IP HOLDINGS LLC, as Issuer and WILMINGTON TRUST COMPANY, as Trustee FIFTH AMENDED AND RESTATED INDENTURE Dated as of August 28, 2006 IP HOLDINGS LLC ASSET-BACKED NOTES
Execution
Copy
IP
HOLDINGS LLC,
as
Issuer
and
WILMINGTON
TRUST COMPANY,
as
Trustee
FIFTH
AMENDED AND RESTATED
Dated
as
of August 28, 2006
$159,941,998
IP
HOLDINGS LLC ASSET-BACKED NOTES
TABLE
OF CONTENTS
Page | |
PRELIMINARY
STATEMENT
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GRANTING
CLAUSES
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3
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Section
1.1. Definitions
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3
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Section
1.2. Acts of Noteholders
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4
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Section
1.3. Notices, etc. to Trustee, Issuer and IPHM
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4
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Section
1.4. Notices to Noteholders; Waiver
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5
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Section
1.5. Effect of Headings and Table of Contents
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5
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Section
1.6. Successors and Assigns
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5
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Section
1.7. Severability
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6
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Section
1.8. Benefits of Indenture
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6
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Section
1.9. Governing Law
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6
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Section
1.10. Counterparts
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6
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Section
1.11. Consents
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6
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Section
1.12. Effective Date
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6
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ARTICLE
II. NOTE FORM
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6
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Section
2.1. Form Generally
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6
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Section
2.2. Form of Note
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7
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ARTICLE
III. THE NOTES
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12
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Section
3.1. Designation of Notes; Certain Related Provisions
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12
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Section
3.2. Denominations
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12
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Section
3.3. Execution, Authentication, Delivery and Dating
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12
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Section
3.4. Registration, Registration of Transfer and Exchange
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13
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Section
3.5. Limitation on Transfer and Exchange
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14
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Section
3.6. Mutilated, Destroyed, Lost or Stolen Notes
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15
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Section
3.7. Payment of Principal and Interest
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16
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Section
3.8. Persons Deemed Owners
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16
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Section
3.9. Cancellation
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16
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i
ARTICLE
IV. DELIVERY OF THE NOTES
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17
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ARTICLE
V. SATISFACTION AND DISCHARGE
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17
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Section
5.1. Satisfaction and Discharge of Indenture
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17
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Section
5.2. Application of Trust Money
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18
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Section
5.3. Discharge of Security Interest
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18
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ARTICLE
VI. EVENTS OF DEFAULT AND REMEDIES
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19
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Section
6.1. Events of Default
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19
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Section
6.2. Acceleration of Maturity, Rescission and Annulment
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20
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Section
6.3. Remedies
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21
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Section
6.4. Trustee May File Claim
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22
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Section
6.5. Trustee May Enforce Claims Without Possession of
Notes
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23
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Section
6.6. Allocation of Money Collected
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23
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Section
6.7. Limitation on Suits
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24
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Section
6.8. Unconditional Right of Noteholders to Receive Principal and
Interest
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25
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Section
6.9. Restoration of Rights and Remedies
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25
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Section
6.10. Rights and Remedies Cumulative
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25
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Section
6.11. Delay or Omission Not Waiver
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26
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Section
6.12. Control by Noteholders
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26
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Section
6.13. Waiver of Past Defaults
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26
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Section
6.14. Undertaking for Costs
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26
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Section
6.15. Waiver of Stay or Extension Laws
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27
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Section
6.16. Sale of Collateral
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27
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Section
6.17. Action on Notes
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28
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ARTICLE
VII. THE TRUSTEE; RESIGNATION OF TRUSTEE AND SUCCESSOR
TRUSTEE
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28
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Section
7.1. Certain Duties and Responsibilities of Trustee
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28
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Section
7.2. Notice of Default, Cure or Waiver
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30
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Section
7.3. Certain Rights of Trustee
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30
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Section
7.4. Not Responsible for Recitals or Issuance of Notes
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31
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Section
7.5. May Hold Notes
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32
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Section
7.6. Money Held in Trust
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32
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Section
7.7. Compensation and Reimbursement
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32
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ii
Section
7.8. Corporate Trustee Requirement Eligibility
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33
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Section
7.9. Resignation and Removal; Appointment of Successor
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33
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Section
7.10. Acceptance of Appointment by Successor
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34
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Section
7.11. Merger, Conversion, Consolidation or Succession to Business
of
Trustee
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34
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Section
7.12. Co-trustees and Separate Trustees
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34
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Section
7.13. Rights of Trustee in Capacity of Payment Agent, Transfer Agent
or
Registrar
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36
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ARTICLE
VIII. CONSOLIDATION AND MERGER
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36
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Section
9.1. Supplemental Indentures Only with Consent of
Noteholders
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36
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Section
9.2. Execution of Supplemental Indentures
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37
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Section
9.3. Effect of Supplemental Indentures
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37
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Section
9.4. Reference in Notes to Supplemental Indenture
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38
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Section
9.5. Solicitation of Holders of Notes
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38
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ARTICLE
X. REDEMPTION OF NOTES
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38
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Section
10.1. Redemption at the Option of the Issuer
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38
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Section
10.2. Notice of Redemption by the Issuer
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40
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Section
10.3. Deposit of the Redemption Price
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40
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Section
10.4. Notes Payable on Redemption Date; Less than All Notes to be
Redeemed
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41
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Section
10.5. Defeasance
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41
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ARTICLE
XI. REPRESENTATIONS, WARRANTIES AND COVENANTS
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42
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Section
11.1. Payment of Principal and Interest
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42
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Section
11.2. Maintenance of Office or Agency
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42
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Section
11.3. Money for Note Payments to Be Held in Trust
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42
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Section
11.4. Continued Existence; Observance of Organizational
Documents
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43
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Section
11.5. Protection of Collateral
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43
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Section
11.6. Biennial Opinion as to Collateral
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45
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Section
11.7. Negative Covenants
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45
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Section
11.8. Statement as to Compliance
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46
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Section
11.9. Inspection
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47
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Section
11.10. Limited Purpose
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47
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Section
11.11. Issuer Ownership
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47
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iii
Section
11.12. Enforcement of Transaction Documents
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47
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Section
11.13. Representations and Warranties
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47
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Section
11.14. Certain Covenants
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51
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Section
11.15. Submission to Jurisdiction
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52
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Section
11.16. Representations with Respect to Assets.
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53
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Section
11.17. Survival of Indenture Representations and
Warranties
|
56
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ARTICLE
XII. ACCOUNTS, ACCOUNTINGS AND RELEASES
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56
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Section
12.1. Collection of Money
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56
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Section
12.2. Accounts
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56
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Section
12.3. Release of Assets
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60
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Section
12.4. Accounting by Trustee to Issuer and the Noteholders
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61
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Section
12.5. Collateral
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62
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Section
12.6. Opinion of Counsel
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62
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ARTICLE
XIII. APPLICATION OF MONIES
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63
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Section
13.1. Disbursements of Monies out of Collection Account
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63
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Section
13.2. Disbursement of Monies out of the Liquidity Reserve
Account
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65
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Section
13.3. Advertising Reserve Account
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66
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Section
13.4. Disbursements of Monies out of the Lockbox Account
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66
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Section
13.5. Disbursement of Monies out of the Renewal Reserve
Account
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66
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Section
13.6. Disbursement of Monies out of Prepaid Fee and Royalty
Account
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67
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Section
13.7. Eligible Investments
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67
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ARTICLE
XIV. COVENANTS OF IP HOLDINGS AND MANAGEMENT CORPORATION
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68
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Section
14.1. Continued Existence; Organizational Documents
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68
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Section
14.2. Negative Covenant
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68
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Section
14.3. No Bankruptcy Petition.
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68
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iv
APPENDIX
A
|
Standard
Definitions
|
EXHIBIT
A
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Form
of Assignment of Note
|
EXHIBIT
B
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Form
of Servicer’s Report
|
EXHIBIT
C
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Form
of Investment Letter
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EXHIBIT
D
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Substitute
Form W-9
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EXHIBIT
E
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Assets
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EXHIBIT
E-1: Trademarks
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EXHIBIT
E-1A: Registered Trademarks
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EXHIBIT
E-1B: Unregistered Trademarks
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EXHIBIT
E-1C: Additional Registrations and Pending Applications
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EXHIBIT
E-2: Licenses
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EXHIBIT
E-3: Copyrights
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|
EXHIBIT
E-4: Patents
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|
EXHIBIT
E-5: Pending Intent-to-Use Applications
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EXHIBIT
E-6: Trademarks Subject to Litigation
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EXHIBIT
F
|
Claims
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v
This
FIFTH AMENDED AND RESTATED INDENTURE (as amended from time to time as permitted
hereby, this “Indenture”)
is
dated as of August 28, 2006, is by and between IP HOLDINGS LLC, a Delaware
limited liability company (together with its permitted successors and assigns,
the “Issuer”),
and
WILMINGTON TRUST COMPANY, a Delaware banking corporation (together with its
permitted successors and assigns, the “Trustee”)
and
amends and restates in its entirety the Fourth Amended and Restated Indenture,
dated as of April 11, 2006, by and between the parties hereto, as amended by
Amendment No. 1 to Fourth Amended and Restated Indenture, dated as of August
14,
2006, by and between the parties hereto (as so amended, the “Fourth
Amended and Restated Indenture”),
which
amended and restated in its entirety the Third Amended and Restated Indenture,
dated as of September 1, 2005 (the “Third
Amended and Restated Indenture”),
by
and between the parties hereto, which amended and restated in its entirety
the
Second Amended and Restated Indenture, dated as of July 1, 2005 (the
“Second
Amended and Restated Indenture”),
by
and between the parties hereto, which amended and restated in its entirety
the
Amended and Restated Indenture, dated as of April 1, 2004 (the “First
Amended and Restated Indenture”),
by
and between the parties hereto, which amended and restated in its entirety,
the
Indenture, dated as of August 20, 2002 (the “Original
Indenture”),
by
and between the parties hereto.
The
Issuer duly authorized the execution and delivery of the Original Indenture
to
provide for the issuance of a single class of 7.93% IP Holdings LLC Asset-Backed
Notes (the “Original
Notes”).
The
Issuer duly authorized the execution and delivery of the First Amended and
Restated Indenture to provide for the issuance of a subordinate class of
Floating Rate IP Holdings LLC Subordinate Asset-Backed Notes (the “Subordinate
Notes”).
The
Issuer duly authorized the execution and delivery of the Second Amended and
Restated Indenture to provide for the issuance of a single class of 8.45% IP
Holdings LLC Asset-Backed Notes (the “July
Notes”),
and
for the exchange of the Original Notes and the Subordinate Notes for the July
Notes.
The
Issuer duly authorized the execution and delivery of the Third Amended and
Restated Indenture to provide for the issuance of a single class of IP Holdings
LLC Asset-Backed Notes (the “September
Notes”),
and
for the exchange of the July Notes for the September Notes.
The
Issuer duly authorized the execution and delivery of the Fourth Amended and
Restated Indenture to provide for the issuance of a single class of IP Holdings
LLC Asset-Backed Notes (the “April
Notes”),
and
for the exchange of the September Notes for the April Notes.
The
Issuer now has duly authorized the execution and delivery of this Indenture
to
provide for the issuance of a single class of IP Holdings LLC Asset-Backed
Notes
(the “Notes”),
and
for the exchange of the April Notes for the Notes.
All
covenants and agreements made by the Issuer herein are for the benefit and
security of the Noteholders. The Issuer is entering into this Indenture, and
the
Trustee is accepting the trust created hereby, for good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged.
The
Issuer hereby Grants to the Trustee for the exclusive benefit of the Holders
of
the Notes a Lien upon and a security interest in all of the Issuer’s right,
title and interest, whether now owned or hereafter acquired, (but none of the
obligations) in and to the following (collectively, the “Collateral”),
subject, however, in each case, to any applicable Lien:
(a) the
Assets;
(b) all
cash,
securities, instruments and other property held from time to time in the
Collection Account, the Liquidity Reserve Account, the Revenue Reduction
Account, the Prepaid Fee and Royalty Account and the Renewal Reserve Account
or
otherwise transferred to the Trustee hereunder (but excluding any amounts
payable to or deposited in the Advertising Reserve Account);
(c) the
Contribution Agreement, the Xxx Xxxxx Contribution Agreement, the Rampage
Contribution Agreement, the Xxxx Contribution Agreement, the London Fog
Contribution Agreement, the Management Agreement, the Back-Up Management
Agreement, the Servicing Agreement, the Xxxx Guaranty and the Xxxx Pledge
Agreement, in each case as the same may be modified, amended, supplemented
or
restated from time to time;
(d) all
books
and records concerning the foregoing property (including without limitation
all
tapes, disks and related items containing any such information);
(e) all
after
acquired property of the Issuer; and
(f) all
proceeds of the foregoing of any nature whatsoever, including without limitation
proceeds and the conversion, voluntary or involuntary, of any
thereof.
Such
Grants are only made, however, in trust, solely to secure (i) the Notes equally
and ratably, except as otherwise may be provided in this Indenture, without
prejudice, priority or distinction among the Notes by reason of differences
in
time of authentication or delivery or otherwise, (ii) the payment of all other
sums payable under this Indenture, and (iii) compliance with the provisions
of
this Indenture, all as provided in this Indenture.
It
is
expressly agreed that anything herein contained to the contrary notwithstanding,
the Issuer shall not, other than as required by applicable law, be released
from
any of its obligations under any of the Collateral, and the Trustee and the
Holders shall have no obligation or liability under any Collateral by reason
of
or arising out of the assignment hereunder, nor shall the Trustee or the Holders
be required or obligated in any manner to perform or fulfill any obligations
of
the Issuer under or pursuant to any of the Collateral or such other documents
or
to make any payment, subject, however, to any applicable Liens, or to make
any
inquiry as to the nature or sufficiency of any payment received by them, or
present or file any claim, or take any action to collect or enforce the payment
of any amounts which may have been assigned to them or to which they may be
entitled at any time or times.
-2-
The
Issuer does hereby warrant and represent that (i) except for Liens
described in Exhibit B to each of the Contribution Agreement, the Xxx Xxxxx
Contribution Agreement, the Rampage Contribution Agreement, the Xxxx
Contribution Agreement and the London Fog Contribution Agreement, it has not
permitted and hereby covenants that it will not permit, the creation of any
Lien
other than the Lien of this Indenture with respect to any part of the
Collateral, so long as this Indenture shall remain in effect, to anyone other
than the Trustee, and (ii) the representations and warranties of the Issuer
contained in this Indenture are true and correct.
The
Trustee acknowledges such Xxxxx, accepts the trusts hereunder in accordance
with
the provisions of this Indenture and agrees to perform the duties herein
required. So long as any Note remains Outstanding, the Trustee shall act for
the
benefit of the Noteholders as their interests may appear to the extent provided
herein.
The
Trustee agrees to maintain in its possession each item of Collateral
constituting a contract or chattel paper under the UCC delivered to it unless
and until such item of Collateral is released from the lien hereof pursuant
to
Article V or Section 12.3 hereof.
All
things necessary to make this Indenture a valid agreement of the Issuer in
accordance with its terms have been done. The Trustee hereby acknowledges
receipt of the April Note in connection with the authentication and delivery
of
the Note.
ARTICLE
I.
DEFINITIONS
AND OTHER PROVISIONS OF GENERAL APPLICATION
Section
1.1 Definitions
(a)
Except
as
otherwise expressly provided herein or unless the context otherwise requires,
the capitalized terms used in this Indenture shall have the respective meanings
specified in the Fifth Amended and Restated Standard Definitions set forth
as
Appendix
A
hereto,
which is incorporated herein by reference. The definitions of such terms are
equally applicable both to the singular and plural forms of such
terms.
(b) All
references in this instrument to designated “Articles,” “Sections,”
“Subsections” and other subdivisions are to the designated Articles, Sections,
Subsections and other subdivisions of this instrument as originally executed
or
if amended or supplemented, as so amended and supplemented. The words “herein,”
“hereof,” “hereunder” and other words of similar import refer to this Indenture
as a whole and not to any particular Article, Section, Subsection or other
subdivision.
-3-
Section
1.2 Acts
of Noteholders
(a) If,
at
any time, there is more than one Holder of the Notes, any request, demand,
authorization, direction, notice, consent, waiver or other action provided
by
this Indenture to be given or taken by the Noteholders shall, unless otherwise
expressly provided herein, be taken by the Holders of 51% of the aggregate
Note
Principal Balance of Notes Outstanding (the “Majority
Holders”)
and,
whether to be taken by all or less than all of the Holders, may be embodied
in
and evidenced by one or more instruments of substantially similar tenor signed
by such Noteholders in person or by an agent 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 herein 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 7.1) conclusive in
favor of the Trustee and the Issuer, if made in the manner provided in this
Section 1.2.
(b) The
fact
and date of the execution by any Person of any such instrument or writing may
be
proved in any manner which the Trustee reasonably deems sufficient.
(c) The
ownership of Notes shall be proved by the Note Register.
