date on
which such outstanding balance was zero to the extent exceeding the difference
of 20% of the Outstanding Principal Balance of all Eligible Receivables minus
the aggregate Outstanding Principal Balance of all Eligible Installment Contract
Receivables the original final maturity date of which has been extended, (ii)
without duplication, the aggregate Outstanding Principal Balance of all Eligible
Revolving Charge Receivables that provide for a minimum monthly payment of less
than 1/36 of the highest outstanding balance since the last date on which such
outstanding balance was zero to the extent exceeding the difference of 2% of the
Outstanding Principal Balance of all Eligible Receivables minus the aggregate
Outstanding Principal Balance of all Eligible Installment Contract Receivables
the original final maturity date of which has been extended by more than six
months, (iii) without duplication, the aggregate Outstanding Principal Balance
of all Eligible Revolving Charge Receivables that provide for a minimum monthly
payment of less than 1/42 of the highest outstanding balance since the last date
on which such outstanding balance was zero;
(j) which was originated in connection with a sale of Merchandise by
a Seller;
(k) which has no Obligor thereon that is an officer, director or
Affiliate of the Seller, is a Governmental Authority or is an Opportunity
Customer;
(l) which arises under a Revolving Charge Account Agreement the
original terms of which provide for (i) the repayment of the balance thereof
with a minimum monthly
11
payment of not less than 1/30 of the highest outstanding balance since the last
date on which the outstanding balance in such account was zero and (ii) stated
interest on the balance thereof, or the payment of finance charges in respect of
the amount financed, at a rate per annum that is not less than 18% (unless
otherwise required by law); provided, that Receivables which provide for no
payment of principal, interest or finance charges in respect of the amount
financed, in each case solely for a period not to exceed twelve months from the
origination thereof, and Receivables which provide for interest or finance
charges at a rate per annum of less than 18%, may be Eligible Receivables
notwithstanding this clause (l) to the extent, and only to the extent, that the
Outstanding Principal Balance of all Installment Contract Receivables and
Revolving Charge Receivables which do not require payment of principal, interest
or finance charges for up to twelve months or which provide for interest or
finance charges at a rate per annum of less than 18% does not exceed 20% of the
Outstanding Principal Balance of all Receivables at such time;
(m) the assignment of which to Issuer does not contravene or conflict
with any law, rule or regulation or any contractual or other restriction,
limitation or encumbrance, and the sale or assignment of which does not require
the consent of the Obligor thereof; and
(n) which is substantially in the form of one of the contracts
attached as Exhibit B hereto (with such changes as may be necessary or desirable
from time to time in light of local statutes or regulations).
"Enhancement" means, with respect to any Series of Notes, the rights and
benefits provided directly to the Noteholders of such Series of Notes pursuant
to any Credit Enhancement, guaranteed rate agreement, maturity liquidity
facility, interest rate cap agreement, interest rate swap agreement, currency
swap agreement or any other similar arrangement, excluding the Servicer Letter
of Credit.
"Enhancement Agreement" means any contract, agreement, instrument or
document (other than a Series Supplement) governing the terms of any Enhancement
or pursuant to which any Enhancement is issued or outstanding.
"Enhancement Agreement Pay Out Event" means, with respect to any Series of
Notes, any Pay Out Event under any Enhancement Agreement specified in the
applicable Series Supplement, after giving effect to any applicable cure
periods.
"Enhancement Invested Amount" is defined, with respect to any Series of
Notes, in the applicable Series Supplement.
"Enhancement Provider" means the Person providing any Enhancement as
designated in the applicable Series Supplement, other than any Noteholders the
Notes of which are subordinated to any Class or Series of Notes.
12
"Enhancement Provider Default" is defined, with respect to any Series of
Notes, in the applicable Series Supplement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, supplemented or otherwise modified and in effect from time to time, and
the rules and regulations promulgated thereunder.
"ERISA Affiliate" means, with respect to any Person, (i) any corporation
which is a member of the same controlled group of corporations (within the
meaning of Section 414(b) of the Code) as such Person; (ii) a trade or business
(whether or not incorporated) under common control (within the meaning of
Section 414(c) of the Code) with such Person; or (iii) a member of the same
affiliated service group (within the meaning of Section 414(n) of the Code) as
such Person, any corporation described in clause (i) above or any trade or
business described in clause (ii) above.
"ERISA Event" means any of the following: (i) the filing pursuant to
Section 412(d) of the Code or Section 303(d) of ERISA of an application for a
waiver of the minimum funding standard with respect to any Pension Plan; (ii)
the receipt by such Person or any ERISA Affiliate from the Pension Benefit
Guaranty Corporation or a plan administrator of any notice relating to an
intention to terminate any Pension Plan or Pension Plans or to appoint a trustee
to administer any Pension Plan; (iii) the incurrence by such Person or any of
its ERISA Affiliates of any liability with respect to the withdrawal or partial
withdrawal from any Pension Plan or Multiemployer Plan; (iv) any "reportable
event" as defined in Section 4043 of ERISA or the regulations issued thereunder
with respect to a Pension Plan (other than an event for which the 30-day notice
period is waived), (v) the incurrence by such Person or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Pension Plan or (vi) the receipt by such Person or any ERISA
Affiliate of any notice, or the receipt by any Multiemployer Plan from such
Person or any ERISA Affiliate of any notice, concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.
"Euroclear" means the Euroclear System, as operated by Euroclear Bank
S.A./N.V.
"Event of Bankruptcy" shall be deemed to have occurred with respect to a
Person if:
(a) a case or other proceeding shall be commenced, without the
application or consent of such Person, before any Official Body, seeking the
liquidation, reorganization, debt arrangement, dissolution, winding up, or
composition or adjustment of debts of such Person, the appointment of a trustee,
receiver, custodian, liquidator, assignee, sequestrator or the like for such
Person or all or substantially all of its assets, or any similar action with
respect to such Person under any law relating to bankruptcy, insolvency,
reorganization, winding up or composition or adjustment of debts, and in the
case of any Person, such case or proceeding shall continue undismissed, or
unstayed and in effect, for a period of sixty (60) consecutive days; or an
13
order for relief in respect of such Person shall be entered in an involuntary
case under the Federal bankruptcy laws or other similar laws now or hereafter in
effect; provided, however, that an "Event of Bankruptcy" for purposes of the
definition of Defaulted Receivable with regard to an insurance company shall not
include the appointment of a conservator, receiver, etc. for such insurance
company; or
(b) such Person shall (i) consent to the institution of (except as
described in the proviso to clause (a) above) any proceeding or petition
described in clause (a) of this definition, or (ii) commence a voluntary case or
other proceeding under any applicable bankruptcy, insolvency, reorganization,
debt arrangement, dissolution or other similar law now or hereafter in effect,
or shall consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) for such Person or for any substantial part of its property, or shall
make any general assignment for the benefit of creditors, or shall fail to, or
admit in writing its inability to, pay its debts generally as they become due,
or, if a corporation or similar entity, its board of directors shall vote to
implement any of the foregoing.
"Event of Default" has the meaning specified in Section 10.1.
"Excess Spread" is defined, with respect to any Series of Notes, in the
applicable Series Supplement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Date" has the meaning specified in the related Series Supplement.
"Expected Final Payment Date" means, with respect to any Series of Notes,
the date, if any, stated in the applicable Series Supplement as the date on
which such Series of Notes is expected to be paid in full.
"FDIC" means the Federal Deposit Insurance Corporation.
"Finance Charge Account" has the meaning specified in subsection 5.3(b).
"Finance Charges" means any finance, interest, late or similar charges or
fee owing by an Obligor pursuant to the Contracts (other than with respect to
Defaulted Receivables), including all periodic interest payments made on Cash
Option Receivables even if credited against the Outstanding Principal Balance of
such Cash Option Receivables in accordance with the terms thereof.
"Fiscal Year" means any period of twelve consecutive calendar months ending
on January 31.
14
"Foreign Clearing Agency" means Clearstream and Euroclear.
"Funding Period" has the meaning with respect to any Series of Notes, if
applicable, specified in the related Series Supplement.
"GAAP" means those principles of accounting set forth in pronouncements of
the Financial Accounting Standards Board, the American Institute of Certified
Public Accountants or which have other substantial authoritative support and are
applicable in the circumstances as of the date of a report, as such principles
are from time to time supplemented and amended.
"Global Note" has the meaning specified in Section 2.19.
"Grant" means the Issuer's grant of a lien on and security interest in, to
and under the Trust Estate as set forth in the Granting Clause of this Base
Indenture.
"Group" means with respect to any Series, the group of Series in which the
related Series Supplement specifies that such Series shall be included, if any.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered in the Note Register and, if applicable, the holder of any Bearer
Note or Coupon, as the case may be, or such other Person deemed to be a "Holder"
or "Noteholder" in any related Series Supplement. Notwithstanding anything to
the contrary contained here, in the event that the Noteholders under any Series
shall have received all principal, interest and other sums owing to such
Noteholders under the Notes and the other Transaction Documents and any sums
shall be due to any Enhancement Providers under such Series, then such
Enhancement Providers shall be deemed to be the Holders of such Notes for all
purposes hereof.
"Indebtedness" means, with respect to any Person, such Person's (i)
obligations for borrowed money, (ii) obligations representing the deferred
purchase price of property other than accounts payable arising in the ordinary
course of such Person's business on terms customary in the trade, (iii)
obligations, whether or not assumed, secured by liens on or payable out of the
proceeds or production from, property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) Capitalized Lease obligations and (vi) obligations of another
Person of a type described in clauses (i) through (v) above, for which such
Person is obligated pursuant to a guaranty, put or similar arrangement.
"Indenture" means the Base Indenture, together with all Series Supplements,
as the same maybe amended, restated, modified or supplemented from time to time.
"Indenture Termination Date" has the meaning specified in Section 12.1.
"Independent" means, when used with respect to any specified Person, that
the person (a) is in fact independent of the Issuer, any other obligor upon the
Notes, each Seller, the Initial
15
Seller and any Affiliate of any of the foregoing persons, (b) does not have any
direct financial interest or any material indirect financial interest in the
Issuer, any such other obligor, any Seller, the Initial Seller or any Affiliate
of any of the foregoing Persons and (c) is not connected with the Issuer, any
such other obligor, any Seller, the Initial Seller or any Affiliate of any of
the foregoing Persons as an officer, employee, promoter, underwriter, trustee,
partner, director or Person performing similar functions.
"Independent Certificate" means a certificate or opinion to be delivered to
the Trustee under the circumstances described in, and otherwise complying with,
the applicable requirements of Section 15.1, prepared by an Independent
appraiser or other expert appointed by an Issuer Order and approved by the
Trustee in the exercise of reasonable care, and such opinion or certificate
shall state that the signer has read the definition of "Independent" in this
Indenture and that the signer is Independent within the meaning thereof.
"Independent Manager" has the meaning specified in subsection 8.2(p).
"Initial Closing Date" means September 13, 2002.
"Initial Investor Interests" means, with respect to any Series of Notes,
the amount stated in the related Series Supplement.
"Initial Seller" has the meaning specified in the Purchase Agreement.
"Installment Contract" means any retail installment sale contract executed
by an Obligor in connection with a sale of Merchandise and all amounts due
thereunder from time to time.
"Installment Contract Receivable" has the meaning specified in the Purchase
Agreement.
"Interest Period" means, with respect to any Series of Notes, the period
specified in the applicable Series Supplement.
"Investment Company Act" means the Investment Company Act of 1940, as
amended.
"Investment Earnings" means all interest and earnings (net of losses and
investment expenses) accrued on funds on deposit in the Trust Accounts (except
if otherwise provided with respect to any Series Account in the related Series
Supplement).
"Investor Account" means each of the Excess Funding Account (as defined in
the Series Supplements), the Finance Charge Account, the Principal Account and
each of the Payment Accounts.
"Investor Interests" has, with respect to any Series of Notes, the meaning
stated in the related Series Supplement.
16
"Investor Percentage" has the meaning stated in the related Series
Supplement.
"Issuer" has the meaning specified in the preamble of this Base Indenture.
"Issuer Distributions" has the meaning specified in subsection 5.4(c).
"Issuer Interest" means at any time, an amount equal to the aggregate
Principal Receivables plus the amounts on deposit in the Collection Account, the
Excess Funding Account (as defined in the applicable Series Supplement) and the
Principal Account minus the Aggregate Investor Interests.
"Issuer Obligations" means all principal and interest, at any time and from
time to time, owing by the Issuer on the Notes and all costs, fees and expenses
and other amounts owing or payable by, or obligations of, the Issuer to any
Person (other than the Initial Seller, the Sellers or the Parent) under the
Indenture and/or the Transaction Documents.
"Issuer Order" and "Issuer Request" means a written order or request signed
in the name of the Issuer by any one of its Responsible Officers and delivered
to the Trustee.
"Issuer Pay Out Event" with respect to all Series of Notes, has the meaning
specified in Section 9.1.
"Law" means any law (including common law), constitution, statute, treaty,
regulation, rule, ordinance, order, injunction, writ, decree or award of any
Official Body.
"Legal Final Payment Date" is defined, with respect to any Series of Notes,
in the applicable Series Supplement.
"Lien" means any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
easement or encumbrance, or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any lease
or title retention agreement, any financing lease having substantially the same
economic effect as any of the foregoing, and the filing of, or agreement to
give, any financing statement perfecting a security interest under the UCC or
comparable law of any jurisdiction).
"Liquidation Event" means, with respect to any Series of Notes, one of the
events specified in the applicable Series Supplement.
"Luxembourg Agent" has the meaning specified in subsection 2.4(a).
"Material Adverse Effect" means any event or condition which would have a
material adverse effect on (i) the collectibility of any material portion of the
Receivables, (ii) the condition
17
(financial or otherwise), businesses or properties of the Issuer, the Servicer
or any Seller, (iii) the ability of the Issuer, the Servicer or any Seller to
perform its respective obligations under the Transaction Documents to which it
is a party and (iv) the interests of the Trustee or any Secured Party in the
Trust Estate or under the Transaction Documents.
"Merchandise" means (i) home appliances, electronic goods, computers,
telephones and other goods and merchandise of the type sold by the Seller from
time to time in the ordinary course of business, which in each case constitute
"consumer goods" under and as defined in Article 9 of the UCC of all applicable
jurisdictions, (ii) service maintenance contracts and services in respect of any
goods or merchandise referred to in clause (i) above, and (iii) credit insurance
(including life, disability, property and involuntary unemployment) in respect
of any goods or merchandise referred to in clause (i) above or any Obligor's
payment obligations in respect of a Receivable.
"Minimum Issuer Interest" has the meaning specified in each Series
Supplement.
"Monthly Noteholders' Statement" means, with respect to any Series of
Notes, a statement substantially in the form attached in the relevant Series
Supplement, with such changes as the Servicer may determine to be necessary or
desirable; provided, however, that no such change shall serve to exclude
information expressly required by this Base Indenture or any Series Supplement.
"Monthly Period" means, unless otherwise defined in any Series Supplement,
the period from and including the first day of a calendar month to and including
the last day of a calendar month.
"Monthly Servicer Report" means a report substantially in the form attached
as Exhibit A-1 to the Servicing Agreement or in such other form as shall be
agreed between the Servicer and the Trustee; provided, however, that no such
other agreed form shall serve to exclude information expressly required by this
Base Indenture or any Series Supplement.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA with respect to which a Seller, the Issuer or any ERISA
Affiliate of a Seller or the Issuer is making, is obligated to make, or has made
or been obligated to make, contributions on behalf of participants who are or
were employed by any of them.
"Net Investor Charge-Offs" means, with respect to each Series, on any date
of determination, the excess of (i) the amount described in clause (c) of the
definition of Investor Interest on such date over (ii) the amount described in
clause (d) of such definition on such date.
18
"New Series Issuance" means any issuance of a new Series of Notes pursuant
to Section 2.2.
"New Series Issuance Date" has the meaning, with respect to any Series
issued pursuant to a New Series Issuance, specified in Section 2.2.
"New Series Issuance Notice" has the meaning, with respect to any Series
issued pursuant to a New Series Issuance, specified in Section 2.2.
"Non-Purchased Receivables" shall mean those Receivables that (i) were
either (A) Receivables which were not originated in accordance with the Credit
and Collection Policies, (B) Receivables which were originated under
manufacturer-sponsored promotional programs, the terms of which are more
favorable to the Obligor than the terms of any non-manufacturer sponsored
promotional program being offered by the Seller or (C) Receivables which would
not be Eligible Receivables on the related Purchase Date, and (ii) were listed
as "Non-Purchased Receivables" on a purchase report delivered on the related
Purchase Date.
"Non-U.S. Person" means a person who is not a "U.S. Person" as such term is
defined in Regulation S.
"Note Interest" means interest payable in respect of the Notes of any
Series pursuant to the Series Supplement for such Series.
"Note Owner" means, with respect to a Book-Entry Note, the Person who is
the beneficial owner of such Book-Entry Note, as reflected on the books of the
Clearing Agency or Foreign Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency or Foreign Clearing Agency
(directly or as an indirect participant, in accordance with the rules of such
Clearing Agency or Foreign Clearing Agency).
"Note Principal" means the principal payable in respect of the Notes of any
Series pursuant to Article 5.
"Note Rate" means, with respect to any Series of Notes (or, for any Series
with more than one Class, for each Class of such Series), the annual rate at
which interest accrues on the Notes of such Series of Notes (or formula on the
basis of which such rate shall be determined) as stated in the applicable Series
Supplement.
"Note Register" means the register maintained pursuant to subsection
2.6(a), providing for the registration of the Notes and transfers and exchanges
thereof.
"Notes" means any one of the notes (including, without limitation, the
Global Notes or the Definitive Notes) issued by the Issuer, executed and
authenticated by the Trustee substantially in the form (or forms in the case of
a Series with multiple classes) of the note attached to the
19
related Series Supplement or such other obligations of the Issuer deemed to be a
"Note" in any related Series Supplement.
"Notice Persons" means, with respect to any Series of Notes, the Persons
identified as such in the applicable Series Supplement.
"Obligor" means, with respect to any Receivable, the Person or Persons
obligated to make payments with respect to such Receivable, including any
guarantor thereof.
"Official Body" means any government or political subdivision or any
agency, authority, bureau, central bank, commission, department or
instrumentality of any such government or political subdivision, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or domestic.
"Opinion of Counsel" means one or more written opinions of counsel to the
Issuer, the Sellers or the Servicer who (except in the case of opinions
regarding matters of organizational standing, power and authority, conflict with
organizational documents, conflict with agreements other than Transaction
Documents, qualification to do business, licensure and litigation or other
proceedings) shall be external counsel, satisfactory to the Trustee, which
opinions shall comply with any applicable requirements of Section 15.1 and TIA
Section 314, and shall be in form and substance satisfactory to the Trustee, and
shall be addressed to the Trustee. An Opinion of Counsel may, to the extent same
is based on any factual matter, rely on a Conn Officer's Certificate as to the
truth of such factual matter.
"Opportunity Customer" means an Obligor which meets the "OFC Underwriting"
criteria but fails to meet the "CCC Underwriting" criteria set forth in the
Credit and Collection Policy.
"Originator Note" has the meaning specified in the Purchase Agreement.
"Outstanding Principal Balance" means, as of any date with respect to any
Purchased Receivable, an amount equal to (i) the original principal balance due
on such Purchased Receivable plus (ii) the amount of any additional advances
before such date minus (iii) the Principal Collections.
"Parent" shall mean Conn Appliances, Inc.
"Pay Out Event" has the meaning specified in Section 9.1.
"Paying Agent" means any paying agent appointed pursuant to Section 2.7 and
shall initially be the Trustee.
"Payment Account" has the meaning specified in subsection 5.3(c).
20
"Payment Date" means, with respect to each Series, the dates specified in
the related Series Supplement.
"Payment Priorities" has the meaning specified in subsection 5.10(e).
"Pension Plan" means a Plan described in Section 3(2) of ERISA.
"Perfection Representations" means the representations, warranties and
covenants set forth in Schedule 1 attached hereto.
"Permitted Encumbrance" (a) with respect to the Issuer, any item described
in clause (i), (iv) or (vi) of the following, and (b) with respect to Conn, any
Seller or the Initial Seller, any item described in clauses (i) through (vi) of
the following:
(i) liens, charges or other encumbrances for taxes and
assessments which are not yet due and payable or which are being
contested in good faith and for which reserves have been established,
if required in accordance with GAAP;
(ii) liens of or resulting from any judgment or award, the time
for the appeal or petition for rehearing of which shall not have
expired, or in respect of which a Seller shall at any time in good
faith be prosecuting an appeal or proceeding for a review and with
respect to which adequate reserves or other appropriate provisions are
being maintained in accordance with GAAP;
(iii) liens, charges or other encumbrances or priority claims
incidental to the conduct of business or the ownership of properties
and assets (including mechanics', carriers', repairers',
warehousemen's and statutory landlords' liens and liens to secure the
performance of leases) and deposits, pledges or liens to secure
statutory obligations, surety or appeal bonds or other liens of like
general nature incurred in the ordinary course of business and not in
connection with the borrowing of money, provided in each case, the
obligation secured is not overdue, or, if overdue, is being contested
in good faith by appropriate actions or proceedings and with respect
to which adequate reserves or other appropriate provisions are being
maintained in accordance with GAAP;
(iv) liens, charges or encumbrances in favor of the Trustee, or
otherwise created by the Issuer, any Seller, the Initial Seller or the
Trustee pursuant to the Transaction Documents, and the interests of
mortgagees and loss payees under the terms of any Contract;
(v) lien, charges, imperfections in title or other
encumbrances which, in the aggregate do not exceed $100,000 and which,
individually or in the
21
aggregate, do not materially interfere with the rights under the
Transaction Documents of the Trustee or any Noteholder in any of the
Receivables; and
(vi) any lien or security interest created in favor of the
Issuer, Conn, such Seller or the Initial Seller in connection with the
purchase of any Receivables by the Issuer, Conn, such Seller or the
Initial Seller and covering such Receivables, the related Contracts
with respect to which are sold or purported to be sold by Conn, such
Seller or the Initial Seller to the Issuer pursuant to the Purchase
Agreement.
"Permitted Investments" means, unless otherwise provided in the Series
Supplement with respect to any Series, any of the following (a) negotiable
instruments or securities represented by instruments in bearer or registered or
in book-entry form which evidence (i) obligations fully guaranteed by the United
States of America; (ii) obligations of any agency of the United States of
America; (iii) time deposits in, or bankers acceptances issued by, any
depositary institution or trust company incorporated under the laws of the
United States of America or any state thereof and subject to supervision and
examination by Federal or state banking or depositary institution authorities;
provided, however, that at the time of investment or contractual commitment to
invest therein, the certificates of deposit or short-term deposits, if any, or
long-term unsecured debt obligations (other than such obligation whose rating is
based on collateral or on the credit of a Person other than such institution or
trust company) of such depositary institution or trust company shall have a
credit rating of at least A-1/P-1 (or the equivalent thereof) from Moody's and,
if rated by any other Rating Agency, such Rating Agency, in the case of the
certificates of deposit or short-term deposits, or a rating not lower than one
of the two highest investment categories granted by Moody's and, if rated by any
other Rating Agency, such Rating Agency; (iv) certificates of deposit having, at
the time of investment or contractual commitment to invest therein, a rating of
at least A-1/P-1 (or the equivalent thereof) from Moody's and, if rated by any
other Rating Agency, such Rating Agency; or (v) investments in money market
funds (including those owned or managed by the Trustee) rated in the highest
investment category by Moody's and, if rated by any other Rating Agency, such
Rating Agency; (b) demand deposits and cash escrows in any depositary
institution or trust company (including those owned or managed by the Trustee)
referred to in (a)(iii) above; (c) commercial paper (having original or
remaining maturities of no more than thirty (30) days) having, at the time of
investment or contractual commitment to invest therein, a credit rating of at
least A-1/P-1 (or the equivalent thereof) by Moody's and, if rated by any other
Rating Agency, such Rating Agency; (d) Eurodollar time deposits having a credit
rating of at least A-1/P-1 (or the equivalent thereof) from Moody's and, if
rated by any other Rating Agency, such Rating Agency; (e) repurchase agreements
involving any of the Permitted Investments described in clauses (a)(i), (a)(iv)
and (d) of this definition so long as the other party to the repurchase
agreement has at the time of investment therein, a rating of at least A-1/P-1
(or the equivalent thereof) from Moody's and, if rated by any other Rating
Agency, such Rating Agency; and (f) any other investment permitted by the Notice
Persons of each Series and which satisfies the Rating Agency Condition.
22
"Permitted Seller" means the Parent, CAI, L.P. and such other entities as
shall be approved by the Notice Persons of each Series.
"Person" means any corporation, limited liability company, natural person,
firm, joint venture, partnership, trust, unincorporated organization,
enterprise, government or any department or agency of any government.
"Post Office Box" has the meaning specified in the Servicing Agreement.
"Potential Pay Out Event" means any occurrence that is, or with notice or
lapse of time or both would become, a Pay Out Event.
"Principal Account" has the meaning specified in subsection 5.3(b).
"Principal Account Floor" means, at any time, the excess, if any, of (i)
the sum of (a) interest and fees accrued and unpaid at such time with respect to
the Notes and "Enhancement" of all Series (together with, if applicable,
interest on any overdue interest and fees at the rate specified in the
accompanying series supplements), (b) accrued and unpaid Servicing Fees and
Trustee and Back-Up Servicer Fees and Expenses at such time, (c) the aggregate
Outstanding Principal Balance of all Receivables that became Defaulted
Receivables since the last Business Day of the Monthly Period preceding the most
recent Payment Date, (d) any other accrued and unpaid costs, expenses, or
liability of the Issuer whatsoever (except for obligations of the Issuer to pay
any principal on the Notes outstanding at such time and except for any taxes and
fee and indemnity expenses for which cash, other than Collections, are available
to the Issuer) and (e) the aggregate, for each Series in an Accumulation Period
or Amortization Period, of the full amount to be set aside or distributed for
each such Series with respect to principal on the Notes on the next Payment
Date, over (ii) the amount on deposit in the Finance Charge Account (plus, so
long as no Daily Payment Event shall have occurred, the amount (not to exceed
the Available Servicer Letter of Credit Amount) of Collections of Finance
Charges held by the Servicer and not deposited in the Finance Charge Account).
"Principal Amortization Period" means, with respect to any Series of Notes,
the period specified, if any, in the applicable Series Supplement.
"Principal Collections" means all Collections received in respect of
Principal Receivables.
"Principal Receivables" means the principal portion of the Receivables
(other than Defaulted Receivables), excluding any Recoveries and any accrued and
unpaid Finance Charges.
"Principal Terms" has the meaning with respect to any Series issued
pursuant to a New Series Issuance specified in subsection 2.2(b).
23
"Proceeding" means any suit in equity, action at law or other judicial or
administrative proceeding.
"Purchase Agreement" means the Receivables Purchase Agreement, dated as of
September 1, 2002, among the Initial Seller, each of the Sellers from time to
time party thereto, and the Issuer, as such agreement may be amended,
supplemented or otherwise modified and in effect from time to time.
"Purchase Date" has the meaning specified in the Purchase Agreement.
"Purchased Receivable" means any Receivable purchased (or purported to be
purchased) by the Issuer pursuant to the terms of the Purchase Agreement.
"Qualified Institution" means a depository institution or trust company,
which may include the Trustee, organized under the laws of the United States or
any one of the states thereof or the District of Columbia, which either (a) has
corporate trust powers and at all times has a certificate of deposit rating of
P-1 (or the equivalent thereof) by Moody's and, if rated by any other Rating
Agency, such Rating Agency, or a long-term unsecured debt obligation rating of
at least A-/A3 (or the equivalent thereof) by Moody's and, if rated by any other
Rating Agency, such Rating Agency, and deposit insurance provided by either the
Bank Insurance Fund ("BIF") or the Savings Association Insurance Fund ("SAIF"),
each administered by the FDIC, or (b) at all times has a certificate of deposit
rating of at least A-1/P-1 (or the equivalent thereof) by Moody's and, if rated
by any other Rating Agency, such Rating Agency, or a long-term unsecured debt
obligation rating of at least A-/A3 (or the equivalent thereof) by Moody's and,
if rated by any other Rating Agency, such Rating Agency, and deposit insurance
as required by the FDIC or (c) a depository institution, which may include the
Trustee, which is acceptable to the Rating Agency.
"Rapid Accumulation Period" means, with respect to any Series of Notes, a
period specified, if any, in the applicable Series Supplement.
"Rapid Amortization Period" means, with respect to any Series of Notes, the
period specified, if any, in the applicable Series Supplement.
"Rating Agency" means, with respect to each outstanding Series of Notes,
the rating agency or agencies, if any, selected by the Issuer to rate all or a
portion of such Series of Notes or any Class thereof, as specified in the
related Series Supplement, at the request of the Issuer.
"Rating Agency Condition" means, unless otherwise provided in a Series
Supplement, with respect to any action requiring rating agency approval or
consent, that each Rating Agency rating any Series shall have notified the
Issuer and the Trustee in writing that such action will not result in a
reduction or withdrawal of the then current rating of any outstanding Series or
Class thereof with respect to which it is a Rating Agency. Satisfaction of the
Rating Agency Condition shall be an expense of the Issuer unless otherwise
provided herein or in any Series Supplement.
24
"Receivable" means the indebtedness of any Obligor under a Contract (which
"Receivable" has been acquired by the Issuer from a Seller or the Initial Seller
pursuant to the terms of the Purchase Agreement), whether constituting an
account, chattel paper, an instrument, a general intangible, payment intangible,
promissory note or otherwise, and shall include (i) the right to payment of such
indebtedness and any interest or finance charges and other obligations of such
Obligor with respect thereto (including, without limitation, the principal
amount of such indebtedness, periodic finance charges, late fees and returned
check fees), and (ii) all proceeds of, and payments or Collections on, under or
in respect of any of the foregoing. Notwithstanding the foregoing, upon release
from the Trust Estate pursuant to Section 2.14, a Removed Receivable shall no
longer constitute a Receivable. If an Installment Contract is rewritten for
credit reasons, the indebtedness under the new Installment Contract shall, for
purposes of the Transaction Documents, constitute the same Receivable as existed
under the original Installment Contract, unless such indebtedness is a
Non-Purchased Receivable (in which case, the original Receivable shall cease to
be a Receivable for purposes of the Transaction Documents upon payment in
accordance with Section 2.5 of the Purchase Agreement with respect thereto). If
an Installment Contract is refinanced in connection with the purchase of
additional Merchandise, the original Receivable shall cease to be a Receivable
for purposes of the Transaction Documents upon payment in accordance with
Section 2.5 of the Purchase Agreement with respect thereto and the indebtedness
under the new Installment Contract shall constitute a new Receivable for
purposes of the Transaction Documents upon the sale thereof to the Purchaser
pursuant to Section 2.1 of the Purchase Agreement.
"Receivable Files" has the meaning specified in the Purchase Agreement.
"Record Date" means, unless otherwise specified in the applicable Series
Supplement, with respect to any Series of Notes and any Payment Date, the last
Business Day of the preceding Monthly Period.
"Records" means all Contracts and other documents, books, records and other
information (including, without limitation, computer programs, tapes, disks,
punch cards, data processing software and related property and rights)
maintained with respect to Receivables and the related Obligors.
"Recoveries" means, with respect to any period, all Collections received
during such period in respect of Receivables that became Charged-Off Receivables
prior to the first day of such period.
"Redemption Date" means (a) in the case of a redemption of the Notes
pursuant to Section 14.1, the Payment Date specified by the Servicer or the
Issuer pursuant to Section 14.1 or (b) the date specified for a Series pursuant
to redemption provisions of the related supplement.
"Redemption Price" means in the case of a redemption of the Notes pursuant
to Section 14.1, an amount equal to the unpaid principal amount of the then
outstanding principal
25
amount of each class of Notes being redeemed plus accrued and unpaid interest
thereon to but excluding the Redemption Date and any other amounts due to
Noteholders.
"Registered Notes" has the meaning specified in Section 2.1.
"Related Security" means, with respect to any Purchased Receivable, all
guaranties, indemnities, insurance and other agreements (including the related
Receivable File) or arrangement and other collateral of whatever character from
time to time supporting or securing payment of such Purchased Receivable or
otherwise relating to such Purchased Receivable.
"Removed Receivables" means any Receivable which is purchased or
repurchased (i) by the Servicer pursuant to the last paragraph of Section 2.08
of the Servicing Agreement, (ii) by any Seller pursuant to the terms of the
Purchase Agreement or (iii) by any other Person pursuant to Section 5.8 of the
Indenture.
"Required Noteholders" means Holders of Notes in the VFN Series, voting
together without regard to Class or Series, representing in excess of 66 2/3% of
the aggregate Maximum Funded Amount (as defined in the applicable Note Purchase
Agreement) of all Noteholders in the VFN Series, and the Holders of Notes of all
other Series, voting together without regard to Class or Series, representing in
excess of 66 2/3% of the aggregate principal balance of all Notes in such other
Series outstanding.
"Required Persons" means, with respect to any Series of Notes, the Persons
identified as such in the applicable Series Supplement.
"Required Rating" shall mean at least P-1 (or the equivalent thereof) by
Moody's and, if rated by any other Rating Agency, such Rating Agency.
"Required Remittance Amount" has the meaning specified in subsection
5.10(a).
"Requirements of Law" means, as to any Person, the organizational documents
of such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Official Body, in each case applicable to or
binding upon such Person or any of its property or to which such Person or any
of its property is subject.
"Responsible Officer" means, with respect to any Person, the Chairman, the
President, the Controller, any Vice President, the Secretary, the Treasurer, or
any other officer of such Person customarily performing functions similar to
those performed by any of the above-designated officers 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.
26
"Restricted Period" has, with respect to any Series of Notes, the meaning
designated as the "Restricted Period," if any, in the related Series Supplement.
"Retailer Credit Agreement" means the Credit Agreement dated as of July 14,
1998, by and among Conn, CAI Credit Insurance Agency, Inc., Chase Bank of Texas,
National Association, individually and as Administrative Agent for lenders
described in such Credit Agreement, Chase Securities, Inc., as arranger, and
Bank of America, N.A. (as successor in interest to NationsBank, N.A.),
individually and as Documentation Agent for the lenders described in such Credit
Agreement, as such Credit Agreement may hereafter be amended from time to time.
"Revolving Charge Account Agreement" means any retail revolving charge
account agreement between the Seller or a Permitted Seller and an Obligor
pursuant to which such Obligor is obligated to pay for Merchandise purchased
under a credit plan and permits such Obligor to purchase such Merchandise on
credit.
"Revolving Charge Receivable" means any indebtedness of an Obligor arising
under a Revolving Charge Account Agreement.
"Revolving Period" means, with respect to any Series of Notes, the period
specified in the applicable Series Supplement.
"Scheduled Payment Date" has the meaning, with respect to any Series of
Notes, if any, in the related Series Supplement.
"Secured Parties" has the meaning specified in Granting Clause of this Base
Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Sellers" means Conn, CAI, L.P. and any additional Sellers approved in
writing by the Required Persons of each Series that become a party to the
Purchase Agreement pursuant to the terms thereof, and each of their successors
and permitted assigns (other than the Initial Seller).
"Series Account" has the meaning specified in subsection 5.3(d).
"Series of Notes" or "Series" means any Series of Notes issued and
authenticated pursuant to the Base Indenture and a related Series Supplement,
which may include within any Series multiple Classes of Notes, one or more of
which may be subordinated to another Class or Classes of Notes.
"Series Pay Out Event" has the meaning, with respect to any Series of
Notes, specified in the related Series Supplement.
27
"Series Supplement" means a supplement to the Base Indenture complying with
the terms of Section 2.2 of the Base Indenture or a Supplement.
"Series Temporary Regulation S Global Note" means, with respect to any
Series of Notes, the notes designated as such, if any, in the related Series
Supplement.
"Series Termination Date" means, with respect to any Series of Notes, the
date specified as such in the applicable Series Supplement.
"Series Transfer Date" means, unless otherwise specified in the related
Series Supplement, with respect to any Series, the Business Day immediately
prior to each Payment Date.
"Servicer" means initially CAI, L.P. and its permitted successors and
assigns and thereafter any Person appointed as successor as herein provided to
service the Receivables.
"Servicer Default" has the meaning specified in Section 2.04 of the
Servicing Agreement.
"Servicer LC Escrow Account" has the meaning specified in subsection
5.10(e).
"Servicer Letter of Credit" shall mean a letter of credit, dated the
Initial Closing Date, issued by the Servicer Letter of Credit Bank for the
benefit of the Trustee or any substitute therefor in accordance with subsection
5.10(c).
"Servicer Letter of Credit Bank" shall mean SunTrust Bank and the issuer of
any substitute Servicer Letter of Credit delivered pursuant to subsection
5.10(c).
"Servicing Agreement" means the Servicing Agreement, dated September 1,
2002, among the Issuer, the Servicer and the Trustee, as the same may be amended
or supplemented from time to time.
"Servicing Fee" means (i) for any Monthly Period during which CAI, L.P. or
any Affiliate acts as Servicer, an amount equal to the product of (i) 3.00%/12
multiplied by (ii) the average aggregate Principal Receivables plus the average
aggregate Defaulted Receivables for such Monthly Period and (ii) for any Monthly
Period during which any other successor Servicer acts as Servicer, the Servicing
Fee shall be an amount equal to the product of (i) the current market rate for
servicing receivables similar to the Receivables divided by 12, multiplied by
(ii) the average aggregate Principal Receivables plus the average aggregate
Defaulted Receivables for such Monthly Period; provided, however, that in no
event shall the current market rate exceed 5.00%.
28
"Servicing Officer" means any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Receivables whose name
appears on a list of servicing officers furnished to the Trustee by the
Servicer, as such list may from time to time be amended.
"Special Receivable" means a Receivable (other than a Defaulted Receivable
or Charged-Off Receivable) as to which as of the Cut-Off Date, all or any part
of a scheduled payment remains unpaid for 31, but not more than 210, days from
the due date for such payment or all of the original Obligors obligated thereon
are deceased or have "skipped" or cannot be located.
"Subsequently Purchased Receivables" has the meaning set forth in the
Purchase Agreement.
"Subsidiary" of a Person means any Person more than 50% of the outstanding
voting interests of which shall at any time be owned or controlled, directly or
indirectly, by such Person or by one or more Subsidiaries of such Person or any
similar business organization which is so owned or controlled.
"Supplement" means a supplement to the Base Indenture complying with the
terms of Article 13 of the Base Indenture.
"Swap Agreement" means one or more interest rate swap contracts, interest
rate cap agreements or similar contracts entered into by the Issuer in
connection with the issuance of a Series of Notes, as specified in the related
Series Supplement, providing limited protection against interest rate risks.
"Tax Opinion" means with respect to any action or event, an Opinion of
Counsel to the effect that, for United States federal income tax purposes (x) in
connection with the initial issuance of a Series of Notes, if so specified in
the related Series Supplement, such Notes constitute indebtedness and (y) (a)
such action or event will not adversely affect the tax characterization of Notes
of any outstanding Series or Class of Notes issued to investors as debt and (b)
such action or event will not give rise to a taxable event for any Secured Party
or the Issuer.
"Title IV Plan" means a Pension Plan (other than a Multiemployer Plan) that
is covered by Title IV of ERISA and that a Seller, the Issuer or an ERISA
Affiliate maintains, contributes to or has an obligation to contribute to on
behalf of participants who are or were employed by any of them.
"Transaction Documents" means, collectively, the Base Indenture, any Series
Supplement, the Notes, the Servicing Agreement, the Back-Up Servicing Agreement
(as defined in the Servicing Agreement), the Purchase Agreement, any Enhancement
Agreement, the Servicer Letter of Credit, the "Note Purchase Agreement" for each
Series, and any agreements of the Issuer relating to the issuance or the
purchase of any of the Notes.
29
"Transfer Agent and Registrar" has the meaning specified in Section 2.6 and
shall initially be the Trustee's Corporate Trust Office.
"Transition Costs" means all reasonable costs and expenses incurred by the
Back-Up Servicer in connection with a transfer of servicing.
"Trust Account" has the meaning specified in the Granting Clause to this
Base Indenture.
"Trust Estate" means all money, instruments, rights and other property that
are subject or intended to be subject to the lien and security interest of this
Indenture for the benefit of the Secured Parties (including all property and
interests Granted to the Trustee), including all proceeds thereof, as defined in
the Granting Clause to this Base Indenture.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as in
force on the date hereof, unless otherwise specifically provided.
"Trust Officer" means any officer within the Corporate Trust Office (or any
successor group of the Trustee), including any Vice President, any Managing
Director, any Assistant Vice President, any Secretary, any Assistant Treasurer,
any Assistant Secretary or any other officer of the Trustee customarily
performing functions similar to those performed by any person who at the time
shall be an above-designated officer and also, with respect to a particular
matter, any other officer to whom any corporate trust matter is referred because
of such officer's knowledge of and familiarity with the particular subject.
"Trustee" means initially ▇▇▇▇▇ Fargo Bank Minnesota, National Association,
and its successors and any corporation resulting from or surviving any
consolidation or merger to which it or its successors may be a party and any
successor trustee appointed in accordance with the provisions of this Base
Indenture.
"Trustee and Back-Up Servicer Fees and Expenses" means, for any Series
Transfer Date, (i) the amount of accrued and unpaid fees and reasonable expenses
(but not in excess of $50,000 per calendar year (or, if an Event of Default has
occurred and is continuing, $150,000 per Series per calendar year)) of the
Trustee and Back-up Servicer; (ii) the amount of unpaid fees and reasonable
expenses of the paying agent; and (iii) the Transition Costs (but not in excess
of $50,000), if applicable.
"UCC" means, with respect to any jurisdiction, the Uniform Commercial Code
as the same may, from time to time, be enacted and in effect in such
jurisdiction.
"Unfunded Pension Liability" means, at any time, the aggregate amount, if
any, of the sum of (a) the amount by which the present value of all accrued
benefits under each Title IV Plan exceeds the fair market value of all assets of
such Title IV Plan allocable to such benefits, all determined as of the most
recent valuation date for each such Title IV Plan using the actuarial
30
assumptions for funding purposes in effect under such Title IV Plan (and not the
assumptions used by the Pension Benefit Guaranty Corporation in calculating such
amounts), and (b) for a period of five years following a transaction that might
reasonably be expected to be covered by Section 4069 of ERISA, the liabilities
(whether or not accrued) that could be avoided by a Seller or any ERISA
Affiliate as a result of such transaction.
"U.S." or "United States" means the United States of America and its
territories.
"U.S. Government Obligations" means direct obligations of the United States
of America, or any agency or instrumentality thereof for the payment of which
the full faith and credit of the United States of America is pledged as to full
and timely payment of such obligations.
"VFN Series" means Series 2002-A and, with the consent of the "Required
Persons" for each outstanding VFN Series, any other Series of variable funding
notes.
"Withdrawal Liability" means liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.
"written" or "in writing" means any form of written communication,
including, without limitation, by means of telex, telecopier device, telegraph
or cable.
Section 1.2. Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture, except to the extent that the
Trustee has been advised by an Opinion of Counsel that the Indenture does not
need to be qualified under the TIA or such provision is not required under the
TIA to be applied to this Indenture in light of the outstanding Notes. The
following TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
31
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.
Section 1.3. Cross-References. Unless otherwise specified, references in
this Indenture and in each other Transaction Document (other than any
Enhancement Agreement) to any Article or Section are references to such Article
or Section of this Indenture or such other Transaction Document, as the case may
be, and, unless otherwise specified, references in any Article, Section or
definition to any clause are references to such clause of such Article, Section
or definition.
Section 1.4. Accounting and Financial Determinations; No Duplication.
Where the character or amount of any asset or liability or item of income or
expense is required to be determined, or any accounting computation is required
to be made, for the purpose of this Indenture, such determination or calculation
shall be made, to the extent applicable and except as otherwise specified in
this Indenture, in accordance with GAAP applied on a consistent basis When used
herein, the term "financial statement" shall include the notes and schedules
thereto. All accounting determinations and computations hereunder or under any
other Transaction Documents (other than any Enhancement Agreement) shall be made
without duplication.
Section 1.5. Rules of Construction. In this Indenture, unless the context
otherwise requires:
(i) "or" is not exclusive;
(ii) the singular includes the plural and vice versa;
(iii) reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are
permitted by this Indenture, and reference to any Person in a particular
capacity only refers to such Person in such capacity;
(iv) reference to any gender includes the other gender;
(v) reference to any Requirement of Law means such Requirement of
Law as amended, modified, codified or reenacted, in whole or in part, and
in effect from time to time;
(vi) "including" (and with correlative meaning "include") means
including without limiting the generality of any description preceding such
term; and
(vii) with respect to the determination of any period of time, "from"
means "from and including" and "to" means "to but excluding".
32
Section 1.6. Other Definitional Provisions.
(a) All terms defined in any Series Supplement or this Base Indenture
shall have the defined meanings when used in any certificate or other document
made or delivered pursuant hereto unless otherwise defined therein. Capitalized
terms used but not defined herein shall have the respective meaning given to
such term in the Servicing Agreement.
(b) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Base Indenture or any Series Supplement shall refer to
this Base Indenture or such Series Supplement as a whole and not to any
particular provision of this Base Indenture or any Series Supplement; and
Section, subsection, Schedule and Exhibit references contained in this Base
Indenture or any Series Supplement are references to Sections, subsections,
Schedules and Exhibits in or to this Base Indenture or any Series Supplement
unless otherwise specified.
ARTICLE 2.
THE NOTES
Section 2.1. Designation and Terms of Notes. Subject to Sections 2.16 and
2.19, the Notes of each Series and any Class thereof 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 substantially in the form of exhibits with respect thereto
attached to the applicable Series Supplement, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture and may have such letters, numbers or other marks of
identification and such restrictions, legends or endorsements placed thereon and
shall bear, upon their face, the designation for such Series to which they
belong so selected by the Issuer, all as determined by the officers executing
such Notes, as evidenced by their execution of the Notes; provided, however,
that Bearer Notes shall be issued only in conformity with applicable laws and
regulations, including without limitation the applicable Bearer Rules. 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. All Notes of any Series
shall, except as specified in the related Series Supplement, be pari passu and
equally and ratably entitled as provided herein to the benefits hereof (except
that, unless otherwise provided for in a related Series Supplement, the
Enhancement provided for any Series shall not be available for any other Series)
without preference, priority or distinction on account of the actual time or
times of authentication and delivery, all in accordance with the terms and
provisions of this Base Indenture and the related Series Supplement. If
specified in the Series Supplement for any Series, the related Notes shall be
issued upon initial issuance as a single note as described in Section 2.16 in an
original principal amount equal to the Investor Interest of such Series and
Class. The aggregate principal amount of Notes which may be authenticated and
delivered under this Indenture is unlimited. Each Series of Notes shall be
issued in the minimum denominations set forth in the related Series Supplement.
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Section 2.2. New Series Issuances. The Notes may be issued in one or more
Series. Each Series of Notes shall be created by a Series Supplement.
(a) The Issuer may effect the issuance of one or more Series of Notes
on or after the Initial Closing Date (a "New Series Issuance") from time to time
by notifying the Trustee in writing at least three (3) days in advance (a "New
Series Issuance Notice") of the date upon which the New Series Issuance is to
occur (a "New Series Issuance Date"). Any New Series Issuance Notice shall state
the designation of any Series (and each Class thereof, if applicable) to be
issued on the New Series Issuance Date and, with respect to each such Series:
(a) its Initial Investor Interest (or the method for calculating such Initial
Investor Interest), which, at any time, may not be greater than the Issuer
Interest at such time (taking into account any Subsequently Purchased
Receivables that the Issuer will purchase with the proceeds of such New Series
Issuance) minus the highest Minimum Issuer Interest specified in the Series
Supplement for any outstanding Series, (b) the aggregate initial outstanding
principal amount of the Notes thereof (or the method for calculating such
amount), and (c) the Enhancement Provider, if any, with respect to such Series.
On the related New Series Issuance Date, the Issuer shall execute and the
Trustee shall authenticate and deliver any such Series of Notes only upon
delivery to it of the following:
(i) an Issuer Order authorizing and directing the authentication
and delivery of the Notes of such new Series by the Trustee and specifying
the designation of such new Series and the aggregate principal amount of
Notes of such new Series (and each Class thereof) to be authenticated with
respect to such new Series;
(ii) a Series Supplement in form reasonably satisfactory to the
Trustee executed by the Issuer and the Trustee and specifying the Principal
Terms of such new Series;
(iii) the related Enhancement, if any;
(iv) the related Enhancement Agreement, if any, executed by each of
the parties thereto, other than the Trustee;
(v) unless otherwise specified in the related Series Supplement, a
Tax Opinion with respect to the issuance of such Series, subject to the
assumptions and qualifications stated therein, and in a form substantially
acceptable to the Trustee, dated the applicable New Series Issuance Date;
(vi) written consent from each Notice Person and written
confirmation that the Rating Agency Condition shall have been satisfied
with respect to such issuance;
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(vii) a Conn Officer's Certificate of the Issuer that on such New
Series Issuance Date, after giving effect to such New Series Issuance, the
Issuer Interest would be at least equal to the highest Minimum Issuer
Interest of any outstanding Series;
(viii) evidence that each of the parties to the Transaction Documents
(other than any Series Supplement, Enhancement Agreement or other
Transaction Document relating solely to another Series of Notes) has
covenanted and agreed that, prior to the date which is one year and one day
after the payment in full of the latest maturing Note, it will not
institute against, or join with any other Person in instituting against,
the Issuer any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings, under any Federal or state
bankruptcy or similar law;
(ix) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee as to the Trustee's Lien in and to the Trust
Estate;
(x) evidence (which, in the case of the filing of financing
statements on form UCC-1, may be telephonic, followed by prompt written
confirmation) that the Issuer has delivered the Trust Estate to the Trustee
and has caused all filings (including filing of financing statements on
form UCC-1) and recordings to be accomplished as may be reasonably required
by law to establish, perfect, protect and preserve the rights, titles,
interests, remedies, powers and security interest of the Trustee in the
Trust Estate for the benefit of the Secured Parties;
(xi) any consents required pursuant to Section 13.1 or otherwise;
and
(xii) such other documents, instruments, certifications, agreements
or other items as the Trustee may reasonably require.
Upon satisfaction of such conditions, the Trustee shall authenticate and
deliver, as provided above, such Series of Notes, and a corresponding reduction
in the Issuer Interest will result. There is no limit to the number of New
Series Issuances that may be performed under the Indenture.
(b) In conjunction with each New Series Issuance, the parties hereto
shall execute a Series Supplement, which shall specify the relevant terms with
respect to any newly issued Series of Notes, which may include without
limitation, as applicable: (i) its name or designation, (ii) the initial
aggregate principal amount of Notes of such Series or a method for calculating
the principal and a method for determining principal for any Series with a
variable principal amount, (iii) the Initial Investor Interest or a method for
calculating the Initial Investor Interest and a method for determining any
adjusted Investor Interest, (iv) the portion of the Trust Estate to be allocated
with respect to such Series and the provisions governing such allocations, (v)
the Note Rate (or the method for calculating such Note Rate) with respect to
such Series, (vi) the Closing Date, (vii) each Rating Agency, if any, rating
such Series, (viii) the name of the
35
Clearing Agency, if any, (ix) the rights of the Issuer that have been
transferred to the Holders of such Series pursuant to such New Series Issuance
(including any rights to allocations of Collections of Finance Charges,
Principal Receivables and Recoveries), (x) the Interest Period, the interest
payment date or dates and the date or dates from which interest shall accrue,
(xi) the periods during which or dates on which principal will be paid or
accrued, (xii) the method of allocating Collections with respect to Principal
Receivables for such Series and, if applicable, with respect to other Series and
the method by which the principal amount of Notes of such Series shall amortize
or accrete and the method for allocating Collections with respect to Finance
Charges and Recoveries, (xiii) any other Collections with respect to Receivables
or other amounts available to be paid with respect to such Series, (xiv) the
names of any Series Accounts and the terms governing the operation of any such
account and use of moneys therein, (xv) the Servicing Fee and Trustee and
Back-Up Servicer Fees and Expenses allocation, (xvi) the Minimum Issuer Interest
and the Series Termination Date, (xvii) the terms of any Enhancement with
respect to such Series and the Enhancement Provider, (xviii) the Group, if any,
applicable to such Series, (xix) the terms on which the Notes of such Series may
be repurchased, refinanced, defeased or remarketed to other investors, (xx) any
deposit into any Series Account, (xxi) the number of Classes of such Series, and
if more than one Class, the rights and priorities of each such Class, including
the method of allocating Collections among such Classes, (xxii) the extent to
which the Notes will be issuable in temporary or permanent global form, (xxiii)
whether the Notes may be issued in bearer form and any limitations imposed
thereon, (xxiv) the subordination, if any, of such Series with respect to any
other Series, (xxv) whether such Series will or may be a Companion Series and
the Series with which it will be paired, (xxvi) transfer restrictions applicable
to Notes of such Series and (xxvii) any other relevant terms of such Series of
Notes (all such terms, the "Principal Terms" of such Series).
(c) The terms of such Series Supplement may modify or amend the terms
of this Indenture solely as applied to such new Series. If on the date of the
issuance of such Series there is issued and outstanding one or more Series of
Notes and no Series of Notes is currently rated by a Rating Agency, then as a
condition to such New Series Issuance a nationally recognized investment banking
firm or commercial bank shall also deliver to the Trustee an officer's
certificate stating, in substance, that the New Series Issuance will not have an
adverse effect on the timing or distribution of payments to such other Series of
Notes then issued and outstanding.
Section 2.3. [Reserved].
Section 2.4. Execution and Authentication.
(a) Each Note shall be executed by manual or facsimile signature by
the Issuer. Notes bearing the manual or facsimile signature of the 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 that such
individual has ceased to be so authorized prior to the authentication and
delivery of such Notes or does not hold such office at the date of such Notes.
36
Unless otherwise provided in the related Series Supplement, no Notes shall be
entitled to any benefit under this Indenture, or be valid for any purpose,
unless there appears on such Note a certificate of authentication substantially
in the form provided for herein, duly executed by or on behalf of the Trustee by
the manual signature of a duly authorized signatory (and the Luxembourg agent
(the "Luxembourg Agent"), if such Notes are listed on Luxembourg Stock
Exchange), and such certificate upon any Note shall be conclusive evidence, and
the only evidence, that such Note has been duly authenticated and delivered
hereunder.
(b) Pursuant to Section 2.2, the Issuer shall execute and the Trustee
shall authenticate and deliver a Series of Notes having the terms specified in
the related Series Supplement, upon the written order of the Issuer, to the
purchasers thereof, the underwriters for sale or to the Issuer for initial
retention by it. If specified in the related Series Supplement for any Series,
the Issuer shall execute and the Trustee shall authenticate and deliver the
Global Note that is issued upon original issuance thereof, upon the written
order of the Issuer, to the Depository against payment of the purchase price
therefor. If specified in the related Series Supplement for any Series, the
Issuer shall execute and the Trustee shall authenticate Book-Entry Notes that
are issued upon original issuance thereof, upon the written order of the Issuer,
to a Clearing Agency or its nominee as provided in Section 2.16 against payment
of the purchase price thereof.
(c) All Notes shall be dated and issued as of the date of their
authentication except Bearer Notes which shall be dated the applicable issuance
date as provided in the related Series Supplement.
(d) Notwithstanding the foregoing, if any Note shall have been
authenticated and delivered hereunder but never issued and sold by the Issuer,
and the Issuer shall deliver such Note to the Trustee for cancellation as
provided in Section 2.13 together with a written statement (which need not
comply with Section 15.1 and need not be accompanied by an Opinion of Counsel)
stating that such Note has never been issued and sold by the Issuer, for all
purposes of this Indenture such Note shall be deemed never to have been
authenticated and delivered hereunder and shall not be entitled to the benefits
of this Indenture.
Section 2.5. Authenticating Agent.
(a) The Trustee may appoint one or more authenticating agents with
respect to the Notes which shall be authorized to act on behalf of the 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 Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication on behalf of the Trustee by an authenticating agent and a
certificate of authentication executed on behalf of the Trustee by an
authenticating agent. Each authenticating agent must be acceptable to the
Issuer.
37
(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 paper or any further act on the part of the Trustee
or such authenticating agent.
(c) An authenticating agent may at any time resign by giving written
notice of resignation to the Trustee and to the Issuer. The 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. 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 Trustee or the Issuer,
the Trustee promptly may 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.
(d) The Issuer agrees to pay each authenticating agent from time to
time reasonable compensation for its services under this Section 2.5.
(e) Pursuant to an appointment made under this Section 2.5, the Notes
may have endorsed thereon, in lieu of the Trustee's certificate of
authentication, an alternate certificate of authentication in substantially the
following form:
This is one of the certificates described in the Indenture.
[Name of Authenticating Agent],
as Authenticating Agent
for the Trustee,
By:
----------------------------
Responsible Officer
Section 2.6. Registration of Transfer and Exchange of Notes.
(a) (i) The Trustee shall cause to be kept at the office or agency to
be maintained by a transfer agent and registrar (the "Transfer Agent and
Registrar"), in accordance with the provisions of subsection 2.6(c) and the
Bearer Rules, a register (the "Note Register") in which, subject to such
reasonable regulations as it may prescribe, the Transfer Agent and Registrar
shall provide for the registration of the Notes of each Series (unless otherwise
provided in the related Series Supplement) and registrations of transfers and
exchanges of the Notes as herein provided. The Trustee is hereby initially
appointed Transfer Agent and Registrar for the purposes of registering the Notes
and transfers and exchanges of the Notes as herein provided. If a Person other
than the Trustee is appointed by the Issuer as Transfer Agent and Registrar, the
Issuer will give the Trustee prompt written notice of the appointment of such
Transfer Agent and
38
Registrar and of the location, and any change in the location, of the Note
Register, and the Trustee shall have the right to inspect the Note Register at
all reasonable times and to obtain copies thereof, and the Trustee shall have
the right to rely upon a certificate executed on behalf of the Transfer Agent
and Registrar by a Responsible Officer thereof as to the names and addresses of
the Holders of the Notes and the principal amounts and number of such Notes. If
any form of Note is issued as a Global Note, the Trustee may, or if and so long
as any Series of Notes are listed on the Luxembourg Stock Exchange, and such
exchange shall so require, the Trustee shall appoint a co-transfer agent and
co-registrar in Luxembourg or another European city. Any reference in this
Indenture to the Transfer Agent and Registrar shall include any co-transfer
agent and co-registrar unless the context otherwise requires. The Trustee shall
be permitted to resign as Transfer Agent and Registrar upon thirty (30) days'
written notice to the Servicer and the Issuer. In the event that the Trustee
shall no longer be the Transfer Agent and Registrar, the Issuer shall appoint a
successor Transfer Agent and Registrar.