(d) Any
request, demand, authorization, direction, notice, consent, waiver or other
action by the Holder of any Note shall bind the Holder of every Note issued
upon
the registration of transfer thereof or in exchange therefor or in lieu thereof,
in respect of anything done, omitted or suffered to be done by the Trustee
or
the Issuer in reliance thereon, whether or not notation of such action is made
upon such Note.
Section
1.3. Notices,
etc. to Trustee, Issuer
and
IPHM
(a) Except
as
otherwise provided, any request, demand, authorization, direction, notice,
consent, waiver or Act of Noteholders or other document provided or permitted
by
this Indenture to be made upon, given or furnished to, or filed
with
(1)
|
the
Trustee by any Noteholder, by the Issuer or by IPHM shall be sufficient
for every purpose hereunder if made, given, furnished or filed in
writing
to or with the Trustee at its Corporate Trust Office;
or
|
(2)
|
the
Issuer or IPHM by the Trustee or by any Noteholder shall be sufficient
for
every purpose hereunder if in writing and mailed, registered mail
return
receipt requested or by overnight courier or hand delivery, to the
Issuer
addressed to it at 000 Xxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000, and
the
Manager at the same address or at any other address previously furnished
in writing to the Trustee by the
Issuer.
|
(b) Without
duplication, a party to this Indenture sending or delivering a notice of any
kind hereunder shall also provide a copy of the notice in any manner authorized
herein to each Noteholder at the Noteholder’s address as it appears on the Note
Register upon receiving such address from the Trustee or the Noteholder and,
in
any event, each such party shall also in similar fashion send a copy of such
notice to PartnerRe New Solutions Inc., Xxx Xxxxxxxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxxxxx 00000-6352.
Section
1.4. 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 by registered mail return receipt requested or by overnight
courier or hand delivery, to each Noteholder, at its address as it appears
on
the Note Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. Any notice which is
mailed in the manner herein provided shall be deemed effective upon receipt
or
refusal.
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 the 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 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 the 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 reasonably satisfactory to the Trustee shall be deemed to be a sufficient
giving of such notice.
Section
1.5. Effect
of Headings and Table of Contents
The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
-4-
Section
1.6. Successors
and Assigns
All
covenants and agreements in this Indenture by the Issuer shall bind its
successors and assigns, whether so expressed or not.
Section
1.7. Severability
In
case
any provision in this Indenture or in the Notes shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Section
1.8. Benefits
of Indenture
Nothing
in this Indenture or in the Notes, expressed or implied, shall give to any
Person, other than the parties hereto, and any of their successors hereunder
and
the Noteholders, any benefit or any legal or equitable right, remedy or claim
under this Indenture.
Section
1.9. Governing
Law
This
Indenture and each Note shall be construed in accordance with and governed
by
the laws of the State of New York applicable to agreements made and to be
performed therein without giving effect to principles of conflicts of law other
than Sections 5-1401 and 5-1402 of the General Obligations Law of the State
of
New York.
Section
1.10. Counterparts
This
Indenture may be executed in any number of counterparts, each of which so
executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
Section
1.11 Consents
Any
consent of any of the parties hereto required pursuant to this Indenture shall
not be unreasonably withheld or delayed.
Section
1.12. Effective
Date
This
Indenture shall not be effective until the Closing Date of the
Notes.
ARTICLE
II.
Section
2.1. Form
Generally
The
Notes
and the certificate of authentication shall be in substantially the form set
forth in Section 2.2 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 legends
or
endorsements placed thereon, as may be required to comply with the rules of
any
securities exchange on which the Notes may be listed, or as may, consistently
herewith, be determined by the officers executing such Notes, as evidenced
by
their execution of the Notes. Any portion of the text of any Note may be set
forth on the reverse thereof, with an appropriate reference thereto on the
face
of the Note.
-5-
Section
2.2. Form
of Note
THIS
NOTE
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR UNDER ANY STATE SECURITIES LAWS AND THE ISSUER HAS NOT
BEEN REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE
“INVESTMENT COMPANY ACT”), AND THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE OR
OTHERWISE TRANSFERRED WITHOUT REGISTRATION UNDER THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS EXCEPT IN A TRANSACTION THAT IS EXEMPTED UNDER
THE SECURITIES ACT (INCLUDING A TRANSFER MADE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT (“RULE 144A”)) AND APPLICABLE STATE SECURITIES LAWS.
EACH
HOLDER OF THIS NOTE MUST BE, AND BY VIRTUE OF HOLDING THIS NOTE SHALL BE DEEMED
TO HAVE REPRESENTED THAT IT IS, AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN
THE
MEANING OF RULE 501(a)(1), (2), (3) AND (7) UNDER THE SECURITIES ACT AND THAT
IT
WAS NOT FORMED TO PURCHASE NOTES.
THE
PRINCIPAL OF THIS NOTE IS PAYABLE ON THE PAYMENT DATES AND IN THE AMOUNTS
DESCRIBED HEREIN. ACCORDINGLY, THE OUTSTANDING NOTE PRINCIPAL BALANCE OF THIS
NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF AND MAY
BE
ASCERTAINED ONLY BY OBTAINING A CONFIRMATION THEREOF FROM THE TRUSTEE NAMED
HEREIN OR ITS SUCCESSOR.
The
Notes
may not be acquired or transferred to 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 Code, or any entity deemed to hold plan
assets of a benefit plan or plan unless the acquiror or the transferee
represents that its acquisition and holding of the Notes will at all times
be
exempt from the prohibited transaction provisions of ERISA and Section 4975
of
the Code under PTE 84-14, PTE 90-1, PTE 91-38, PTE 95-60 or PTE 96-23 or a
similar exemption.
The
Trustee and the Note Registrar shall not permit a transfer of a Note if such
transfer would result in the Issuer having more than eight (8) registered
Noteholders as shown in the Note Register or five (5) registered Noteholders
excluding the initial Noteholder and its direct transferees.
The
Holder of this Note is not a partnership, grantor trust or S corporation of
which (i) substantially all of the value of the interest of a person owning
an
interest in such entity is attributable to the entity’s (direct or indirect)
interest in the Note, and (ii) a principal purpose of the use of the tiered
arrangement is to permit the Issuer to satisfy the 100-person limitation in
paragraph (h)(1)(ii) of Section 1.7704-1 of the Treasury
Regulations.
-6-
No.
[___]
Initial
Note Principal
Balance
of the
Notes:
$[ ]
Initial
Note Principal
Balance
of this Note:
$[ ]
IP
HOLDINGS LLC
ASSET-BACKED
NOTES
ISSUE
DATE: ________, 2006
LEGAL
MATURITY DATE: February 22, 2016
IP
HOLDINGS LLC, a limited liability company duly organized and existing under
the
laws of the State of Delaware (the “Issuer,” which term includes any successor
entity under the Indenture referred to below), for value received, hereby
promises to pay to [PAYEE], or registered assigns (the “Payee”), the principal
sum of [ Dollars
($ )] payable on each Payment
Date in distributions of principal and interest as set forth in the Indenture,
but in no event less than the amounts set forth in the amortization schedule
attached hereto on each Payment Date (which, in connection with an Unscheduled
Amortization Events, shall be amended and restated by the Servicer such that
the
Notes will continue to amortize on a level debt service basis from the date
of
such Unscheduled Amortization Event to the Legal Maturity Date (with the
concurrence of the Noteholders that the revised schedule has been properly
determined)); provided,
however,
that
the Issuer shall only be required to make the principal payment under the
heading “Reserve Payments” on the amortization schedule attached hereto to the
extent of funds on deposit in the Liquidity Reserve Account and in accordance
with the provisions of Sections 13.1(a)(vi) and 13.2(b) of the Indenture. This
Note shall be a limited obligation of the Issuer, payable solely from and to
the
extent of the Collateral subject to the Lien of the Indenture (defined below).
This Note shall bear interest on the outstanding unpaid principal balance at
a
rate equal to the Note Interest Rate; provided,
however,
that
interest on any amount of principal or interest that is not timely paid when
due
shall accrue interest until paid at a rate per annum equal to 2% per annum
in
excess of the Note Interest Rate then in effect to the extent allowed by law
(the “Default Rate”); and, provided,
further,
that if
a Default shall have occurred under, and as defined in, the Indenture, interest
shall accrue from that time forward at the Default Rate, to the extent allowed
by law, until such Default is cured. All unpaid principal of and accrued
interest on the Notes shall be due and payable on February 22, 2016. The
interest and principal so payable on any Payment Date shall, as provided in
the
Indenture, be paid to the Person in whose name this Note is registered in the
Note Register on the Record Date for such Payment Date which shall be the close
of business on the last day of the month prior to such Payment Date (whether
or
not a Business Day). All terms used in this Note which are defined in the
Indenture shall have the meanings assigned to them in the Indenture. Certain
provisions of the Indenture are described in this Note.
-7-
The
principal of and interest on this Note are payable solely by wire transfer
to
the Person whose name appears as the Registered Holder of this Note on the
Note
Register on the Record Date for the Payment Date, in such coin or currency
of
the United States of America as at the time of payment is legal tender for
payment of public and private debts.
Unless
the certificate of authentication hereon has been executed by the Trustee whose
name appears below by manual signature, this Note shall not be entitled to
any
benefit under the Indenture, or be valid or obligatory for any
purpose.
This
Note
is one of a duly authorized issue of Notes of the Issuer designated as its
IP
Holdings LLC Asset-Backed Notes (the “Notes”) issued under a Fifth Amended and
Restated Indenture, dated as of August 28, 2006 (herein, called the
“Indenture”), by and between the Issuer and Wilmington Trust Company, as trustee
(the “Trustee”), which term includes any successor Trustee under the Indenture,
to which Indenture reference is hereby made for a statement of the respective
rights thereunder of the Issuer, the Trustee and the Holders of the Notes,
and
the terms upon which the Notes are, and are to be, authenticated and delivered.
This Note has been exchanged for the April Notes, which had an initial note
principal balance of $135,564,529, which had been exchanged for the September
Notes, which had an initial note principal balance of $103,000,000, which had
been exchanged for the July Notes, which had an initial note principal balance
of $63,000,000, which had been exchanged for the Original Notes and the
Subordinate Notes, which had initial note principal balances of $20,000,000
and
$3,600,000, respectively.
As
provided in the Indenture, the Notes are secured by and payable solely from
Assets conveyed to the Issuer by its present and former members, proceeds
thereof and other amounts, if any, held by the Trustee as security for the
Notes, (the “Collateral”) described in the Indenture. The Notes are equally and
ratably secured by the Collateral pledged therefor to the extent provided by
the
Indenture.
Unless
earlier declared due and payable by reason of an Event of Default, the Notes
are
payable at the time and in the manner provided in the Indenture and are
redeemable at the option of the Issuer before such time in whole or in part,
on
either a Payment Date or on the first Business Day of any calendar month if
there is no Payment Date occurring in such calendar month. The Notes shall
be
redeemed at a Redemption Price equal to the Note Principal Balance or portion
thereof to be redeemed, plus accrued interest thereon to the Redemption Date,
plus the Redemption Premium in the amount established under the Indenture
(unless the redemption is an Extraordinary Optional Redemption, a Liquidity
Reserve Fund Redemption, in which case no Redemption Premium shall be payable
or
a redemption made pursuant to Section 10.1(b) of the Indenture, in which case
the Redemption Price shall be calculated as set forth therein). If an Event
of
Default (as defined in the Indenture) shall occur and be continuing, the
principal of all the Notes may become or be declared due and payable in the
manner and with the effect provided in the Indenture.
-8-
The
Issuer may remove all or a portion of the Assets relating to any or all Primary
Marks from the Lien of the Indenture in accordance with Section 12.3 of the
Indenture upon giving notice to the Trustee and delivering the Release Price
of
the Assets to be removed to the Trustee or making a Grant of Defeasance
Securities. Any such election to remove Assets shall be deemed to be an exercise
of the option to redeem Notes as provided in the Indenture.
As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Note may be registered on the Note Register of the Issuer,
upon surrender of this Note for registration of transfer at the office or agency
of the Trustee in the United States of America, duly endorsed by, or accompanied
by a written instrument of transfer in form and content satisfactory to the
Issuer and the Trustee duly executed by, the Holder hereof or its attorney
duly
authorized in writing, and thereupon one or more new Notes, of authorized
denominations and for the same aggregate Initial Note Principal Balance, shall
be issued to the designated transferee or transferees.
Prior
to
due presentment for registration of transfer of this Note, the Issuer, the
Trustee and any agent of the Issuer or the Trustee may treat the Person in
whose
name this Note is registered as the owner hereof for the purpose of receiving
payment as herein provided and for all other purposes whether or not this Note
be overdue, and neither the Issuer, the Trustee, nor any such agent shall be
affected by notice to the contrary.
The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Issuer and
the
rights of the Holders of the Notes under the Indenture at any time by the Issuer
subject to procedures and approvals set forth in the Indenture. The Indenture
also contains provisions permitting the Noteholders to waive compliance by
the
Issuer with certain provisions of the Indenture and certain past defaults and
their consequences under the Indenture. Any such consent or waiver shall be
conclusive and binding upon the Noteholder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent
or
waiver is made upon this Note.
The
Notes
are issuable only in registered form without coupons in such authorized
denominations as provided in Section 3.2 of the Indenture and subject to certain
limitations therein set forth. The Notes are exchangeable for Notes of a like
Initial Note Principal Balance of a different authorized denomination, as
requested by the Holder surrendering same.
This
Note and the Indenture shall be governed by and construed in accordance with
the
laws of the State of New York without giving effect to principles of conflicts
of law other than Section 5-1401 and 5-1402 of the General Obligations Law
of
the State of New York.
No
reference herein to the Indenture and no provision of this Note or of the
Indenture shall alter or impair the obligation of the Issuer, which is absolute
and unconditional, to pay the principal of and interest on this Note in
accordance with the Indenture at the times, place and rate, and in the coin
or
currency, herein prescribed.
-9-
IP HOLDINGS LLC | ||
|
|
|
By: | IP Holdings and Management Corporation, its Manager | |
By: | ||
Name: |
||
Title: |
[FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION]
This
is
one of the Notes referred to in the within mentioned Indenture.
Dated: | |||
[TRUSTEE], not
in its individual capacity, but solely
as
Trustee
|
|||
By | |||
Authorized
Signatory
|
|||
-10-
ARTICLE
III.
Section
3.1. Designation
of Notes; Certain Related Provisions
The
Notes
shall be designated generally as the “IP Holdings LLC Asset-Backed Notes” of the
Issuer.
The
Notes
and all accrued interest thereon shall be due and payable on the Legal Maturity
Date to the extent not paid before such date.
All
calculations of interest on the Notes are to be determined as set forth in
the
definitions of the Candie’s/Xxx Xxxxx Note Interest Rate, the Rampage Note
Interest Rate, the Xxxx Note Interest Rate and the London Fog Note Interest
Rate.
The
aggregate Initial Note Principal Balance of the Notes that may be authenticated
and delivered hereunder is limited to $159,941,998, except for Notes issued
and
delivered upon registration of transfer of, or in exchange for, or in lieu
of,
other Notes, pursuant to Sections 3.4, 3.6 or 10.5 hereof.
The
Notes
are limited obligations of the Issuer, payable solely from and to the extent
of
the Collateral subject to the Lien of the Indenture.
Section
3.2 Denominations
The
Notes
are available in a minimum denomination of $2,500,000 and integral multiples
of
$1,000 in excess thereof.
Section
3.3. Execution,
Authentication, Delivery and Dating
The
April
Notes are hereby exchanged for Notes issued pursuant to this Indenture. For
the
avoidance of doubt, the indebtedness evidenced by the April Notes remains
outstanding and is consolidated with the indebtedness evidenced by the Notes
issued hereunder.
The
Notes
shall be executed on behalf of the Issuer by the President or one of its Vice
Presidents which may be in facsimile form or otherwise reproduced thereon.
The
signature of any of these officers on the Notes may be manual or facsimile.
The
Notes may be printed, lithographed, typewritten, mimeographed or otherwise
produced. The Notes need not be sealed.
Notes
bearing the manual or facsimile signatures of individuals who were at any time
the proper officers of the Issuer shall bind the Issuer, notwithstanding that
such individuals or any of them have ceased to hold such offices prior to the
authentication or delivery of such Notes or did not hold such offices at the
date of authentication or delivery of such Notes.
-11-
At
any
time and from time to time after the execution and delivery of this Indenture,
the Issuer may deliver Notes executed by the Issuer together with an Issuer
Order authorizing authentication thereof to the Trustee for authentication;
and
the Trustee shall authenticate and deliver such Notes as provided in this
Indenture, having an aggregate Initial Note Principal Balance not in excess
of
the amount stated in Section 3.1, and not otherwise.
Each
Note
shall bear on its face the Issue Date and the Legal Maturity Date and be dated
as of the date of its authentication.
No
Note
shall be entitled to any benefit under this Indenture or be valid or obligatory
for any purpose, unless there appears on such Note a certificate of
authentication substantially in the form provided for herein, executed by the
Trustee by the manual signature of one of its authorized officers, and such
certificate upon any Note shall be conclusive evidence, and the only evidence,
that such Note has been duly authenticated and delivered hereunder. Each Holder
shall provide the Trustee for recordation in the Note Register its mailing
address for notices under this Indenture.