(ii) Upon surrender for registration of transfer of any Note at any
office or agency of the Transfer Agent and Registrar, if the requirements of
Section 8-401(1) of the UCC are met, the Issuer shall execute, subject to the
provisions of subsection 2.6(b), and the Trustee shall authenticate and (unless
the Transfer Agent and Registrar is different than the Trustee, in which case
the Transfer Agent and Registrar shall) deliver and the Noteholder shall obtain
from the Trustee, in the name of the designated transferee or transferees, one
or more new Notes in authorized denominations of like aggregate principal
amount; provided, that the provisions of this paragraph shall not apply to
Bearer Notes.
(iii) All Notes issued upon any registration of transfer or exchange
of Notes shall be valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
(iv) At the option of any Holder of Registered Notes, Registered
Notes may be exchanged for other Registered Notes of the same Series of the same
Class in authorized denominations of like aggregate principal amounts in the
manner specified in the Series Supplement for such Series, upon surrender of the
Registered Notes to be exchanged at any office or agency of the Transfer Agent
and Registrar maintained for such purpose. Registered Notes may not be exchanged
for Bearer Notes. At the option of any Holder of Bearer Notes, subject to
applicable laws and regulations (including without limitation, the Bearer
Rules), Bearer Notes may be exchanged for other Bearer Notes or Registered Notes
of the same Series of the same Class in authorized denominations of like
aggregate principal amounts, in the manner specified in the Series Supplement
for such Series, upon surrender of the Bearer Notes to be exchanged at an office
or agency of the Transfer Agent and Registrar located outside the United States.
Each Bearer Note surrendered pursuant to this Section 2.6 shall have attached
thereto (or be accompanied by) all unmatured Coupons, provided that any Bearer
Note so surrendered after the close of business on the Record Date preceding the
relevant Payment Date after the related Series Termination Date need not have
attached the Coupons relating to such Payment Date.
39
(v) Whenever any Notes of any Series are so surrendered for
exchange, if the requirements of Section 8-401(1) of the UCC are met the Issuer
shall execute and the Trustee shall authenticate and (unless the Transfer Agent
and Registrar is different than the Trustee, in which case the Transfer Agent
and Registrar shall) deliver and the Noteholders shall obtain from the Trustee,
the Notes of such Series which the Noteholder making the exchange is entitled to
receive. Every Note presented or surrendered for registration of transfer or
exchange shall be accompanied by a written instrument of transfer in a form
satisfactory to the Trustee and the Transfer Agent and Registrar duly executed
by the Noteholder thereof or his attorney-in-fact duly authorized in writing.
(vi) The preceding provisions of this Section 2.6 notwithstanding,
the Trustee or the Transfer Agent and Registrar, as the case may be, shall not
be required to register the exchange of any Global Note of any Series for a
Definitive Note or the transfer of or exchange any Note of any Series for a
period of five (5) Business Days preceding the due date for any payment with
respect to the Notes of such Series or during the period beginning on any Record
Date and ending on the next following Payment Date.
(vii) Unless otherwise provided in the related Series Supplement, no
service charge shall be made for any registration of transfer or exchange of
Notes, but the Transfer Agent and Registrar may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Notes.
(viii) All Notes (together with any Coupons attached to Bearer Notes)
surrendered for registration of transfer and exchange shall be cancelled by the
Transfer Agent and Registrar and disposed of in a manner satisfactory to the
Trustee. The Trustee shall cancel and destroy any 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 2.19 was
received with respect to each portion of the Global Note exchanged for
Definitive Notes.
(ix) Upon written direction, the Issuer shall deliver to the Trustee
or the Transfer Agent and Registrar, as applicable, Bearer Notes and Registered
Notes in such amounts and at such times as are necessary to enable the Trustee
to fulfill its responsibilities under this Indenture and the Notes.
(x) Notwithstanding any other provision of this Section 2.6, the
typewritten Note or Notes representing Book-Entry Notes for any Series may be
transferred, in whole but not in part, only to another nominee of the Clearing
Agency or Foreign Clearing Agency for such Series, or to a successor Clearing
Agency or Foreign Clearing Agency for such Series selected or approved by the
Issuer or to a nominee of such successor Clearing Agency or Foreign Clearing
Agency, only if in accordance with this Section 2.6.
40
(xi) If the Notes are listed on the Luxembourg Stock Exchange, the
Trustee or the Luxembourg Agent, as the case may be, shall send to the Issuer
upon any transfer or exchange of any Note information reflected in the copy of
the register for the Notes maintained by the Registrar or the Luxembourg Agent,
as the case may be.
(xii) By its acceptance of a Note, each Noteholder and Note Owner
shall be deemed to have represented and warranted that either (i) it is not
acquiring the Note with the assets of a benefit plan subject to ERISA or Section
4975 of the Code, or (ii) its purchase and holding of the Note will not,
throughout the term of its holding an interest therein, constitute a non-exempt
"prohibited transaction" under Section 406(a) of ERISA or Section 4975 of the
Code.
(b) Unless otherwise provided in the related Series Supplement,
registration of transfer of Registered Notes containing a legend relating to the
restrictions on transfer of such Registered Notes (which legend shall be set
forth in the Series Supplement relating to such Notes) shall be effected only if
the conditions set forth in such related Series Supplement are satisfied.
Whenever a Registered Note containing the legend set forth in the related
Series Supplement is presented to the Transfer Agent and Registrar for
registration of transfer, the Transfer Agent and Registrar shall promptly seek
instructions from the Issuer regarding such transfer. The Transfer Agent and
Registrar and the Trustee shall be entitled to receive written instructions
signed by a Responsible Officer prior to registering any such transfer or
authenticating new Registered Notes, as the case may be. The Issuer hereby
agrees to indemnify the Transfer Agent and Registrar and the Trustee and to hold
each of them harmless against any loss, liability or expense incurred without
negligence or bad faith on their part arising out of or in connection with
actions taken or omitted by them in reliance on any such written instructions
furnished pursuant to this subsection 2.6(b).
(c) The Transfer Agent and Registrar will maintain at its expense in
the Borough of Manhattan, the City of New York (and subject to this Section 2.6,
if specified in the related Series Supplement for any Series, any other city
designated in such Series Supplement) an office or offices or an agency or
agencies where Notes of such Series may be surrendered for registration of
transfer or exchange (except that Bearer Notes may not be surrendered for
exchange at any such office or agency in the United States, but may be
surrendered for exchange at such office or agency outside the United States as
shall be specified in the related Supplement). For purposes of this subsection
2.6(c), "United States" includes Puerto Rico, the U.S. Virgin Islands, the
Northern Mariana Islands, Guam, Wake Island and American Samoa.
Section 2.7. Appointment of Paying Agent. The Paying Agent shall make
payments to the Secured Parties from the appropriate account or accounts
maintained for the benefit of the Secured Parties as specified in this Base
Indenture or the related Series Supplement for any Series pursuant to Articles 5
and 6. Any Paying Agent shall have the revocable power to
41
withdraw funds from such appropriate account or accounts for the purpose of
making distributions referred to above. The Trustee (or the Servicer on behalf
of the Issuer if the Trustee is the Paying Agent) may revoke such power and
remove the Paying Agent, if the Trustee (or the Servicer on behalf of the Issuer
if the Trustee is the Paying Agent) determines in its sole discretion that the
Paying Agent shall have failed to perform its obligations under this Indenture
in any material respect or for other good cause. The Trustee (or the Servicer on
behalf of the Issuer if the Trustee is the Paying Agent) shall notify each
Rating Agency of the removal of any Paying Agent. The Paying Agent, unless the
Series Supplement with respect to any Series states otherwise, shall initially
be the Trustee. The Trustee shall be permitted to resign as Paying Agent upon
thirty (30) days' written notice to the Servicer on behalf of the Issuer. In the
event that the Trustee shall no longer be the Paying Agent, the Trustee shall
appoint a successor to act as Paying Agent (which shall be a bank or trust
company).
If specified in the related Series Supplement for any Series, so long as
the Notes of such Series are outstanding, the Issuer shall maintain a co-paying
agent in New York City (for Registered Notes only) or any other city designated
in such Series Supplement which, if and so long as any Series of Notes is listed
on the Luxembourg Stock Exchange or other stock exchange and such exchange so
requires, shall be in Luxembourg or the location required by such other stock
exchange. Any reference in this Indenture to the Paying Agent shall include any
co-paying agent unless the context requires otherwise. For so long as any Bearer
Notes are outstanding, the Issuer shall maintain a Paying Agent and a Transfer
Agent and Registrar outside the United States (as defined in subsection 2.6(c)).
Section 2.8. Paying Agent to Hold Money in Trust.
(a) The Issuer will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee (and if the Trustee acts as Paying Agent, it hereby
so agrees), subject to the provisions of this Section, that such Paying Agent
will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Issuer Obligations in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or otherwise
disposed of as provided herein and in the applicable Series Supplement and
pay such sums to such Persons as provided herein and in the applicable
Series Supplement;
(ii) give the Trustee written notice of any default by the Issuer
(or any other obligor under the Issuer Obligations) of which it (or, in the
case of the Trustee, a Trust Officer) has actual knowledge in the making of
any payment required to be made with respect to the Notes;
42
(iii) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to the
Trustee all sums held by it in trust for the payment of the Issuer
Obligations if at any time it ceases to meet the standards required to be
met by a Trustee hereunder; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Issuer Obligations of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith.
(b) 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 Trustee all sums held in trust by
such Paying Agent, such sums to be held by the Trustee upon the same trusts as
those upon which the sums were held by such Paying Agent; and upon such payment
by any Paying Agent to the Trustee, such Paying Agent shall be released from all
further liability with respect to such money.
(c) Subject to applicable laws with respect to escheat of funds, any
money held by the Trustee, any Paying Agent or any Clearing Agency in trust for
the payment of any amount due with respect to any Issuer Obligation and
remaining unclaimed for two years after such amount has become due and payable
shall be discharged from such trust and be paid to the Issuer on Issuer Request;
and the holder of such Issuer Obligation shall thereafter, as an unsecured
general creditor, look only to the Issuer for payment thereof (but only to the
extent of the amounts so paid to the Issuer), and all liability of the Trustee,
such Paying Agent or such Clearing Agency with respect to such trust money shall
thereupon cease; provided, however, that the Trustee, such Paying Agent or such
Clearing Agency, before being required to make any such repayment, may at the
expense of the Issuer cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in New York City and, if the related Series of Notes has been listed
on the Luxembourg Stock Exchange, and if the Luxembourg Stock Exchange so
requires, in a newspaper customarily published on each Luxembourg business day
and of general circulation in Luxembourg City, Luxembourg, notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than thirty (30) days from the date of such publication, any
unclaimed balance of such money then remaining will be repaid to the Issuer. The
Trustee may also adopt and employ, at the expense of the Issuer, any other
reasonable means of notification of such repayment.
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Section 2.9. Private Placement Legend.
Unless otherwise provided for in a Series Supplement, in addition to any
legend required by Section 2.16, each Note shall bear a legend in substantially
the following form:
THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE SECURITIES LAWS OF ANY
OTHER JURISDICTION. THIS NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY (1) TO A PERSON THE TRANSFEROR REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT ("RULE 144A")) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
OR (2) IN A TRANSACTION OTHERWISE EXEMPT FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES AND ANY OTHER JURISDICTION AND BASED ON AN OPINION OF COUNSEL
IF THE ISSUER AND THE TRANSFER AGENT AND REGISTRAR SO REQUEST, IN EACH CASE
IN ACCORDANCE WITH THE INDENTURE AND ALL APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION. THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY TRANSFEREE FROM IT OF THE
RESALE RESTRICTIONS SET FORTH ABOVE.
BY ACQUIRING THIS NOTE, EACH PURCHASER WILL BE DEEMED TO HAVE REPRESENTED,
WARRANTED AND COVENANTED EITHER THAT (A) IT IS NOT AN "EMPLOYEE BENEFIT
PLAN" SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), A "PLAN" DESCRIBED IN SECTION 4975(e)(1) OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, AN ENTITY DEEMED TO HOLD "PLAN ASSETS" OF
ANY OF THE FOREGOING BY REASON OF INVESTMENT BY AN "EMPLOYEE BENEFIT PLAN"
OR "PLAN" IN SUCH ENTITY, OR A GOVERNMENTAL PLAN SUBJECT TO APPLICABLE LAW
THAT IS SUBSTANTIALLY SIMILAR TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF
ERISA OR SECTION 4975 OF THE CODE OR (B) ITS PURCHASE AND HOLDING OF THIS
NOTE WILL NOT RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA OR
SECTION 4975 OF THE CODE (OR, IN THE CASE OF A GOVERNMENTAL PLAN, ANY
SUBSTANTIALLY SIMILAR APPLICABLE LAW).
44
Section 2.10. Mutilated, Destroyed, Lost or Stolen Notes.
(a) If (i) any mutilated Note (together, in the case of Bearer Notes,
with all unmatured Coupons, if any, appertaining thereto) is surrendered to the
Transfer Agent and Registrar, or the Transfer Agent and Registrar receives
evidence to its satisfaction of the destruction, loss or theft of any Note, and
(ii) there is delivered to the Transfer Agent and Registrar and the Trustee such
security or indemnity as may be required by them to hold the Transfer Agent and
Registrar and the Trustee harmless, then, in the absence of notice to the
Trustee that such Note has been acquired by a bona fide purchaser, and provided
that the requirements of Section 8-405 of the UCC (which generally permit the
Issuer to impose reasonable requirements) are met, the Issuer shall execute and
the Trustee shall authenticate and (unless the Transfer Agent and Registrar is
different from the Trustee, in which case the Transfer Agent and Registrar
shall) deliver (in compliance with applicable law), in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Note, a replacement Note of
like tenor and aggregate principal balance; provided, however, that if any such
destroyed, lost or stolen Note, but not a mutilated Note, shall have become or
within seven (7) days shall be due and payable or shall have been called for
redemption, instead of issuing a replacement Note, the Issuer may pay such
destroyed, lost or stolen Note when so due or payable without surrender thereof.
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 for value of the original Note in lieu of which such replacement
Note was issued presents for payment such original Note, the Issuer and the
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 for value, 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
Trustee in connection therewith.
(b) Upon the issuance of any replacement Note under this
Section 2.10, the Transfer Agent and Registrar or the Trustee 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 Trustee and the
Transfer Agent and Registrar) connected therewith.
(c) Any duplicate Note issued pursuant to this Section 2.10 shall
constitute complete and indefeasible evidence of contractual debt obligation of
the Issuer, as if originally issued, whether or not the lost, stolen or
destroyed Note shall be found at any time.
(d) Every replacement Note issued pursuant to this Section 2.10 in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original additional Contractual Obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note
45
shall be at any time enforceable by anyone and shall be entitled to all the
benefits of this Indenture equally and proportionately with any and all other
Notes duly issued hereunder.
(e) The provisions of this Section 2.10 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 2.11. Temporary Notes.
(a) Pending the preparation of Definitive Notes, the Issuer may
request and the Trustee, upon receipt of an Issuer Order, shall authenticate and
deliver temporary Notes of such Series. Temporary Notes shall be substantially
in the form of Definitive Notes of like Series but may have variations that are
not inconsistent with the terms of this Indenture as the officers executing such
Notes may determine, as evidenced by their execution of such Notes.
(b) If temporary Notes are issued pursuant to subsection 2.11(a)
above, the Issuer will cause Definitive Notes to be prepared without
unreasonable delay. After the preparation of Definitive Notes, the temporary
Notes shall be exchangeable for Definitive Notes upon surrender of the temporary
Notes at the office or agency of the Issuer to be maintained as provided in
Section 8.2, without charge to the Noteholder. Upon surrender for cancellation
of any one or more temporary Notes, the Issuer shall execute and at the Issuer's
request the Trustee shall authenticate and deliver in exchange therefor a like
principal amount of Definitive Notes of authorized denominations. Until so
exchanged, the temporary Notes shall in all respects be entitled to the same
benefits under this Indenture as Definitive Notes.
Section 2.12. Persons Deemed Owners. Prior to due presentation of a Note
for registration of transfer, the Servicer, the Trustee, the Paying Agent, the
Transfer Agent and Registrar and any agent of any of them may treat a Person in
whose name any Note is registered (as of any date of determination) as the owner
of the related Note for the purpose of receiving payments of principal and
interest, if any, on such Note and for all other purposes whatsoever whether or
not such Note be overdue, and neither the Trustee, the Paying Agent, the
Transfer Agent and Registrar nor any agent of any of them shall be affected by
any notice to the contrary; provided, however, that in determining whether the
requisite number of Holders of Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder (including under
any Series Supplement), Notes owned by any of the Issuer, the Sellers, the
Initial Seller, the Servicer or any Affiliate controlled by or controlling Conn
shall be disregarded and deemed not to be outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only Notes
which a Trust Officer in the Corporate Trust Office of the Trustee knows to be
so owned shall be so disregarded.
In the case of a Bearer Note, the Trustee, the Paying Agent, the Transfer
Agent and Registrar and any agent of any of them may treat the holder of a
Bearer Note or Coupon as the
46
owner of such Bearer Note or Coupon for the purpose of receiving distributions
and for all other purposes whatsoever, and neither the Trustee, the Paying
Agent, the Transfer Agent and Registrar nor any agent of any of them shall be
affected by any notice to the contrary.
Section 2.13. Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee and shall be promptly
cancelled by the Trustee. The Issuer may at any time deliver to the Trustee for
cancellation any Notes previously authenticated and delivered hereunder which
the Issuer may have acquired in any manner whatsoever, and all Notes so
delivered shall be promptly cancelled by the 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 may be held or disposed of by the Trustee in accordance with its standard
retention or disposal policy as in effect at the time unless the Issuer shall
direct by an Issuer Order that they be destroyed or returned to it; provided
that such Issuer Order is timely and the Notes have not been previously disposed
of by the Trustee. The Registrar and Paying Agent shall forward to the Trustee
any Notes surrendered to them for registration of transfer, exchange or payment.
Section 2.14. Release of Trust Estate. The Trustee shall (a) in
connection with any removal of Removed Receivables from the Trust Estate,
release the portion of the Trust Estate securing the Removed Receivables from
the Lien created by this Indenture upon receipt of a Conn Officer's Certificate
certifying that the Outstanding Principal Balance with respect thereto has been
deposited into the Collection Account and (b) on or after the Indenture
Termination Date, release any remaining portion of the Trust Estate from the
Lien created by this Indenture and in each case deposit in the Collection
Account any funds then on deposit in any other Trust Account upon receipt of a
Issuer Request accompanied by a Conn Officer's Certificate, and Independent
Certificates (if this Indenture is required to be qualified under the TIA) in
accordance with TIA Sections 314(c) and 314(d)(1) meeting the applicable
requirements of Section 15.1.
Section 2.15. Payment of Principal and Interest.
(a) The principal of each Series of Notes shall be payable at the
times and in the amounts set forth in the related Series Supplement and in
accordance with Section 8.1.
(b) Each Series of Notes shall accrue interest as provided in the
related Series Supplement and such interest shall be payable at the times and in
the amounts set forth in the related Series Supplement and in accordance with
Section 8.1.
(c) Any installment of interest or principal, if any, payable on any
Note which is punctually paid or duly provided for by the Issuer on the
applicable Payment Date shall be paid to the Person in whose name such Note is
registered at the close of business on any Record Date with respect to a Payment
Date for such Note and such Person shall be entitled to receive the
47
principal and interest payable on such Payment Date notwithstanding the
cancellation of such Note upon any registration of transfer, exchange or
substitution of such Note subsequent to such Record Date, by check mailed
first-class, postage prepaid, to such Person's address as it appears on the Note
Register on such Record Date or, if the related investor has provided the
Trustee wiring instructions at least three (3) Business Days prior to the
related Payment Date, then by wire transfer in immediately available funds to
the account designated by the Holder of such Note, except that, unless
Definitive Notes have been issued pursuant to Section 2.18, with respect to
Notes registered on the Record Date in the name of the nominee of the Clearing
Agency (initially, such nominee to be Cede & Co.), payment will be made by wire
transfer in immediately available funds to the account designated by such
nominee and except for the final installment of principal payable with respect
to such Note on a Payment Date or on the Legal Final Payment Date (and except
for the Redemption Price for any Note called for redemption pursuant to Section
14.1) which shall be payable as provided herein; except that, any interest
payable at maturity shall be paid to the Person to whom the principal of such
Note is payable. The funds represented by any such checks returned undelivered
shall be held in accordance with Section 2.8.
Section 2.16. Book-Entry Notes.
(a) If provided in the related Series Supplement, the Notes of such
Series, upon original issuance, shall be issued in the form of Book-Entry Notes,
to be delivered to the depository specified in such Series Supplement (the
"Depository,") which shall be the Clearing Agency or Foreign Clearing Agency, by
or on behalf of such Series. The Notes of each Series issued as Book-Entry Notes
shall, unless otherwise provided in the related Series Supplement, initially be
registered on the Note Register in the name of the nominee of the Clearing
Agency or Foreign Clearing Agency. Unless otherwise provided in a related Series
Supplement, no Note Owner of Notes issued as Book-Entry Notes will receive a
definitive note representing such Note Owner's interest in the related Series of
Notes, except as provided in Section 2.18.
(b) For each Series of Notes to be issued in registered form, the
Issuer shall duly execute, and the Trustee shall, in accordance with Section 2.4
hereof, authenticate and deliver initially, unless otherwise provided in the
applicable Series Supplement, one or more Global Notes that shall be registered
on the Note Register in the name of a Clearing Agency or Foreign Clearing Agency
or such Clearing Agency's or Foreign Clearing Agency's nominee. Each Global Note
registered in the name of DTC or its nominee shall bear a legend substantially
to the following effect:
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION, TO CONN FUNDING II, L.P.
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. ("CEDE") OR SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT
48
HEREON IS MADE TO CEDE OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED
OWNER HEREOF, CEDE, HAS AN INTEREST HEREIN.
So long as the Clearing Agency or Foreign Clearing Agency or its nominee is
the registered owner or holder of a Global Note, the Clearing Agency or Foreign
Clearing Agency or its nominee, as the case may be, will be considered the sole
owner or holder of the Notes represented by such Global Note for purposes of
this Indenture and such Notes. Members of, or participants in, the Clearing
Agency or Foreign Clearing Agency shall have no rights under this Indenture with
respect to any Global Note held on their behalf by the Clearing Agency or
Foreign Clearing Agency, and the Clearing Agency or Foreign Clearing Agency may
be treated by the Issuer, the Trustee, any Agent and any agent of such entities
as the absolute owner of such Global Note for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the
Trustee, any Agent and any agent of such entities from giving effect to any
written certification, proxy or other authorization furnished by the Clearing
Agency or Foreign Clearing Agency or impair, as between the Clearing Agency or
Foreign Clearing Agency and its agent members, the operation of customary
practices governing the exercise of the rights of a holder of any Note.
(c) Subject to paragraph 2.6(a)(xi), the provisions of the
"Operating Procedures of the Euroclear System" and the "Terms and Conditions
Governing Use of Euroclear" and such procedures governing the use of such
Clearing Agencies as may be enacted from time to time shall be applicable to a
Global Note insofar as interests in such Global Note are held by the agent
members of Euroclear or Clearstream (which shall only occur in the case of a
temporary Regulation S Global Note and a permanent Regulation S Global Note).
Account holders or participants in Euroclear and Clearstream shall have no
rights under this Indenture with respect to such Global Note and the registered
holder may be treated by the Issuer, the Trustee, any Agent and any agent of the
Issuer or the Trustee as the owner of such Global Note for all purposes
whatsoever.
(d) Title to the Notes shall pass only by registration in the Note
Register maintained by the Transfer Agent and Registrar pursuant to Section 2.6.
(e) Any typewritten Note or Notes representing Book-Entry Notes shall
provide that they represent the aggregate or a specified amount of outstanding
Notes from time to time endorsed thereon and may also provide that the aggregate
amount of outstanding Notes represented thereby may from time to time be
increased or reduced to reflect exchanges. Any endorsement of a typewritten Note
or Notes representing Book-Entry Notes to reflect the amount, or any increase or
decrease in the amount, or changes in the rights of Note Owners represented
thereby, shall be made in such manner and by such Person or Persons as shall be
specified therein or in the Issuer Order to be delivered to the Trustee pursuant
to subsection 2.4(b). The Trustee
49
shall deliver and redeliver any typewritten Note or Notes representing
Book-Entry Notes in the manner and upon instructions given by the Person or
Persons specified therein or in the applicable Issuer Order. Any instructions by
the Issuer with respect to endorsement or delivery or redelivery of a
typewritten Note or Notes representing the Book-Entry Notes shall be in writing
but need not comply with Section 13.3 hereof and need not be accompanied by an
Opinion of Counsel.
(f) Unless and until definitive, fully registered Notes of any Series
or any Class thereof ("Definitive Notes") have been issued to Note Owners with
respect to any Series of Notes initially issued as Book-Entry Notes pursuant to
Section 2.18 or the applicable Series Supplement:
(i) the provisions of this Section 2.16 shall be in full force and
effect with respect to each such Series;
(ii) the Issuer, the Sellers, the Servicer, the Paying Agent, the
Transfer Agent and Registrar and the Trustee may deal with the Clearing
Agency or Foreign Clearing Agency and the Clearing Agency Participants for
all purposes of this Indenture (including the making of payments on the
Notes of each such Series and the giving of instructions or directions
hereunder) as the authorized representatives of such Note Owners;
(iii) to the extent that the provisions of this Section 2.16 conflict
with any other provisions of this Indenture, the provisions of this Section
2.16 shall control;
(iv) whenever this Indenture requires or permits actions to be taken
based upon instructions or directions of Holders of such Series of Notes
evidencing a specified percentage of the outstanding principal amount of
such Series of Notes, the Clearing Agency or Foreign Clearing Agency, as
applicable, shall be deemed to represent such percentage only to the extent
that it has received instructions to such effect from Note Owners and/or
their related Clearing Agency Participants owning or representing,
respectively, such required percentage of the beneficial interest in such
Series of Notes and has delivered such instructions to the Trustee;
(v) the rights of Note Owners of each such Series shall be
exercised only through the Clearing Agency or Foreign Clearing Agency and
their related Clearing Agency Participants and shall be limited to those
established by law and agreements between such Note Owners and the related
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 2.18, the applicable Clearing Agencies or Foreign Clearing Agencies
will make book-entry transfers among their related Clearing Agency
Participants and receive and transmit payments of principal and interest on
such Series of Notes to such Clearing Agency Participants; and
50
(vi) Note Owners may receive copies of any reports sent to
Noteholders of the relevant Series generally pursuant to the Indenture,
upon written request, together with a certification that they are Note
Owners and payments of reproduction and postage expenses associated with
the distribution of such reports, from the Trustee at the Corporate Trust
Office.
Section 2.17. Notices to Clearing Agency. Whenever notice or other
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Note Owners pursuant to Section
2.18 or the applicable Series Supplement, the Trustee shall give all such
notices and communications specified herein to be given to Holders of the Notes
to the applicable Clearing Agency or Foreign Clearing Agency for distribution to
the Holders of the Notes.
Section 2.18. Definitive Notes.
(a) Conditions for Exchange. If with respect to any Series of
Book-Entry Notes (i) (A) the Issuer advises the Trustee in writing that the
Clearing Agency or Foreign Clearing Agency is no longer willing or able to
discharge properly its responsibilities under the applicable Depository
Agreement and (B) neither the Trustee nor the Issuer is able to locate a
qualified successor, (ii) the Issuer, at its option, advises the Trustee in
writing that it elects to terminate the book-entry system through the Clearing
Agency or Foreign Clearing Agency with respect to any Series of Notes or (iii)
after the occurrence of a Servicer Default or Event of Default, Note Owners of a
Series representing beneficial interests aggregating not less than 50% (or such
other percent specified in a related Series Supplement) of the portion of
outstanding principal amount of the Notes represented by such Series advise the
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 through the applicable Clearing Agency or Foreign Clearing
Agency is no longer in the best interests of the Note Owners of such Series, the
Trustee shall notify all Note Owners of such Series, through the applicable
Clearing Agency Participants, of the occurrence of any such event and of the
availability of Definitive Notes to Note Owners of such Series requesting the
same. Upon surrender to the Trustee of the typewritten Note or Notes
representing the Book-Entry Notes of such Series by the applicable Clearing
Agency or Foreign Clearing Agency, accompanied by registration instructions from
the applicable Clearing Agency or Foreign Clearing Agency for registration, the
Trustee shall issue the Definitive Notes of such Series or Class. Neither the
Issuer nor the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Notes of such Series and upon
the issuance of any Series of Notes or any Class thereof in definitive form in
accordance with the related Series Supplement, 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
Trustee, to the extent applicable with respect to such Definitive Notes, and the
Trustee shall recognize the Holders of
51
the Definitive Notes of such Series or Classes as Noteholders of such Series or
Classes hereunder. Notwithstanding anything in this Indenture to the contrary,
Definitive Notes shall not be issued in respect of any Series Temporary
Regulation S Global Note unless the applicable Restricted Period has expired and
then only upon receipt by the Trustee from the Holder thereof of any
certifications required by the relevant Series Supplement.
(b) Transfer of Definitive Notes. Subject to the terms of this
Indenture (including the requirements of any relevant Series Supplement), the
holder of any Definitive Note may transfer the same in whole or in part, in an
amount equivalent to an authorized denomination, by surrendering at the office
maintained by the Transfer Agent and Registrar for such purpose in the Borough
of Manhattan, the City of New York, such Note with the form of transfer endorsed
on it duly completed and executed by, or accompanied by a written instrument of
transfer in form satisfactory to the Issuer and the Transfer Agent and Registrar
by, the holder thereof and, if applicable, accompanied by a certificate
substantially in the form required under the related Series Supplement. In
exchange for any Definitive Note properly presented for transfer, the Issuer
shall execute and the Trustee shall promptly authenticate and deliver or cause
to be executed, authenticated and delivered in compliance with applicable law,
to the transferee at such office, or send by mail (at the risk of the
transferee) to such address as the transferee may request, Definitive Notes for
the same aggregate principal amount as was transferred. In the case of the
transfer of any Definitive Note in part, the Issuer shall execute and the
Trustee shall promptly authenticate and deliver or cause to be authenticated and
delivered to the transferor at such office, or send by mail (at the risk of the
transferor) to such address as the transferor may request, Definitive Notes for
the aggregate principal amount that was not transferred. No transfer of any
Definitive Note shall be made unless the request for such transfer is made by
the Holder at such office. Neither the Issuer nor the Trustee shall be liable
for any delay in delivery of transfer instructions and each may conclusively
rely on, and shall be protected in relying on, such instructions. Upon the
issuance of Definitive Notes for such Series, the Trustee shall recognize the
Holders of the Definitive Notes as Noteholders of such Series.
Section 2.19. Global Note; Euro-Note Exchange Date. If specified in the
related Series Supplement for any Series, (i) the Notes may be initially issued
in the form of a single temporary global note (the "Global Note") in registered
or bearer form, without interest coupons, in the denomination of the initial
aggregate principal amount of the Notes and (ii) a Class of Notes may be
initially issued in the form of a single temporary Global Note in registered or
bearer form, in the denomination of the portion of the initial aggregate
principal amount of the Notes represented by such Class, each substantially in
the form attached to the related Series Supplement. Unless otherwise specified
in the related Series Supplement, the provisions of this Section 2.19 shall
apply to such Global Note. The Global Note will be authenticated by the 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 Series Supplement for Registered Notes or Bearer Notes
in definitive form.
52
Section 2.20. Tax Treatment. The Issuer has structured this Indenture and
any Collateral Interest, and the Notes have been (or will be) issued with the
intention that, the Notes and any Collateral Interest will qualify under
applicable tax law as indebtedness of the Issuer secured by the Trust Estate and
any entity acquiring any direct or indirect interest in any (i) Note by
acceptance of its Notes (or, in the case of a Note Owner, by virtue of such Note
Owner's acquisition of a beneficial interest therein) agrees to treat the Notes
(or beneficial interests therein) or (ii) Collateral Interest or any interest
therein agrees to treat the Collateral Interest or any interest therein, for
purposes of Federal, state and local and income or franchise taxes and any other
tax imposed on or measured by income, as indebtedness. Each Noteholder agrees
that it will cause any Note Owner acquiring an interest in a Note through it and
each owner of any Collateral Interest or any interest therein agrees that it
will cause any Person acquiring any such interest to comply with this Indenture
as to treatment as indebtedness for such tax purposes.
ARTICLE 3.
[ARTICLE 3 IS RESERVED AND SHALL BE SPECIFIED IN ANY
SUPPLEMENT WITH RESPECT TO ANY SERIES OF NOTES]
ARTICLE 4.
NOTEHOLDER LISTS AND REPORTS
Section 4.1. Issuer To Furnish To Trustee Names and Addresses of
Noteholders. The Issuer will furnish or cause the Transfer Agent and Registrar
to furnish to the Trustee (a) not more than five (5) days after each Record Date
a list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders as of such Record Date, (b) at such other times as the
Trustee may request in writing, within thirty (30) days after receipt by the
Issuer of any such request, a list of similar form and content as of a date not
more than ten (10) days prior to the time such list is furnished; provided,
however, that so long as the Trustee is the Transfer Agent and Registrar, no
such list shall be required to be furnished. The Trustee will furnish or cause
to be furnished by the Transfer Agent and Registrar to the Servicer or the
Paying Agent such list for payment of distributions to Noteholders.
Section 4.2. Preservation of Information; Communications to Noteholders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders contained in the most recent
list furnished to the Trustee as provided in Section 4.1 and the names and
addresses of Holders received by the Trustee in its capacity as Transfer Agent
and Registrar. The Trustee may destroy any list furnished to it as provided in
such Section 4.1 upon receipt of a new list so furnished.
(b) Noteholders may communicate (including pursuant to TIA Section
312(b) (if this Indenture is required to be qualified under the TIA)) with other
Noteholders with respect
53
to their rights under this Indenture or under the Notes. Unless otherwise
provided in the related Series Supplement, if holders of Notes evidencing in
aggregate not less than 20% of the outstanding principal balance of the Notes of
any Series (the "Applicants") apply in writing to the Trustee, and furnish to
the Trustee reasonable proof that each such Applicant has owned a Note for a
period of at least 6 months preceding the date of such application, and if such
application states that the Applicants desire to communicate with other
Noteholders of any Series with respect to their rights under this Indenture or
under the Notes and is accompanied by a copy of the communication which such
Applicants propose to transmit, then the Trustee, after having been adequately
indemnified by such Applicants for its costs and expenses, shall within five (5)
Business Days after the receipt of such application 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 Trustee and
shall give the Servicer notice that such request has been made within five (5)
Business Days after the receipt of such application. Such list shall be as of
the most recent Record Date, but in no event more than forty five (45) days
prior to the date of receipt of such Applicants' request.
(c) The Issuer, the Trustee and the Transfer Agent and Registrar
shall have the protection of TIA Section 312(c) (if this Indenture is required
to be qualified under the TIA). Every Noteholder, by receiving and holding a
Note, agrees with the Issuer and the Trustee that neither the Issuer, the
Trustee, the Transfer Agent and Registrar, nor any of their respective agents
shall be held accountable by reason of the disclosure of any such information as
to the names and addresses of the Noteholders in accordance with this Section
4.2, regardless of the source from which such information was obtained.
Section 4.3. Reports by Issuer.
(a) The Servicer on behalf of the Issuer shall:
(i) deliver to the Trustee, at least two (2) Business Days prior to
the date, if any, the Issuer is required to file the same with the
Commission, hard and electronic 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 Trustee and the Commission in accordance with
rules and regulations prescribed from time to time by the Commission such
additional information, documents and reports, if any, 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;
(iii) supply to the Trustee (and the Trustee shall transmit by mail
to all Noteholders) such summaries of any information, documents and
reports required to be
54
filed by the Issuer (if any) pursuant to clauses (i) and (ii) of this
subsection 4.3(a) as may be required by rules and regulations prescribed
from time to time by the Commission; and
(iv) prepare and distribute any other reports required to be
prepared by the Servicer under any Transaction Documents.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on January 31 of each year.
Section 4.4. Reports by Trustee. If this Indenture is required to be
qualified under the TIA, within sixty (60) days after each March 1, beginning
with March 1, 2003, the Trustee shall mail to each Noteholder as required by TIA
Section 313(c) a brief report dated as of such date that complies with TIA
Section 313(a). The Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Noteholders shall be
filed by the Trustee with the Commission and each stock exchange, if any, on
which the Notes are listed. The Issuer shall notify the Trustee if and when the
Notes are listed on any stock exchange.
Section 4.5. Reports and Records for the Trustee and Instructions.
(a) Unless otherwise stated in the related Series Supplement with
respect to any Series and subject to the requirements of Section 4.4, on each
Determination Date the Servicer shall forward to the Trustee a Monthly Servicer
Report prepared by the Servicer.
(b) Unless otherwise specified in the related Series Supplement, on
each Payment Date, the Trustee or the Paying Agent shall forward to each
Noteholder of record of each outstanding Series the Monthly Noteholders'
Statement with respect to such Series, with a copy to the Rating Agencies and
each Enhancement Provider with respect to such Series.
ARTICLE 5.
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 5.1. Rights of Noteholders. Each Series of Notes shall be
secured by the entire Trust Estate, including the benefits of any Enhancement
issued with respect to such Series and the right to receive the Collections and
other amounts at the times and in the amounts specified in this Article 5 to be
deposited in the Investor Accounts and any other Series Account (if so specified
in the related Series Supplement) or to be paid to the Noteholders of such
Series. In no event shall the grant of a security interest in the entire Trust
Estate be deemed to entitle any Noteholder to receive Collections or other
proceeds of the Trust Estate in excess of the amounts described in Article 5.
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Section 5.2. Collection of Money. Except as otherwise expressly provided
herein, the 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
Trustee pursuant to this Indenture. The Trustee shall apply all such money
received by it as provided in this Indenture. Except as otherwise expressly
provided in this Indenture, if any default occurs in the making of any payment
or performance under any agreement or instrument that is part of the Trust
Estate, the Trustee may take such action as may be appropriate to enforce such
payment or performance, including the institution and prosecution of appropriate
Proceedings. Any such action shall be without prejudice to any right to claim a
Default or Event of Default under this Indenture and any right to proceed
thereafter as provided in Article 9.
Section 5.3. Establishment of Accounts.
(a) The Collection Account. On or prior to the Initial Closing Date,
the Issuer shall cause the Servicer and the Servicer, for the benefit of the
Secured Parties, shall establish and maintain in the city in which the Corporate
Trust Office is located, with a Qualified Institution or as a segregated trust
account with the corporate trust department of a depository institution or trust
company having corporate trust powers and acting as trustee for funds deposited
in the Collection Account, in the name of the Trustee, a non-interest bearing
segregated account (the "Collection Account") bearing a designation clearly
indicating that the funds deposited therein are held in trust for the benefit of
the Secured Parties. Pursuant to authority granted to it pursuant to subsection
2.02(a) of the Servicing Agreement, the Servicer shall have the revocable power
to withdraw funds from the Collection Account for the purposes of carrying out
its duties thereunder. The Trustee shall be the entitlement holder of the
Collection Account, and shall possess all right, title and interest in all
moneys, instruments, securities and other property on deposit from time to time
in the Collection Account and the proceeds thereof for the benefit of the
Secured Parties. Initially, the Collection Account will be established with the
Trustee. Funds on deposit in the Collection Account that are not both deposited
and to be withdrawn on the same day shall be invested in Permitted Investments.
(b) The Finance Charge and Principal Accounts. The Trustee, for the
benefit of the Secured Parties, shall establish and maintain in the city in
which the Corporate Trust Office is located, with a Qualified Institution, in
the name of the Trustee, two non-interest bearing segregated trust accounts (the
"Finance Charge Account" and the "Principal Account" respectively), each bearing
a designation clearly indicating that the funds therein are held for the benefit
of the Secured Parties. The Trustee shall possess all right, title and interest
in all funds on deposit from time to time in the Finance Charge Account and the
Principal Account and in all proceeds thereof. The Trustee shall be the
entitlement holder of both the Finance Charge Account and the Principal Account
and, subject to the next sentence, the Finance Charge Account and the Principal
Account shall be under the sole dominion and control of the Trustee for the
benefit of the Secured Parties. Pursuant to authority granted to it hereunder
and in the Servicing Agreement, the Servicer shall have the revocable power to
instruct the Trustee to
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withdraw funds from the Finance Charge Account and Principal Account for the
purpose of carrying out the Servicer's duties under the Servicing Agreement. The
Trustee at all times shall maintain accurate records reflecting each transaction
in the Principal Account and the Finance Charge Account and that funds held
therein shall at all times be held in trust for the benefit of the Secured
Parties.
(c) The Payment Accounts. For each Series, the Trustee, for the
benefit of the Secured Parties of such Series, shall establish and maintain in
the State of New York or in the city in which the Corporate Trust Office is
located, with one or more Qualified Institutions, in the name of the Trustee, a
non-interest bearing segregated trust account (each, a "Payment Account" and
collectively, the "Payment Accounts") bearing a designation clearly indicating
that the funds deposited therein are held in trust for the benefit of the
Secured Parties of such Series. The Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Payment Accounts and
in all proceeds thereof. The Payment Accounts shall be under the sole dominion
and control of the Trustee for the benefit of the Secured Parties of such
Series.
(d) Series Accounts. If so provided in the related Series Supplement,
the Trustee or the Servicer, for the benefit of the Secured Parties of such
Series, shall cause to be established and maintained, in the name of the
Trustee, one or more accounts (each, a "Series Account" and, collectively, the
"Series Accounts"). Each such Series Account shall bear a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Secured Parties of such Series. Each such Series Account will be a trust
account, if so provided in the related Series Supplement, and will have the
other features and be applied as set forth in the related Series Supplement.
(e) Administration of the Finance Charge and Principal Accounts.
Funds on deposit in the Principal Account and the Finance Charge Account that
are not both deposited and to be withdrawn on the same date shall be invested in
Permitted Investments. Any such investment shall mature and such funds shall be
available for withdrawal on or prior to the Series Transfer Date related to the
Monthly Period in which such funds were received or deposited, or if so
specified in the related Series Supplement, immediately preceding a Payment
Date. The Trustee shall: (i) hold each Permitted Investment (other than such as
are described in clause (c) of the definition thereof) that constitutes
investment property through a securities intermediary, which securities
intermediary shall (I) agree that such investment property shall at all times be
credited to a securities account of which the Trustee is the entitlement holder,
(II) comply with entitlement orders originated by the Trustee without the
further consent of any other person or entity, (III) agree that all property
credited to such securities account shall be treated as a financial asset, (IV)
waive any lien on, security interest in, or right of set-off with respect to any
property credited to such securities account, and (V) agree that its
jurisdiction for purposes of Section 8-110 and Section 9-305(a)(3) of the UCC
shall be New York, and that such agreement shall be governed by the laws of the
State of New York; and (ii) maintain for the benefit of the Secured Parties,
possession or control of each other Permitted Investment (including any
negotiable instruments, if any, evidencing such Permitted Investments) not
described in clause (i)
57
above (other than such as are described in clause (c) of the definition
thereof); provided that no Permitted Investment shall be disposed of prior to
its maturity date if such disposition would result in a loss. Terms used in
clause (i) above that are defined in the New York UCC and not otherwise defined
herein shall have the meaning set forth in the New York UCC. At the end of each
month, all interest and earnings (net of losses and investment expenses) on
funds on deposit in the Principal Account and the Finance Charge Account shall
be deposited in the Collection Account and treated as Investment Earnings. If at
the end of a month losses and investment expenses on funds on deposit in either
of the Principal Account and the Finance Charge Account exceed interest and
earnings on such funds during such month, losses and expenses to the extent of
such excess will be allocated, with respect to any Series, among the Noteholders
of such Series and the Issuer as provided in the related Series Supplement.
Subject to the restrictions set forth above, the Issuer, or a Person designated
in writing by the Holder of the Issuer Interest, of which the Trustee shall have
received written notification thereof, shall have the authority to instruct the
Trustee with respect to the investment of funds on deposit in the Principal
Account and the Finance Charge Account.
(f) Qualified Institution. If, at any time, the institution holding
any account established pursuant to this Section 5.3 ceases to be a Qualified
Institution, the Trustee shall notify each Rating Agency and within ten (10)
Business Days establish a new account or accounts, as the case may be, meeting
the conditions specified above with a Qualified Institution, and shall transfer
any cash or any investments to such new account or accounts, as the case may be.
Section 5.4. Collections and Allocations.
(a) Collections in General. Subject to the last paragraph of this
Section 5.4(a), until this Indenture is terminated pursuant to Section 12.1, the
Issuer shall or shall cause the Servicer under the Servicing Agreement to cause
all Collections due and to become due, as the case may be, to be paid directly
into the Collection Account as promptly as possible after the date of receipt of
such Collections, but in no event later than the second Business Day following
such date of receipt. All monies, instruments, cash and other proceeds received
by the Servicer in respect of the Trust Estate pursuant to this Indenture shall
be deposited in the Collection Account as specified herein and shall be applied
as provided in this Article 5 and Article 6.
The Servicer shall allocate such amounts to each Series of Notes and to the
Issuer in accordance with this Article 5 and shall withdraw the required amounts
from the Collection Account or pay such amounts to the Issuer in accordance with
this Article 5, in both cases as modified by any Series Supplement. The Servicer
shall make such deposits or payments on the date indicated therein by wire
transfer or as otherwise provided in the Series Supplement for any Series of
Notes with respect to such Series.
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Notwithstanding anything in this Base Indenture or the Servicing Agreement
to the contrary, and in consideration of and reliance upon the Issuer and the
Servicer securing the Servicer Letter of Credit, for so long as, and only so
long as, no Daily Payment Event shall have occurred and the aggregate amount of
Collections then held by the Servicer or otherwise commingled with its general
funds does not exceed the Available Servicer Letter of Credit Amount under the
Servicer Letter of Credit, the Issuer shall not be required to cause the
Servicer to make daily deposits of Collections into the Collection Account in
the manner provided in this Article 5 or as required under the Servicing
Agreement or, with respect to any Series, make daily payments from and daily
deposits into the Finance Charge Account, the Principal Account or any Series
Account as provided in any applicable Series Supplement prior to the close of
business on the day any Collections are deposited in the Collection Account as
provided in this Article 5, but instead, the Servicer may commingle such
Collections with its general funds or otherwise during each Monthly Period and
make a single deposit in the Collection Account in immediately available funds
not later than 12:00 p.m., New York City time, on each Series Transfer Date
immediately preceding the related Payment Date in an amount equal to the lesser
of (A) Collections received in the immediately preceding Monthly Period
allocable to the Aggregate Investor Interests for each Group and (B) the amount
required to be deposited in the Finance Charge Account, the Principal Account or
any Series Account or, without duplication, distributed on or prior to the
related Payment Date to the Secured Parties.
If a Daily Payment Event shall have occurred or the aggregate amount of
Collections then held by the Servicer or otherwise commingled with its general
fund exceeds the Available Servicer Letter of Credit Amount, the Issuer shall or
shall cause the Servicer under the Servicing Agreement to cause all Collections
due and to become due, as the case may be, to be paid directly into the
Collection Account as promptly as possible after the date of receipt of such
Collections, but in no event later than the second Business Day following such
date of receipt.
(b) Allocation of Collections Between Finance Charges and Principal
Receivables. At all times and for all purposes of this Base Indenture, the
Servicer shall allocate Collections received in respect of any Receivables for
any Monthly Period to Finance Charges and to Principal Receivables in the manner
specified in subsection 3.02(b) of the Servicing Agreement.
(c) Issuer Distributions. Prior to the commencement of the Rapid
Amortization Period with respect to each Series of Notes, amounts on deposit in
the related Principal Account in excess of the related Principal Account Floor
may on each Business Day (other than a Series Transfer Date or Payment Date) be
paid to the Issuer ("Issuer Distributions") provided that (i) the Coverage Test
is satisfied; (ii) such payment to the Issuer shall be limited to the extent
used by the Issuer to pay the Sellers for Subsequently Purchased Receivables or
to repay any Originator Notes solely to the extent of any increase in the
principal of such Originator Note since the preceding Payment Date; (iii) there
shall not exist on such Business Day, and such payment and the application
thereof shall not result in the occurrence of, a Pay Out Event, a Potential Pay
Out Event, a Servicer Default, an Event of Default or a Default. The Issuer will
59
meet the " Coverage Test" if, on any date of determination, (i) the Issuer
Interest as of such date exceeds the largest required "Minimum Issuer Interest"
of any outstanding Series (such excess being herein called the " Available
Issuer Interest") as of such date (determined by the Servicer taking into
account any increases, decreases and status changes of the Receivables and any
increases or decreases in the outstanding notes including those scheduled to
occur on such date) and (ii) the Aggregate Net Investor Charge-Offs is zero as
of such date.
(d) Adjustments to Issuer Interest. The Issuer shall cause the
Servicer to deduct, on or prior to each Determination Date, on a net basis for
each Monthly Period from the aggregate amount of Principal Receivables used to
calculate the Issuer Interest the portion of each Principal Receivable which is
reduced by the Servicer by any rebate, refund, chargeback or adjustment
(including due to Servicer errors) made by the Servicer (a "Credit Adjustment").
(e) Disqualification of Institution Maintaining Collection Account.
Upon and after the establishment of a new Collection Account with a Qualified
Institution, the Servicer shall deposit or cause to be deposited all Collections
as set forth in subsection 5.3(a) into the new Collection Account, and in no
such event shall deposit or cause to be deposited any Collections thereafter
into any account established, held or maintained with the institution formerly
maintaining the Collection Account (unless it later becomes a Qualified
Institution or qualified corporate trust department maintaining the Collection
Account).
(f) Sharing Collections. In the manner described in the related
Series Supplement, to the extent that Collections allocated to Principal
Receivables that are allocated to any Series are not needed to make payments to
the Secured Parties of such Series or required to be deposited in a cash reserve
account or a Payment Account for such Series, such Collections may be applied to
cover payments due to or for the benefit of the Secured Parties of another
Series. Any such reallocation will not result in a reduction in the Investor
Interest of the Series to which such Collections were initially allocated.
Section 5.5. Determination of Monthly Interest. Monthly interest with
respect to each Series of Notes shall be determined, allocated and distributed
in accordance with the procedures set forth in the applicable Series Supplement.
Section 5.6. Determination of Monthly Principal. Monthly principal with
respect to each Series of Notes shall be determined, allocated and distributed
in accordance with the procedures set forth in the applicable Series Supplement.
However, all principal or interest with respect to any Series of Notes shall be
due and payable no later than the Legal Final Payment Date with respect to such
Series.
Section 5.7. General Provisions Regarding Accounts. Subject to
subsection 11.1(c), the Trustee shall not in any way be held liable by reason of
any insufficiency in any of the Trust Estate resulting from any loss on any
Permitted Investment included therein except for losses attributable to the
Trustee's failure to make payments on such Permitted Investments issued by
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the Trustee, in its commercial capacity as principal obligor and not as trustee,
in accordance with their terms.
Section 5.8. Removed Receivables. Upon satisfaction of the conditions
and the requirements of any of (i) subsection 8.3(a) and Section 15.1 hereof (to
the extent applicable), (ii) Section 2.08 of the Servicing Agreement or (iii)
Section 2.4 of the Purchase Agreement, as applicable, the Issuer shall execute
and deliver and the Trustee shall acknowledge an instrument in the form attached
hereto as Exhibit C evidencing the Trustee's release of the related Removed
Receivables and Related Security, and the Removed Receivables and Related
Security shall no longer constitute a part of the Trust Estate. No party relying
upon an instrument executed by the Trustee as provided in this Article 5 shall
be bound to ascertain the Trustee's authority, inquire into the satisfaction of
any conditions precedent or see to the application of any moneys.
Section 5.9. [Reserved].
Section 5.10. Servicer Letter of Credit. The following provisions
shall apply so long as CAI, L.P. is the Servicer under the Servicing Agreement.
(a) Servicer Letter of Credit. If with respect to any Series Transfer
Date the Issuer shall have failed to cause the Servicer to make in full, the
remittance of Collections required to be remitted by it pursuant to the
Servicing Agreement and Section 5.4 (the "Required Remittance Amount") the
Trustee shall draw (prior to making a draw on any Enhancement) on the Servicer
Letter of Credit, in accordance with the terms thereof, in the amount of the
difference between (i) the Required Remittance Amount, and (ii) the amount of
funds actually so remitted. Any such draw on the Servicer Letter of Credit shall
be made on or before 2:00 P.M. (New York City time) on the applicable Series
Transfer Date. Upon receipt of the proceeds of any drawing under the Servicer
Letter of Credit, the Trustee shall deposit such proceeds into the Collection
Account and such proceeds shall, for all purposes of this Indenture, be deemed
to be Collections and shall be distributed accordingly. The Servicer shall
include in each Monthly Servicer Report, the Stated Amount (as defined in the
Servicer Letter of Credit) of the Servicer Letter of Credit as of the last day
of the immediately preceding calendar month. In the event that a successor
Servicer is appointed and acting as such as a result of a failure by the
Servicer to prepare and deliver a Monthly Servicer Report, the successor
Servicer shall prepare and deliver such statement to the Trustee as promptly as
practicable, and the Trustee shall make a drawing on the basis of such statement
on the next succeeding Series Transfer Date.
(b) Downgrade of Servicer Letter of Credit Bank or Expiration of Term
of Servicer Letter of Credit.
(i) On the fifteenth day prior to the expiry date of the
Servicer Letter of Credit (as such letter of credit may have been renewed
or extended), the Trustee shall give written notice thereof to the Issuer,
the Servicer and each Rating Agency.
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(ii) In the event that the Trustee receives notice that the
letter of credit rating of the Servicer Letter of Credit Bank has been
withdrawn or reduced below the Required Rating, the Trustee shall promptly
give written notice thereof to the Issuer and the Servicer. Within 35 days
(or five Business Days, if the Servicer Letter of Credit Bank does not have
letter of credit ratings equal to or higher than P-2 (or the equivalent
thereof) from ▇▇▇▇▇'▇ and, if rated by any other Rating Agency, such Rating
Agency) of receipt of such notice, the Servicer shall either (x) deliver to
the Trustee a substitute Servicer Letter of Credit in accordance with
clause (c) below, (y) instruct the Trustee in writing to make a demand for
a drawing under the Servicer Letter of Credit in accordance with Section
5.10(e) or (z) commence depositing Collections including any Collections
then held by it, into the Collection Account in the manner described in the
first paragraph of Section 5.4(a).
(c) Substitute Servicer Letter of Credit. The Trustee shall accept
delivery of a letter of credit in substitution for the Servicer Letter of Credit
and shall deliver the Servicer Letter of Credit to the Servicer Letter of Credit
Bank for cancellation upon the satisfaction of the following conditions:
(i) The substitute letter of credit shall be irrevocable and
shall be issued by a bank or other financial institution whose letter
of credit or short-term deposit or other debt obligations have the
Required Rating, and the substitute letter of credit shall provide
that drawings thereunder may be made on substantially the same terms
and conditions as the initial Servicer Letter of Credit, and the
substitute letter of credit shall have been delivered to the Trustee.
(ii) The amount available to be drawn under, and the Stated
Amount of, the substitute letter of credit shall be at least equal to
the amount which was available to be drawn under, and the Stated
Amount of, the Servicer Letter of Credit being replaced.
(iii) The Trustee shall have received written opinions of counsel
(acceptable to the Trustee) (including domestic and foreign counsel,
if applicable) from the issuer of the substitute letter of credit,
which opinions shall be reasonably satisfactory to the Trustee and its
respective counsel, as to the enforceability of the substitute
Servicer letter of credit.
(iv) The Servicer shall have delivered to the Trustee a
certificate from a Responsible Officer of the Servicer confirming the
items set forth in (i) and (ii) above.
Upon the delivery to the Trustee of a substitute letter of credit in
accordance with this section, such substitute letter of credit shall be the
Servicer Letter of Credit and the issuer thereof shall be the Servicer Letter of
Credit Bank for all purposes hereof.
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(d) Regular Remittances. If the Servicer elects to begin regular
remittances of Collections to the Collection Account in accordance with the
first paragraph of subsection 5.4(a), the Servicer shall instruct the Trustee in
writing to submit the Servicer Letter of Credit to the Servicer Letter of Credit
Bank for cancellation and the Servicer shall begin such regular remittances in
accordance with the first paragraph of subsection 5.4(a).
(e) Special Drawing. On the Closing Date, the Trustee shall establish
or cause to be established in the name of the Trustee a segregated trust account
(the "Servicer LC Escrow Account"), bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the Secured
Parties. If the Servicer elects to instruct the Trustee to make a drawing as
described in clause (b)(ii)(y) above, the Servicer shall provide two Business
Days notice to the Servicer Letter of Credit Bank and shall instruct the Trustee
in writing to promptly draw upon the Servicer Letter of Credit to the full
extent of the Available Servicer Letter of Credit Amount thereunder and deposit
such amount into the Servicer LC Escrow Account. All funds on deposit in the
Servicer LC Escrow Account shall, at the direction of the Servicer, be invested
by the Trustee in Permitted Investments which will be held to maturity and which
will mature so that all funds on deposit therein will be available prior to the
Series Transfer Date next following the date of such investment. The Trustee
shall: (i) hold each Permitted Investment (other than such as are described in
clause (c) of the definition thereof) that constitutes investment property
through a securities intermediary, which securities intermediary shall (I) agree
that such investment property shall at all times be credited to a securities
account of which the Trustee is the entitlement holder, (II) comply with
entitlement orders originated by the Trustee without the further consent of any
other person or entity, (III) agree that all property credited to such
securities account shall be treated as a financial asset, (IV) waive any lien
on, security interest in, or right of set-off with respect to any property
credited to such securities account, and (V) agree that its jurisdiction for
purposes of Section 8-110 and Section 9-305(a)(3) of the UCC shall be New York,
and that such agreement shall be governed by the laws of the State of New York;
and (ii) maintain for the benefit of the Secured Parties, possession or control
of each other Permitted Investment (including any negotiable instruments, if
any, evidencing such Permitted Investments) not described in clause (i) above
(other than such as are described in clause (c) of the definition thereof);
provided that no Permitted Investment shall be disposed of prior to its maturity
date if such disposition would result in a loss. Terms used in clause (i) above
that are defined in the New York UCC and not otherwise defined herein shall have
the meaning set forth in the New York UCC. Until the Indenture Termination Date,
if a drawing under the Servicer Letter of Credit is called for under subsection
(a) above, a withdrawal in the same amount from the Servicer LC Escrow Account
shall instead be made and the related funds applied as provided therein. From
and after the date of such Special Drawing, the term "Available Servicer Letter
of Credit Amount" with respect to the Servicer Letter of Credit shall be deemed
to refer to the amount on deposit in the Servicer LC Escrow Account (excluding
any investment earnings thereon). On the first Business Day after the Indenture
Termination Date, all funds in the Servicer LC Escrow Account shall be paid,
first, to the Servicer Letter of Credit Bank to the extent of any amounts
payable thereto under the reimbursement agreement for the Servicer Letter
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of Credit, second, to the Excess Funding Account to the extent of any payments
by the Issuer to the Servicer Letter of Credit Bank under such reimbursement
agreement and, third, to the Servicer (the "Payment Priorities"). Any investment
earnings on the Servicer LC Escrow Account shall be remitted on each Series
Transfer Date in accordance with the Payment Priorities. All funds on deposit in
the Servicer LC Escrow Account shall be the sole and exclusive property of the
Trustee, subject to the rights of the Servicer as provided herein. Neither the
Issuer nor the Servicer shall at any time have any ownership or other interest
in such funds or any right to withdraw or to receive such funds except as
described in the third preceding sentence. In the event that, notwithstanding
the intention of the parties hereto, such funds are deemed to be the property of
the Issuer or the Servicer, each of the Issuer and the Servicer hereby grants to
the Trustee, a security interest in and to all of the Issuer's or the Servicer's
(as the case may be) right, title and interest in such funds for the purpose of
securing the rights of the Trustee hereunder.