Section
3.4. Registration,
Registration of Transfer and Exchange
The
Trustee is hereby appointed as registrar of the Notes (the “Note
Registrar”),
as
agent of the Issuer for transfer of the Notes (the “Transfer
Agent”)
and as
the agent of the Issuer for the payment of the Notes (the “Paying
Agent”)
and
the Trustee accepts such appointments. The Trustee in its capacity as the Note
Registrar shall cause to be kept a register (the “Note
Register”)
in
which, subject to such reasonable regulations as it may prescribe, the Trustee
shall provide for the registration of Notes and the registration of transfers
of
Notes.
Upon
surrender for registration of transfer of any Note at the office or agency
of
the Trustee to be maintained as provided in Section 11.2, the Issuer shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Notes of any authorized
denominations and of a like principal amount.
At
the
option of the Holder, Notes may be exchanged for other Notes of any authorized
denominations and of a like principal amount, upon surrender of the Notes to
be
exchanged at such office or agency. Whenever any Notes are so surrendered for
exchange, the Issuer shall execute, and the Trustee shall authenticate and
deliver the Notes which the Noteholder making the exchange is entitled to
receive.
All
Notes
issued upon any registration of transfer or exchange of Notes shall be the
valid
obligations of the Issuer, evidencing the same debt, entitled to the same
benefits and subject to all the terms and conditions of this Indenture, as
the
Notes surrendered upon such registration of such transfer or
exchange.
Every
Note presented or surrendered for registration of transfer or exchange shall
(if
so required by the Issuer or the Trustee) be duly endorsed, or be accompanied
by
a written instrument of transfer in form and content satisfactory to the Issuer
and the Trustee duly executed, by the Holder thereof or his attorney duly
authorized in writing. The form of assignment set forth at Exhibit
A
hereof
shall be deemed to be satisfactory for purposes of the last preceding sentence.
Concurrently with any transfer, the transferring Holder shall provide the
Trustee for recordation in the Note Register the mailing address of such
transferee for service of any notices to be delivered pursuant to this Indenture
and the payment of amounts due to such transferee.
-12-
No
service charge shall be made to a Holder for any registration of transfer or
exchange of Notes, but the Issuer or the Trustee may require payment of a sum
sufficient to cover any expense, tax or other governmental charge that may
be
imposed in connection with any registration of transfer or exchange of Notes,
other than exchanges pursuant to Section 10.5 not involving any registration
of
transfer.
Prior
to
any sale or other disposition of any Note the Holder transferring such Note
will, at its election, either endorse thereon the amount of principal paid
thereon and the last date to which interest has been paid thereon or surrender
such Note to the Trustee in exchange for a new Note or Notes pursuant to this
Section.
Section
3.5. Limitation
on Transfer and Exchange
The
Notes
have not been registered or qualified under the Securities Act or the securities
laws of any state. No transfer of any Note shall be made unless such transfer
is
made pursuant to an effective registration statement under the Securities Act
and registration or qualification under applicable state securities laws or
is
exempt from such registration or qualification. In the event that a transfer
is
to be made in reliance upon an exemption from the Securities Act and applicable
state securities laws, the Issuer shall require, in order to assure compliance
with the Securities Act, that the prospective transferee certify to the Issuer
and the Trustee in writing the facts surrounding the transfer in the form of
the
investment letter described in Exhibit
C
hereto
or such other form as the Issuer may agree to accept, in its sole discretion
(each such letter, an “Investment
Letter”).
Neither the Issuer nor the Trustee is obligated to register or qualify the
Issuer or Notes (or any offering or sale thereof) under the Securities Act
or
any other securities law.
While
not
conceding that the Issuer is an investment company within the meaning of the
Investment Company Act, in no event shall the transfer of a Note be permitted
if
the transfer would cause the loss to the Issuer of a necessary exemption under
the Investment Company Act of 1940, as amended.
The
Notes
may not be acquired or transferred to 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 Code, or any entity deemed to hold
plan assets of a benefit plan or plan unless the acquiror or the transferee
represents that its acquisition and holding of the Notes will at all times
be
exempt from the prohibited transaction provisions of ERISA and Section 4975
of
the Code under PTE 84-14, PTE 90-1, PTE 91-38, PTE 95-60 or PTE 96-23 or a
similar exemption.
-13-
The
Trustee and the Note Registrar shall not permit a transfer of a Note if such
transfer would result in the Issuer having more than eight (8) registered
Noteholders as shown in the Note Register or five (5) registered Noteholders
excluding the initial Noteholder and its direct transferees.
Further,
if its absence will be deemed adverse to the Issuer pursuant to an opinion
of
counsel to that effect, each purchaser of a Note other than the initial
purchaser of the Notes will be required to represent that it is not a
partnership, grantor trust or S corporation of which (i) substantially all
of
the value of the interest of a person owning an interest in such entity is
attributable to the entity’s (direct or indirect) interest in a Note, and (ii) a
principal purpose of the use of the tiered arrangement is to permit the Issuer
to satisfy the 100-person limitation in paragraph (h)(1)(ii) of Section 1.7704-1
of the Treasury Regulations.
The
Issuer and the Trustee shall have no liability to the Noteholders or otherwise
arising from a transfer of any such Note in reliance upon the Investment Letter
delivered in connection therewith.
Section
3.6. Mutilated,
Destroyed, Lost or Stolen Notes
If
(i)
any mutilated Note is surrendered to the Trustee, or the Trustee receives
evidence to its satisfaction of the destruction, loss or theft of any Note,
and
(ii) there is delivered to the Trustee such security or indemnity as may be
required by the Trustee to indemnify and hold the Issuer and the Trustee
harmless (which in the case of any Holder that is, or is a subsidiary of, a
bank
or other institutional buyer with a net worth of at least $50,000,000, and
whose
claims paying ability or long-term debt is rated at least investment grade
or
better by a Rating Agency, need only be such bank’s or institutional buyer’s
unsecured written promise of indemnity), then, in the absence of notice to
the
Issuer or the Note Registrar that such Note has been acquired by a bona fide
purchaser, the Issuer shall execute and upon its request the Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a new Note of the same tenor and principal
amount, bearing a number not contemporaneously outstanding; provided,
however,
that if
any such mutilated, destroyed, lost or stolen Note shall have become or shall
be
about to become due and payable the Issuer in its discretion may, instead of
issuing a new Note, pay such Note.
Upon
the
issuance of any new Note under this Section, the Issuer or the Trustee may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto, but no service charge may be
imposed in connection therewith.
Every
new
Note issued pursuant to this Section in lieu of any destroyed, lost or stolen
Note shall constitute an original additional contractual obligation of the
Issuer, whether or not the destroyed, lost or stolen Note 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.
-14-
The
provisions of this Section are exclusive and shall preclude (to the extent
lawful) all other rights and remedies with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Notes.
Section
3.7. Payment
of Principal and Interest
The
principal of and interest on the Notes are payable by wire transfer in
immediately available funds to the account specified in directions delivered
at
least five (5) Business Days prior to such Payment Date by a Registered Holder
to the Person whose name appears as the Registered Holder of such Note on the
Record Date on the Note Register. Such payment shall be in such coin or currency
of the United States of America as at the time of tender is legal tender for
the
payment of public and private debts. Payments pursuant to Section 13.1 shall
be
made to each Noteholder based on the Percentage Interests represented by Notes
held by such Noteholder. Upon the final payment in full of any Note, the Holder
shall promptly surrender such Note at the Corporate Trust Office of the Trustee.
To
prevent backup withholding on payments made with respect to the Notes, each
Noteholder is required to provide the Trustee with (i) the Noteholder’s correct
TIN by completing the form at Exhibit
D
(Substitute Form W-9), certifying that the TIN provided on the Substitute Form
W-9 is correct (or that such Noteholder is awaiting a TIN) and that (A) such
Noteholder is exempt from backup withholding, (B) the Noteholder has not been
notified by the IRS that the Noteholder is subject to backup withholding as
a
result of failure to report all interest or dividends or (C) the IRS has
notified the Noteholder that the Noteholder is no longer subject to backup
withholding, or (ii) if applicable, an adequate basis for exemption. A Foreign
Noteholder may qualify as an exempt recipient by submitting to the Trustee
a
properly completed IRS Form W-8BEN or W-8ECI, as applicable, signed under
penalties of perjury, attesting to that Noteholder’s exempt status.
Section
3.8. Persons
Deemed Owners
Prior
to
due presentment for registration of transfer of any Note, the Issuer, the
Trustee and any agent of the Issuer or the Trustee may treat the Person in
whose
name any Note is registered as the owner of such Note for the purpose of
receiving payments of principal of and interest on such Note (subject to Section
3.7) and for all other purposes whatsoever, whether or not such Note be overdue,
and neither the Issuer, the Trustee nor any agent of the Issuer or the Trustee
shall be affected by notice to the contrary.
Section
3.9. Cancellation
All
Notes
surrendered to the Trustee following payment or for registration of transfer
or
exchange (including Notes surrendered to any Person other than the Trustee
which
shall be delivered to the Trustee) shall be promptly canceled and destroyed
by
the Trustee in accordance with its customary procedures.
-15-
ARTICLE
IV.
The
Notes
shall be executed by the Issuer and delivered to the Trustee for authentication
and thereupon the same shall be authenticated and delivered by the Trustee
upon
Issuer Order, and upon delivery to the Trustee of the following:
(a) a
certificate, certified by the Issuer, authorizing the execution and delivery
of
this Indenture and the Notes;
(b) either
(i) a certificate or other official document evidencing the due authorization,
approval or consent of any government body or bodies, at the time having
jurisdiction in the premises, and that the authorization, approval or consent
of
no other governmental body is required for valid issuance of the Notes, or
(ii)
an Opinion of Counsel that no such authorization, approval or consent of any
governmental body is required;
(c) an
Officer’s Certificate from the Issuer stating that the Issuer is not, as of the
Issue Date, in Default under this Indenture and that the issuance of the Notes
will not result in any breach of any of the terms, conditions or provisions
of,
or constitute a default under, the Issuer’s organizational documents or any
indenture, mortgage, deed of trust or other agreement or instrument to which
the
Issuer is a party or by which it is bound, or any order of any court or
administrative agency entered in any proceeding to which the Issuer is a party
or by which it may be bound or to which it may be subject; and that all
conditions precedent provided in this Indenture relating to the authentication
and delivery of the Notes have been complied with;
(d) duly
executed copies of all Transaction Documents; and
(e) such
other documents as the Trustee may reasonably require.
ARTICLE
V.
Section
5.1. Satisfaction
and Discharge of Indenture
This
Indenture shall cease to be of further effect (except as to any surviving rights
of indemnification, payment of fees and registration of transfer and exchange
or
payment) with respect to the Notes 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
shall
pay, assign, transfer and deliver to the Issuer upon Issuer Order all cash,
securities and all other property held by it as part of the Collateral (except
for amounts required to pay and discharge the entire indebtedness of the Notes),
when
(a) |
either:
|
-16-
(i)
|
all
Notes theretofore authenticated and delivered (other than (i) Notes
which have
been destroyed, lost or stolen and which have been replaced or paid
as
provided in Section 3.6, and (ii) Notes for whose payment money has
theretofore been deposited in trust or segregated and held in trust
by the
Issuer and thereafter repaid to the Issuer or discharged from such
trust,
as provided in Section 11.3) have been delivered to the Trustee for
cancellation; or
|
(ii)
|
all
Notes not theretofore delivered to the Trustee for cancellation have
become due and payable and the Issuer has irrevocably deposited or
caused
to be deposited with the Trustee, in trust for the purpose, an amount
sufficient to pay and discharge the entire indebtedness on such Notes
together with all accrued interest thereon not theretofore delivered
to
the Trustee for cancellation;
|
(b) |
the
Issuer has paid or caused to be paid all other sums payable hereunder
by
the Issuer; and
|
(c) |
the
Issuer has delivered to the Trustee an Officer’s Certificate stating that
all conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture with respect to the Notes have been
complied with.
|
Notwithstanding
the satisfaction and discharge of this Indenture, the Issuer’s obligations in
Sections 3.4, 3.6, 7.7, 11.2 and 11.3, the Trustee’s obligations hereunder and
the Paying Agent’s obligations in Section 5.2 and the rights and immunities of
the Trustee under this Indenture shall survive until the Notes are no longer
Outstanding. Thereafter, the obligations of the Issuer in Section 7.7 and the
Trustee in Section 5.2 and the rights and immunities of the Trustee under this
Indenture shall survive the discharge of this Indenture or the earlier
resignation or removal of the Trustee.
Section
5.2. Application
of Trust Money
All
monies deposited with the Paying Agent pursuant to Section 12.1 shall be held
in
trust and applied by it, in accordance with the provisions of the Notes and
this
Indenture, to the payment, to the Persons entitled thereto, of the principal
and
interest for whose payment such money has been deposited with the Paying Agent
and such money shall be segregated from all other funds as required herein
or
required by law.
Section
5.3. Discharge
of Security Interest
Upon
satisfaction and discharge of the Indenture as specified in Section 5.1, the
Trustee shall execute a release of the Collateral provided by and at the expense
of the Issuer. Further, on demand of and at the expense of the Issuer and upon
being supplied with instruments appropriate for the purpose, the Trustee shall
execute and the Issuer shall file all documents (including without limitation
UCC Form 3) necessary to discharge all liens, mortgages, chattel mortgages
and
other security interests filed with any governmental board or body with respect
to the Collateral, and the Trustee shall otherwise cooperate in any way
reasonably necessary to restore full unencumbered title in the Collateral to
the
Issuer or its designee.
-17-
ARTICLE
VI.
Section
6.1. Events
of Default
“Event
of Default”
wherever used herein means any one of the following events (whatever the reason
for such Event of Default and without regard to 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) and when used with respect to the Notes
shall mean the same occurring at any time while there are Notes Outstanding
(except that no event of default under the Management Agreement or the Back-Up
Management Agreement shall, in and of itself, constitute an Event of
Default):
(1)
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the
Issuer shall fail to comply with Section 11.7(iii)(a) of this
Indenture or IPHM shall fail to comply with Section 14.2 of this
Indenture;
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(2)
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failure
by the Issuer to make payments of principal of and interest on the
Notes
as and when due pursuant to the terms and provisions of the Notes
and this
Indenture;
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(3)
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default
in the performance by, or breach of any covenant of, the Issuer in
any
Transaction Document to which it is a party (not referenced in clause
(1)
or clause (2) above) and continuance of such default or breach for
a
period of thirty (30) days after the earlier of (A) the date on
which an officer of the Managing Member of the Issuer first has actual,
personal knowledge (or, in the exercise of reasonable care, should
have
known) of such default or breach and (B) the date on which written
notice, specifying in reasonable detail, such default or breach and
requiring it to be remedied and stating that such notice is a “Notice of
Default” hereunder shall have been given to the
Issuer;
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(4)
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a
failure of any representation or warranty of the Issuer in this Indenture
to be true and correct as and when made, which failure has a material
adverse effect on the interests of the Noteholders and which, if
susceptible of being cured, remains uncured after the earlier of
(A) thirty (30) days after the date on which an officer of the
Managing Member of the Issuer first has actual, personal knowledge
(or, in
the exercise of reasonable care, should have known) of such failure
and
(B) the date which is thirty (30) days after written notice,
specifying in reasonable detail, such breach and requiring it to
be
remedied and stating that such notice is a “Notice of Default” hereunder
shall have been given to the Issuer; provided,
however,
any such failure of a representation or warranty as to an Asset that
is
set forth in Section 11.16 hereof shall not result in an Event of
Default unless the cure or payment of the Release Price for such
Asset or
acquisition and Grant of Defeasance Securities by the Issuer is required
in accordance with Section 12.3 of this Indenture and is not achieved
or paid as and when required;
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(5)
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the
entry of a decree or order for relief by a court having jurisdiction
in
respect of the Issuer in an involuntary case under the federal bankruptcy
laws, as now or hereafter in effect, or any other present or future
federal or state bankruptcy, insolvency or similar law, or appointing
a
receiver, liquidator, assignee, trustee, custodian, sequestrator
or other
similar official of the Issuer or of any substantial part of its
property,
or ordering the winding up or liquidation of the affairs of the Issuer
and
the continuance of any such decree or order unstayed and in effect
for a
period of 90 consecutive days;
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(6)
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the
commencement by the Issuer of a voluntary case under the federal
bankruptcy laws, as now or hereafter in effect, or any other present
or
future federal or state bankruptcy, insolvency or similar law, or
the
consent by the Issuer to the appointment of or taking possession
by a
receiver, liquidator, assignee, trustee, custodian, sequestrator
or other
similar official of the Issuer or any substantial part of its property
or
the making by the Issuer of an 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 partnership action by the Issuer in furtherance
of
any of the foregoing; or
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(7)
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any
Note remains Outstanding on the first Payment Date following the
Payment
Date on which the DSCR is 1.0 or less (as set forth in the related
Servicer Report).