In the event that the Servicer delivers to the Trustee a substitute letter
of credit meeting the requirements of subsection (c) above, the Trustee shall
release any funds on deposit in the Servicer LC Escrow Account in accordance
with the Payment Priorities.
(f) Reimbursement. If any amounts are payable by the Issuer to the
Servicer Letter of Credit Bank under the reimbursement agreement for the
Servicer Letter of Credit, the Trustee shall pay such amounts on behalf of the
Issuer in accordance with each Series Supplement.
(g) Notices. If the Servicer Letter of Credit is amended, replaced or
terminated, the Issuer shall promptly provide written notice thereof to each
Rating Agency.
[THE REMAINDER OF ARTICLE 5 IS RESERVED AND SHALL BE SPECIFIED IN ANY
SERIES SUPPLEMENT WITH RESPECT TO ANY SERIES.]
ARTICLE 6.
[ARTICLE 6 IS RESERVED AND SHALL BE SPECIFIED IN ANY SUPPLEMENT WITH
RESPECT TO ANY SERIES]
ARTICLE 7.
[ARTICLE 7 IS RESERVED AND SHALL BE SPECIFIED IN ANY SUPPLEMENT WITH
RESPECT TO ANY SERIES]
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ARTICLE 8.
COVENANTS
Section 8.1. Money for Payments To Be Held in Trust. At all times from
the date hereof to the Indenture Termination Date, unless the Required Persons
of each Series shall otherwise consent in writing, all payments of amounts due
and payable with respect to any Notes that are to be made from amounts withdrawn
from the applicable Payment Account shall be made on behalf of the Issuer by the
Trustee or by another Paying Agent, and no amounts so withdrawn from such
Payment Account for payments of such Notes shall be paid over to the Issuer
except as provided in this Indenture.
Section 8.2. Affirmative Covenants of Issuer. At all times from the date
hereof to the Indenture Termination Date, unless the Required Persons of each
Series shall otherwise consent in writing, the Issuer shall:
(a) Payment of Notes. Duly and punctually pay or cause to be
paid principal of (and premium, if any) and interest on the Notes pursuant to
the provisions of this Base Indenture and any applicable Series Supplement.
Principal and interest shall be considered paid on the date due if the Trustee
or the Paying Agent holds on that date money designated for and sufficient to
pay all principal and interest then due. Amounts properly withheld under the
Code by any Person from a payment to any Noteholder of interest and/or principal
shall be considered as having been paid by the Issuer to such Noteholder for all
purposes of this Indenture.
(b) Maintenance of Office or Agency. Maintain in the Borough of
Manhattan, the City of New York, an office or agency (which may be an office of
the Trustee, Transfer Agent and Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or exchange, where notices and demands
to or upon the Issuer in respect of the Notes and this Indenture may be served,
and where, at any time when the Issuer is obligated to make a payment of
principal and premium upon the Notes, the Notes may be surrendered for payment.
The Issuer hereby initially appoints the Trustee to serve as its agent for the
foregoing purposes. The Issuer will give prompt written notice to the Trustee of
the location, and any change in the location, of such office or agency. If at
any time the Issuer shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Issuer hereby appoints the Trustee as its agent
to receive all such surrenders, notices and demands.
The Issuer may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations. The Issuer will
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.
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The Issuer hereby designates the Corporate Trust Office of the Trustee as
one such office or agency of the Issuer.
(c) Compliance with Laws, Etc. Comply in all material respects with
all applicable Laws (including those which relate to the Purchased Receivables).
(d) Preservation of Existence. Preserve and maintain its existence
rights, franchises and privileges in the jurisdiction of its incorporation or
organization, and qualify and remain qualified in good standing as a foreign
entity in the jurisdiction where its principal place of business and its chief
executive office are located and in each other jurisdiction where the failure to
preserve and maintain such existence, rights, franchises, privileges and
qualifications would have a Material Adverse Effect.
(e) Performance and Compliance with Purchased Receivables. Timely and
fully perform and comply with all provisions, covenants and other promises
required to be observed by it under the Purchased Receivables and all other
agreements related to such Purchased Receivables.
(f) Collection Policy. Comply in all material respects with the
Credit and Collection Policy in regard to each Purchased Receivable.
(g) Reporting Requirements of The Issuer. Until the Indenture
Termination Date, furnish to the Trustee:
(i) Financial Statements.
(A) as soon as available, and in any event within ninety (90)
days after the end of each Fiscal Year of the Issuer, a copy of the
annual audited report for such Fiscal Year of the Issuer including a
copy of the balance sheet of the Issuer, in each case, as at the end
of such Fiscal Year, together with the related statements of earnings
and cash flows for such Fiscal Year, certified without material
qualification in a manner satisfactory to the Trustee by Ernst & Young
or other nationally recognized independent public accountants
acceptable to the Trustee, together with a certificate of such
accounting firm stating that in the course of the regular audit of the
business of the Issuer, which audit was conducted in accordance with
GAAP, such accounting firm has obtained no knowledge that an Event of
Default, Default, Pay Out Event or Potential Pay Out Event has
occurred and is continuing, or if, in the opinion of such accounting
firm, such an Event of Default, Default, Pay Out Event or Potential
Pay Out Event has occurred and is continuing, a statement as to the
nature thereof; provided, that if the Issuer is consolidated with the
Parent for financial reporting purposes in accordance with GAAP, then
the requirements of (B) below will satisfy this section;
66
(B) as soon as available and in any event within ninety (90)
days after the end of each Fiscal Year of Parent, a balance sheet of
Parent as of the end of such year and statements of income and
retained earnings and of source and application of funds of Parent,
along with consolidating statements, for the period commencing at the
end of the previous Fiscal Year and ending with the end of such year,
in each case setting forth comparative figures for the previous Fiscal
Year, certified without material qualification in a manner
satisfactory to the Trustee by Ernst & Young or other nationally
recognized independent public accountants acceptable to the Trustee,
together with a certificate of such accounting firm stating that in
the course of the regular audit of the business of Parent, which audit
was conducted in accordance with GAAP, such accounting firm has
obtained no knowledge that an Event of Default, Default, Pay Out Event
or Potential Pay Out Event has occurred and is continuing, or if, in
the opinion of such accounting firm, such an Event of Default,
Default, Pay Out Event or Potential Pay Out Event has occurred and is
continuing, a statement as to the nature thereof; and
(C) as soon as available and in any event within forty five (45)
days after the end of each fiscal quarter, quarterly balance sheets
and quarterly statements of source and application of funds and
quarterly statements of income and retained earnings of Parent,
certified by the Responsible Officer of Parent (which certification
shall state that such balance sheets and statements fairly present the
financial condition and results of operations for such fiscal quarter,
subject to year-end audit adjustments), delivery of which balance
sheets and statements shall be accompanied by a Conn Officer's
Certificate to the effect that no Event of Default, Default, Pay Out
Event or Potential Pay Out Event has occurred and is continuing.
(ii) Notice of Default, Event of Default, Pay Out Event or Potential
Pay Out Event. Immediately, and in any event within one (1) Business Day
after the Issuer obtains knowledge of the occurrence of each Default, Event
of Default, Pay Out Event or Potential Pay Out Event, a statement of the
Responsible Officer of the Issuer setting forth details of such Default,
Event of Default, Pay Out Event or Potential Pay Out Event and the action
which the Issuer proposes to take with respect thereto;
(iii) Change in Credit and Collection Policy. Within ten (10) Business
Days after the date any material change in or amendment to the Credit and
Collection Policy is made, a copy of the Credit and Collection Policy then
in effect indicating such change or amendment;
(iv) ERISA. Promptly after the filing or receiving thereof, copies of
all reports and notices with respect to any reportable event as defined in
Section 4043 of ERISA (other than an event for which the 30-day notice
period is waived) which either (i) the
67
Issuer or any ERISA Affiliate of the Issuer files under ERISA with the
Internal Revenue Service, the Pension Benefit Guaranty Corporation or the
U.S. Department of Labor or (ii) the Issuer or any ERISA Affiliates of the
Issuer receives from the Internal Revenue Service, the Pension Benefit
Guaranty Corporation or the U.S. Department of Labor. The Issuer shall give
the Trustee and each Noteholder prompt written notice of any event that
could result in the imposition of a Lien under Section 412 of the Code or
Section 302 or 4068 of ERISA;
(v) If a Responsible Officer of the Issuer shall have actual
knowledge of the occurrence of a Servicer Default, notice thereof to the
Trustee, and the Rating Agencies thereof in accordance with Section 15.4,
which notice shall specify the action, if any, the Issuer is taking in
respect of such default. If a Servicer Default shall arise from the failure
of the Servicer to perform any of its duties or obligations under the
Servicing Agreement, the Issuer shall take all reasonable steps available
to it to remedy such failure, including any action reasonably requested by
the Trustee; and
(vi) On or before April 1, 2003 and on or before April 1 of each year
thereafter, and otherwise in compliance with the requirements of TIA
Section 314(a)(4) (if this Indenture is required to be qualified under the
TIA), a Conn Officer's Certificate stating, as to the Responsible Officer
signing such Conn Officer's Certificate, that
(A) a review of the activities of the Issuer during such year
and of performance under this Indenture has been made under such
Responsible Officer's supervision; and
(B) to the best of such Responsible 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, Event of Default, Pay Out Event or Potential Pay Out
Event, specifying each such Default, Event of Default, Pay Out Event
or Potential Pay Out Event known to such Responsible Officer and the
nature and status thereof.
(h) Use of Proceeds. Use the proceeds of the Notes solely in
connection with the acquisition or funding of Receivables or the repayment of
amounts owed under the Originator Note in connection therewith.
(i) Protection of Trust Estate. At its expense, perform all acts and
execute all documents reasonably requested by the Trustee at any time to
evidence, perfect, maintain and enforce the title or the security interest of
the Trustee in the Trust Estate and the priority thereof. The Issuer will, at
the reasonable request of the Trustee, prepare, deliver and authorize the filing
of financing statements relating to or covering the Trust Estate sold to the
Issuer and subsequently conveyed to the Trustee. The Issuer shall cause each
Contract with respect to a Receivable to be stamped in a conspicuous place
(other than with respect to Contracts purchased
68
on the Initial Closing Date the originals of which have been copied on microfilm
and destroyed), and its Records relating to the Purchased Receivables to be
marked, with a legend stating that it has been pledged to the Trustee for the
benefit of the Noteholders; provided that, subject to the immediately preceding
parenthetical, in the case of the Receivables purchased on the Initial Closing
Date, the Issuer shall cause each Contract related to such Receivables to be
stamped on or prior to the date that is sixty (60) days after the Initial
Closing Date.
(j) Inspection of Records. Permit the Trustee, any one or more of the
Notice Persons or their duly authorized representatives, attorneys or auditors
to inspect the Receivables, the Receivable Files and the Records at such times
as such Person may reasonably request. Upon instructions from the Trustee, any
one or more of the Notice Persons or their duly authorized representatives,
attorneys or auditors, the Issuer shall release any document related to any
Receivables to such Person.
(k) Furnishing of Information. Provide such cooperation, information
and assistance, and prepare and supply the Trustee and the Notice Persons of
each Series with such data regarding the performance by the Obligors of their
obligations under the Purchased Receivables and the performance by the Issuer
and Servicer of their respective obligations under the Transaction Documents, as
may be reasonably requested by the Trustee or any Notice Person from time to
time.
(l) Accounts. Not maintain any bank accounts other than the Trust
Accounts. Except as set forth in the Servicing Agreement the Issuer shall not
make, nor will it permit any Seller, the Initial Seller or Servicer to make, any
change in its instructions to Obligors regarding payments to be made to the Post
Office Box. The Issuer shall not add any additional Trust Accounts unless the
Trustee shall have consented thereto and received a copy of any documentation
with respect thereto. The Issuer shall not terminate any Trust Accounts or close
any Trust Accounts unless the Trustee shall have received at least thirty (30)
days prior notice of such termination and shall have consented thereto.
(m) Performance and Compliance with Receivables and Contracts. At its
expense, timely and fully perform and comply with all material provisions,
covenants and other promises, if any, required to be observed by the Issuer
under the Contracts related to the Receivables.
(n) Collections Received. Hold in trust, and immediately (but in any
event no later than two (2) Business Days following its receipt thereof)
transfer to the Servicer for deposit into the Collection Account (subject to
Section 5.4(a)) all Collections, if any, received from time to time by the
Issuer.
(o) Enforcement of Transaction Documents. Use its best efforts to
enforce all rights held by it under any of the Transaction Documents, shall not
amend, supplement or otherwise modify any of the Transaction Documents and shall
not waive any breach of any
69
covenant contained thereunder without the prior written consent of the Required
Persons for each Series. The Issuer shall take all actions reasonably requested
by the Trustee to enforce the Issuer's rights and remedies under the Transaction
Documents. The Issuer agrees that it will not waive timely performance or
observance by the Servicer, the Initial Seller or any Seller of their respective
duties under the Transaction Documents if the effect thereof would adversely
affect any of the Secured Parties.
(p) Separate Legal Entity. The Issuer hereby acknowledges that the
Trustee and the Noteholders are entering into the transactions contemplated by
this Base Indenture and the other Transaction Documents in reliance upon the
Issuer's identity as a legal entity separate from any other Person. Therefore,
from and after the date hereof, the Issuer shall take all reasonable steps to
continue the Issuer's identity as a separate legal entity and to make it
apparent to third Persons that the Issuer is an entity with assets and
liabilities distinct from those of any other Person, and is not a division of
any other Person. Without limiting the generality of the foregoing and in
addition to and consistent with the covenant set forth herein, the Issuer shall
take such actions as shall be required in order that:
(i) The Issuer will be a limited purpose limited partnership whose
primary activities are restricted in a partnership agreement to owning
financial assets and financing the acquisition thereof and conducting such
other activities as it deems necessary or appropriate to carry out its
primary activities;
(ii) At least two managers of the general partner of the Issuer (the
"Independent Managers") shall be individuals who are not present or former
directors, officers, employees or 5% beneficial owners of the outstanding
common stock of any Person or entity beneficially owning any outstanding
shares of common stock of Conn or any Affiliate thereof; provided, however,
that an individual shall not be deemed to be ineligible to be an
Independent Manager solely because such individual serves or has served in
the capacity of an "independent manager" or similar capacity for special
purpose entities formed by Parent or any of its Affiliates. The partnership
agreement of the Issuer shall provide that (i) the general partner of the
Issuer shall not approve, or take any other action to cause the filing of,
a voluntary bankruptcy petition with respect to the Issuer unless the
Independent Managers shall approve the taking of such action in writing
prior to the taking of such action, and (ii) such provision cannot be
amended without the prior written consent of the Independent Managers;
(iii) Any employee, consultant or agent of the Issuer will be
compensated from funds of the Issuer, as appropriate, for services provided
to the Issuer;
(iv) The Issuer will allocate and charge fairly and reasonably
overhead expenses shared with any other Person. To the extent, if any, that
the Issuer and any other Person share items of expenses such as legal,
auditing and other professional services, such expenses will be allocated
to the extent practical on the basis of actual use or the
70
value of services rendered, and otherwise on a basis reasonably related to
the actual use or the value of services rendered;
(v) The Issuer's operating expenses will not be paid by any other
Person except as permitted under the terms of this Indenture or otherwise
consented to by the Trustee and the Required Persons;
(vi) The Issuer's books and records will be maintained separately
from those of any other Person;
(vii) All audited financial statements of any Person that are
consolidated to include the Issuer will contain notes clearly stating that
(A) all of the Issuer's assets are owned by the Issuer, and (B) the Issuer
is a separate entity;
(viii) The Issuer's assets will be maintained in a manner that
facilitates their identification and segregation from those of any other
Person;
(ix) The Issuer will strictly observe appropriate formalities in its
dealings with all other Persons, and funds or other assets of the Issuer
will not be commingled with those of any other Person, other than temporary
commingling in connection with servicing the Receivables to the extent
explicitly permitted by this Indenture and the other Transaction Documents;
(x) The Issuer shall not, directly or indirectly, be named or enter
into an agreement to be named, as a direct or contingent beneficiary or
loss payee, under any insurance policy with respect to any amounts payable
due to occurrences or events related to any other Person;
(xi) Any Person that renders or otherwise furnishes services to the
Issuer will be compensated thereby at market rates for such services it
renders or otherwise furnishes thereto. Except as expressly provided in the
Transaction Documents, the Issuer will not hold itself out to be
responsible for the debts of any other Person or the decisions or actions
respecting the daily business and affairs of any other Person; and
(xii) comply with all material assumptions of fact set forth in the
opinion with respect to certain bankruptcy matters delivered by ▇▇▇▇▇▇▇ &
▇▇▇▇▇ L.L.P. on the date hereof, relating to the Issuer, its obligations
hereunder and under the other Transaction Documents to which it is a party
and the conduct of its business with Conn, any other Seller, the Initial
Seller or any other Person.
(q) Minimum Net Worth. Have a net worth (in accordance with GAAP) of
at least 1% of the outstanding principal amount of the Notes.
71
(r) Servicer's Obligations. Cause the Servicer to comply with
subsection 2.02(c) and Sections 2.09 and 2.10 of the Servicing Agreement.
(s) Income Tax Characterization. For purposes of federal income,
state and local income and franchise and any other income taxes, unless
otherwise required by the relevant governmental authority, the Issuer will treat
the Notes as indebtedness.
Section 8.3. Negative Covenants. So long as any Notes are outstanding,
the Issuer shall not, unless the Required Persons of each Series shall otherwise
consent in writing:
(a) Sales, Liens, Etc. Except pursuant to, or as contemplated by,
the Transaction Documents, the Issuer shall not sell, assign (by operation of
law or otherwise) or otherwise dispose of, or create or suffer to exist
voluntarily or, for a period in excess of thirty (30) days, involuntarily any
Adverse Claims upon or with respect to any of its assets, including, without
limitation, the Collateral, any interest therein or any right to receive any
amount from or in respect thereof.
(b) Claims, Deductions. Claim any credit on, or make any deduction
from the principal or interest payable in respect of, the Notes (other than
amounts properly withheld from such payments under the Code) or assert any claim
against any present or former Noteholder by reason of the payment of the taxes
levied or assessed upon any part of the Trust Estate; or
(c) Mergers, Acquisitions, Sales, Subsidiaries, etc. The Issuer
shall not:
(i) be a party to any merger or consolidation, or directly or
indirectly purchase or otherwise acquire all or substantially all of the
assets or any stock of any class of, or any partnership or joint venture
interest in, any other Person, except for Permitted Investments, or sell,
transfer, assign, convey or lease any of its property and assets (or any
interest therein) other than pursuant to, or as contemplated by, this
Indenture or the other Transaction Documents;
(ii) make, incur or suffer to exist an investment in, equity
contribution to, loan or advance to, or payment obligation in respect of
the deferred purchase price of property from, any other Person, except for
Permitted Investments or pursuant to the Transaction Documents;
(iii) create any direct or indirect Subsidiary or otherwise acquire
direct or indirect ownership of any equity interests in any other Person
other than pursuant to the Transaction Documents; or
(iv) enter into any transaction with any Affiliate except for the
transactions contemplated by the Transaction Documents and other
transactions upon fair and
72
reasonable terms materially no less favorable to the Issuer than would be
obtained in a comparable arm's length transaction with a Person not an
Affiliate.
(d) Change in Business Policy. The Issuer shall not make any
change in the character of its business which would impair in any material
respect the collectibility of any Receivable.
(e) Other Debt. Except as provided for herein, the Issuer shall not
create, incur, assume or suffer to exist any Indebtedness whether current or
funded, other than (i) the Notes, (ii) Indebtedness of the Issuer representing
fees, expenses and indemnities arising hereunder or under the Purchase Agreement
(including the Originator Notes) for the purchase price of the Receivables under
the Purchase Agreement, (iii) any Credit Enhancement, and (iv) other
Indebtedness permitted pursuant to subsection 8.3(h).
(f) Certificate of Limited Partnership and Limited Partnership
Agreement. The Issuer shall not amend its certificate of limited partnership or
limited partnership agreement unless the Trustee shall have received written
confirmation by the Rating Agencies that after such amendment the Rating Agency
Condition will be met.
(g) Financing Statements. The Issuer shall not authorize the
filing of any financing statement (or similar statement or instrument of
registration under the laws of any jurisdiction) or statements relating to the
Trust Estate other than the financing statements authorized and filed in
connection with and pursuant to the Transaction Documents.
(h) Business Restrictions. The Issuer shall not (i) engage in any
business or transactions, or be a party to any documents, agreements or
instruments, other than the Transaction Documents or those incidental to the
purposes thereof, or (ii) make any expenditure for any assets (other than
Receivables) if such expenditure, when added to other such expenditures made
during the same calendar year would, in the aggregate, exceed Ten Thousand
Dollars ($10,000); provided, however, that the foregoing will not restrict the
Issuer's ability to pay servicing compensation as provided herein and, so long
as no Default, Event of Default, Pay Out Event or Potential Pay Out Event shall
have occurred and be continuing, the Issuer's ability to pay amounts due on the
Originator Note or other payments or distributions legally made to the Issuer's
equity owners.
(i) ERISA Matters.
(i) To the extent applicable, the Issuer will not (A) engage or
permit any of its respective ERISA Affiliates to engage in any prohibited
transaction (as defined in Section 4975 of the Code and Section 406 of
ERISA) for which an exemption is not available or has not previously been
obtained from the U.S. Department of Labor; (B) fail to make any payments
to any Multiemployer Plan that the Issuer or any ERISA Affiliate of the
Issuer is required to make under the agreement relating to such
Multiemployer Plan or any law
73
pertaining thereto; (C) terminate any Pension Plan so as to result in any
liability to Issuer or any ERISA Affiliate; or (D) permit to exist any
occurrence of any reportable event described in Title IV of ERISA, if such
prohibited transactions, failures to make payment, terminations and
reportable events described in clauses (A), (B), (C) and (D) above would in
the aggregate have a Material Adverse Effect.
(ii) To the extent applicable, the Issuer will not permit to exist
any accumulated funding deficiency (as defined in Section 302(a) of ERISA
and Section 412(a) of the Code) or funding deficiency with respect to any
Title IV Plan other than a Multiemployer Plan.
(iii) To the extent applicable, the Issuer will not cause or permit
any of its ERISA Affiliates to cause or permit the occurrence of an ERISA
Event with respect to Title IV Plans of the Issuer or its ERISA Affiliates
that have an aggregate Unfunded Pension Liability equal to or greater than
$1,000,000.
(j) Name, Principal Office. The Issuer will not change its name,
its jurisdiction of organization or the location of its chief executive office
or principal place of business (within the meaning of the applicable UCC)
without prior written notice to the Trustee sufficient to allow the Trustee to
make all filings (including filings of financing statements on form UCC-1) and
recordings necessary to maintain the perfection of the interest of the Trustee
in the Trust Estate pursuant to this Indenture. The Issuer further agrees that
it will not become or seek to become organized under the laws of more than one
jurisdiction. In the event that the Issuer desires to so change its jurisdiction
of incorporation or its office or change its name, the Issuer will make any
required filings and prior to actually making such change the Issuer will
deliver to the Trustee (i) a Conn Officers' Certificate and (except with respect
to a change of the location of the Issuer's chief executive office or principal
place of business to a new location in the same county) an Opinion of Counsel
confirming that all required filings have been made to continue the perfected
interest of the Trustee in the Trust Estate in respect of such change and (ii)
copies of all such required filings with the filing information duly noted
thereon by the office in which such filings were made.
Section 8.4. Further Instruments and Acts. Upon request of the Trustee,
the Issuer will execute and deliver such further instruments, furnish such other
information and do such further acts as may be reasonably necessary or proper to
carry out more effectively the purpose of this Indenture.
Section 8.5. Appointment of Successor Servicer. If the Trustee has given
notice of termination to the Servicer of the Servicer's rights and powers
pursuant to Section 2.01 of the Servicing Agreement, as promptly as possible
thereafter, the Trustee shall appoint a successor servicer in accordance with
Section 2.01 of the Servicing Agreement.
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Section 8.6. Perfection Representations. The parties hereto agree that
the Perfection Representations shall be a part of this Indenture for all
purposes.
ARTICLE 9.
PAY OUT EVENTS AND REMEDIES
Section 9.1. Pay Out Events. If any one of the following events shall
occur during the Revolving Period, the Accumulation Period, the Controlled
Amortization Period or the Principal Amortization Period, with respect to any
Series of Notes (each, a "Pay Out Event"):
(a) an Event of Bankruptcy shall occur with respect to any Seller,
the Initial Seller or the Servicer;
(b) all of the Sellers shall become unable for any reason to
transfer Receivables to the Issuer in accordance with the provisions of the
Purchase Agreement and such inability shall continue for three (3) Business Days
after the Issuer or any Seller shall have notice or knowledge thereof;
(c) the Issuer, the Initial Seller or any Seller shall have become
an "investment company" or shall have become under the "control" of an
"investment company" under the Investment Company Act of 1940, as amended;
(d) the aggregate amount on deposit in the Trust Accounts exceeds
66 2/3% of the aggregate Principal Receivables at any time; or
(e) any other event shall occur which may be specified in any
Series Supplement as a "Series Pay Out Event";
then, in the case of any event described in clause (a) through (d) above
(collectively, an "Issuer Pay Out Event"), a Pay Out Event with respect to all
Series of Notes shall occur and (ii) unless otherwise specified in the related
Series Supplement, in the case of any event described in clause (e) above, a Pay
Out Event with respect to only Notes of the related Series shall occur, in each
case, unless otherwise specified in a related Series Supplement, without any
notice or other action on the part of the Trustee or the affected Noteholders
immediately upon the occurrence of such event. Upon the occurrence of a Pay Out
Event, the Rapid Amortization Period, or, if specified in a Series Supplement,
the Rapid Accumulation Period will commence for each affected Series.
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ARTICLE 10.
REMEDIES
Section 10.1. Events of Default. Unless otherwise specified in a Series
Supplement, an "Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(i) default in the payment of any interest on any Class of Notes of
any Series (other than the most subordinated Class of any Series as
specified in a Series Supplement, if such subordinated Class is retained by
the Issuer or any of its Affiliates) when the same becomes due and payable,
and such default shall continue (and shall not have been waived by the
Required Persons of each affected Series) for a period of five (5) Business
Days after receipt of notice thereof from the Trustee;
(ii) default in the payment of the principal of or any installment
of the principal of any Class of Notes of any Series (other than the most
subordinated Class of any Series as specified in a Series Supplement, if
such subordinated Class is retained by the Issuer or any of its Affiliates)
when the same becomes due and payable on the related Legal Final Payment
Date;
(iii) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial
part of the Trust Estate in an involuntary case under any applicable
Federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Issuer or for
any substantial part of the Trust Estate, or ordering the winding-up or
liquidation of the Issuer's affairs, and such decree or order shall remain
unstayed and in effect for a period of sixty (60) consecutive days; or
(iv) the commencement by the Issuer of a voluntary case under any
applicable Federal or state bankruptcy, insolvency or other similar law now
or hereafter in effect, or the consent by the Issuer to the entry of an
order for relief in an involuntary case under any such law, or the consent
by the Issuer to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
of the Issuer or for any substantial part of the Trust Estate, or the
making by the Issuer of any general assignment for the benefit of
creditors, or the failure by the Issuer generally to pay its debts as such
debts become due, or the taking of action by the Issuer in furtherance of
any of the foregoing.
76
Section 10.2. Rights of the Trustee Upon Events of Default.
(a) If and whenever an Event of Default (other than in clause (iii)
and (iv) of Section 10.1) shall have occurred and be continuing, the Trustee
may, and, at the written direction of the Required Noteholders shall, cause the
principal amount of all Notes of all Series outstanding to be immediately due
and payable at par, together with interest thereon. If an Event of Default with
respect to the Issuer specified in clause (iii) and (iv) of Section 10.1 shall
occur, all unpaid principal of and accrued interest on all the Notes of all
Series outstanding shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any
Noteholder. If an Event of Default shall have occurred and be continuing, the
Trustee may exercise from time to time any rights and remedies available to it
under applicable law and Section 10.4. Any amounts obtained by the Trustee on
account of or as a result of the exercise by the Trustee of any right shall be
held by the Trustee as additional collateral for the repayment of the Issuer
Obligations and shall be applied as provided in Article 5 hereof. If so
specified in the applicable Series Supplement, the Trustee may agree to limit
its exercise of rights and remedies available to it as a result of the
occurrence of an Event of Default to the extent set forth therein.
(b) If an Event of Default shall have occurred and be continuing,
then 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 Trustee as hereinafter in this Article 10 provided, the Required
Noteholders, by written notice to the Issuer and the Trustee, may rescind and
annul such declaration and its consequences if:
(i) the Issuer has paid to or deposited with the Trustee a sum
sufficient to pay
(A) all payments of principal of and interest on all Notes and
all other amounts that would then be due hereunder or upon such Notes
if the Event of Default giving rise to such acceleration had not
occurred; and
(B) all sums paid by the Trustee hereunder and the reasonable
compensation, expenses, disbursements of the Trustee and its agents
and counsel; and
(ii) all Events of Default, other than the nonpayment of the principal
of the Notes that has become due solely by such acceleration, have been
cured or waived as provided in Section 10.6.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
(c) Additional Remedies. In addition to any rights and remedies now
or hereafter granted hereunder or under applicable law with respect to the Trust
Estate, the Trustee
77
shall have all of the rights and remedies of a secured party under the UCC as
enacted in any applicable jurisdiction.
Section 10.3. Collection of Indebtedness and Suits for Enforcement by
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 five (5) days, or (ii) default is made in the
payment of the principal of or any installment of the principal of any Note when
the same becomes due and payable, and such default continues for a period of
five (5) days, the Issuer will, upon demand of the Trustee, pay to it, for the
benefit of the Holders of the Notes, 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, upon overdue installments of interest, at the applicable Note Rate
and in addition thereto such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee and its agents and counsel.
(b) If an Event of Default occurs and is continuing, the Trustee may
in its discretion proceed to protect and enforce its rights and the rights of
the Secured Parties by such appropriate Proceedings as the 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 Trustee by this Indenture or by law.
(c) In any Proceedings brought by the Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture),
the Trustee shall be held to represent all the Secured Parties, and it shall not
be necessary to make any such Person a party to any such proceedings.
(d) In case there shall be pending, relative to the Issuer or any
other obligor upon the Notes or any Person having or claiming an ownership
interest in the Trust Estate, proceedings under Title 11 of the United States
Code or any other applicable Federal or state bankruptcy, insolvency or other
similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor or Person, or in case of any other comparable judicial proceedings
relative to the Issuer or other obligor upon the Notes, or to the creditors or
property of the Issuer or such other obligor, the 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 Trustee
shall have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such proceedings or otherwise:
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(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 and to file
such other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for reasonable
compensation to the Trustee and each predecessor Trustee, and their
respective agents, attorneys and counsel, and for reimbursement of all
expenses and liabilities incurred, and all advances made, by the Trustee
and each predecessor Trustee, except as a result of negligence, bad faith
or willful misconduct) and of the Secured Parties allowed in such
proceedings;
(ii) unless prohibited by applicable law and regulations, to vote on
behalf of the Secured Parties 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 Secured Parties and of the 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 Trustee or
the Secured Parties allowed in any judicial proceedings relative to the
Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official
in any such proceeding is hereby authorized by each of such Secured Parties to
make payments to the Trustee, and, in the event that the Trustee shall consent
to the making of payments directly to such Secured Parties, to pay to the
Trustee such amounts as shall be sufficient to cover reasonable compensation to
the Trustee, each predecessor Trustee and their respective agents, attorneys and
counsel, and all other expenses and liabilities incurred, and all advances made,
by the Trustee and each predecessor Trustee except as a result of negligence,
bad faith or willful misconduct.
(e) Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Secured Party any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Secured Party or to
authorize the Trustee to vote in respect of the claim of any Secured Party 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 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 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
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compensation of the Trustee, each predecessor Trustee and their respective
agents and attorneys, shall be for the Secured Parties.
Section 10.4. Remedies. If an Event of Default shall have occurred and be
continuing, the Trustee may do one or more of the following:
(a) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable under the
Transaction Documents, enforce any judgment obtained, and collect from the
Issuer and any other obligor under the Transaction Documents moneys adjudged
due;
(b) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Trust Estate;
(c) subject to the limitations set forth in clause (d) below,
exercise any remedies of a secured party under the UCC and take any other
appropriate action to protect and enforce the rights and remedies of the Trustee
and the Secured Parties; and
(d) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private sales called and conducted in
any manner permitted by law; provided, however, that the Trustee may not sell or
otherwise liquidate the Trust Estate following an Event of Default unless:
(i) the Holders of 100% of all of the outstanding Notes and, unless
otherwise specified in the applicable Series Supplement, the Enhancement
Providers of each Series of all outstanding Series consent thereto,
(ii) the Investor Percentage of the proceeds of such sale or
liquidation distributable to the Noteholders and Enhancement Providers of
each Series are sufficient to discharge in full all amounts then due and
unpaid with respect to all outstanding Notes and to the Enhancement
Providers of all outstanding Series at such date for principal and interest
and any other amounts due Noteholders, or
(iii) the Trustee determines that the Investor Percentage of the
proceeds of the Trust Estate will not continue to provide sufficient funds
for the payment of principal of and interest on the outstanding Notes of
all outstanding Series as such amounts would have become due if the Notes
had not been declared due and payable, and the Trustee obtains the consent
of the Required Noteholders and the Enhancement Providers.
In determining such sufficiency or insufficiency with respect to clauses
(d)(ii) and (d)(iii), the 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 Receivables in the Trust Estate for such purpose.
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The Trustee may maintain a Proceeding even if it does not possess any of
the Notes or does not produce any of them in the Proceeding, and any such
Proceeding instituted by the Trustee shall be in its own name as trustee. All
remedies are cumulative to the extent permitted by law.
Section 10.5. [Reserved].
Section 10.6. Waiver of Past Events. If an Event of Default shall have
occurred and be continuing, prior to the declaration of the acceleration of the
maturity of the Notes as provided in subsection 10.2(a), the Required Persons of
each Series may waive any past Default or Event of Default and its consequences
except a Default in payment of principal (or premium, if any) of or interest on
any of the Notes. In the case of any such waiver, the Issuer, the Trustee and
the Holders of the Notes shall be restored to their former positions and rights
hereunder, respectively; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed to
have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereto.
Section 10.7. Limitation on Suits. No Secured Party shall have any right
to institute any Proceeding, judicial or otherwise, with respect to this Base
Indenture and related Series Supplement, or for the appointment of a receiver or
trustee, or for any other remedy hereunder, unless:
(i) such Secured Party previously has given written notice to the
Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% in principal amount of the
outstanding Notes of all affected Series have made written request to the
Trustee to institute such Proceeding in respect of such Event of Default in
its own name as Trustee hereunder;
(iii) such Secured Party has offered and, if requested, provided to
the Trustee indemnity reasonably satisfactory to it against the costs,
expenses and liabilities to be incurred in complying with such request;
(iv) the Trustee for sixty (60) days after its receipt of such
notice, request and offer of indemnity has failed to institute such
Proceedings; and
(v) no direction inconsistent with such written request has been
given to the Trustee during such sixty (60)-day period by the Required
Noteholders;
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it being understood and intended that no one or more Secured Parties 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 Secured Parties or to obtain or to seek to obtain priority or preference
over any other Secured Parties or to enforce any right under this Indenture,
except in the manner herein provided.
In the event the Trustee shall receive conflicting or inconsistent requests
and indemnity from two or more groups of Secured Parties, each representing less
than the Required Noteholders, the Trustee shall proceed in accordance with the
request of the greater majority of the outstanding principal amount of the
Notes, as determined by reference to such requests.
Section 10.8. Unconditional Rights of Holders to Receive Payment;
Withholding Taxes.
(a) Notwithstanding any other provision of this Indenture, the right
of any Noteholder of a Note to receive payment of principal and interest, if
any, on the Note, on or after the respective due dates expressed in the Note or
in this Indenture (or, in the case of redemption, on or after the Redemption
Date), or to bring suit for the enforcement of any such payment on or after such
respective dates, is absolute and unconditional and shall not be impaired or
affected without the consent of the Noteholder.
(b) The Paying Agent shall (or if the Trustee is not the Paying
Agent, the Trustee shall cause the Paying Agent to execute and deliver to the
Trustee an instrument in which such Paying Agent shall agree with the Trustee
that such Paying Agent shall) comply with all requirements of the Code regarding
the withholding of payments in respect of Federal income taxes due from
Noteholders and otherwise comply with the provisions of this Indenture
applicable to it.
Section 10.9. Restoration of Rights and Remedies. If any Noteholder has
instituted any proceeding to enforce any right or remedy under this Indenture
and such proceeding has been discontinued or abandoned for any reason or has
been determined adversely to the Trustee or to such Noteholder, then and in
every such case the Issuer, the Trustee and the Noteholders shall, subject to
any determination in such Proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee and the Noteholders shall continue as though no such proceeding had been
instituted.
Section 10.10. The Trustee May File Proofs of Claim. The Trustee is
authorized 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 Trustee (including any
claim for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel) and the Secured Parties allowed in any
judicial proceedings relative to the Issuer (or any other obligor upon the
Notes), its creditors or its property, and shall be entitled and empowered to
collect, receive and distribute any money or other property payable or
deliverable on any such claim and any custodian in any
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such judicial proceeding is hereby authorized by each Secured Party to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Secured Parties, to pay the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 11.6. To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 11.6 out of the
estate in any such proceeding, shall be denied for any reason, payment of the
same shall be secured by a Lien on, and shall be paid out of, any and all
distributions, dividends, money, notes and other properties which the Secured
Parties may be entitled to receive in such proceeding whether in liquidation or
under any plan of reorganization or arrangement or otherwise. Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Secured Party any plan of reorganization,
arrangement, adjustment or composition affecting the Notes or the rights of any
Noteholder thereof, or to authorize the Trustee to vote in respect of the claim
of any Noteholder in any such proceeding.
Section 10.11. Priorities. Following the declaration of a Pay Out Event or
an Event of Default pursuant to Section 9.1 or 10.2, all amounts in any Payment
Account, including any money or property collected pursuant to Section 10.4,
shall be applied by the Trustee on the related Payment Date in accordance with
the provisions of Article 5 and the applicable Series Supplement.
The Trustee may fix a record date and payment date for any payment to
Secured Parties pursuant to this Section. At least fifteen (15) days before such
record date the Issuer shall mail to each Secured Party and the Trustee a notice
that states the record date, the payment date and the amount to be paid.
Section 10.12. Undertaking for Costs. All parties to this Indenture agree,
and each Secured Party 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 Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to (a) any suit instituted by the
Trustee, (b) any suit instituted by any Noteholder, or group of Noteholders, in
each case holding in the aggregate more than 10% of the aggregate outstanding
principal balance of the Notes on the date of the filing of such action or (c)
any suit instituted by any Noteholder for the enforcement of the payment of
principal of or interest on any Note on or after the respective due dates
expressed in such Note and in this Indenture (or, in the case of redemption, on
or after the Redemption Date).
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Section 10.13. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Trustee or to the Secured Parties is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 10.14. Delay or Omission Not Waiver. No delay or omission of the
Trustee or any Secured Party to exercise any right or remedy accruing upon any
Default or Event of Default shall impair any such right or remedy or constitute
a waiver of any such Default or Event of Default or an acquiescence therein.
Every right and remedy given by this Article 10 or by law to the Trustee or to
the Secured Parties may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Secured Parties, as the case may be.
Section 10.15. Control by Noteholders. The Required Noteholders shall have
the right to direct the time, method and place of conducting any Proceeding for
any remedy available to the Trustee with respect to the Notes or exercising any
trust or power conferred on the Trustee; provided that:
(i) such direction shall not be in conflict with any rule of law or
with this Indenture;
(ii) subject to the express terms of Section 10.4, any direction to
the Trustee to sell or liquidate the Receivables shall be by the Holders of
Notes representing not less than 100% of the aggregate outstanding
principal balance of all the Notes of all Series; and
(iii) the Trustee may take any other action deemed proper by the
Trustee that is not inconsistent with such direction;
provided, however, that, subject to Section 11.1, the Trustee need not take any
action that it determines might involve it in liability or might materially
adversely affect the rights of any Noteholders not consenting to such action.
Section 10.16. 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, that may affect the covenants or the performance of this Indenture; and
the Issuer (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
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Section 10.17. Action on Notes. The Trustee's right to seek and recover
judgment on the Notes or under this Indenture shall not be affected by the
seeking, obtaining or application of any other relief under or with respect to
this Indenture. Neither the lien of this Indenture nor any rights or remedies of
the Trustee or the Secured Parties shall be impaired by the recovery of any
judgment by the Trustee against the Issuer or by the levy of any execution under
such judgment upon any portion of the Trust Estate or upon any of the assets of
the Issuer.
Section 10.18. Performance and Enforcement of Certain Obligations.
(a) Promptly following a request from the Trustee to do so the
Issuer agrees to take all such lawful action as the Trustee may reasonably
request to compel or secure the performance and observance by the Sellers, the
Initial Seller, the Parent and the Servicer, as applicable, of each of their
obligations to the Issuer under or in connection with the Transaction Documents
in accordance with the terms thereof, and to exercise any and all rights,
remedies, powers and privileges lawfully available to the Issuer under or in
connection with the Transaction Documents to the extent and in the manner
directed by the Trustee, including the transmission of notices of default on the
part of the Sellers, the Initial Seller, the Parent or the Servicer thereunder
and the institution of legal or administrative actions or proceedings to compel
or secure performance by the Sellers, the Initial Seller, the Parent or the
Servicer of each of their obligations under the Transaction Documents.
(b) If an Event of Default has occurred and is continuing, the
Trustee may, and, at the direction (which direction shall be in writing or by
telephone (confirmed in writing promptly thereafter)) of the Required
Noteholders shall, subject to subsection 10.2(b), exercise all rights, remedies,
powers, privileges and claims of the Issuer against the Sellers, the Initial
Seller, the Parent or the Servicer under or in connection with the Transaction
Documents, including the right or power to take any action to compel or secure
performance or observance by the Sellers, the Initial Seller, the Parent or the
Servicer of each of their obligations to the Issuer thereunder and to give any
consent, request, notice, direction, approval, extension or waiver under the
Transaction Documents, and any right of the Issuer to take such action shall be
suspended.
Section 10.19. Reassignment of Surplus. Promptly after termination of this
Indenture and the payment in full of the Issuer Obligations, any proceeds of all
the Receivables and other assets in the Trust Estate received or held by the
Trustee shall be turned over to the Issuer and the Receivables and other assets
in the Trust Estate shall be released to the Issuer by the Trustee without
recourse to the Trustee and without any representations, warranties or
agreements of any kind.
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ARTICLE 11.
THE TRUSTEE
Section 11.1. Duties of the Trustee.
(a) If an Event of Default has occurred and is continuing, and of
which a Trust Officer of the Trustee has knowledge, the Trustee shall exercise
such of the rights and powers vested in it by this Indenture, and use the same
degree of care and skill in their exercise, as a prudent man would exercise or
use under the circumstances in the conduct of his own affairs; provided,
however, that the Trustee shall have no liability in connection with any action
or inaction taken, or not taken, by it upon the deemed occurrence of an Event of
Default of which a Trust Officer has not received written notice; and provided,
further that the preceding sentence shall not have the effect of insulating the
Trustee from liability arising out of the Trustee's negligence or willful
misconduct.
(b) Except during the occurrence and continuance of an Event of
Default:
(i) the Trustee undertakes to perform only those duties that are
specifically set forth in this Indenture and no others, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of negligence and bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; provided, however, in the case of any such certificates or
opinions which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of
this Indenture and, if applicable, the Transaction Documents to which the
Trustee is a party, provided, further, that the Trustee shall not be
responsible for the accuracy or content of any of the aforementioned
documents and the Trustee shall have no obligation to verify or recompute
any numeral information provided to it pursuant to the Transaction
Documents.
(c) No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct or for the breach of the express
terms of the Indenture, except that:
(i) this clause does not limit the effect of clause (b) of this
Section 11.1;
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(ii) the Trustee shall not be personally liable for any error of
judgment made in good faith by a Trust Officer or Trust Officers of the
Trustee, unless it is proved that the Trustee was negligent in ascertaining
the pertinent facts;
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 10.15;
(iv) the Trustee shall not be charged with knowledge of any failure
by the Servicer referred to in clauses (a), (b) or (c) of Section 2.04 of
the Servicing Agreement unless a Trust Officer of the Trustee obtains
actual knowledge of such failure or the Trustee receives written notice of
such failure from an Enhancement Provider, the Servicer or any Holders of
Notes evidencing not less than 10% of the aggregate outstanding principal
balance of the Notes of any Series adversely affected thereby.
(d) Notwithstanding anything to the contrary contained in this
Indenture or any of the Transaction Documents, no provision of this Indenture
shall require the 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 and powers, if there is reasonable ground (as
determined by the Trustee in its sole discretion) for believing that the
repayment of such funds or adequate indemnity against such risk is not
reasonably assured to it by the security afforded to it by the terms of this
Indenture.
(e) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA (if
this Indenture is required to be qualified under the TIA).
(f) The Trustee shall, and hereby agrees that it will, perform all
of the obligations and duties required of it under the Servicing Agreement.
(g) Except for actions expressly authorized by this Indenture, the
Trustee shall take no action reasonably likely to impair the interests of the
Issuer in any asset of the Trust Estate now existing or hereafter created or to
impair the value of any asset of the Trust Estate now existing or hereafter
created.
(h) Except as provided in this subsection 11.1(h), the Trustee shall
have no power to vary the corpus of the Trust Estate including, without
limitation, the power to (i) accept any substitute obligation for an asset of
the Trust Estate assigned by the Issuer under the Granting Clause except for
actions expressly authorized by this Indenture or (ii) release any assets from
the Trust Estate, except in each case as permitted or contemplated by the
Transaction Documents permitted under Sections 5.8, 10.19, 12.1, 12.4, 15.1 or
Article 5 and Section 2.08 of the Servicing Agreement.
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(i) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Indenture, shall examine them to determine whether they
substantially conform to the requirements of this Indenture.
(j) Without limiting the generality of this Section 11.1 and subject
to the other provisions of this Indenture, the Trustee shall have no duty (i) to
see to any recording, filing or depositing of this Indenture or any agreement
referred to herein, or to see to the maintenance of any such recording or filing
or depositing or to any recording, refiling or redepositing of any thereof, (ii)
to see to the payment or discharge of any tax, assessment or other governmental
Lien owing with respect to, assessed or levied against any part of the Issuer,
(iii) to confirm or verify the contents of any reports or certificates delivered
to the Trustee pursuant to this Indenture or the Servicing Agreement believed by
the Trustee to be genuine and to have been signed or presented by the proper
party or parties, or (iv) to inspect the Receivables at any time or ascertain or
inquire as to the performance or observance of any of the Issuer's, the
Sellers', the Initial Seller's, the Parent's or the Servicer's representations,
warranties or covenants or the Servicer's duties and obligations as Servicer and
as Custodian of the Receivable Files under the Transaction Documents.
(k) Subject to subsection 11.1(d), in the event that the Paying
Agent or the Transfer Agent and Registrar (if other than the Trustee) shall fail
to perform any obligation, duty or agreement in the manner or on the day
required to be performed by the Paying Agent or the Transfer Agent and
Registrar, as the case may be, under this Indenture, the Trustee shall be
obligated as soon as practicable upon actual knowledge of a Trust Officer
thereof and receipt of appropriate records and information, if any, to perform
such obligation, duty or agreement in the manner so required.
(l) No provision of this Indenture shall be construed to require the
Trustee to perform, or accept any responsibility for the performance of, the
obligations of the Servicer hereunder until it shall have assumed such
obligations in accordance with this Section 11.1 and the provisions of the
Servicing Agreement.
(m) Subject to Section 11.4, all moneys received by the Trustee
shall, until used or applied as herein provided, be held in trust for the
purposes for which they were received, but need not be segregated from other
funds except to the extent required by law or the Transaction Documents.
(n) Except as otherwise required or permitted by the TIA (if this
Indenture is required to be qualified under the TIA), nothing contained herein
shall be deemed to authorize the Trustee to engage in any business operations or
any activities other than those set forth in this Indenture. Specifically, the
Trustee shall have no authority to engage in any business operations, acquire
any assets other than those specifically included in the Trust Estate under this
Indenture or otherwise vary the assets held by the Issuer. Similarly, the
Trustee shall have no discretionary
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duties other than performing those ministerial acts set forth above necessary to
accomplish the purpose of this Indenture.
(o) The Trustee shall not be required to take notice or be deemed to
have notice or knowledge of any Default or Event of Default unless a Trust
Officer of the Trustee shall have received written notice thereof. In the
absence of receipt of such notice, the Trustee may conclusively assume that
there is no Default or Event of Default.
(p) Anything in this Indenture to the contrary notwithstanding, in
no event shall the Trustee be liable for special, indirect or consequential loss
or damage of any kind whatsoever (including but not limited to lost profits),
even if the Trustee has been advised of the likelihood of such loss or damage
regardless of the form of action.
Section 11.2. Rights of the Trustee. Except as otherwise provided by
Section 11.1:
(a) The Trustee may conclusively rely on and shall be protected in
acting upon or refraining from acting upon and in accord with, without any duty
to verify the contents or recompute any calculations therein, any document
(whether in its original or facsimile form), including any assignment of
Subsequently Purchased Receivables, the initial report, the Monthly Servicer
Report, the annual Servicer's certificate, the monthly payment instructions and
notification to the Trustee, the Monthly Noteholders' Statement, any resolution,
Conn Officer's Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document, believed by it to be genuine and to
have been signed by or presented by the proper person. Subject to Section 11.1,
the Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, the Trustee may
require a Conn Officer's Certificate or consult with counsel of its selection
and the Conn Officer's Certificate or the advice of such counsel or any Opinion
of Counsel shall be full and complete authorization and protection from
liability in respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon.
(c) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys, custodians and nominees and the Trustee shall not be liable for any
misconduct or negligence on the part of, or for the supervision of, any such
agent or attorneys, custodian or nominee so long as such agent, custodian or
nominee is appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers conferred upon it by this Indenture; provided, however, that the
Trustee's conduct does not constitute willful misconduct, negligence or bad
faith or a breach of the express terms of this Indenture.
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(e) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Base Indenture, any Series Supplement or
any Enhancement Agreement, or to institute, conduct or defend any litigation
hereunder or in relation hereto, at the request, order or direction of any of
the Noteholders or any Enhancement Provider, pursuant to the provisions of this
Base Indenture or any Series Supplement, unless such Noteholders or the
Enhancement Provider shall have offered to the Trustee reasonable security or
indemnity satisfactory to the Trustee against the costs, expenses and
liabilities which may be incurred therein or thereby; nothing contained herein
shall, however, relieve the Trustee of the obligations, upon the occurrence of
an Event of Default (which has not been cured or waived), to exercise such of
the rights and powers vested in it by this Base Indenture or any Series
Supplement and any Enhancement, and to use the same degree of care and skill in
their exercise as a prudent man would exercise or use under the circumstances in
the conduct of his own affairs.
(f) The Trustee shall not be bound to make any investigation into
the facts of matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document (including, any assignment of Subsequently Purchased
Receivables, the initial report, the Monthly Servicer's Report, the annual
Servicer's certificate, the monthly payment instructions and notification to the
Trustee or the Monthly Noteholders' Statement), unless requested in writing so
to do by the Holders of Notes evidencing not less than 25% of the aggregate
outstanding principal balance of Notes of any Series or any Enhancement Provider
which could be materially adversely affected if the Trustee does not perform
such acts, but the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if the Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Issuer, personally or
by agent or attorney at the sole cost of the Issuer and shall incur no liability
or additional liability of any kind by reason of such inquiry or investigation;
provided, however, that if the payment within a reasonable time to the Trustee
of the costs, expenses or liabilities likely to be incurred by it in the making
of such investigation is, in the opinion of the Trustee, not reasonably assured
to the Trustee by the security afforded to it by the terms of this Indenture,
the Trustee may require reasonable indemnity against such cost, expense or
liability as a condition to so proceeding; the reasonable expense of every such
examination shall be paid by the Person making such request, or, if paid by the
Trustee, shall be reimbursed by the Person making such request upon demand.
(g) The Trustee shall have no liability for the selection of
Permitted Investments and shall not be liable for any losses or liquidation
penalties in connection with Permitted Investments, unless such losses or
liquidation penalties were incurred through the Trustee's own willful misconduct
or negligence. The Trustee shall have no obligation to invest or reinvest any
amounts except as provided in this Indenture or as directed by the Issuer (or
the Servicer on its behalf).
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(h) The Trustee shall not be liable for the acts or omissions of any
successor to the Trustee so long as such acts or omissions were not the result
of the negligence, bad faith or willful misconduct of the predecessor Trustee.
(i) The rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and to each agent, custodian and other Person
employed to act hereunder.
(j) Except as may be required by paragraph 11.1(b)(ii) and
subsections 11.1(i), 11.2(a) and 11.2(f), the Trustee shall not be required to
make any initial or periodic examination of any documents or records related to
the Trust Estate for the purpose of establishing the presence or absence of
defects, the compliance by any Seller, the Initial Seller, the Parent or the
Servicer with their respective representations and warranties or for any other
purpose.
Section 11.3. Trustee Not Liable for Recitals in Notes. The Trustee
assumes no responsibility for the correctness of the recitals contained in this
Indenture and in the Notes (other than the signature and authentication of the
Trustee on the Notes). Except as set forth in Section 11.16, the Trustee makes
no representations as to the validity or sufficiency of this Indenture or of the
Notes (other than the signature and authentication of the Trustee on the Notes)
or of any asset of the Trust Estate or related document. The Trustee shall not
be accountable for the use or application by the Issuer, the Initial Seller or
the Sellers of any of the Notes or of the proceeds of such Notes, or for the use
or application of any funds paid to the Sellers, the Initial Seller or to the
Issuer in respect of the Trust Estate or deposited in or withdrawn from the
Collection Account, the Principal Account, the Finance Charge Account or any
Series Account by the Servicer.
Section 11.4. Individual Rights of the Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Issuer or an Affiliate of the Issuer with the same
rights it would have if it were not Trustee. Any Paying Agent, Transfer Agent
and Registrar, co-registrar or co-paying agent may do the same with like rights.
However, the Trustee must comply with Sections 11.9 and 11.11.
Section 11.5. Notice of Defaults. If a Default, Event of Default, Pay Out
Event or Potential Pay Out Event occurs and is continuing and if a Trust Officer
of the Trustee receives written notice or has actual knowledge thereof, the
Trustee shall promptly provide each Notice Person (and, with respect to any
Event of Default or Pay Out Event, each Noteholder (or, in the case of a Series
Pay Out Event, each Noteholder of the relevant Series)) and each Rating Agency
promptly (and in any event within three (3) Business Days) after such knowledge
or notice occurs, to the extent possible by telephone and facsimile, and,
otherwise, by first class mail at their respective addresses appearing in the
Note Register.
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Section 11.6. Compensation.
(a) To the extent not otherwise paid pursuant to the Indenture, the
Issuer covenants and agrees to pay to the Trustee from time to time, and the
Trustee shall be entitled to receive, reasonable compensation (which shall not
be limited by any provision of law in regard to the compensation of a trustee of
an express trust) for all services rendered by it in the execution of the trust
hereby created and in the exercise and performance of any of the powers and
duties hereunder of the Trustee, and, the Issuer will pay or reimburse the
Trustee (without reimbursement from the Collection Account, any Investor
Account, any Series Account or otherwise) upon its request for all reasonable
expenses, disbursements and advances (including legal fees and costs and costs
of persons not regularly employed by the Trustee) incurred or made by the
Trustee in accordance with any of the provisions of this Indenture except any
such expense, disbursement or advance as may arise from its own willful
misconduct, negligence or bad faith or breach of the express terms of this
Indenture and except as provided in the following sentence.
(b) The obligations of the Issuer under this Section 11.6 shall
survive the termination of this Base Indenture and the resignation or removal of
the Trustee.
Section 11.7. Replacement of the Trustee.
(a) A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 11.7.
(b) The Trustee may, after giving sixty (60) days prior written
notice to the Issuer and the Servicer, resign at any time and be discharged from
the trust hereby created; provided, however, that no such resignation of the
Trustee shall be effective until a successor trustee has assumed the obligations
of the Trustee hereunder. The Issuer may remove the Trustee by so notifying the
Trustee and the Servicer. The Issuer may remove the Trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee if:
(i) the Trustee fails to comply with Section 11.9;
(ii) a court or Federal or state bank regulatory agency having
jurisdiction in the premises in respect of the Trustee shall have entered a
decree or order granting relief or appointing a receiver, liquidator,
assignee, custodian, trustee, conservator, sequestrator (or similar
official) for the Trustee or for any substantial part of the Trustee's
property, or ordering the winding-up or liquidation of the Trustee's
affairs;
(iii) the Trustee consents to the appointment of or taking possession
by a receiver, liquidator, assignee, custodian, trustee, conservator,
sequestrator (or other
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similar official) for the Trustee or for any substantial part of the
Trustee's property, or makes any assignment for the benefit of creditors or
fails generally to pay its debts as such debts become due or takes any
corporate action in furtherance of any of the foregoing; or
(iv) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of the Trustee for any reason, the Servicer shall promptly appoint a successor
Trustee by written instrument, in duplicate, one copy of which instrument shall
be delivered to the resigning and one copy to the successor trustee.
(c) If a successor Trustee does not take office within thirty (30)
days after the retiring Trustee resigns or is removed, the retiring Trustee may
petition any court of competent jurisdiction for the appointment of a successor
trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring or removed Trustee and to the Issuer. Thereupon the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee, without any further act, deed or conveyance, shall become fully vested
with all the rights, powers and duties of the Trustee under this Base Indenture
and any Series Supplement. The successor Trustee shall mail a notice of its
succession to Noteholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee; provided, however, that
all sums owing to the retiring Trustee hereunder (and its agents and counsel)
have been paid and all documents and statements held by it hereunder, and the
Issuer and the predecessor Trustee shall execute and deliver such instruments
and do such other things as may reasonably be required for fully and certainly
vesting and confirming in the successor Trustee all such rights, powers, duties
and obligations. Notwithstanding replacement of the Trustee pursuant to this
Section 11.7, the Issuer's obligations under Sections 11.6 and 11.17 shall
continue for the benefit of the retiring Trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 11.7 shall
not become effective until acceptance of appointment by the successor Trustee
pursuant to this Section 11.7 and payment of all fees and expenses owed to the
retiring Trustee.