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Section
6.2. Acceleration
of Maturity, Rescission and Annulment
If
an
Event of Default of the kind specified in clauses (5), (6) and (7) of Section
6.1 occurs, the unpaid principal amount of all of the Notes shall automatically
become immediately due and payable without notice, presentment or demand of
any
kind. If an Event of Default (other than an Event of Default of the kind
specified in clauses (5), (6) and (7) of Section 6.1) occurs and is continuing
of which a Responsible Officer of the Trustee has actual knowledge, then, and
in
every such case the Trustee or Majority Holders pursuant to an Act may declare
the principal of all of the Notes to be immediately due and payable, by a notice
in writing to the Issuer (and to the Trustee if given by Noteholders) and upon
any such declaration (in accordance with this sentence or the preceding
sentence), the Notes shall become immediately due and payable together with
accrued and unpaid interest and a Redemption Premium.
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At
any
time after such a declaration of acceleration has been made, but before any
Sale
of the Collateral has been made or a judgment or decree for payment of the
money
due has been obtained by the Trustee as hereinafter in this Article provided,
the Majority Holders by an Act and evidenced by a written notice delivered
to
the Issuer and the Trustee, may rescind and annul such declaration and its
consequence if:
(i)
the
Issuer has paid or deposited with the Trustee a sum sufficient to
pay:
(1) |
all
overdue installments of interest on all
Notes;
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(2)
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the
principal of any of the Notes which has become due other than by
such
declaration of acceleration and interest thereon at the Default Rate
(to
the extent permitted by applicable
law);
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(3) |
to
the extent that payment of such interest is lawful, interest upon
overdue
installments of interest on the Notes at the rate specified therefor
in the Notes;
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(4) |
in
connection with the preservation of the Collateral and enforcement
of its rights all sums paid or advanced by the Noteholders
hereunder and the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel; and
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(5) |
all
Events of Default, other than the nonpayment of the principal of
the
Notes which have become due solely by such acceleration, have
been cured or waived as provided in Section
6.13.
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No
such
rescission shall affect any subsequent default or impair any right consequent
thereon.
Subsequent
to any such declaration of acceleration and so long as such declaration and
its
consequences have not been rescinded and annulled, prior to the exercise by
the
Trustee of the remedies set forth in Section 6.3 the Trustee shall give the
Issuer and the Noteholders ten (10) days notice of its intention to take such
actions.
Section
6.3. Remedies
If
an
Event of Default shall have occurred and be continuing, the Trustee may, and
by
an Act of the Majority Holders and subject to Article VII herein pursuant to
specific instruction shall, do one or more of the following:
(a)institute
Proceedings for the collection of all amounts then payable on the Notes or
under
this Indenture, whether by declaration or otherwise, enforce any judgment
obtained, and collect from the Collateral securing the Notes (including any
amounts in the Liquidity Reserve Account, the Renewal Reserve Account, the
Defeasance Account and the Prepaid Fee and Royalty Account) the monies adjudged
due;
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(b)
sell
the
Collateral or any portion thereof or rights or interest therein, at one or
more
Sales called and conducted in any manner permitted by law;
(c)
institute
Proceedings from time to time for the complete or partial foreclosure of
this
Indenture with respect to any portion of the Collateral securing the Notes;
and
(d)
exercise
any remedies of a secured party under the Uniform Commercial Code or other
applicable law and take any other appropriate action to protect and enforce
the
rights and remedies of the Trustee or the Holders of the Notes
hereunder;
provided,
however,
that if
there is more than one Holder of Outstanding Notes and if less than all of
the
Holders of Outstanding Notes have approved a Sale of the Collateral and if
the
proceeds of any such Sale will be less than the amount required to retire all
of
the Outstanding Notes in full, then, in any such event, the Trustee may not
sell
or otherwise liquidate any of the Collateral unless after consultation with
an
independent accounting firm or another Person approved by Act of the Majority
Holders of national reputation in the field of appraisal of assets of the type
constituting the Collateral, such Person provides the Trustee with a written
report that the proceeds of such Sale reflect a reasonable approximation of
the
fair market value of the Collateral. The Trustee shall have no liability for
any
public Sale or private Sale conducted in reliance upon the advice, with respect
to the commercial reasonableness of the sale, of a Person of national reputation
in the field of appraisal. In the event that the Trustee does not sell or
otherwise liquidate the Collateral, it shall continue to hold such Collateral
and make distributions therefrom pursuant to Article XIII hereof.
Section
6.4. Trustee
May File Claim
In
case
of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
Proceeding, relating to the Issuer or any other obligor upon the Notes or the
property of the Issuer or of such other obligor or their creditors, the Trustee
(irrespective of whether the principal of the 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 on the Issuer for the payment
of
overdue principal or interest) shall be entitled and empowered, to intervene
in
such proceeding or otherwise:
(i)
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to
file and prove a claim for all amounts owing and unpaid in respect
of the
Notes and to file such other papers or documents and take such other
action including participating as a member, voting or otherwise,
in any
committee of creditors appointed in the matter, 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 of the Noteholders allowed
in
such judicial Proceeding;
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(ii)
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to
petition for lifting of the automatic stay and thereupon to foreclose
upon
the Collateral as elsewhere provided herein;
and
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(iii)
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to
collect and receive any monies or other property payable or deliverable
on
any such claims and to distribute the
same;
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and
any
receiver, assignee, trustee, liquidator, or sequestrator (or other similar
official) in any such judicial Proceeding is hereby authorized by each
Noteholder 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
Noteholders, to pay to 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
7.7.
Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Noteholder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes
or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Noteholder in any such Proceeding.
All
rights of actions and claims under this Indenture or the 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 Proceedings
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and 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 benefit of the Holders of the
Notes in respect of which such judgment has been recovered applied to payments
on the Notes in the order set forth in Section 6.6.
Section
6.6. Allocation
of Money Collected
If
the
Notes have been declared due and payable following an Event of Default and
such
declaration and its consequences have not been rescinded and annulled, any
money
collected by the Trustee with respect to the Notes pursuant to this Article
(and
any funds then held or thereafter received by the Paying Agent) shall be applied
in the following order, at the date or dates fixed by the Paying
Agent:
FIRST:
To
the payment of all amounts due the Trustee;
SECOND:
To the payment of all amounts due the Servicer under the Servicing Agreement,
including all earned and due but unpaid Servicing Fees and Servicer
Costs;
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THIRD:
To
the payment of all reasonable costs and expenses incurred by any Noteholder
in
connection with the enforcement of its rights hereunder or under the Notes,
ratably, without preference or priority of any kind;
FOURTH:
To the payment of accrued interest on and the Note Principal Balance of the
Notes, including interest at the Default Rate (to the extent such interest
has
been collected by the Paying Agent or a sum sufficient therefor has been so
collected and payment thereof is legally enforceable at the rate prescribed
therefor in the Notes or in this Indenture) on overdue installments of principal
and interest, ratably, without preference or priority of any kind, according
to
the amounts due and payable on the Notes;
FIFTH:
To
the payment of all earned and due but unpaid fees and expenses of the Manager
and the Back-Up Manager, if any;
SIXTH:
[Reserved]
SEVENTH:
To the payment of all earned and due but unpaid Structuring Fee
amounts.
EIGHTH:
To the payment of any surplus to or at the written direction of the Issuer
or
any other person legally entitled thereto.
Section
6.7. Limitation
on Suits
No
Holder
shall have any right to institute any Proceeding, judicial or otherwise, with
respect to this Indenture, or for the appointment of a receiver or trustee,
or
for any other remedy hereunder, unless:
(1)
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such
Holder has previously given written notice to the Trustee of a continuing
Event of Default;
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(2)
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the
Holders of 25% or more of the aggregate Note Principal Balance of
the
Outstanding Notes shall have made written request to the Trustee
to
institute Proceedings in respect of such Event of Default in its
own name
as Trustee hereunder;
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(3)
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such
Holder or Holders have offered to the Trustee indemnity satisfactory
to it
(which, in the case of a holder that is, or is a subsidiary of, a
bank or
other institutional buyer with a net worth of at least $50,000,000
and
whose claims paying ability or long-term debt is rated at least investment
grade or better by a Rating Agency need only be such bank’s or
institutional buyer’s unsecured written promise of indemnity) against the
costs, expenses and liabilities to be incurred in compliance with
such
request;
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(4)
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the
Trustee for 60 days after its receipt of such notice, request and
offer of
indemnity has failed to institute any such Proceeding;
and
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(5)
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no
direction inconsistent with such written request has been given to
the
Trustee during such 60 day period by the Majority
Holders;
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it
being
understood and intended that no one or more Holders 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 Holders or to enforce
any right under this Indenture, except in the manner herein
provided.
Notwithstanding
any other provision in this Indenture, the Holder of any Note shall have the
right, which is absolute and unconditional, to receive payment of the principal
of and interest on such Note as such principal and interest becomes due and
payable and to institute suit for the enforcement of any such payment, and
such
right shall not be impaired without the consent of such Holder; provided,
however,
that
neither the Holder of any Note nor the Trustee shall, if requested by the
Noteholders, petition or otherwise invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against the Issuer
under any federal or state bankruptcy, insolvency or similar law or appointing
a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Issuer or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the
Issuer.
Section
6.9. Restoration
of Rights and Remedies
If
the
Trustee or any Noteholder has instituted any Proceeding to enforce any right
or
remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Person who
instituted the Proceeding, 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 has been instituted.
Section
6.10. Rights
and Remedies Cumulative
No
right
or remedy herein conferred upon or reserved to the Trustee or to the Noteholders
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.
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Section
6.11. Delay
or Omission Not Waiver
No
delay
or omission of the Trustee or of any Noteholder to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to
the
Noteholders, or any of them, may be exercised from time to time, and as often
as
may be deemed expedient, by the Trustee or by the Noteholder or Noteholders,
as
the case may be.
Section
6.12. Control
by Noteholders
The
Majority Holders shall have the right to direct the decision whether to conduct,
and 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 with respect to the Notes; provided
that:
(1)
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such
direction shall not be in conflict with any rule of law or with this
Indenture; and
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(2)
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the
Trustee may take any other action deemed proper by the Trustee which
is
not inconsistent with such direction; provided,
however,
that, subject to Section 7.1, the Trustee need not take any action
which
it determines might involve it in liability or be unjustly prejudicial
to
the Noteholders not consenting.
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Section
6.13. Waiver
of Past Defaults
The
Noteholders may waive any past Default with respect to the Notes hereunder
and
its consequences, except a Default
(1) |
described
in Sections 6.1(5) and (6), or
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(2)
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in
respect of a covenant or provision hereof which under Article IX
cannot be
modified or amended without the consent of the Holder of each Outstanding
Note affected thereby.
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Upon
any
such waiver, such Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this
Indenture. Upon receipt of notice of such waiver, the Trustee shall transmit
by
mail to the Issuer and the Servicer notice of such waiver specifying the date
on
which the Default was waived promptly after the occurrence of such
waiver.
Section
6.14. Undertaking
for Costs
All
parties to the Indenture and each Noteholder by its acceptance of a Note 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 attorney’s 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 6.14 shall not apply to any suit instituted by the Trustee, to any
suit
instituted by any Noteholder, or the Majority Holders or to any suit instituted
by any Noteholder for the enforcement of the payment of principal of or interest
on any Notes on or after the Legal Maturity Date (or, in the case of redemption
of Notes, on or after the applicable Redemption Date).
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Section
6.15. Waiver
of Stay or Extension Laws
The
Issuer covenants (to the extent that it may lawfully do so) that it will not
at
any time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or
at
any time hereafter in force, which may affect the covenants or the performance
by the Issuer under 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.
Section
6.16. Sale
of Collateral
(a) The
power
to effect any sale (a “Sale”)
of any
portion of the Collateral pursuant to Section 6.3 shall not be exhausted by
any
one or more Sales as to any portion of the Collateral remaining unsold, but
shall continue unimpaired until the entire Collateral securing the Notes shall
have been sold or all amounts payable under this Indenture with respect thereto
shall have been paid. Any Sale conducted hereunder shall be completed in
accordance with the applicable terms and provisions of the New York State
Uniform Commercial Code. The Trustee may from time to time postpone any Sale
by
public announcement made at the time and place of such Sale. It is hereby
expressly agreed that the Trustee is not limited to any amount fixed by law
as
compensation for any Sale, so long as the same shall be reasonable.
(b) Any
Noteholder may bid for and acquire any portion of the Collateral securing the
Notes in connection with any Sale thereof. In lieu of paying cash for the entire
purchase price therefor, such Noteholder, after deducting the costs, charges
and
expenses (including reasonable attorney’s fees and expenses) incurred by the
Trustee in connection with such Sale may make settlement for any portion of
the
purchase price remaining by crediting against amounts owing on the Notes held
by
it or other amounts owing to such Noteholder secured by this Indenture, the
portion of the net proceeds of such Sale to which such Noteholder would be
entitled hereunder.
(c) The
Issuer covenants and agrees that ten (10) Business Days prior notice of a Sale
of the entirety of the Collateral by a public Sale is a commercially reasonable
notice.
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(d) The
Trustee shall execute and deliver an appropriate instrument of conveyance
transferring its interest in any portion of the Collateral in connection with
a
Sale thereof, which Sale shall be at the expense of the Issuer. In addition,
the
Servicer is hereby irrevocably appointed the agent and attorney-in-fact of
the
Issuer to cause the transfer and conveyance of the Issuer’s interest in any
portion of the Collateral in connection with a Sale thereof pursuant to the
terms of this Indenture, and to take all action necessary to effect such Sale.
No purchaser or transferee at such a sale shall be bound to ascertain the
Servicer’s or the Trustee’s authority, inquire into the satisfaction of any
conditions precedent or see to the application of any monies.
(e) Any
amounts received by the Noteholders in connection with a public or private
sale
pursuant this Section shall be deemed to be conclusive and binding upon the
parties hereto and the Noteholders shall have no liability in respect
hereto.
Section
6.17. Action
on Notes
The
Noteholder’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 Noteholders shall be impaired by
the
recovery of any judgment by the Noteholders against the Issuer or by the levy
of
any execution under such judgment upon any portion of the Collateral or upon
any
of the assets of the Issuer.
ARTICLE
VII.
Section
7.1. Certain
Duties and Responsibilities
of
Trustee
(a) Except
during the continuance of an Event of Default, the Trustee undertakes to perform
such duties and only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read into this
Indenture against the Trustee.
(b) In
case
an Event of Default has occurred and is continuing and is actually known to
a
Responsible Officer of the Trustee, 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 person would exercise or use
under the circumstances in the conduct of his own affairs.
(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, except that:
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(1)
|
this
Subsection shall not be construed to limit the effect of Subsection
(a) of
this Section;
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(2) |
the
Trustee shall not be liable for any error of judgment made in good
faith
by a Responsible Officer, unless it shall be proved that the Trustee
was
negligent in ascertaining
the pertinent facts;
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(3)
|
the
Trustee shall not be liable with respect to any action taken or omitted
to
be taken by it in good faith in accordance with the direction of
the
Holders of a majority of aggregate Note Principal Balance of Outstanding
Notes relating to the time, method and place of conducting any Proceeding
for any remedy available to the Trustee, or exercising any trust
or power
conferred upon the Trustee, under this Indenture with respect to
the
Notes;
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(4) |
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 or powers, if it shall have
reasonable
grounds for believing that repayment of such funds or indemnity
satisfactory to it against such risk or liability is not reasonably
assured to it (which, in the case of a Holder that is, or is a subsidiary
of, a bank or other institutional
buyer with a net worth of at least $50,000,000 and whose long-term
debt or
claims paying ability is rated at least investment grade by a Rating
Agency need only be such bank’s or institutional buyer’s unsecured written
promise of indemnity), provided,
that nothing herein contained shall excuse the Trustee for failure
to
perform its duties as Trustee under this
Indenture;
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(5)
|
the
Trustee shall not be charged with knowledge of any default hereunder
or
unless one of its Responsible Officers has actual knowledge
thereof;
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(6)
|
the
Trustee shall have no obligation to ascertain whether any payment
of
interest on an overdue installment of interest is legally enforceable;
and
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(7)
|
in
the absence of bad faith on its part, the Trustee may conclusively
rely,
as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the
Trustee
and conforming to the requirements of this Indenture; but 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 be
under a duty to examine the same to determine whether or not they
conform
to the requirements of this
Indenture.
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(d) Whether
or not therein expressly so provided, 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.
(e) The
Trustee is hereby authorized to execute the Servicing Agreement and the Security
Agreements.
Section
7.2. Notice
of Default, Cure or Waiver
Promptly
after the occurrence of any Default actually known to a Responsible Officer
of
Trustee, the Trustee shall transmit to all Holders, as their names and addresses
appear on the Note Register, notice of such Default hereunder known to the
Trustee.