(e) No successor Trustee shall accept appointment as provided in
this Section 11.7 unless at the time of such acceptance such successor Trustee
shall be eligible under the provisions of Section 11.9 hereof.
Section 11.8. Successor Trustee by Merger, etc. Any Person into which the
Trustee may be merged or converted or with which it may be consolidated, or any
Person resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any Person succeeding to the corporate trust
business of the Trustee, shall be the successor of the Trustee
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hereunder, provided such Person shall be eligible under the provisions of
Section 11.9 hereof, without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
In case at the time such successor or successors by merger, conversion or
consolidation to the 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 Trustee may adopt the certificate of authentication of any
predecessor Trustee, and deliver such Notes so authenticated; and in case at
that time any of the Notes shall not have been authenticated, any successor to
the Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor to the 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 Trustee shall have.
Section 11.9. Eligibility: Disqualification. The Trustee shall at all
times satisfy the requirements of TIA Section 310(a) (if this Indenture is
required to be qualified under the TIA).
The Trustee hereunder shall at all times be a corporation organized and
doing business under the laws of the United States of America or any State
thereof authorized under such laws to exercise corporate trust powers, having a
long-term unsecured debt rating of at least BBB-/Baa3 (or the equivalent
thereof) by Moody's and, if rated by any other Rating Agency, such Rating
Agency's, having, in the case of an entity that is subject to risk-based capital
adequacy requirements, risk-based capital of at least $50,000,000 or, in the
case of an entity that is not subject to risk-based capital adequacy
requirements, having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by federal or state authority. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purpose of this Section 11.9, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published.
The Trustee shall comply with TIA Section 310(b), including the optional
provision permitted by the second sentence of TIA Section 310(b)(9) (if this
Indenture is required to be qualified under the TIA); provided, however, that
there shall be excluded from the operation of TIA Section 310(b)(1) any
indenture or indentures under which other securities of the Issuer are
outstanding if the requirements for such exclusion set forth in TIA Section
310(b)(1) are met.
(a) In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 11.9, the Trustee shall resign
immediately in the manner and with the effect specified in Section 11.7.
Section 11.10. Appointment of Co-Trustee or Separate Trustee.
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(a) Notwithstanding any other provisions of this Base Indenture or
any Series Supplement, at any time, for the purpose of meeting any legal
requirements of any jurisdiction in which any part of the Trust Estate may at
the time be located, the Trustee shall have the power and may execute and
deliver all instruments to appoint one or more persons to act as a co-trustee or
co-trustees, or separate trustee or separate trustees, of all or any part of the
Trust Estate, and to vest in such Person or Persons, in such capacity and for
the benefit of the Secured Parties, such title to the Trust Estate, or any part
thereof, and, subject to the other provisions of this Section 11.10 such powers,
duties, obligations, rights and trusts as the 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 11.9 and no notice
to Noteholders of the appointment of any co-trustee or separate trustee shall be
required under Section 11.7. No co-trustee shall be appointed without the
consent of the Issuer unless such appointment is required as a matter of state
law or to enable the Trustee to perform its functions hereunder. The appointment
of any co-trustee or separate trustee shall not relieve the Trustee of any of
its obligations hereunder.
(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) the Notes of each Series shall be authenticated and delivered
solely by the Trustee or an authenticating agent appointed by the Trustee;
(ii) all rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or
performed by the 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 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 (whether as Trustee hereunder or
as successor to the Servicer under the Servicing Agreement), the Trustee
shall be incompetent or unqualified to perform, such act or acts, in which
event such rights, powers, duties and obligations (including the holding of
title to the Trust Estate or any portion thereof in any such jurisdiction)
shall be exercised and performed singly by such separate trustee or
co-trustee, but solely at the direction of the Trustee;
(iii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustees, hereunder, including acts or
omissions of predecessor or successor trustees;
(iv) the Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee; and
(v) the Trustee shall remain primarily liable for the actions of
any co-trustee.
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(c) Any notice, request or other writing given to the 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 11. 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
Trustee or separately, as may be provided therein, subject to all the provisions
of this Base Indenture and any Series Supplement, specifically including every
provision of this Base Indenture or any Series Supplement relating to the
conduct of, affecting the liability of, or affording protection to, the Trustee.
Every such instrument shall be filed with the Trustee and a copy thereof given
to the Servicer.
(d) Any separate trustee or co-trustee may at any time constitute
the 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 to this
Base Indenture or any Series Supplement 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 Trustee, to the extent permitted by law, without
the appointment of a new or successor Trustee.
Section 11.11. Preferential Collection of Claims Against the Issuer. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b) (if this Indenture is required to be
qualified under the TIA). A Trustee who has resigned or been removed shall be
subject to TIA Section 311(a) to the extent indicated (if this Indenture is
required to be qualified under the TIA).
Section 11.12. Tax Returns. Neither the Trustee nor (except to the extent
the Servicer breaches its obligations or covenants contained in the Servicing
Agreement) the Servicer shall be liable for any liabilities, costs or expenses
of the Issuer, the Noteholders nor the Note Owners arising under any tax law,
including without limitation federal, state, local or foreign income or
franchise taxes or any other tax imposed on or measured by income (or any
interest or penalty with respect thereto or arising from a failure to comply
therewith).
Section 11.13. Trustee May Enforce Claims Without Possession of Notes. All
rights of action and claims under this Base Indenture or any Series of Notes may
be prosecuted and enforced by the Trustee without the possession of any of the
Notes or the production thereof in any Proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own name as
trustee. Any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of any Series of Noteholders
in respect of which such judgment has been obtained.
Section 11.14. Suits for Enforcement. If an Event of Default shall occur
and be continuing, the Trustee, in its discretion may, subject to the provisions
of Section 2.01 of the
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Servicing Agreement and Section 11.19, proceed to protect and enforce its rights
and the rights of any Secured Party under this Indenture or any other
Transaction Document by a Proceeding, whether for the specific performance of
any covenant or agreement contained in this Indenture or such other Transaction
Document or in aid of the execution of any power granted in this Indenture or
such other Transaction Document or for the enforcement of any other legal,
equitable or other remedy as the Trustee, being advised by counsel, shall deem
most effectual to protect and enforce any of the rights of the Trustee or any
Secured Party.
Section 11.15. Reports by Trustee to Holders. The Trustee shall deliver to
each Noteholder such information as may be reasonably required to enable such
Holder to prepare its Federal and state income tax returns.
Section 11.16. Representations and Warranties of Trustee. The Trustee
represents and warrants to the Issuer and the Secured Parties that:
(i) the Trustee is a banking association duly organized, existing
and authorized to engage in the business of banking under the laws of the
United States of America;
(ii) the Trustee has full power, authority and right to execute,
deliver and perform this Base Indenture and any Series Supplement issued
concurrently with this Base Indenture and to authenticate the Notes, and
has taken all necessary action to authorize the execution, delivery and
performance by it of this Base Indenture and any Series Supplement issued
concurrently with this Base Indenture and to authenticate the Notes;
(iii) this Indenture has been duly executed and delivered by the
Trustee; and
(iv) the Trustee meets the requirements of eligibility hereunder set
forth in Section 11.9.
Section 11.17. The Issuer Indemnification of the Trustee. The Issuer shall
fully indemnify and hold harmless the Trustee (and any predecessor Trustee) and
its directors, officers, agents and employees from and against any and all loss,
liability, claim, expense, damage or injury suffered or sustained by reason of
any acts, omissions or alleged acts or omissions arising out of the activities
of the Trustee pursuant to this Base Indenture or any Series Supplement and any
other Transaction Document to which it is a party, including but not limited to
any judgment, award, settlement, reasonable attorneys' fees and other costs or
expenses incurred in connection with the defense of any actual or threatened
action, proceeding or claim; provided, however, that the Issuer shall not
indemnify the Trustee or its directors, officers, employees or agents if such
acts, omissions or alleged acts or omissions constitute negligence or willful
misconduct by the Trustee. The indemnity provided herein shall survive the
termination of this Indenture and the resignation and removal of the Trustee.
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Section 11.18. Trustee's Application for Instructions from the Issuer. Any
application by the Trustee for written instructions from the Issuer or the
Servicer may, at the option of the Trustee, set forth in writing any action
proposed to be taken or omitted by the Trustee under this Indenture and the date
on and/or after which such action shall be taken or such omission shall be
effective. Subject to Section 11.1, the Trustee shall not be liable for any
action taken by, or omission of, the Trustee in accordance with a proposal
included in such application on or after the date specified in such application
(which date shall not be less than thirty (30) days after the date any
Responsible Officer of the Issuer or the Servicer actually receives such
application, unless any such officer shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective date in
the case of an omission), the Trustee shall have received written instructions
in response to such application specifying the action to be taken or omitted.
Section 11.19. Rights of Noteholders to Direct Trustee. Unless otherwise
specified in this Indenture, Required Noteholders (or, with respect to any
remedy, trust or power that does not relate to all Series, 66 2/3% of the
aggregate Investor Interest of the Notes of all Series to which such remedy,
trust or power relates) shall have the right to direct the time, method, and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee; provided, however, that,
subject to Section 11.1, the Trustee shall have the right to decline to follow
any such direction if the Trustee being advised by counsel determines that the
action so directed may not lawfully be taken, or if the Trustee in good faith
shall, by a Trust Officer or Trust Officers of the Trustee, determine that the
proceedings so directed would be illegal or involve it in personal liability or
be unduly prejudicial to the rights of Noteholders not parties to such
direction; and provided further, that nothing in this Indenture shall impair the
right of the Trustee to take any action deemed proper by the Trustee and which
is not inconsistent with such direction of such Holders of Notes.
Section 11.20. Maintenance of Office or Agency. The Trustee will maintain
at its expense in the Borough of Manhattan, the City of New York an office or
offices, or agency or agencies, where notices and demands to or upon the Trustee
in respect of the Notes and this Indenture may be served. The Trustee initially
appoints its Corporate Trust Office as its office for such purposes. The Trustee
will give prompt written notice to the Issuer, the Servicer and to Noteholders
(or in the case of Holders of Bearer Notes, in the manner provided for in the
related Series Supplement) of any change in the location of the Note Register or
any such office or agency.
Section 11.21. Concerning the Rights of the Trustee. The rights,
privileges and immunities afforded to the Trustee in the performance of its
duties under this Indenture shall apply equally to the performance by the
Trustee of its duties under each other Transaction Document to which it is a
party.
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ARTICLE 12.
DISCHARGE OF INDENTURE
Section 12.1. Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect with respect to the Notes except as to (i)
rights of Noteholders to receive payments of principal thereof and interest
thereon and any other amount due to Noteholders, (ii) Sections 8.1, 11.6, 11.12,
12.2, 15.16 and 15.17 and subsection 12.5(b), (iii) the rights, obligations and
immunities of the Trustee hereunder (including the rights of the Trustee under
Sections 11.6 and 11.17 and the obligations of the Trustee under Section 12.2)
and (iv) the rights of Noteholders as beneficiaries hereof with respect to the
property deposited with the Trustee as described below payable to all or any of
them, and the Trustee, on demand of and at the expense of the Issuer, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture with respect to the Notes (and their related Secured Parties), on the
first Business Day after the Payment Date with respect to any Series (the
"Indenture Termination Date") on which the Issuer has paid, caused to be paid or
irrevocably deposited or caused to be irrevocably deposited in the applicable
Payment Account and any applicable Series Account funds sufficient to pay in
full all amounts owed to each Enhancement Provider (and returned any original
documents issued by such Enhancement Provider evidencing such Enhancement) and
all Issuer Obligations and Collateral Interests, if any, and the Issuer has
delivered to the Trustee and any Enhancement Provider a Conn Officer's
Certificate, an Opinion of Counsel and, if required by the TIA (if this
Indenture is required to be qualified under the TIA), an Independent Certificate
from a firm of certified public accountants, each meeting the applicable
requirements of subsection 15.1(a) and each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
After any irrevocable deposit made pursuant to Section 12.1 and
satisfaction of the other conditions set forth herein, the Trustee promptly upon
request shall acknowledge in writing the discharge of the Issuer's obligations
under this Indenture except for those surviving obligations specified above.
Section 12.2. Application of Issuer Money. All moneys deposited with the
Trustee pursuant to Section 12.1 shall be held in trust and applied by it, in
accordance with the provisions of the Notes and this Base Indenture and the
related Series Supplement, to the payment, either directly or through any Paying
Agent, as the Trustee may determine, to the Holders of the particular Notes for
the payment or redemption of which such moneys have been deposited with the
Trustee, of all sums due and to become due thereon for principal and interest;
but such moneys need not be segregated from other funds except to the extent
required herein or in the other Transaction Documents or required by law.
The provisions of this Section 12.2 shall survive the expiration or earlier
termination of this Indenture.
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Section 12.3. Repayment of Moneys Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to the Notes,
all moneys then held by any Paying Agent other than the Trustee under the
provisions of this Indenture with respect to such Notes shall, upon demand of
the Issuer, be paid to the Trustee to be held and applied according to Section
8.1 and thereupon such Paying Agent shall be released from all further liability
with respect to such moneys.
Section 12.4. Cleanup Call.
(a) If so provided in any Series Supplement, the initial Servicer
may, but shall not be obligated to, purchase the Notes of any Series on any
Payment Date on or after the Payment Date on which the Investor Interests for
such Series and the Enhancement Invested Amount, if any, with respect to such
Series is less than or equal to 10% of the "Initial Note Principal" on the
Closing Date for such Series (or such other amount as may be specified in a
Series Supplement for such Series). Such purchase shall be made by depositing
into the applicable Payment Account or the applicable Series Account, not later
than the Series Transfer Date preceding such Payment Date, for application in
accordance with Section 12.5, the amount specified in such Series Supplement.
(b) The amount deposited pursuant to subsection 12.4(a) shall be
paid to the Noteholders of the related Series pursuant to Section 12.5 on the
related Payment Date following the date of such deposit. All Notes of a Series
which are paid pursuant to subsection 12.4(a) shall be delivered by the Issuer
upon such purchase to, and be cancelled by, the Transfer Agent and Registrar and
be disposed of in a manner satisfactory to the Trustee and the Issuer. The Notes
of each Series which is paid pursuant to subsection 12.4(a) shall, for the
purposes of the definition of "Issuer Interest," be deemed to be equal to zero
on the Payment Date following the making of the deposit, and the Issuer Interest
shall thereupon be deemed to have been increased by the Investor Interests of
such Series.
Section 12.5. Final Payment with Respect to Any Series.
(a) Written notice of any termination, specifying the Payment Date
upon which the Noteholders of any Series may surrender their Notes for final
payment with respect to such Series and cancellation, shall be given (subject to
at least two (2) Business Days' prior notice from the Servicer to the Trustee)
by the Trustee to Noteholders of such Series mailed not later than the last day
of the month preceding such final payment (or in the manner provided by the
Series Supplement relating to such Series) specifying (i) the Payment Date
(which shall be the Payment Date in the month (x) in which the deposit is made
pursuant to subsection 12.4(a) of this Base Indenture or such other section as
may be specified in the related Series Supplement, or (y) in which the related
Series Termination Date occurs) upon which final payment of such Notes will be
made upon presentation and surrender of such Notes at the office or offices
therein designated (which, in the case of Bearer Notes, shall be outside the
United States), (ii) the amount of any such final payment and (iii) that the
Record Date otherwise applicable to such
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Payment Date is not applicable, payments being made only upon presentation and
surrender of the Notes at the office or offices therein specified. The
Servicer's notice to the Trustee in accordance with the preceding sentence shall
be accompanied by a Conn Officer's Certificate setting forth the information
specified in Article 6 of this Base Indenture covering the period during the
then current calendar year through the date of such notice and setting forth the
date of such final distribution. The Trustee shall give such notice to the
Transfer Agent and the Paying Agent at the time such notice is given to such
Noteholders.
(b) Notwithstanding the termination or discharge of the trust of the
Indenture pursuant to Section 12.1 or the occurrence of the Series Termination
Date with respect to any Series, all funds then on deposit in the Finance Charge
Account, the Principal Account, the Payment Account or any Series Account
applicable to the related Series shall continue to be held in trust for the
benefit of the Noteholders of the related Series and the Paying Agent or the
Trustee shall pay such funds to the Noteholders of the related Series upon
surrender of their Notes (which surrenders and payments, in the case of Bearer
Notes, shall be made only outside the United States). In the event that all of
the Noteholders of any Series shall not surrender their Notes for cancellation
within six (6) months after the date specified in the above-mentioned written
notice, the Trustee shall give second written notice (or, in the case of Bearer
Certificates, publication notice) to the remaining Noteholders of such Series
upon receipt of the appropriate records from the Transfer Agent and Registrar to
surrender their Notes for cancellation and receive the final distribution with
respect thereto. If within one and one-half years after the second notice with
respect to a Series, all the Notes of such Series shall not have been
surrendered for cancellation, the Trustee may take appropriate steps or may
appoint an agent to take appropriate steps, to contact the remaining Noteholders
of such Series concerning surrender of their Notes, and the cost thereof shall
be paid out of the funds in the Payment Account or any Series Account held for
the benefit of such Noteholders. The Trustee and the Paying Agent shall pay to
the Issuer upon request any monies held by them for the payment of principal or
interest which remains unclaimed for two (2) years. After such payment to the
Issuer, Noteholders entitled to the money must look to the Issuer for payment as
general creditors unless an applicable abandoned property law designates another
Person.
(c) All Notes surrendered for payment of the final distribution with
respect to such Notes and cancellation shall be cancelled by the Transfer Agent
and Registrar and be disposed of in a manner satisfactory to the Trustee and the
Issuer.
Section 12.6. Termination Rights of Issuer. Upon the termination of the
Lien of the Indenture pursuant to Section 12.1, and after payment of all amounts
due hereunder on or prior to such termination, the Trustee shall execute a
written release and reconveyance substantially in the form of Exhibit A pursuant
to which it shall release the Lien of the Indenture and reconvey to the Issuer
(without recourse, representation or warranty) all right, title and interest in
the Trust Estate, whether then existing or thereafter created, all moneys due or
to become due with respect to such Trust Estate (including all accrued interest
theretofore posted as Finance Charges) and all proceeds of the Trust Estate,
except for amounts held by the Trustee or any Paying Agent
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pursuant to subsection 12.5(b). The Trustee shall execute and deliver such
instruments of transfer and assignment, in each case without recourse, as shall
be reasonably requested by the Issuer or the Servicer to vest in the Issuer all
right, title and interest in the Trust Estate.
Section 12.7. Repayment to the Issuer. The Trustee and the Paying Agent
shall promptly pay to the Issuer upon written request any excess money or,
pursuant to Sections 2.10 and 2.13, return any Notes held by them at any time.
ARTICLE 13.
AMENDMENTS
Section 13.1. Without Consent of the Noteholders. Without the consent of
the Holders of any Notes, and, unless otherwise provided in any Series
Supplement, with the consent of the Notice Persons of each Series (or, with
respect to an amendment to a particular Series Supplement, the Notice Persons of
such Series) and, if the Servicer's rights and/or obligations are materially and
adversely affected thereby, the Servicer and with prior written notice to the
Rating Agencies by the Issuer, as evidenced to the Trustee, the Issuer and the
Trustee, when authorized by an Issuer Order, at any time and from time to time,
may enter into one or more indenture supplements or amendments hereto or Series
Supplements or amendments to any Series Supplement (which shall conform to any
applicable provisions of the TIA as in force at the date of execution thereof),
in form satisfactory to the Trustee, unless otherwise provided in a Series
Supplement, for any of the following purposes:
(a) to create a new Series of Notes;
(b) 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 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;
(c) to evidence the succession, in compliance with the applicable
provisions hereof, of another Person to the Issuer, and the assumption by any
such successor of the covenants of the Issuer herein and in the Notes;
(d) to add to the covenants of the Issuer for the benefit of any
Secured Parties (and if such covenants are to be for the benefit of less than
all Series of Notes, stating that such covenants are expressly being included
solely for the benefit of such Series) or to surrender any right or power herein
conferred upon the Issuer;
(e) to convey, transfer, assign, mortgage or pledge to the Trustee
any property or assets as security for the Issuer Obligations and to specify the
terms and conditions upon which such property or assets are to be held and dealt
with by the Trustee and to set forth such
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other provisions in respect thereof as may be required by the Indenture or as
may, consistent with the provisions of the Indenture, be deemed appropriate by
the Issuer and the Trustee, or to correct or amplify the description of any such
property or assets at any time so mortgaged, pledged, conveyed and transferred
to the Trustee;
(f) to cure any ambiguity, or correct or supplement any provision
herein or in any supplemental indenture hereto or in any Series Supplement or
amendment to any Series Supplement which may be inconsistent with any other
provision herein or in any supplemental indenture or any Series Supplement or
amendment to any Series Supplement or to make any other provisions with respect
to matters or questions arising under this Indenture (including any Series
Supplement or amendment to any Series Supplement) or with respect to the
restructuring of any Seller, the Servicer or the Issuer as a limited liability
company; provided, however, that such action shall not adversely affect the
interests of any Holder of the Notes in any material respect without its
consent;
(g) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Notes of one or more Series
or to add to or change any of the provisions of the Indenture as shall be
necessary and permitted to provide for or facilitate the administration of the
trusts hereunder by more than one trustee pursuant to the requirements of
Article 11;
(h) to modify, eliminate or add to the provisions of this Indenture
to such extent as shall be necessary to effect the qualification of this
Indenture under the TIA or under any similar Federal statute hereafter enacted
and to add to this Indenture such other provisions as may be expressly required
by the TIA; or
(i) to add any provisions to, or change in any manner or eliminate
any of the provisions of, this Indenture (including any Series Supplement or
amendment to any Series Supplement) or modify in any manner the rights of the
Holders of the Notes under this Indenture (including any Series Supplement or
amendment to any Series Supplement); provided, however, that no amendment or
supplement shall be permitted if it would result in a taxable event to any
Noteholder unless such Noteholder's consent is obtained.
Upon the request of the Issuer and upon receipt by the Trustee of the
documents described in Section 2.2, the Trustee shall join with the Issuer in
the execution of any supplemental indenture or Series Supplement authorized or
permitted by the terms of this Base Indenture and shall make any further
appropriate agreements and stipulations which may be therein contained, but the
Trustee shall not be obligated to enter into such Series Supplement which
affects its own rights, duties or immunities under this Indenture or otherwise.
Section 13.2. Supplemental Indentures with Consent of Noteholders. The
Issuer and the Trustee, when authorized by an Issuer Order, also may, and unless
otherwise provided in any Series Supplement, with the consent of the Required
Persons of each Series (or, with respect to
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an amendment to a particular Series Supplement, the Required Persons of such
Series) and, if the Servicer's rights and/or obligations are materially and
adversely affected thereby, the Servicer and, unless otherwise specified in the
related Series Supplement, with the consent of at least two (if there are more
than one) Holders of not less than 66 2/3% of the aggregate outstanding
principal balance of all Notes of all Series materially and adversely affected,
voting collectively by written notice delivered to the Issuer and the Trustee,
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to, or changing in any manner or eliminating any of the
provisions of, this Base Indenture or any Series Supplement or of modifying in
any manner the rights of the Holders of the Notes of any Series under this Base
Indenture or any Series Supplement; provided, however, that no such supplemental
indenture shall, unless otherwise provided in the related Series Supplement,
without the consent of the Required Persons of each Series (or, with respect to
the amendment of a particular Series Supplement, the Required Persons of such
Series and any other Series affected thereby) and without the consent of the
Holder of each outstanding Note affected thereby (and in the case of clause
(iii) below, the consent of each Secured Party of all Series affected):
(i) change the date of payment of any installment of principal of
or interest on, or any premium payable upon the redemption of, any Note or
reduce in any manner the principal amount thereof, the interest rate
thereon or the Redemption Price with respect thereto, modify the provisions
of this Base Indenture or any Series Supplement relating to the application
of collections on, or the proceeds of the sale of, the Trust Estate to
payment of principal of, or interest on, the Notes, or change any place of
payment where, or the coin or currency in which, any Note or the interest
thereon is payable;
(ii) change the definition of or the manner of calculating the
Investor Interest, the Aggregate Investor Default Amount or the Investor
Percentage of such Series;
(iii) change the voting requirements in any Transaction Document;
(iv) impair the right to institute suit for the enforcement of the
certain provisions of this Base Indenture or any Series Supplement
requiring the application of funds available therefor, as provided in
Article 9, 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);
(v) reduce the percentage of the aggregate outstanding principal
amount of the Notes, the consent of the Holders of which is required for
any such supplemental indenture or Series Supplement or amendment of a
Series Supplement, or the consent of the Holders of which is required for
any waiver of compliance with certain provisions of this Base Indenture or
any Series Supplement or certain defaults hereunder and their consequences
provided for in this Base Indenture or any Series Supplement;
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(vi) modify or alter the provisions of this Base Indenture or any
Series Supplement regarding the voting of Notes held by the Issuer, any
Seller, the Initial Seller or an Affiliate of the foregoing;
(vii) reduce the percentage of the aggregate outstanding principal
amount of the Notes, the consent of the Holders of which is required to
direct the Trustee to sell or liquidate the Trust Estate pursuant to
Section 10.4 if the proceeds of such sale would be insufficient to pay the
principal amount and accrued but unpaid interest on the outstanding Notes;
(viii) modify any provision of this Section 13.2, except to increase
any percentage specified herein or to provide that certain additional
provisions of this Base Indenture or any Series Supplement cannot be
modified or waived without the consent of the Holder of each outstanding
Note affected thereby;
(ix) modify any of the provisions of this Base Indenture or any
Series Supplement in such manner as to affect in any material respect the
calculation of the amount of any payment of interest or principal due on
any Note on any Payment Date (including the calculation of any of the
individual components of such calculation), to alter the application of
"Available Investor Principal Collections" of any Series or to affect the
rights of the Holders of Notes to the benefit of any provisions for the
mandatory redemption of the Notes contained in this Base Indenture or any
Series Supplement; or
(x) permit the creation of any Lien ranking prior to or on a
parity with the Lien of this Indenture with respect to any part of the
Trust Estate for the Notes (except for Permitted Encumbrances) or, except
as otherwise permitted or contemplated in this Base Indenture or any Series
Supplement, terminate the Lien of this Indenture on any such collateral at
any time subject hereto or deprive any Secured Party of the security
provided by the Lien of this Base Indenture or any Series Supplement;
provided, further, that no amendment will be permitted if it would result
in a taxable event to any Noteholder, unless such Noteholder's consent is
obtained as described above.
The Trustee may, but shall not be obligated to, enter into any such
amendment or supplement which affects the Trustee's rights, duties or immunities
under this Indenture or otherwise.
Notwithstanding anything in Sections 13.1 and 13.2 to the contrary, the
Series Supplement with respect to any Series may be amended with respect to the
items and in accordance with the procedures provided in such Series Supplement.
It shall not be necessary for any consent of Noteholders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such consent shall approve the substance thereof.
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The manner of obtaining such consents and of evidencing the authorization
of the execution thereof by Note shall be subject to such reasonable
requirements as the Trustee may prescribe.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture, amendment to this Base Indenture, or any Series
Supplement pursuant to this Section, the Trustee shall mail to each Holder of
the Notes of all Series (or with respect to an amendment of a Series Supplement,
to the Noteholder of the applicable Series), to any related Enhancement Provider
and to each Rating Agency rating any affected Series a notice setting forth in
general terms the substance of such supplemental indenture, amendment to this
Base Indenture, or any Series Supplement. Any failure of the 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 13.3. Execution of Supplemental Indentures. In executing any
supplemental indenture permitted by this Article 13 or the modifications thereby
of the trust created by this Indenture, the Trustee shall be entitled to
receive, and subject to Section 11.1, shall be fully protected in relying upon,
an Opinion of Counsel stating that the execution of such supplemental indenture
is authorized, permitted or not prohibited (as the case may be) by this
Indenture. Such Opinion of Counsel may be subject to reasonable qualifications
and assumptions of fact. The Trustee may, but shall not be obligated to, enter
into any such supplemental indenture that affects the Trustee's own rights,
duties, liabilities or immunities under this Indenture or otherwise.
Section 13.4. Effect of Supplemental Indenture. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and be deemed to be modified and amended in accordance therewith with respect
to the Notes affected thereby, and the respective rights, limitations of rights,
obligations, duties, liabilities and immunities under this Indenture of the
Trustee, the Issuer and the Holders of the Notes shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.
Section 13.5. Conformity With TIA. Every amendment of this Indenture and
every supplemental indenture executed pursuant to this Article 13 shall conform
to the requirements of the TIA as then in effect so long as this Indenture shall
then be required to be qualified under the TIA.
Section 13.6. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article 13 may, and if required by the Trustee shall, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Issuer or the Trustee shall so determine, new
Notes so modified as to conform, in the opinion of the Trustee and the Issuer,
to any such supplemental indenture may be prepared, executed, authenticated and
delivered by the Trustee in exchange for outstanding Notes.
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Section 13.7. Series Supplements. The initial effectiveness of each
Series Supplement shall be subject to the satisfaction of the Rating Agency
Condition with respect to such Series Supplement. In addition to the manner
provided in Sections 13.1 and 13.2, each Series Supplement may be amended as
provided in such Series Supplement.