Section
7.3. Certain
Rights of Trustee
Subject
to Section 7.1:
(a) the
Trustee may conclusively rely and shall be fully protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, note or
other
obligation, paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) any
request or direction of the Issuer mentioned herein shall be sufficiently
evidenced by an Issuer Order;
(c) whenever
in the administration of this Indenture the Trustee shall deem it desirable
that
a matter be proved or established prior to taking, suffering or omitting any
action hereunder, the Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its part, rely upon an Officers’
Certificate of the Issuer;
(d) the
Trustee may consult with counsel and the advice of such counsel or any Opinion
of Counsel shall be full and complete authorization and protection in respect
of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon;
(e) the
Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the written request or direction of any of
the
Noteholders pursuant to this Indenture, unless such Noteholders shall have
offered to the Trustee security or indemnity satisfactory to it (which, in
the
case of a holder that is, or is a subsidiary of, a bank or other institutional
buyer with a net worth of at least $50,000,000 and whose claims paying ability
or long-term debt is rated at least investment grade or better by a Rating
Agency need only be such bank’s or institutional buyer’s unsecured written
promise of indemnity) against the costs, expenses and liabilities which might
be
incurred by it in compliance with such request or direction;
-29-
(f) the
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, note or other paper or
document, 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, attorney, custodian or nominee; and
(g) the
Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents, attorneys, custodians or
nominees and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent, attorney, custodian or nominee appointed
with due care by it hereunder.
Except
as
otherwise agreed in writing, the Trustee shall not be responsible for the
payment of any interest on amounts deposited with it hereunder.
Section
7.4. Not
Responsible for Recitals or Issuance of Notes
(a) The
recitals contained herein and in the Notes, except the certificates of
authentication on the Notes, shall be taken as the statements of the Issuer,
and
the Trustee assumes no responsibility for their correctness. The Trustee makes
no representations as to the validity, adequacy or condition of the Collateral
or any part thereof, or as to the title of the Issuer thereto or as to the
security afforded thereby or hereby, or as to the validity or genuineness of
any
securities at any time pledged and deposited with the Trustee hereunder or
as to
the validity or sufficiency of this Indenture or of the Notes. The Trustee
shall
not be accountable for the use or application by the Issuer of the Notes or
the
proceeds thereof or of any money paid to the Issuer upon Issuer
Order.
(b) Except
as
otherwise expressly provided herein and without limiting the generality of
the
foregoing, the Trustee shall have no responsibility or liability for or with
respect to the existence or validity of any Collateral or validity of the
assignment of any portion of the Collateral to the Trustee or of any intervening
assignment.
(c) The
Trustee shall not have any obligation or liability under any Collateral by
reason of or arising out of this Indenture or the granting of a security
interest in such Collateral hereunder or the receipt by the Trustee of any
payment relating to any Collateral pursuant thereto, nor shall the Trustee
be
required or obligated in any manner to perform or fulfill any of the obligations
of the Issuer under or pursuant to any Collateral, or to make any payment,
or to
make any inquiry as to the nature or the sufficiency of any payment received
by
it, or the sufficiency of any performance by any party, under any
Collateral.
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Section
7.5. May
Hold Notes
The
Trustee, Note Registrar or any other agent of the Issuer, in its individual
or
any other capacity, may become the owner or pledgee of Notes and if operative,
may otherwise deal with the Issuer with the same rights it would have if it
were
not Trustee, Note Registrar or such other agent.
Section
7.6. Money
Held in Trust
Money
held by the Trustee in trust hereunder shall be segregated from other funds
held
by the Trustee. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed in writing with the
Issuer.
Section
7.7. Compensation
and Reimbursement
The
Issuer agrees:
(1)
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to
pay the Trustee in accordance with a separate fee agreement and such
fees
in accordance with Section 13.1 hereof, as reasonable compensation
for all
services rendered by it hereunder (which Trustee Fee shall not be
limited
by any provision of law in regard to the compensation of a trustee
of an
express trust);
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(2)
|
except
as otherwise expressly provided herein, to reimburse the Trustee
upon its
written request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision
of this
Indenture (including the reasonable compensation and the expenses
and
disbursements of the Trustee’s agents and counsel), except any such
expense, disbursement or advance as may be attributable to its negligence
or bad faith; and
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(3)
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to
indemnify the Trustee its officers, directors, employees and agents
for,
and to hold them harmless against, any loss, liability, obligation,
damage, penalty, tax, claim, action, investigation, proceeding, cost,
disbursement or expense incurred without negligence or bad faith
on their
part, arising out of or in connection with the acceptance or
administration of this trust and performance hereunder, including
the
reasonable costs and expenses of defending itself against any claim
or
liability in connection with the exercise or performance of any of
its
powers or duties hereunder.
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The
provisions of this Section 7.7 shall survive any expiration or termination
of
this Indenture.
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Section
7.8. Corporate
Trustee Requirement Eligibility
There
shall at all times be a Trustee hereunder which shall (a) be a depository
institution, banking corporation or trust company organized and doing business
under the laws of the United States of America or of any state, authorized
under
such laws to exercise corporate trust powers and (b) meet the requirements
of an
Eligible Financial Institution. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
Section
7.9. Resignation
and Removal; Appointment of Successor
(a) No
resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee under Section 7.10.
(b) The
Trustee may resign at any time by giving written notice thereof to the Issuer
and the Noteholders. If an instrument of acceptance by a successor Trustee
shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(c) The
Trustee may be removed at any time by Act of the Majority Holders, delivered
to
the Trustee and to the Issuer.
(d) If
at any
time:
(1) |
the
Trustee shall cease to be eligible under Section 7.8 and shall fail
to
resign after written request therefor by the Issuer or by the Majority
Holders; or
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(2)
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the
Trustee shall become incapable of acting or shall be adjudged a bankrupt
or insolvent or a receiver of the Trustee or of its property shall
be
appointed or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation;
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then,
in
any such case, (i) the Issuer by a Board Resolution may remove the Trustee,
or
(ii) subject to Section 6.14, any Noteholder who has been a bona fide Holder
of
a Note for at least two months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
(e) If
the
Trustee shall resign, be removed or become incapable of acting, or if a vacancy
shall occur in the office of the Trustee for any cause, the Issuer, by a Board
Resolution, shall promptly appoint a successor Trustee that meets the
requirements set forth in Section 7.8 and is approved by an Act of the Majority
Holders. If no successor Trustee shall have been so appointed by the Issuer
within 30 days after such resignation or removal, any Noteholder who has been
a
bona fide Holder of Notes for at least two months may, on behalf of himself
and
all others similarly situated, petition any court of competent jurisdiction
for
the appointment of a successor Trustee.
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(f) The
Issuer shall give notice of each resignation and each removal of the Trustee
and
each appointment of a successor Trustee by mailing written notice of such event
by first-class mail, postage prepaid, to the Holders of Notes as their names
and
addresses appear in the Note Register. Each notice shall include the name of
the
successor Trustee and the address of its corporate trust office.
Section
7.10. Acceptance
of Appointment by Successor
Every
successor Trustee appointed hereunder shall execute, acknowledge and deliver
to
the Issuer and the retiring Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee; but, on request of the Issuer or the successor Trustee,
such retiring Trustee shall, execute and deliver an instrument transferring
to
such successor Trustee all the rights, powers and trusts of the retiring
Trustee, and shall duly assign, transfer and deliver to such successor Trustee
all property and money held by such retiring Trustee hereunder. Upon request
of
any such successor Trustee, the Issuer shall execute any and all instruments
for
more fully and certainly vesting in and confirming to such successor Trustee
all
such rights, powers and trusts. The predecessor Trustee shall not be liable
for
the actions or the failure to act of any successor Trustee hereunder, but each
retiring Trustee shall remain liable for its actions or failure to act during
its tenure as Trustee hereunder.
No
successor Trustee shall accept its appointment unless at the time of such
acceptance, such successor Trustee shall be qualified and eligible under this
Article.
Any
corporation into which the Trustee may be merged or converted or with which
it
may be consolidated, or any corporation resulting from any merger, conversion
or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided,
such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part
of
any of the parties hereto.
Section
7.12. Co-trustees
and Separate Trustees
At
any
time or times, for the purpose of meeting the legal requirements of any
jurisdiction in which any portion of the Collateral may at the time be located,
the Issuer and the Trustee shall have power to appoint, and, upon the written
request of the Trustee or of the Holders of Notes representing at least 25%
of
the aggregate Note Principal Balance of Outstanding Notes, the Issuer shall
for
such purpose join with the Trustee in the execution, delivery and performance
of
all instruments and agreements necessary or proper to appoint, one or more
Persons approved by the Trustee either to act as co-trustee, jointly with the
Trustee, of all or any part of such Collateral, or to act as separate trustee
of
any such property, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such Person or Persons in the capacity
aforesaid, any property, title, right or power deemed necessary or desirable,
subject to the other provisions of this Section. If the Issuer does not join
in
such appointment within 15 days after the receipt by it of a request to do
so,
or in case an Event of Default has occurred and is continuing, the Trustee
alone
shall have power to make such appointment.
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Should
any written instrument from the Issuer be required by any co-trustee or separate
trustee so appointed for more fully confirming to such co-trustee or separate
trustee such property, title, right or power, any and all such instruments
shall, on request, be executed, acknowledged and delivered by the
Issuer.
Every
co-trustee or separate trustee shall, to the extent permitted by law, but to
such extent only, be appointed subject to the following terms,
namely:
(1)
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The
Notes shall be authenticated and delivered and all rights, powers,
duties
and obligations hereunder in respect of the custody of securities,
cash
and other personal property held by, or required to be deposited
or
pledged with, the Trustee hereunder, shall be exercised solely by
the
Trustee.
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(2)
|
The
rights, powers, duties and obligations hereby conferred or imposed
upon
the Trustee in respect of any property covered by such appointment
shall
be conferred or imposed upon and exercised or performed by the Trustee
or
by the Trustee and such co-trustee or separate trustee jointly, as
shall
be provided in the instrument appointing such co-trustee or separate
trustee, except to the extent that under any law of any jurisdiction
in
which any particular act is to be performed, the Trustee shall be
incompetent or unqualified to perform such act, in which event such
rights, powers, duties and obligations shall be exercised and performed
by
such co-trustee or separate
trustee.
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(3)
|
The
Trustee at any time, by an instrument in writing executed by it,
with the
concurrence of the Issuer evidenced by a Board Resolution, may accept
the
resignation of or remove any co-trustee or separate trustee appointed
under this Section, and, in case an Event of Default has occurred
and is
continuing, the Trustee shall have power to accept the resignation
of, or
remove, any such co-trustee or separate trustee without the concurrence
of
the Issuer. Upon the written request of the Trustee, the Issuer shall
join
with the Trustee in the execution, delivery and performance of all
instruments and agreements necessary or proper to effectuate such
resignation or removal. A successor to any co-trustee or separate
trustee
that has so resigned or been removed may be appointed in the manner
provided in this Section.
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(4)
|
No
co-trustee or separate trustee hereunder shall be personally liable
by
reason of any act or omission of the Trustee or any other such trustee
hereunder nor shall the Trustee be liable by reason of any act or
omission
of any co-trustee or separate trustee hereunder, so long as such
co-trustee or separate trustee has been appointed by the Trustee
with due
care.
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(5)
|
Any
Act of Noteholders delivered to the Trustee shall be deemed to have
been
delivered to each such co-trustee and separate
trustee.
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In
the
event that the Trustee is also acting as Paying Agent or Transfer Agent or
Registrar hereunder, the rights and protections afforded to the Trustee pursuant
to this Article VII shall also be afforded to the Paying Agent, Transfer Agent
and Registrar and to any successor serving in any such capacity.
ARTICLE
VIII.
The
Issuer shall not consolidate or merge with or into any other Person or convey
or
transfer its properties and assets substantially as an entirety to any
Person.
ARTICLE
IX.
With
the
written consent of the Noteholders by Act of the Noteholders delivered to the
Issuer and the Trustee, the Issuer, when authorized by a Board Resolution,
and
the Trustee may enter into one or more supplemental indentures for the purpose
of adding any provisions to, or changing in any manner or eliminating any of
the
provisions of, this Indenture or modifying in any manner the rights of the
Holders of the Notes under this Indenture; provided,
however,
no such
supplemental indenture shall, without the consent of all of the
Noteholders:
-35-
(1)
|
reduce
the Note Principal Balance of any Note or the Note Interest Rate
thereon
or change the amount or priority or time of any payment on any Note
or any
place of payment where, or the coin or currency in which, any Note
or the
interest thereon is payable, or impair the right to institute suit
for the
enforcement of any such payment; or
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(2)
|
modify
or release the Collateral in any material respect except as otherwise
permitted herein; or
|
(3)
|
modify
or alter the definition of the term “Outstanding”;
or
|
(4)
|
modify
or alter the provisions of the proviso to Section 6.3;
or
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(5)
|
modify
any of the provisions of this Section 9.1, except to increase any
such
percentage or to provide that certain other provisions of this Indenture
cannot be modified or waived without the consent of the Holder of
each
Outstanding Note; or
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(6)
|
permit
the creation of any Lien ranking prior to or on a parity with the
Lien of
this Indenture with respect to any part of the Collateral, or, except
as
permitted under this Indenture, terminate the Lien of this Indenture
on
any property at any time subject hereto or, except as permitted under
this
Indenture, deprive the Holder of any Note of the security afforded
by the
Lien of this Indenture.
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Promptly
after the execution by the Issuer and the Trustee of any supplemental indenture
pursuant to this Section, the Issuer shall, if requested by any Noteholder,
mail
to the each of the Holders of the Notes, a notice setting forth in general
terms
the substance of such supplemental indenture together with a copy of such
supplemental indenture. Any failure of the Issuer to mail such notice and copy,
or any defect therein, shall not, however, in any way impair or affect the
validity of any such supplemental indenture.
Section
9.2. Execution
of Supplemental Indentures
In
executing or accepting the additional trusts created by any supplemental
indenture permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to be supplied with,
and prior to executing any supplemental indenture pursuant to Section 9.1,
the
Trustee shall require an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture. The Trustee
may, but shall not be obligated to, enter into any such supplemental indenture
which affects the Trustee’s own duties, immunities, rights or indemnities under
this Indenture or otherwise.
Section
9.3. Effect
of Supplemental Indentures
Upon
the
execution of any supplemental indenture under this Article, this Indenture
shall
be modified in accordance therewith, and such supplemental indenture shall
form
a part of this Indenture for all purposes; and every Holder of Notes theretofore
or thereafter authenticated and delivered hereunder shall be bound
thereby.
-36-
Section
9.4. Reference
in Notes to Supplemental Indenture
Notes
issued and delivered after the execution of any supplemental indenture pursuant
to this Article may, and if required by the Issuer shall, bear a notation in
form approved by the Trustee as to any matter provided for in such supplemental
indenture. If the Issuer shall so determine, new Notes so modified as to
conform, in the opinion of the Issuer, to any such supplemental indenture may
be
prepared and executed by the Issuer and authenticated and delivered by the
Trustee in exchange for Outstanding Notes.
Section
9.5. Solicitation
of Holders of Notes
(a) Solicitation.
The
Issuer shall provide each Noteholder (irrespective of the amount of Notes then
owned by it) with sufficient information, at least five (5) Business Days in
advance of the date a decision is required, to enable such Holder to make an
informed and considered decision with respect to any proposed amendment, waiver
or consent in respect of any of the provisions hereof or of the Notes. The
Issuer shall deliver to the Servicer executed or true and correct copies of
each
amendment, waiver or consent effected pursuant to the provisions of this
Indenture and the Servicer shall deliver copies of the same to each Noteholder
promptly following the date on which it is executed and delivered by the Issuer;
provided,
however,
nothing
in this Section 9.5(a) shall, in the absence of affirmative consent of a
Noteholder, be construed as deemed consent.
(b) Payment.
The
Issuer will not directly or indirectly pay or cause to be paid any remuneration,
whether by way of supplemental or additional interest, fee or otherwise, or
grant any security, to any Noteholder as consideration for or as an inducement
to the entering into by any Noteholder of any waiver or amendment of any of
the
terms and provisions hereof or of the Notes unless such remuneration is
concurrently paid, or security is concurrently granted, on the same terms,
ratably to each Noteholder then Outstanding even if such Noteholder did not
consent to such waiver or amendment.
ARTICLE
X.
Section
10.1. Redemption
at the Option of the Issuer
The
Notes
are redeemable (1) at the option of the Issuer in whole, or in part at only
one
time during the term hereof or (2) pursuant to the provisions of Section
12.3(d), at the Redemption Price on any Redemption Date and such redemption,
unless deemed exercised hereunder, shall be exercised by delivery of an Issuer
Order to the Trustee; provided,
that
(i) no Event of Default has occurred and remains uncured and (ii) except in
the
case of an Extraordinary Optional Redemption, the Redemption Date must be the
first available Redemption Date for which the Trustee can give a proper
Redemption Notice after receipt of such Issuer Order by the Trustee;
provided,
further,
that
any redemption in part pursuant to clause (1) above is in an amount equal to
50%
of the Note Principal Balance outstanding on the Redemption Date and shall
be
applied pro rata among each of the Candie’s/Xxx Xxxxx Note Principal Balance,
the Rampage Note Principal Balance, the Xxxx Note Principal Balance and the
London Fog Note Principal Balance of each Note; and provided,
further,
that
any redemption pursuant to clause (2) above with respect to any Asset relating
to (i) the Primary Xxxx XXXXXXX or XXX XXXXX, (ii) the Primary Xxxx XXXXXXX,
(iii) the Primary Xxxx XXXX or (iv) the Primary Xxxx XXXXXX FOG shall be
applied in reduction of the Candie’s/Xxx Xxxxx Note Principal Balance, the
Rampage Note Principal Balance, the Xxxx Note Principal Balance or the London
Fog Note Principal Balance, respectively, of each Note. Note Principal Payments
shall not constitute payments to redeem Notes and the reduction in the Note
Principal Balance of any Note with any such payment shall not be a redemption
of
such Note within the meaning and for any purposes of this Indenture.
-37-
Section
10.2. Mandatory
Redemption
(a) In
the
event that there is to be a payment of the Release Price for an Asset as
described in Section 12.3(c) of this Indenture, upon such payment, the affected
Asset shall be released from the Lien of this Indenture. The Release Price
of
the affected Asset shall be deposited in the Collection Account by the Trustee
upon receipt and shall be applied to the redemption of Notes on the next ensuing
Redemption Date for which a proper Redemption Notice can be given in a principal
amount equal to the portion of such Release Price allocable to principal, which
principal amount shall be applied to the reduction of the Candie’s/Xxx Xxxxx
Note Principal Balance, the Rampage Note Principal Balance, the Xxxx Note
Principal Balance or the London Fog Note Principal Balance of each Note,
depending on whether the affected Asset relates to the (i) Primary Xxxx XXXXXXX
or XXX XXXXX, (ii) Primary Xxxx XXXXXXX, (iii) Primary Xxxx XXXX or
(iv) Primary Xxxx XXXXXX XXX, respectively. Deposit of such Release Price
in the Collection Account shall be deemed to be an exercise of the option to
redeem Notes on such Redemption Date in such principal amount and at the
Redemption Price.
(b) In
accordance with Section 13.2(b) of this Indenture, specified funds are to be
withdrawn from the Liquidity Reserve Account and applied to the redemption
of
Notes. Such funds shall be set aside by the Trustee in the Collection Account
and applied to the redemption of Notes on the next ensuing Redemption Date
for
which a proper Redemption Notice can be given in a principal amount equal,
as
nearly as practicable, to the amount of the funds available after withdrawing
therefrom all funds needed to pay accrued interest on the Notes to be redeemed
to the applicable Redemption Date plus the related Redemption Premium, if
applicable. The Issuer shall be deemed to have elected any such
redemption.
-38-
Section
10.3 Notice
of Redemption by the Issuer
Notice
of
redemption pursuant to Section 10.1 or Section 10.2 if not waived in writing
by
a Noteholder delivered to the Trustee, shall be given by U.S. registered mail,
return receipt requested, or by nationally recognized overnight private mail
delivery service, postage prepaid, mailed not less than 30 days or more than
60
days prior to the applicable Redemption Date to each Holder of Notes whose
Notes
are to be redeemed, at its address in the Note Register. It shall be assumed
for
purposes of this Indenture that the Trustee can and will mail a notice of
redemption 5 days after receipt of an Issuer Order to redeem Notes or a deemed
election by the Issuer to redeem Notes.
All
notices of redemption shall state:
(1) |
the
Redemption Date;
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(2)
|
the
principal amount of Notes to be redeemed and the allocation of such
principal amount among the Candie’s/Xxx Xxxxx Note Principal Balance, the
Rampage Note Principal Balance, the Xxxx Note Principal Balance and
the
London Fog Note Principal Balance;
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(3)
|
a
pro forma Redemption Price for each Note redeemed, calculated as
of the
date of the notice of redemption;
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(4)
|
that
on the Redemption Date, the Redemption Price shall become due and
payable
upon each Note called for redemption, and that interest thereon shall
cease to accrue on such date; and
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(5)
|
the
place where such Notes to be redeemed are to be surrendered on or
within
30 days after the Redemption Date, which shall be the office or agency
of
the Issuer to be maintained as provided in Section
11.2.
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Notice
of
redemption of Notes shall be given by the Issuer or, at the Issuer’s request, 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 selected for
redemption shall not impair or affect the validity of the redemption of any
other Note.
Section
10.4 Deposit
of the Redemption Price
On
or
before 1:00 P.M. (New York City time) on the Business Day immediately preceding
any Redemption Date, the Issuer shall remit to the Trustee for deposit into
the
Collection Account an amount of monies sufficient to pay the Redemption Price
of
all Notes which are to be redeemed on such Redemption Date (less any portion
of
such payment set aside from monies in the Collection Account or the Liquidity
Reserve Account
for the
Notes to be redeemed).
-39-
(a)
Notice
of
redemption having been given as provided in Section 10.3, the Notes to be
redeemed shall, on the applicable Redemption Date, become due and payable at
the
Redemption Price and on such Redemption Date such Notes shall cease to bear
interest on the portion of the Notes actually redeemed. On the Redemption Date,
the Holders of such Notes shall be paid the Redemption Price by the Trustee
from
funds available to the Trustee pursuant to Section 10.4, Section 13.2 or
otherwise; provided,
however,
that
installments of principal and interest which are due on or prior to the
Redemption Date shall be payable to the Holders of such Notes registered as
such
on the relevant Record Dates according to their terms and the provisions of
Section 3.7.
(b)
If
a
Holder of any Note called in whole or in part for redemption shall not be so
paid due to a failure of the Trustee to remit funds timely deposited by the
Issuer, the Issuer shall have no liability as a result of such failure and
the
principal amount thereof shall, until paid, continue to bear interest from
the
Redemption Date at the related Note Interest Rate until payment of principal
is
made.
(c)
If
less
than the principal amount of all Notes Outstanding are to be redeemed on any
Redemption Date, such Notes shall be redeemed pro rata from available funds
as
nearly as practicable in the judgment of the Trustee, observing in the process
authorized denominations in accordance with Section 3.2 of this Indenture and
shall be applied in installments of principal payable on the affected Note
in
the reverse order of maturity in accordance with the schedule attached to such
Note.
(d)
Installments
of interest and principal due on or prior to a Redemption Date shall continue
to
be payable to the Holders of Notes called for redemption as of the relevant
Record Dates according to their terms and the provisions of Section 3.7. Except
as otherwise specifically provided herein, the election of the Issuer to redeem
any Notes pursuant to this Section shall be evidenced by an Issuer Order
directing the Trustee to make the payment of the Redemption Price on all of
the
Notes to be redeemed from monies deposited with the Trustee pursuant to Section
10.4 or otherwise available to the Trustee in accordance with this Indenture
for
the purpose of redeeming Notes.
Section
10.6 Defeasance
Notwithstanding
anything in this Article X to the contrary, the Issuer may at its discretion
(or
at the sole discretion of the Noteholder if at any time the Redemption Premium
is zero, the Issuer shall), instead of depositing the Redemption Price as
otherwise required by this Article X, purchase Defeasance Securities with a
principal balance and bearing an interest rate such that, as determined by
the
Servicer, such securities will be sufficient to provide principal and interest
payments on each Payment Date (beginning on the immediately following Payment
Date until the Legal Maturity Date) in an amount at least equal to the payments
that would be required under the portion of the Notes that would have been
redeemed had the Issuer not elected (or the Noteholder not required the Issuer)
to purchase Defeasance Securities pursuant to this Section 10.6. Defeasance
Securities shall be deposited into the Defeasance Account and shall be part
of
the Collateral without any further action by any party hereto. The Issuer and
the Trustee shall direct that principal and interest payments received in
respect of the Defeasance Securities be deposited directly into the Collection
Account.
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ARTICLE
XI.
Section
11.1 Payment
of Principal and Interest
The
Issuer shall duly and punctually pay the principal of and interest on the Notes,
subject to and in accordance with the terms of the Notes and this
Indenture.
Section
11.2 Maintenance
of Office or Agency
The
Issuer shall maintain an office or agency within the United States of America
where Notes may be presented or surrendered for payment, where Notes may be
surrendered for registration of transfer or exchange and where notices in
respect of the Notes and this Indenture may be served. The Issuer hereby
initially appoints the Trustee its office or agency for each of said purposes.
The Issuer shall give prompt written notice to the Trustee of the location,
and
of any change in the location, of any such office or agency. If at any time
the
Issuer shall fail to maintain any such office or agency or shall fail to furnish
the Trustee with the address thereof, such presentations, surrenders or
exchanges may be made or served at the Corporate Trust Office. As of the date
hereof, on the Issue Date, and at all times since its formation, the chief
executive office and place of business of the Issuer is and has been located
at
000 Xxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000.
Section
11.3 Money
for Note Payments to Be Held in Trust
Subject
to any applicable escheat law, any money deposited with the Trustee in trust
for
payment to the Noteholders on any Payment Date and remaining unclaimed for
three
years after such payment has become due and payable shall be paid to the Issuer
upon a written request of the Issuer; and any Noteholder with a right to or
interest in such money shall thereafter, as an unsecured general creditor,
look
only to the Issuer for payment thereof, and all liability of the Trustee with
respect to such trust money, shall thereupon cease; provided,
however,
that
the Trustee, before being required to make any such repayment, shall at the
expense of the Issuer send by first class mail to each Noteholder with a right
to or interest in monies due and payable but not claimed, at the last address
as
shown on the Note Register for such Noteholders, and cause to be published
once,
in a newspaper published in the English language, customarily published on
each
Business Day and of general circulation in the city in which the Trustee’s
Office is located, notice that such money remains unclaimed and that, after
a
date specified therein, which shall not be less than 60 days from the date
of
such publication, any unclaimed balance of such money then remaining shall
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
(including, but not limited to, mailing notice of such repayment to each
Noteholder whose right to or interest in monies due and payable but not claimed
is determinable from the records of the Trustee, at the last address as shown
on
the Note Register for such Noteholder).
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The
Issuer shall keep in full effect its existence, rights and franchises as a
limited liability company under the laws of the State of Delaware, shall operate
in accordance with, and subject to the limitations set forth in, its
Organizational Documents and shall obtain and preserve its qualification to
do
business as a foreign corporation in each jurisdiction in which the failure
to
be so qualified shall have a material adverse effect on the validity and
enforceability of this Indenture or the Notes.
Section
11.5. Protection
of Collateral
(a) The
Issuer covenants to file or cause to be filed all UCC Financing Statements
and
any related forms necessary or desirable to be filed with respect to the
Collateral in the United States Patent and Trademark Office within ten (10)
Business Days of the applicable Closing Date and in the United States Copyright
Office within thirty (30) days of the applicable Closing Date.
(b) The
Issuer shall from time to time execute and deliver to the Trustee, the Servicer
and such other parties as the Issuer shall deem appropriate all such supplements
and amendments hereto and all such financing statements, continuation
statements, instruments of further assurance and other instruments, and shall
take such other action as is necessary or advisable to:
(i)
|
ensure
a first priority, perfected security interest in all or any portion
of the
Collateral;
|
(ii)
|
maintain
or preserve the lien of this Indenture or carry out the purposes
hereof;
|
(iii)
|
protect
the validity of any Xxxxx made by this
Indenture;
|
(iv) |
enforce
any of the Collateral or, where appropriate, any security interest
in
the
Collateral and the proceeds thereof;
|
(v) |
preserve
and defend the Issuer’s title to the Collateral and the rights of the
Noteholders
therein against the claims of all persons and parties subject
to the
rights of licensees under the Licenses;
or
|
(vi) |
record
or register the Issuer’s ownership of all of the Trademarks of record
in
the Territory;
|
-42-
but
in
the foregoing cases of items (i) through (v), only to the extent the same can
be
achieved by recordation or filing under the laws of the Covered Jurisdictions,
and in the foregoing case of item (vi), only to the extent the same can be
achieved by recordation or filing under the laws of the Territory.
(c) For
avoidance of doubt, the Issuer agrees that:
(i) |
In
the event that, on any Payment Date following any Closing Date, the
DSCR
is less than 1.6 to 1.0 (i.e., 160%), it shall, promptly, but in
no event
later than 180 days from such Payment Date, (i) cause the recordation
of
its title to the Primary Marks BONGO, XXX XXXXX, RAMPAGE, XXXX and
LONDON
FOG, in all jurisdictions in which such title has not previously
been
recorded and (ii) file in all jurisdictions in which a filing can
be made
to perfect the lien of the Indenture on the Primary Marks BONGO,
XXXXXX’S,
XXX XXXXX, RAMPAGE, XXXX and LONDON FOG;
|
(ii) |
In
the event that the aggregate Individual Asset Earned Income for Assets
related to any one of the Primary Marks BONGO, XXX XXXXX, RAMPAGE,
XXXX
or
LONDON FOG in a single jurisdiction exceeds $10,000 in any single
fiscal
year of the Issuer, the Issuer shall, on or before the first Payment
Date
following such fiscal year, cause the recordation of its title to
such
Primary Mark in such jurisdiction unless such title has been previously
been recorded therein; and
|
(iii) |
In
the event that the aggregate Individual Asset Earned Income for Assets
related to any of the Primary Marks BONGO, CANDIE’S, XXX XXXXX RAMPAGE,
XXXX or LONDON FOG (but, for the avoidance of doubt, not in the case
where
such income is taken in the aggregate for all Primary Marks) in a
single
jurisdiction exceeds $250,000 in any single fiscal year of the Issuer,
the
Issuer shall, on or before the first Payment Date following such
fiscal
year, cause a filing to be made in such jurisdiction, to the extent
legally possible, to perfect the lien of the Indenture on such Primary
Mark and, if it is customary practice in such jurisdiction, deliver
to the
Trustee and Noteholders a customary opinion of counsel in such
jurisdiction confirming that such filing was sufficient to perfect
such
lien to the extent the same can be accomplished by
filing.
|
(d) At
the
Trustee’s reasonable request, the Issuer shall provide to the Trustee such
evidence as to the Issuer’s ownership of Defeasance Securities and an Opinion of
Counsel as the creation and perfection of the security interest of the Trustee
in the Defeasance Securities.
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Section
11.6. Biennial
Opinion as to Collateral
On
or
before May 22nd
in each
second succeeding calendar year, commencing in 2008, the Issuer shall furnish
to
the Trustee, and to the Noteholders an Opinion of Counsel (which shall be
independent counsel) either (i) stating that, in the opinion of such
counsel, such action has been taken with respect to the recording, filing,
re-recording and refiling of any requisite documents as is necessary to maintain
the lien and security interest created by this Indenture and the perfection
and
priority thereof as the same originally existed under and in accordance with
this Indenture and reciting the details of such action or (ii) stating that
in
the opinion of such counsel no such action is necessary to maintain such lien
and security interest; but in each of the foregoing cases, only to the extent
the same can be achieved under the law of the United States or any state within
the United States or the law of Canada or (if and to the extent such opinions
are customarily given in Material Jurisdictions other than the United States
and
Canada) any other Material Jurisdiction, as applicable. Such Opinion of Counsel
shall also describe the recording, filing, re-recording and refiling of such
requisite documents that shall, in the opinion of such counsel, be required
to
maintain the lien and security interest of this Indenture and the perfection
and
priority thereof until February 22, 2016 in the second succeeding calendar
year,
based upon the state of the law and facts in existence at the time of delivering
the opinion.