Section 13.8. Revocation and Effect of Consents. Until an amendment or
waiver becomes effective, a consent to it by a Noteholder of a Note is a
continuing consent by the Noteholder and every subsequent Noteholder of a Note
or portion of a Note that evidences the same debt as the consenting Noteholder's
Note, even if notation of the consent is not made on any Note. However, any such
Noteholder or subsequent Noteholder may revoke the consent as to his Note or
portion of a Note if the Trustee receives written notice of revocation before
the date the amendment or waiver becomes effective. An amendment or waiver
becomes effective in accordance with its terms and thereafter binds every
Noteholder. The Issuer may fix a record date for determining which Noteholders
must consent to such amendment or waiver.
Section 13.9. Notation on or Exchange of Notes. The Trustee may place an
appropriate notation about an amendment or waiver on any Note thereafter
authenticated. The Issuer in exchange for all Notes may issue and the Trustee
shall authenticate new Notes that reflect the amendment or waiver. Failure to
make the appropriate notation or issue a new Note shall not affect the validity
and effect of such amendment or waiver.
Section 13.10. The Trustee to Sign Amendments, etc. The Trustee shall sign
any Series Supplement authorized pursuant to this Article 13 if the Series
Supplement does not adversely affect in any material respect the rights, duties,
liabilities or immunities of the Trustee. If it does have such a materially
adverse effect, the Trustee may, but need not, sign it. In signing such Series
Supplement, the Trustee shall be entitled to receive, if requested, an indemnity
reasonably satisfactory to it and to receive and, subject to Section 11.1, shall
be fully protected in relying upon, a Conn Officer's Certificate and an Opinion
of Counsel as conclusive evidence that such Series Supplement is authorized,
permitted or not prohibited (as the case may be) by this Indenture and that it
will be valid and binding upon the Issuer in accordance with its terms.
ARTICLE 14.
REDEMPTION AND REFINANCING OF NOTES
Section 14.1. Redemption and Refinancing. If specified in a Series
Supplement, the Notes of any Series are subject to redemption as may be
specified in the related Series Supplement, on any Payment Date on which the
Issuer exercises its option to refinance or purchase the Trust Estate pursuant
to Section 12.4, for a purchase price equal to the Redemption Price; provided,
however, that the Issuer has available funds sufficient to pay the Redemption
Price. If the Notes of any Series are to be redeemed pursuant to this Section
14.1, the Issuer shall furnish notice of such election to the Trustee not later
than fifteen (15) days prior to the
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Redemption Date and the Issuer shall deposit with the Trustee in the related
Payment Account the Redemption Price of the Notes of such Series to be redeemed
whereupon all such redeemed Notes shall be due and payable on the Redemption
Date upon the furnishing of a notice complying with Section 14.2 to each Holder
of such Notes.
Section 14.2. Form of Redemption Notice. Notice of redemption under
Section 14.1 shall be given by the Trustee by facsimile or by first-class mail,
postage prepaid, transmitted or mailed prior to the applicable Redemption Date
to each Holder of Notes of the Series to be redeemed, as of the close of
business on the Record Date preceding the applicable Redemption Date, at such
Holder's address appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) that the Record Date otherwise applicable to such Redemption
Date is not applicable and that payments shall be made only upon
presentation and surrender of such Notes and the place where such Notes are
to be surrendered for payment of the Redemption Price (which shall be the
office or agency of the Issuer to be maintained as provided in Section
8.2); and
(iv) that interest on the Notes shall cease to accrue on the
Redemption Date.
Notice of redemption of the Notes shall be given by the Trustee in the name
and at the expense of the Issuer. Failure to give notice of redemption, or any
defect therein, to any Holder of any Note to be redeemed shall not impair or
affect the validity of the redemption of any other Note.
Section 14.3. Notes Payable on Redemption Date. The Notes of any Series
to be redeemed shall, following notice of redemption as required by Section 14.2
(in the case of redemption pursuant to Section 14.1), on the Redemption Date
become due and payable at the Redemption Price and (unless the Issuer shall
default in the payment of the Redemption Price) no interest shall accrue on the
Redemption Price for any period after the date to which accrued interest is
calculated for purposes of calculating the Redemption Price.
ARTICLE 15.
MISCELLANEOUS
Section 15.1. Compliance Certificates and Opinions, etc. (a) Upon any
application or request by the Issuer to the Trustee to take any action under any
provision of this Indenture, the
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Issuer shall furnish to the Trustee if requested thereby (i) a Conn 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 this
Indenture is required to be qualified under the TIA) an Independent Certificate
from a firm of certified public accountants meeting the applicable requirements
of this Section, except that, in the case of any such application or request as
to which the furnishing of such documents is specifically required by any
provision of this Indenture, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or opinion
has read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
signatory such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Receivables or other property
or securities (other than cash) with the 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
15.1(a) or elsewhere in this Indenture, furnish to the Trustee upon the
Trustee's request a Conn Officer's Certificate certifying or stating the opinion
of each person signing such certificate as to the fair value (within ninety (90)
days of such deposit) to the Issuer of the Receivables or other property or
securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the Trustee a
Conn 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 Trustee 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
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more of the aggregate outstanding principal amount of all the Notes of all
Series issued by the Issuer, 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 Conn Officer's Certificate is less
than $25,000 or less than 1% percent of the aggregate outstanding principal
amount of all the Notes of all Series issued by the Issuer of the Notes.
(iii) Other than with respect to the release of any Removed
Receivables or liquidated Receivables (and the Related Security therefor),
and except for discharges of this Indenture as described in Section 12.1,
whenever any property or securities are to be released from the lien of
this Indenture, the Issuer shall also furnish to the Trustee a Conn
Officer's Certificate certifying or stating the opinion of each person
signing such certificate as to the fair value (within ninety (90) days of
such release) of the property or securities proposed to be released and
stating that in the opinion of such person the proposed release will not
impair the security under this Indenture in contravention of the provisions
hereof.
(iv) Whenever the Issuer is required to furnish to the Trustee a
Conn 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 Trustee an Independent Certificate as to the same
matters if the fair value of the property or securities and of all other
property other than Removed Receivables and Defaulted Receivable, 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 aggregate outstanding principal amount of all Notes of all Series
issued by the Issuer, 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 Conn Officer's Certificate is less than $25,000 or
less than 1% percent of the then aggregate outstanding principal amount of
all Notes of all Series issued by the Issuer of the Notes.
Section 15.2. Form of Documents Delivered to 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 his or her certificate or opinion is
based are erroneous. Any such certificate of an Responsible Officer or Opinion
of Counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or
110
representations by, an officer or officers of the Servicer, the Sellers or the
Issuer, stating that the information with respect to such factual matters is in
the possession of or known to the Servicer, the Sellers or the Issuer, unless
such counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the 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 Trustee's right to rely upon the truth and accuracy of
any statement or opinion contained in any such document as provided in Article
10.
Section 15.3. Acts of Noteholders.
(a) Wherever in this Indenture a provision is made that an action may
be taken or a notice, demand or instruction given by Noteholders, such action,
notice or instruction may be taken or given by any Noteholder, unless such
provision requires a specific percentage of Noteholders. Notwithstanding
anything in this Indenture to the contrary, none of the Sellers, the Initial
Seller, the Issuer or any Affiliate controlled by Conn or controlling Conn shall
have any right to vote with respect to any Note, provided that the voting rights
of any other Affiliate of Conn shall be subject to Section 3.16(a) of the TIA
(if this Indenture is required to be qualified under the TIA).
(b) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by agents
duly appointed in writing; and except as herein otherwise expressly provided
such action shall become effective when such instrument or instruments are
delivered to the Trustee, and, where it is hereby expressly required, to the
Issuer. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Noteholders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 11.1) conclusive in
favor of the Trustee and the Issuer, if made in the manner provided in this
Section.
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(c) The fact and date of the execution by any person of any such
instrument or writing may be proved in any customary manner of the Trustee.
(d) The ownership of Notes shall be proved by the Note Register.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any such Notes shall bind such
Noteholder and the Holder of every Note and every subsequent Holder of such
Notes issued upon the registration thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to be done by the
Trustee, the Servicer or the Issuer in reliance thereon, whether or not notation
of such action is made upon such Note.
Section 15.4. Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at, sent by facsimile to, sent by courier at or mailed by registered
mail, return receipt requested, to (a) in the case of the Issuer, to ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇, (b) in the case
of the Servicer or Conn, to ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇ ▇▇▇▇▇, (c) in the case of the Trustee, to the Corporate Trust
Office, (e) in the case of any Enhancement Provider for, or Required Person with
respect to, a particular Series, the address, if any, specified in the Series
Supplement relating to such Series and (f) in the case of the Rating Agency for
a particular Series, the address, if any, specified in the Series Supplement
relating to such Series; or, as to each party, at such other address as shall be
designated by such party in a written notice to each other party. Unless
otherwise provided with respect to any Series in the related Series Supplement
or otherwise expressly provided herein, any notice required or permitted to be
mailed to a Noteholder shall be given by first class mail, postage prepaid, at
the address of such Noteholder as shown in the Note Register, or with respect to
any notice required or permitted to be made to the Holders of Bearer Notes, by
publication in the manner provided in the related Series Supplement. If and so
long as any Series or Class is listed on the Luxembourg Stock Exchange and such
exchange shall so require, any notice to Noteholders shall be published in an
authorized newspaper of general circulation in Luxembourg (which maybe the
Luxembourger Wort or Zeitung) within the time period prescribed in this
Indenture. Any notice so mailed or published, as the case may be, within the
time prescribed in this Indenture shall be conclusively presumed to have been
duly given, whether or not the Noteholder receives such notice.
The Issuer or the Trustee by notice to the other may designate additional
or different addresses for subsequent notices or communications; provided,
however, the Issuer may not at any time designate more than a total of three (3)
addresses to which notices must be sent in order to be effective.
Any notice (i) given in person shall be deemed delivered on the date of
delivery of such notice, (ii) given by first class mail shall be deemed given
five (5) days after the date that such notice is mailed, (iii) delivered by
telex or telecopier shall be deemed given on the date of
112
delivery of such notice, and (iv) delivered by overnight air courier shall be
deemed delivered one Business Day after the date that such notice is delivered
to such overnight courier.
Notwithstanding any provisions of this Indenture to the contrary, the
Trustee shall have no liability based upon or arising from the failure to
receive any notice required by or relating to this Indenture or the Notes.
If the Issuer mails a notice or communication to Noteholders, it shall mail
a copy to the Trustee at the same time.
Section 15.5. Notices to Noteholders: Waiver. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at his address as it appears on the Note Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner here
in 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 Trustee but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a result of
a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Noteholders when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies, failure to
give such notice shall not affect any other rights or obligations created
hereunder, and shall not under any circumstance constitute a Default or Event of
Default.
Section 15.6. Alternate Payment and Notice Provisions. Notwithstanding
any provision of this Indenture or any of the Notes to the contrary, the Trustee
on behalf of the Issuer may enter into any agreement with any Holder of a Note
providing for a method of payment, or notice by the Trustee or any Paying Agent
to such Holder, that is different from the methods provided for in this
Indenture for such payments or notices, provided that such methods are consented
to by the Issuer (which consent shall not be unreasonably withheld). The Trustee
will cause payments to be made and notices to be given in accordance with such
agreements.
113
Section 15.7. Conflict with TIA. 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 (if this Indenture is required to be qualified under the TIA).
The provisions of TIA Sections 310 through 317 that impose duties on any
person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein (if this Indenture is required to be
qualified under the TIA). Notwithstanding the foregoing, and regardless of
whether the Indenture is required to be qualified under the TIA, the provisions
of Section 316(a)(1) of the TIA shall be excluded from this Indenture.
Section 15.8. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents and Cross-Reference Table are
for convenience of reference only, are not to be considered a part hereof, and
shall not affect the meaning or construction hereof.
Section 15.9. Successors and Assigns. All covenants and agreements in this
Indenture and the Notes by the Issuer shall bind its successors and assigns,
whether so expressed or not. All agreements of the Trustee in this Indenture
shall bind its successors.
Section 15.10. Separability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Indenture or Notes shall for
any reason whatsoever be held invalid, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Indenture and shall in no way affect the
validity or enforceability of the other provisions of this Indenture or of the
Notes or rights of the Holders thereof.
Section 15.11. Benefits of Indenture. Except as set forth in this
Indenture, nothing in this Indenture or in the Notes, expressed or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Secured Parties, any benefit or any legal or equitable right,
remedy or claim under the Indenture.
Section 15.12. Legal Holidays. In any case where the date on which any
payment is due to any Secured Party shall not be a Business Day, then
(notwithstanding any other provision of the Notes or this Indenture) any such
payment need not be made on such date, but may be made on the next succeeding
Business Day with the same force and effect as if made on the date on which
nominally due, and no interest shall accrue for the period from and after any
such nominal date.
Section 15.13. GOVERNING LAW; JURISDICTION. THIS INDENTURE AND THE NOTES
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
114
OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS. EACH OF THE PARTIES TO THIS INDENTURE AND EACH
SECURED PARTY HEREBY AGREES TO THE NON-EXCLUSIVE JURISDICTION OF THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND ANY APPELLATE
COURT HAVING JURISDICTION TO REVIEW THE JUDGEMENT THEREOF. EACH OF THE PARTIES
AND EACH SECURED PARTY HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS
AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY OF THE
AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE
RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.
Section 15.14. Counterparts. This Indenture may be executed in any number
of counterparts, and by different parties on separate 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.
Section15.15. Recording of Indenture. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the Trustee or any other counsel reasonably acceptable
to the Trustee) to the effect that such recording is necessary either for the
protection of the Noteholders or any other person secured hereunder or for the
enforcement of any right or remedy granted to the Trustee under this Indenture.
Section 15.16. Issuer Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer or under this
Indenture or any certificate or other writing delivered in connection herewith
or therewith, against (i) any Seller, the Initial Seller, the Servicer or the
Trustee or (ii) any partner, owner, incorporator beneficiary, beneficial owner,
agent, officer, director, employee, shareholder or agent of the Issuer, the
Initial Seller, any Seller, the Servicer or the Trustee, except (x) as any such
Person may have expressly agreed and (y) nothing in this Section shall relieve
any Seller, the Initial Seller or the Servicer from its own obligations under
the terms of any Transaction Document. Nothing in this Section 15.16 shall be
construed to limit the Trustee from exercising its rights hereunder with respect
to the Trust Estate.
Section 15.17. No Bankruptcy Petition Against the Issuer. Each of the
Secured Parties and the Trustee by entering into the Indenture, any Enhancement
Agreement, any Series Supplement or any Note Purchase Agreement (as defined in
such Series Supplement) and in the case of a Noteholder and Note Owner, by
accepting a Note, hereby covenants and agrees that, prior to the date which is
one year and one day after the payment in full of the latest maturing Note and
the termination of the Indenture, it will not institute against, or join with
any other Person in instituting against, the Issuer any bankruptcy,
reorganization, arrangement, insolvency
115
or liquidation proceedings, or other proceedings, under any United States
Federal or state bankruptcy or similar law in connection with any obligations
relating to the Notes, the Indenture or any of the Transaction Documents. In the
event that any such Secured Party or the Trustee takes action in violation of
this Section 15.17, the Issuer shall file an answer with the bankruptcy court or
otherwise properly contesting the filing of such a petition by any such Secured
Party or the Trustee against the Issuer or the commencement of such action and
raising the defense that such Secured Party or the Trustee has agreed in writing
not to take such action and should be estopped and precluded therefrom and such
other defenses, if any, as its counsel advises that it may assert. The
provisions of this Section 15.17 shall survive the termination of this
Indenture, and the resignation or removal of the Trustee. Nothing contained
herein shall preclude participation by any Secured Party or the Trustee in the
assertion or defense of its claims in any such proceeding involving the Issuer.
Section 15.18. No Joint Venture. Nothing herein contained shall be deemed
or construed to create a co-partnership or joint venture between the parties
hereto and the services of the Servicer shall be rendered as an independent
contractor and not as agent for the Trustee.
Section 15.19. Rule 144A Information. For so long as any of the Notes of
any Series or any Class are "restricted securities" within the meaning of Rule
144(a)(3) under the Securities Act, the Issuer, the Servicer and the Trustee
agree to cooperate with each other to provide to any Noteholders of such Series
or Class and to any prospective purchaser of Notes designated by such Noteholder
upon the request of such Noteholder or prospective purchaser, any information
required to be provided to such holder or prospective purchaser to satisfy the
condition set forth in Rule 144A(d)(4) under the Securities Act if at the time
of the request the Issuer is not a reporting company under Section 13 or Section
15(d) of the Exchange Act.
Section 15.20. No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Trustee, any Secured Party, any
right, remedy, power or privilege hereunder, shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exhaustive of any
rights, remedies, powers and privileges provided by law.
Section 15.21. Third-Party Beneficiaries. This Indenture will inure to the
benefit of and be binding upon the parties hereto, the Secured Parties, and
their respective successors and permitted assigns. Except as otherwise provided
in this Article 15, no other Person will have any right or obligation hereunder.
Section 15.22. Merger and Integration. Except as specifically stated
otherwise herein, this Indenture sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Indenture.
116
Section 15.23. Rules by the Trustee. The Trustee may make reasonable rules
for action by or at a meeting of any Secured Parties.
Section 15.24. Duplicate Originals. The parties may sign any number of
copies of this Indenture. One signed copy is enough to prove this Indenture.
Section 15.25. Waiver of Trial by Jury. To the extent permitted by
applicable law, each of the Secured Parties irrevocably waives all right of
trial by jury in any action, proceeding or counterclaim arising out of or in
connection with this Indenture or the Transaction Documents or any matter
arising hereunder or thereunder.
[THIS SPACE LEFT INTENTIONALLY BLANK]
117
IN WITNESS WHEREOF, the Trustee and the Issuer have caused this Base
Indenture to be duly executed by their respective duly authorized officers as of
the day and year first written above.
CONN FUNDING II, L.P., as Issuer
By: Conn Funding II GP, L.L.C.,
its general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Secretary/Treasurer
▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, not in its
individual capacity, but solely as
Trustee
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
Accepted and Agreed:
CAI, L.P.,
individually and as Servicer
By: Conn Appliances, Inc.,
its general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: CEO and Chairman of the Board
S-1 Base Indenture
EXHIBIT A
TO BASE INDENTURE
Form of Release and Reconveyance of Trust Estate
================================================================================
RELEASE AND RECONVEYANCE OF TRUST ESTATE
----------------------------------------
RELEASE AND RECONVEYANCE OF TRUST ESTATE, dated as of __________, _____,
between Conn Funding II, L.P. (the "Issuer") and ▇▇▇▇▇ Fargo Bank Minnesota,
National Association, a banking association organized and existing under the
laws of the United States of America (the "Trustee") pursuant to the Base
Indenture referred to below.
W I T N E S S E T H:
-------------------
WHEREAS, the Issuer and the Trustee are parties to the Base Indenture dated
as of September 1, 2002 (hereinafter as such agreement may have been, or may
from time to time be, amended, supplemented or otherwise modified, the "Base
Indenture");
WHEREAS, pursuant to the Base Indenture, upon the termination of the Lien
of the Base Indenture pursuant to Section 12.1 of the Base Indenture and after
payment of all amounts due under the terms of the Base Indenture on or prior to
such termination and the surrender of the Issuer Interest, the Trustee shall at
the request of the Issuer reconvey and release the lien on the Trust Estate;
WHEREAS, the conditions to termination of the Base Indenture pursuant to
Sections 12.1 and 12.6 have been satisfied;
WHEREAS, the Issuer has requested that the Trustee terminate the Lien of
the Indenture on the Trust Estate pursuant to Section 12.6; and
WHEREAS, the Trustee is willing to execute such release and reconveyance
subject to the terms and conditions hereof;
NOW, THEREFORE, the Issuer and the Trustee hereby agree as follows:
1. Defined Terms. All terms defined in the Base Indenture and used herein
shall have such defined meanings when used herein, unless otherwise defined
herein.
2. Release and Reconveyance. (a) The Trustee does hereby release and
reconvey to the Issuer, without recourse, representation or warranty, on and
after ____, ____ (the "Reconveyance Date") all right, title and interest in the
Trust Estate whether then existing or thereafter created, all monies due or to
become due with respect thereto (including all accrued interest theretofore
posted as Finance Charges) and all proceeds of such Trust Estate, except for
A-1 Base Indenture
amounts, if any, held by the Trustee or any Paying Agent pursuant to subsection
12.05(b) of the Base Indenture.
(b) In connection with such transfer, the Trustee does hereby release the
Lien of the Indenture on the Trust Estate and agrees, upon the request and at
the expense of the Issuer, to authorize the filing of any necessary or
reasonably desirable UCC termination statements in connection therewith.
3. Return of Lists of Receivables. The Trustee shall deliver to the
Issuer, not later than five (5) Business Days after the Reconveyance Date, each
and every computer file or microfiche list of Receivables delivered to the
Trustee pursuant to the terms of the Base Indenture.
4. Counterparts. This Release and Reconveyance may be executed in two or
more counterparts (and by different parties on separate counterparts), each of
which shall be an original, but all of which together shall constitute one and
the same instrument.
5. Governing Law. THIS RELEASE AND RECONVEYANCE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
A-2 Base Indenture
IN WITNESS WHEREOF, the undersigned have caused this Release and
Reconveyance of Trust Estate to be duly executed and delivered by their
respective duly authorized officers on the day and year first above written.
CONN FUNDING II, L.P., as Issuer
By: Conn Funding II GP, L.L.C.,
its general partner
By:
---------------------------------
Name:
Title:
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, not in its individual
capacity, but solely as Trustee
By:
---------------------------------
Name:
Title:
A-3 Base Indenture
Schedule 1
PERFECTION REPRESENTATIONS, WARRANTIES
AND COVENANTS
In addition to the representations, warranties and covenants contained in the
Indenture, the Issuer hereby represents, warrants, and covenants to the Trustee
as follows on the Closing Date:
General
-------
1. The Indenture creates a valid and continuing security interest (as defined
in the applicable UCC) in the Receivables in favor of the Trustee, which
security interest is prior to all other Liens, and is enforceable as such as
against creditors of and purchasers from the Issuer.
2. The Receivables constitute "accounts", "tangible chattel paper" or
"electronic chattel paper" within the meaning of the UCC as in effect in the
State of Texas.
3. Each of the Trust Accounts and all subaccounts thereof constitute either a
deposit account or a securities account.
Creation
--------
4. The Issuer owns and has good and marketable title to the Receivables free
and clear of any Lien, claim or encumbrance of any Person, excepting only liens
for taxes, assessments or similar governmental charges or levies incurred in the
ordinary course of business that are not yet due and payable or as to which any
applicable grace period shall not have expired, or that are being contested in
good faith by proper proceedings and for which adequate reserves have been
established, but only so long as foreclosure with respect to such a lien is not
imminent and the use and value of the property to which the Lien attaches is not
impaired during the pendency of such proceeding.
Perfection:
-----------
5. The Issuer has caused or will have caused, within ten days after the
effective date of the Indenture, the filing of all appropriate financing
statements in the proper filing office in the appropriate jurisdictions under
applicable law in order to perfect the sale of the Receivables from the Sellers
and the Initial Seller to the Issuer, and the security interest in the
Receivables granted to the Trustee hereunder; and Servicer has in its possession
the original copies of such instruments, certificated securities or tangible
chattel paper that constitute or evidence the Receivables, and all financing
statements referred to in this paragraph contain a statement that: "A purchase
of or security interest in any collateral described in this financing statement
will violate the rights of the Trustee."
Schedule 1, Page 1 Base Indenture
6. With respect to Receivables that constitute tangible chattel paper, either:
(i) All original executed copies of each such tangible chattel paper have
been delivered to the Trustee;
(ii) (A) Such tangible chattel paper is in the possession of the Servicer
and the Trustee has received a written acknowledgment from the Servicer
that the Servicer is holding such tangible chattel paper solely on behalf
and for the benefit of the Trustee; (B) the Sellers have marked on or
before the date that is sixty (60) days after the Initial Closing Date the
authoritative copy of each Contract or lease that constitutes or evidences
the Receivables with a legend to the following effect: "Conn Funding II,
L.P. has pledged all its rights and interest herein to ▇▇▇▇▇ Fargo Bank
Minnesota, National Association"; and (C) such Contracts or leases do not
have any other marks or notations indicating that they have been pledged,
assigned or otherwise conveyed to any Person other than the Trustee; or
(iii) A third party custodian received possession of such instruments or
tangible chattel paper after the Trustee received a written acknowledgment
from such custodian that such custodian is acting solely as agent of the
Trustee;
7. With respect to Receivables that constitute electronic chattel paper,
either:
(a) The Issuer has caused, or will have caused within ten days of the
effective date of the Purchase Agreement, the filing of financing statement
against Issuer, the Initial Seller and Sellers in favor of the Trustee in
connection herewith describing such Receivables and containing a statement that:
"A purchase of or security interest in any collateral described in this
financing statement will violate the rights of the Trustee"; or
(b) All of the following are true:
(i) Only one authoritative copy of each such Contract or lease exists;
and each such authoritative copy (A) is unique, identifiable and
unalterable (other than with the participation of the Trustee in the case
of an addition or amendment of an identified assignee and other than a
revision that is readily identifiable as an authorized or unauthorized
revision), (B) has been marked with a legend to the following effect:
"Authoritative Copy" and (C) has been communicated to and is maintained by
the Trustee or a custodian who has acknowledged in writing that it is
maintaining the authoritative copy of each electronic chattel paper solely
on behalf of and for the benefit of the Trustee, or is acting solely as its
agent; and
(ii) Sellers have marked on or before the date that is sixty (60) days
after the Initial Closing Date the authoritative copy of each Contract or
lease that constitutes or evidences the Receivables with a legend to the
following effect: "Conn Funding II, L.P. has pledged all its rights and
interest herein to ▇▇▇▇▇ Fargo Bank Minnesota, National Association." Such
Contracts or leases do not have any other marks or notations indicating
that they have been pledged, assigned or otherwise conveyed to any Person
other than the Trustee; and
Schedule 1, Page 2 Base Indenture
(iii) Sellers have marked all copies of each Contract or lease that
constitute or evidence the Receivables other than the authoritative copy
with a legend to the following effect: "This is not an authoritative copy";
and
(iv) The records evidencing the Receivables have been established in a
manner such that (a) all copies or revisions that add or change an
identified assignee of the authoritative copy of each such electronic
chattel paper must be made with the participation of the Trustee and (b)
all revisions of the authoritative copy of each such electronic chattel
paper must be readily identifiable as an authorized or unauthorized
revision.
8. With respect to each of the Trust Accounts and all subaccounts that
constitute deposit accounts, either:
(i) The Issuer has delivered to the Trustee a fully executed agreement
pursuant to which the bank maintaining the deposit accounts has agreed to
comply with all instructions originated by the Trustee directing
disposition of the funds in the Trust Accounts without further consent by
the Issuer; or
(ii) The Issuer has taken all steps necessary to cause the Trustee to
become the account holder of the Trust Accounts.
9. With respect to each of the Trust Accounts or subaccounts thereof that
constitute securities accounts or securities entitlements, either:
(i) The Issuer has delivered to the Trustee a fully executed agreement
pursuant to which the securities intermediary has agreed to comply with all
instructions originated by the Trustee relating to the Trust Accounts
without further consent by the Issuer; or
(ii) The Issuer has taken all steps necessary to cause the securities
intermediary to identify in its records the Trustee as the person having a
security entitlement against the securities intermediary in each of the
Trust Accounts.
Priority
--------
10. Other than the transfer of the Receivables to the Issuer under the Purchase
Agreement and the security interest granted to the Trustee pursuant to the
Indenture, none of the Issuer, the Initial Seller or the Sellers have pledged,
assigned, sold, granted a security interest in, or otherwise conveyed any of the
Receivables or the Trust Accounts. None of the Issuer, the Initial Seller or the
Sellers have authorized the filing of, or is aware of any financing statements
against the Issuer, the Initial Seller or the Sellers that include a description
of collateral covering the Receivables or the Trust Accounts or any subaccount
thereof other than those that have been released or any financing statement
relating to the security interest granted to the Trustee hereunder or that has
been terminated.
11. None of the Trust Accounts nor any subaccount thereof are in the name of
any person other than the Trustee. The Issuer has not consented to the bank
maintaining the Trust Accounts that constitute deposit accounts to comply with
instructions of any person other than the Trustee.
Schedule 1, Page 3 Base Indenture
The Issuer has not consented to the securities intermediary of any Trust Account
that constitutes a securities account to comply with entitlement orders of any
person other than the Trustee.
12. None of the Issuer, the Initial Seller or the Sellers is aware of any
judgment, ERISA or tax lien filings against either the Issuer, the Initial
Seller or the Sellers.
13. None of the Issuer, the Initial Seller or the Sellers or a custodian
holding any Collateral that is electronic chattel paper has communicated an
authoritative copy of any Contract or lease that constitutes or evidences the
Receivables to any Person other than the Trustee.
14. None of the tangible chattel paper or electronic chattel paper that
constitutes or evidences the Receivables has any marks or notations indicating
that it has been pledged, assigned or otherwise conveyed to any Person other
than the Trustee.
15. Survival of Perfection Representations. Notwithstanding any other provision
of the Indenture or any other Transaction Document, the Perfection
Representations contained in this Schedule shall be continuing, and remain in
full force and effect (notwithstanding any replacement of the Servicer or
termination of Servicer's rights to act as such) until such time as the Issuer
Obligations under the Indenture have been finally and fully paid and performed.
16. No Waiver. The parties to the Indenture shall not, without satisfying the
Rating Agency Condition, waive any of the Perfection Representations.
Schedule 1, Page 4 Base Indenture