Section
11.7. Negative
Covenants
The
Issuer shall not:
(i)
|
sell,
transfer, exchange or otherwise dispose of any of the Collateral
(except
as expressly permitted by the Management Agreement or this Indenture);
or
|
(ii)
|
claim
any credit on, or make any deduction from, the principal or interest
payable in respect of the Notes by reason of the payment of any taxes
levied or assessed upon any of the Collateral;
or
|
(iii)
|
amend
(a) either Section 7, Section 8(g) or Section 25 of its Limited
Liability Company Agreement or (b) any Transaction Document without
receiving approval thereof by Act of the Noteholders (which may not
be
unreasonably withheld); or
|
-44-
(iv)
|
(a)
permit the validity or effectiveness of this Indenture to be impaired,
or
permit this
Indenture to be amended, hypothecated, subordinated, terminated or
discharged, or permit any Person to be released from any covenants
or
obligations of this Indenture, except as may be expressly permitted
hereby
and thereby, (b) permit any lien, charge, security interest, mortgage
or
other encumbrances, other than the Lien of this Indenture and Licenses,
to
be created on or extended to or otherwise arise upon or burden the
Collateral or any part thereof or any interest therein or the proceeds
thereof or incur any indebtedness other than the Notes, or (c) permit
this
Indenture not to constitute a valid first priority security interest
in
the Collateral to the extent the same can be achieved by filing under
the
laws of the Covered Jurisdictions, as applicable;
or
|
(v)
|
change
the state of its organization without thirty days’ prior written notice to
the Trustee, accompanied by such evidence of actions to be taken
as shall
be necessary to continue the perfection of the lien on the Collateral
to
the extent the same can be achieved by filing under the laws of the
Covered Jurisdictions, as applicable;
or
|
(vi)
|
(i) institute,
or consent to the institution of, bankruptcy or insolvency proceedings
in
respect to the Issuer, or file a petition seeking or consenting to
reorganization or relief under any applicable federal or state law
relating to bankruptcy, or seek or consent to the appointment of
a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Issuer or any substantial part of its assets, or
make any
assignment for the benefit of creditors, or admit in writing its
inability
to pay its debts generally as they become due, or take any corporate
action in furtherance of any such action; or (ii) consolidate, merge,
dissolve or liquidate, in whole or in part;
or
|
(vii)
|
except
for Indebtedness as may be expressly permitted under this Indenture,
incur, assume or guaranty any Indebtedness except for such Indebtedness
as
has been approved by the Noteholders; or
|
(viii)
|
except
as contemplated in the Management Agreement, enter into any material
amendment or supplement to or modification of the Assets or grant
any
material waiver or consent under the Assets;
or
|
(ix)
|
issue
any bonds, notes or other obligations other than the
Notes.
|
Section
11.8. Statement
as to Compliance
The
Issuer shall deliver to the Trustee, the Noteholders and the Servicer, on or
before each January 31 (commencing January 31, 2007), a written statement signed
by the President or a Vice President and by the Treasurer or an Assistant
Treasurer or the Secretary or an Assistant Secretary of the Issuer stating,
as
to each signer thereof, that
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(1)
|
a
review of the activities of the Issuer during the preceding calendar
year
(or such lesser period in the case of the first such statement) and
of
performance under this Indenture has been made under his supervision;
and
|
(2)
|
the
Issuer has fulfilled all its obligations in all material respects
under
this Indenture throughout such period, or, if there has been a default
in
the fulfillment of any such obligation, specifying each such Default
known
to him and the nature and status
thereof.
|
Section
11.9. Inspection
At
any
time and from time to time, the Issuer shall permit the Trustee, the Servicer
and the Noteholders, or their respective agents or representatives, during
regular business hours and without charge: (i) to examine and make copies of
and
abstracts from the books and records (financial and corporate) of the Issuer,
and (ii) to visit the offices and properties of the Issuer for the purpose
of
reviewing and examining such books and records and discussing matters relating
thereto and to the performance of the Issuer under this Indenture with any
of
the officers or employees of the Issuer having knowledge of such matters or
with
the Issuer’s outside auditors.
Section
11.10. Limited
Purpose
The
Issuer shall not engage in any business other than the transactions permitted
by
its Organizational Documents.
Section
11.11. Issuer
Ownership
The
Issuer agrees that its books and records will reflect its ownership of the
Collateral, subject to the liens and security interests created by this
Indenture.
Section
11.12. Enforcement
of Transaction Documents
The
Issuer shall take all actions necessary, and diligently pursue all remedies
available to it, to enforce the obligations of each other party to a Transaction
Document to secure its and the Noteholders’ rights thereunder, provided,
that
prior to taking any action in the name of the Noteholders, it shall receive
the
written consent of the Noteholders.
Section
11.13. Representations
and Warranties
The
Issuer, as of the date hereof and as of each Closing Date, hereby represents
and
warrants the following:
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(a) Except
for the interests created by Licenses, the Issuer is the owner of all of the
Collateral free of liens and encumbrances, the Issuer has not assigned any
interest or participation in any Collateral, and the Issuer has full right
to
Grant such Collateral to the Trustee for the benefit of the
Noteholders.
(b) The
Issuer has Granted a security interest in all of its right, title, and interest
in the Collateral to the Noteholders.
(c) The
Notes
have not been registered under the Securities Act nor pursuant to the securities
or blue sky laws of any State.
(d) The
Trustee will, upon proper filing and/or recording of UCC financing statements,
copyright documents and trademark documents, as applicable, in the Covered
Jurisdictions by the Issuer or the Servicer on the Issuer’s behalf, have a
perfected first priority security interest in each item of Collateral, free
from
any lien, security interest encumbrance or other right, title or interest of
any
Person, except for any Lien created by this Indenture and the Licenses, but
in
all cases only to the extent the same can be achieved by filing under the laws
of the Covered Jurisdictions, as applicable.
(e) The
Issuer has its chief executive office at 000 Xxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx
00000.
(f) The
Issuer, (i) is a limited liability company, duly organized, validly
existing in good standing under the laws of Delaware; (ii) has requisite power
and authority and all licenses and permits to own and operate its properties
to
carry on its business as now conducted, and to enter into and perform its
obligations under each Transaction Document to which it is a party and the
transactions contemplated thereby, including, the issuance and sale of the
Notes
and the performance of its obligations thereunder; and (iii) has been duly
qualified and is authorized to do business and, if applicable, is in good
standing as a foreign corporation (or is exempt from such requirements) and
has
obtained all necessary licenses and approvals in each jurisdiction where the
failure to be so qualified would have a material adverse effect on its ability
to conduct its business.
(g) Each
Transaction Document (other than the Notes) to which the Issuer is a party
has
been duly authorized and, when executed and delivered by the Issuer will
constitute valid, binding and enforceable obligations of the Issuer in
accordance with its terms, subject, as to the enforcement of remedies, to
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting the enforceability of creditors’ rights generally applicable in the
event of the bankruptcy, insolvency or reorganization of the Issuer and to
general principles of equity.
(h) No
event
has occurred and is continuing that constitutes a Default or an Event of Default
under, and as defined in, this Indenture, the Servicing Agreement or any other
Transaction Document. Neither the execution and delivery of any Transaction
Document by the Issuer, the consummation of the transactions contemplated
thereby nor the satisfaction of the terms and conditions of the Transaction
Documents (i) conflicts with or results in any breach or violation of any
provision of the Organizational Documents of the Issuer, or any law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
currently in effect having applicability to the Issuer, or any of its
properties, including regulations issued by an administrative agency or other
governmental authority having supervisory powers over the Issuer; or (ii)
constitutes a default by the Issuer under or a breach
of
any provision of this Indenture or any contract, agreement, mortgage or other
instrument to which it is a party or by which it or any of its properties are
or
may be bound or affected or (iii) results in the creation or imposition of
any
lien upon any of the properties or assets of the Issuer pursuant to the terms
of
any mortgage, deed of trust, contract, agreement, charter instrument, by-law
or
other instrument.
-47-
(i) The
Notes
have been duly and validly authorized by the Issuer and, when duly and validly
executed in accordance with this Indenture, will be validly issued and
outstanding and entitled to the benefits of this Indenture and will constitute
valid and legally binding obligations of the Issuer, enforceable against the
Issuer in accordance with their terms, subject, as to the enforcement of
remedies, to bankruptcy, insolvency, reorganization, moratorium and other
similar laws affecting the enforceability of creditors’ rights generally
applicable in the event of the bankruptcy, insolvency or reorganization of
the
Issuer and to general principles of equity.
(j) The
Issuer had at all relevant times and now has full power and authority to
originate, own and, has full power and authority to Grant the Collateral, has
duly authorized such Grant by all necessary action, and does not require any
member approval, or approval or consent of any trustee or holders of any
indebtedness or obligations of the Issuer other than such as have been
obtained.
(k) There
is
no pending action, suit, proceeding or investigation, including, but not limited
to, any such proceeding or investigation resulting from the ownership or use
of
any of the Collateral, against or affecting the Issuer before any administrative
agency, arbitrator or governmental body or, to the best knowledge of the Issuer,
any threatened action or proceeding, including but not limited to any such
proceeding or investigation resulting from the ownership or use of any of the
Collateral, against or affecting the Issuer before any of the foregoing which,
if decided adversely to the Issuer, would materially affect (i) the condition
(financial or otherwise), business, properties, prospects, profits or operations
of the Issuer, (ii) the ability of the Issuer to perform its obligations
under, or the validity or enforceability of, any Transaction Document to which
it is a party or (iii) the Noteholders’ ability to foreclose or otherwise
enforce their interest in the Collateral as contemplated under this Indenture
and the Servicing Agreement. This Issuer is not subject to any order of any
court, governmental authority or agency or arbitration board of
tribunal.
(l) No
consent, approval, authorization, order of, or filing, registration, application
with any court or other governmental authority in respect of the Issuer is
necessary or required under the law of the United States or any state within
the
United States (or other Covered Jurisdictions in the case of filings to perfect
the Lien of the Indenture) in connection with the authorization, execution,
delivery or performance by the Issuer of this Indenture or any other Transaction
Document to which it is a party or any of the other documents or transactions
contemplated thereby, including without limitation, the pledge of the Collateral
to the Noteholders, the servicing of the Collateral, or the offer, issue, sale,
delivery or performance of the Notes, other than that consent, approval,
authorization, order, filing, registration or qualification which has been,
or
will be promptly, made or obtained in the United States (or the other Covered
Jurisdictions in the case of filings to perfect the Lien of the Indenture);
provided
that no
representation is made with respect to filings of qualifications under the
“Blue
Sky” laws of the various states within the United States.
-48-
(m) None
of
the transactions contemplated herein (including, without limitation thereof,
the
use of the proceeds from the sale of the Notes) will result in a violation
of
Section 7 of the Securities Exchange Act, or any regulations thereto, including,
without limitation, Regulations T, U and X of the Board of Governors of the
Federal Reserve System, 12 C.F.R., Chapter II; provided
that the
Issuer is not responsible for any such violation that results from the status
of
a Noteholder. The Issuer does not own or intend to carry or purchase, and no
proceeds from the sale of the Notes will be used by the Issuer to purchase,
any
“margin stock” within the meaning of said Regulation U.
(n) The
representations and warranties of the Issuer in each of the Servicing Agreement,
the Note Purchase Agreement, the 2005 Note Purchase Agreement, the 2005-B Note
Purchase Agreement, the 2006 Note Purchase Agreement, the 2006-B Note Purchase
Agreement, this Indenture and the other Transaction Documents to which it is
a
party are true and correct and are hereby incorporated by reference as if each
such representation and warranty were specifically made herein.
(o) The
Issuer is not a party to any contract or agreement, or subject to any charter
or
other legal restriction, which materially and adversely affects its business
as
contemplated in the Transaction Documents. The Issuer has not agreed to cause
or
permit in the future (upon the happening of a contingency or otherwise) any
of
its properties or any of the Collateral, other than as otherwise set forth
in
this Indenture, whether now owned or hereafter acquired, to be subject to a
lien
not permitted by this Indenture.
(p) For
so
long as any of the Notes are Outstanding and are “restricted securities” within
the meaning of Rule 144(a)(3) under the Securities Act, the Issuer will cause
to
be provided to the Noteholders and any prospective purchaser of Notes designated
by a Holder of such Notes, upon the request of such Holder or prospective
purchaser, the information required to be provided to such Holder or prospective
purchaser by Rule 144A(d)(4) under the Securities Act.
(q) The
Issuer does not intend to treat the Notes and related transactions as being
a
“reportable transaction” (within the meaning of Treasury Regulation Section
1.6011-4). In the event the Issuer determines to take any action inconsistent
with such intention, it will promptly notify the Noteholders hereof. If the
Issuer so notifies the Noteholders, the Issuer acknowledges that one or more
of
the Noteholders may treat its Notes as part of a transaction that is subject
to
Treasury Regulations 301.6112-1, and that such Noteholder or Noteholders, as
applicable, will maintain the lists and other records required by such Treasury
Regulation.
-49-
(r) The
Issuer is not (i) a country, territory, organization, person or entity name
on
an OFAC list; (ii) a Person that resides or has a place of business in a country
or territory named on such lists or which is designated as a Non-Cooperative
Jurisdiction by the Financial Action Task Force on Money Laundering
(“FATF”),
or
whose subscription funds are transferred from or through such a jurisdiction;
(iii) a “Foreign Shell Lender” within the meaning of the USA PATRIOT Act, i.e.,
a foreign bank that does not have a physical presence in any country and that
is
not affiliated with a bank that has a physical presence and an acceptable level
of regulation and supervision; or (iv) a person or entity that resides in or
is
organized under the laws of a jurisdiction designated by the United States
Secretary of Treasury under Section 311 or 312 of the USA PATRIOT Act as
warranting special measures due to money laundering.
Section
11.14. Certain
Covenants
(a) The
Issuer agrees that any Person, designated in writing by a Noteholder may, upon
reasonable prior written notice, consult with proper officials of the Issuer
and
(subject to consent by the Servicer under the Servicing Agreement) the Servicer
at such times during normal business hours and as often as such Person may
reasonably request regarding the information required to be furnished pursuant
to the Servicing Agreement or regarding the performance of the Issuer’s
covenants and agreements contained in this Indenture or any of the Transaction
Documents to which it is a party.
(b) The
Issuer will comply in all material respects with all requirements of law
applicable to the Issuer relating to the performance of its obligations under
this Indenture and the Notes.
(c) The
Issuer agrees to furnish the Noteholders copies of each of the Transaction
Documents and any documents to be furnished pursuant to the terms of the
Transaction Documents and such other information and documents relating to
the
Notes and the Collateral any Noteholder may reasonably request.
(d) The
Issuer will pay or cause to be paid all present and future recording and filing
fees, and all legal, financial and miscellaneous out-of-pocket expenses and
costs incurred by the Issuer in connection with the negotiation of and
consummation of the transactions contemplated by this Indenture and the issuance
and sale of the Notes. The Issuer further agrees that it will pay or cause
to be
paid, promptly upon demand,
any
reasonable out of pocket expense incurred by the Noteholders in connection
with
the making of amendment to, or the giving of any release, consent or waiver
in
respect of, this Indenture and any document executed pursuant hereto or thereto,
whether or not consummated, including the reasonable fees and disbursements
of
counsel for the Noteholders in connection therewith. The obligations of the
Issuer under the preceding sentences shall be subject to the priority of
distributions set forth in Section 13.1 hereof and shall survive the termination
of this Indenture, the transfer of any Note or portion thereof or interest
therein by a Noteholder and the payment of any Note.
(e) The
Issuer will add to Schedule 1 to the Fifth Amended and Restated Standard
Definitions, included herein as Appendix A, a description of and required
information pertaining to: (i) each separate and identifiable Asset in which
it
has ownership rights but which was not listed thereon at a Closing Date (whether
or not it was in existence on a Closing Date) promptly after the jurisdiction
in
which it generates income for the Issuer becomes a Material Jurisdiction and
(ii) without duplication, each separate and identifiable Asset not listed
on such Schedule 1 at a Closing Date promptly after the same is conveyed to
the
Issuer pursuant to Section 2.2(b) of the Contribution Agreement, the Xxx Xxxxx
Contribution Agreement, the Rampage Contribution Agreement, the Xxxx
Contribution Agreement or the London Fog Contribution
Agreement.
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(f) The
Issuer will promptly following the conveyance of an Asset to the Issuer (or
Release of an Asset) or upon the loss, sale or defeasance of an Asset from
the
Issuer, update the schedules and exhibits attached to the Transaction Documents,
with copies to the Servicer, Trustee and Noteholders.
(g) The
Issuer will comply with, and obey the terms and provisions of, its
Organizational Documents and will not take any action which it is prohibited
from taking under its Organizational Documents.
(h) The
Issuer will maintain, or be a subject insured party under, insurance of the
type
that is customarily maintained by business entities of the same type and scale
as the Issuer.
(i) For
so
long as any of the Notes remain Outstanding, the Issuer will not (x) merge
or
consolidate with or into any other entity or engage in any other business
combination with any other entity or (y) sell or transfer all or substantially
all of its assets other than in conformity with the Transaction
Documents.
(j) The
Issuer shall seek to enter into Licenses in the future that permit the Obligors
thereunder to be audited with respect to performance under such
Licenses.
(k) The
Issuer shall notify the Noteholders of any litigation in which the Issuer is
a
party, promptly upon the Issuer’s receipt of notice of the filing of such
litigation, in writing by delivery by a reputable courier service or by
registered mail (return receipt requested), all charges prepaid.
Section
11.15. Submission
to Jurisdiction
THE
VENUE FOR ANY AMOUNT, SUIT OR PROCEEDING ARISING FROM OR BASED UPON THIS
INDENTURE SHALL BE THE APPROPRIATE STATE AND FEDERAL COURTS LOCATED IN THE
COUNTY OF NEW YORK IN THE STATE OF NEW YORK. ACCORDINGLY, THE ISSUER AGREES
THAT
ANY ACTION, SUIT OR PROCEEDING ARISING FROM OR BASED ON THIS INDENTURE SHALL
BE
COMMENCED IN AND DETERMINED BY THOSE APPROPRIATE STATE AND FEDERAL COURTS
LOCATED IN THE COUNTY OF NEW YORK IN THE STATE OF NEW YORK; THE PARTIES HEREBY
WAIVE ANY OBJECTION TO THE PROPRIETY OR CONVENIENCE OF VENUE IN SUCH COURTS
OR
TO THE JURISDICTION OF THE COURTS OVER EITHER PARTY AND AGREE THAT ANY JUDGMENT
ENTERED THEREIN MAY BE ENFORCED WITH NO FURTHER DEFENSE OR OFFSET IN ANY
JURISDICTION IN WHICH THE DEFENDANT IS A CITIZEN, RESIDES OR OWNS
PROPERTY.
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Section
11.16. Representations
with Respect to Assets. On
and as
of the date of this Indenture, and on and as of each date on which an Asset
becomes subject to the Lien of this Indenture, the Issuer represents with
respect to such Asset which the Issuer pledges to the Trustee hereunder,
that:
(a) Payments
After a Closing Date.
No
monies or other contingent compensation shall be payable after a Closing Date
to
any person, firm or corporation with respect to any exploitation of the Assets
which occurred prior to a Closing Date.
(b) No
Defaults.
The
execution and implementation of this Indenture shall not result in the breach
of
any conditions or constitute a default (with or without notice or the lapse
of
time, or both) under any license or agreement constituting a portion of the
Assets pledged hereunder or to which any of the Assets pledged hereunder is
subject. Neither the Issuer nor, to the Issuer’s knowledge, any person, firm or
corporation associated with or deriving rights through or from the Issuer,
is in
breach or is in default of any applicable agreement constituting a portion
of
the Assets which the Issuer pledges to the Trustee or to which any of such
Assets are subject on the date of execution of this Indenture.
(c) Advances.
No
advances or other charges heretofore received by the Issuer in
connection with the Assets which the Issuer pledges to the Trustee remain
recoupable at any time from and after a Closing Date from any License Income
earned at any time either before or after the date of this Indenture, except
as
listed on Exhibit
C
to each
of the Contribution Agreement, the Xxx Xxxxx Contribution Agreement, the Rampage
Contribution Agreement, the Xxxx Contribution Agreement and the London Fog
Contribution Agreement.
(d)
Non-Contravention.
Neither
the Issuer’s exercise of any of the rights, licenses, privileges and properties
regarding the Assets pledged hereunder nor the Issuer’s right, title and
interest in and to the Assets pledged hereunder will violate or infringe on
any
common law or statutory rights of any person, firm or corporation, except such
violations or infringements outside the First Stage Covered Jurisdictions as
would not have a material adverse effect on the business of the
Issuer.
(e) [RESERVED].
(f) Exhibits
and Schedules Accurate.
All of
the information set forth in the exhibits and schedules attached hereto and
the
Fifth Amended and Restated Standard Definitions is complete and accurate in
all
material respects. No information supplied in writing by, or on behalf of,
the
Issuer in
connection with the transactions contemplated by this Indenture, in each case
as
of each Closing Date or on a future date on which an Asset becomes subject
to
the Lien of this Indenture, as the case may be, contains any untrue statement
of
a material fact or omits a material fact necessary to make the statements
contained therein or herein, in light of the circumstances under which they
were
made, not misleading.
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(g) Ownership
of the Trademarks.
(i)
|
Exhibit
E-1A
contains a true and complete list of all registrations and pending
applications for the Trademarks in the First Stage Territory owned
by the
Issuer, with the exception of intent-to-use applications filed within
the
United States, all of which registrations exist, are subsisting and
are
validly registered except as provided therein and all of which
applications are validly pending. Exhibit
E-1B
contains a true and complete list of all registrations and pending
applications in the Second Stage Territory. Exhibit
E-1C
contains a true and complete list of additional registrations and
pending
applications owned by Xxxxxx and not in the First Stage Territory.
All of
the Trademarks set forth in Exhibit
E-1A,
except to the extent otherwise provided therein, are currently in
use on
the goods set forth in the registrations for Trademarks in the First
Stage
Covered Jurisdictions.
|
(ii)
|
Notwithstanding
anything contained in Exhibit
F,
(i) the Issuer owns all right, title and interest in and to the Trademarks
related to and including the Primary Marks CANDIE’S, BONGO, XXX XXXXX,
RAMPAGE, XXXX and LONDON FOG for use in the First Stage Territory;
(ii)
the Issuer has the full and exclusive right, subject to the related
Licenses, to use and to license the use of the Trademarks related
to and
including the Primary Marks CANDIE’S, XXXXX, XXX XXXXX, RAMPAGE, XXXX and
LONDON FOG in the First Stage Territory; and (iii) the consummation
of the
transactions contemplated by the Transaction Documents will not alter
or
impair any of the foregoing such rights. The use by the Issuer in
the
First Stage Territory of the Trademarks related to and including
the
Primary Marks CANDIE’S, XXXXX, XXX XXXXX, RAMPAGE, XXXX and LONDON FOG
will not infringe on the rights of any Person, except such infringements
outside the First Stage Covered Jurisdictions as would not have a
material
adverse effect on the business of the Issuer.
|
(iii)
|
Except
as provided in Exhibit
F,
no claim has been asserted against the Issuer or any Affiliate thereof
by
any Person to the use of, and the Issuer has no knowledge of the
use by
any person (other than the licensees under the Licenses) of, any
of the
Trademarks related to and including the Primary Marks CANDIE’S, BONGO, XXX
XXXXX, RAMPAGE, XXXX and LONDON FOG in the First Stage Territory,
and
there is no valid basis for such claim with respect to the Trademarks
or
for any person (other than the licensees under the Licenses) to use
any of
the Trademarks related to and including the Primary Marks CANDIE’S, BONGO,
XXX XXXXX, RAMPAGE, XXXX and LONDON FOG in the First Stage Territory,
except such claims or uses outside the First Stage Covered Jurisdictions
as would not have a material adverse effect on the business of the
Issuer.
|
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(iv)
|
Each
of the Trademarks related to and including the Primary Marks CANDIE’S,
XXXXX, XXX XXXXX, RAMPAGE, XXXX and LONDON FOG is valid, subsisting
and
enforceable in the First Stage Territory, with the exception of such
Trademarks the lack of enforceability of which outside the First
Stage
Covered Jurisdictions would not have a material adverse effect on
the
business of the Company. There is vested in the Issuer title to the
Trademarks related to and including the Primary Marks CANDIE’S, XXXXX, XXX
XXXXX, RAMPAGE, XXXX and LONDON FOG and related Trademarks for use
in the
First Stage Territory, free and clear of all Liens (other than such
Liens
with respect to the Licenses and such Liens as may arise from actions
or
inactions of the Issuer).
|
(h) Additional
Representations with Respect to the Licenses.
(i)
|
Exhibit
E-2
lists all licenses and other agreements relating to the use of any
of the
Trademarks, respectively, in the Territory. All of the Licenses are
valid
and in full force and effect, except as set forth in Exhibit
E-2,
there are no existing defaults (or events that, with notice or lapse
of
time or both, would constitute a default) by any party thereunder.
No
claim has been asserted by any Person challenging or questioning
the
validity or effectiveness of any of the Licenses and there is no
valid
basis for any such claim. The Issuer has not, other than pursuant
to the
Licenses, licensed or authorized any other Person to use the Primary
Marks
CANDIE’S, BONGO, XXX XXXXX, RAMPAGE, XXXX or LONDON FOG, or any related
Trademarks, respectively, in the First Stage Territory, or granted
to any
other Person any other right with respect thereto. Except for the
Licenses, no agreement to which the Issuer is a party or by which
its
assets are bound restricts or in any way affects the Primary Marks
CANDIE’S, BONGO, XXX XXXXX, RAMPAGE, XXXX or LONDON FOG, or any related
Trademarks, respectively, or the right to use thereof in the First
Stage
Territory. There is vested in the Issuer title to all of the Licenses
free
and clear of all Liens (other than such liens with respect to the
Licenses
and such Liens as may arise from actions or inactions of the
Issuer).
|
(ii)
|
The
Issuer has considered the activities of all of the licensees under
the
Licenses and has verified that the products manufactured, sold or
offered
for sale under the Trademarks by such licensees meet the quality
control
standards set forth in such Licenses and all other such standards
promulgated by the Issuer.
|
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(iii) |
No
License is a Defaulted Contract Asset.
|
(iv)
|
All
required consents, assignment and/or assumption agreements or notices,
if
any, have been obtained or delivered in the manner required by each
License.
|
(v)
|
To
the Issuer’s best knowledge, the Obligors under Canadian Licenses have not
sold products bearing the trademarks covered by such Licenses in
the
United States.
|
Section
11.17. Survival
of Indenture Representations and Warranties
The
Issuer hereby agrees that each representation and warranty made by it in the
Original Indenture, the First Amended and Restated Indenture, the Second Amended
and Restated Indenture, the Third Amended and Restated Indenture and the Fourth
Amended and Restated Indenture shall survive notwithstanding the exchange and
cancellation of the Original Notes and the Subordinate Notes and the issuance
of
the July Notes, the exchange and cancellation of the July Notes and the issuance
of the September Notes, the exchange and cancellation of the September Notes
and
the issuance of the April Notes or the exchange and cancellation of the April
Notes and the issuance of the Notes. Each of the representations and warranties
of the Issuer in the Original Indenture, the First Amended and Restated
Indenture, the Second Amended and Restated Indenture, the Third Amended and
Restated Indenture and the Fourth Amended and Restated Indenture are true and
correct as of the date thereof and are hereby incorporated by
reference.
ARTICLE
XII.
Section
12.1. Collection
of Money
Except
as
otherwise expressly provided herein, the Trustee shall be forwarded all money
and other property payable to or receivable by the Issuer pursuant to the
Collateral from the Servicer as provided in Section 2.2(c) of the Servicing
Agreement and as otherwise provided in this Indenture. The Trustee shall hold
all such money and property so received by it as part of the Collateral, shall
deposit the same into the Collection Account, and shall apply it as provided
in
this Indenture.
-55-
Section
12.2. Accounts
(a)
Liquidity
Reserve Account.
The
Issuer shall establish with the Trustee and the Trustee shall maintain a
segregated trust account (the “Liquidity
Reserve Account”),
which
shall be in the name of the Trustee “as trustee on behalf of the Holders of the
IP Holdings LLC Asset-Backed Notes,” and which shall be in an Eligible Financial
Institution, for the receipt of funds deposited into the Liquidity Reserve
Account. On or before the Closing Date for the Notes, the Issuer shall deposit
or cause to be deposited into the Liquidity Reserve Account an amount equal
to
the Initial Liquidity Reserve Deposit Amount, such that the total amount on
deposit therein shall equal $10,575,250. Thereafter, the Trustee shall deposit
to the Liquidity Reserve Account the amounts referred to in Section 13.1(a)(ix).
If the bank with which the Liquidity Reserve Account is held ceases to be an
Eligible Financial Institution, the Trustee shall within five (5) days of
obtaining actual knowledge of such cessation and the identity of the replacement
Eligible Financial Institution selected by the Issuer, transfer the Liquidity
Reserve Account to an account maintained with a replacement Eligible Financial
Institution selected by the Issuer (unless an Event of Default shall have
occurred and not been waived, in which case, such Eligible Financial Institution
shall be selected by the Trustee). The Issuer shall promptly (within two
Business Days) notify the Trustee of any such selection. Funds in the Liquidity
Reserve Account shall not be commingled with any other monies. All payments
to
be made from time to time by the Trustee to the Noteholders out of funds in
the
Liquidity Reserve Account pursuant to this Indenture shall be made by the
Trustee as Paying Agent. Funds on deposit in the Liquidity Reserve Account
shall
be invested in Eligible Investments at the written direction of the Issuer.
On
the day preceding each Payment Date, any interest or other earnings realized
on
funds on deposit in the Liquidity Reserve Account shall be transferred and
credited to the Collection Account. The maximum permissible maturity or, if
applicable, the latest redemption date of any Eligible Investments made with
amounts on deposit in the Liquidity Reserve Account shall be not later than
the
Business Day preceding the next succeeding Payment Date or Redemption Date.
All
monies deposited from time to time in the Liquidity Reserve Account pursuant
to
this Indenture shall be held by the Trustee as part of the Collateral for the
exclusive benefit of the Holders as herein provided. Monies in the Liquidity
Reserve Account shall be subject to withdrawal pursuant to this Indenture,
including Section 13.2 of this Indenture.
(b) Collection
Account.
The
Issuer shall establish with the Trustee and the Trustee shall maintain a
segregated trust account (the “Collection
Account”)
which
shall be in the name of the Trustee “as trustee on behalf of the Holders of the
IP Holdings LLC Asset-Backed Notes,” and which shall be in an Eligible Financial
Institution, for the receipt of, and there shall be deposited into the
Collection Account, payments to be deposited therein as provided herein. If
the
bank with which the Collection Account is maintained ceases to be an Eligible
Financial Institution, the Trustee shall transfer the Collection Account to
an
account maintained with an Eligible Financial Institution selected by the Issuer
(unless an Event of Default shall have occurred and not been waived, in which
case, such Eligible Financial Institution shall be selected by the Trustee).
The
Collection Account shall relate solely to the transactions contemplated in
this
Indenture, and funds in such account shall not be commingled with any other
monies. All payments to be made from time to time by the Trustee to the
Noteholders out of funds in the Collection Account pursuant to this Indenture
shall be made by the Trustee as Paying Agent. Funds on deposit in the Collection
Account shall be invested in Eligible Investments at the written direction
of
the Issuer. The maximum permissible maturity or, if applicable, the latest
redemption date of any Eligible Investments made with amounts on deposit in
the
Collection Account shall be not later than the Business Day preceding the next
succeeding Payment Date or a Redemption Date, as applicable. All monies
deposited from time to time in the Collection Account pursuant to this Indenture
shall be held by the Trustee as part of the related Collateral as herein
provided. Monies in the Collection Account shall be subject to withdrawals
pursuant to this Indenture, including Section 13.1 and Section 10.3 of this
Indenture. The Paying Agent agrees to make withdrawals from the Collection
Account upon direction from the Servicer as set forth in Section 2.2(d) of
the
Servicing Agreement.
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(c) Lockbox
Account
The
Trustee is hereby authorized to establish and maintain with an Eligible
Financial Institution in Delaware, which may be the Wilmington Trust Company,
in
the name of the Trustee “as trustee for benefit of the Holders of the IP
Holdings LLC Asset-Backed Notes”, from time to time, such sub-accounts,
sub-ledger accounts and lockbox accounts (collectively, the “Lockbox
Account”)
as
part of, for the purposes of administering the payments to, the Collection
Account, remitted by the obligated parties under the Collateral. All of the
Trustee’s rights, powers, immunities, indemnities and protections afforded
herein shall also be afforded to it with respect to its administration of the
Lockbox Account. The Eligible Financial Institution at which the Lockbox Account
is established shall be under standing instructions from the Trustee to the
effect that funds on deposit in the Lockbox Account if any, shall be deposited
into the Collection Account pursuant to Section 13.4 of this
Indenture.
(d) Revenue
Reduction Account.
The
Issuer shall establish with the Trustee and the Trustee shall maintain a
segregated trust account (the “Revenue
Reduction Account”)
which
shall be in the name of the Trustee “as trustee on behalf of the Holders of the
IP Holdings LLC Asset-Backed Notes,” and which shall be in an Eligible Financial
Institution. All payments relating to the Issuer Revenue Reduction Cure shall
be
deposited by the Issuer into the Revenue Reduction Account. If the bank with
which the Revenue Reduction Account is held ceases to be an Eligible Financial
Institution, the Trustee shall within five (5) days of obtaining actual
knowledge of such cessation and the identity of the replacement Eligible
Financial Institution selected by the Issuer, transfer the Revenue Reduction
Account to an account maintained with a replacement Eligible Financial
Institution selected by the Issuer (unless an Event of Default shall have
occurred and not been waived, in which case, such Eligible Financial Institution
shall be selected by the Trustee). The Issuer shall promptly (within two
Business Days) notify the Trustee of any such selection. Funds in the Revenue
Reduction Account shall not be commingled with any other monies. All moneys
deposited from time to time in the Revenue Reduction Account pursuant to this
Indenture shall be held by the Trustee as part of the related Collateral as
herein provided. Any interest or other earnings realized on funds on deposit
in
the Revenue Reduction Account shall be transferred and credited to the
Collection Account within one Business Day of receipt by the Trustee.
Investments on deposit in the Revenue Reduction Account, which were specifically
intended by the Issuer to be liquidated in order to effect an Issuer Revenue
Reduction Cure, shall be liquidated and transferred pursuant to a direction
of
the Servicer by the Trustee to the Collection Account on each Payment Date
as
may be necessary to pay the Issuer’s obligations in connection with an Issuer
Revenue Reduction.
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(e) Renewal
Reserve Account.
The
Issuer shall establish with the Trustee and the Trustee shall maintain a
segregated trust account (the “Renewal
Reserve Account”),
which
shall be in the name of the Trustee “as trustee on behalf of the Holders of the
IP Holdings LLC Asset-Backed Notes,” and which shall be in an Eligible Financial
Institution, for the receipt of funds deposited into the Renewal Reserve
Account. The Trustee shall deposit to the Renewal Reserve Account the amounts
referred to in Section 13.1(a)(xi). If the bank with which the Renewal Reserve
Account is held ceases to be an Eligible Financial Institution, the Trustee
shall within five (5) days of obtaining actual knowledge of such cessation
and
the identity of the replacement Eligible Financial Institution selected by
the
Issuer, transfer the Renewal Reserve Account to an account maintained with
a
replacement Eligible Financial Institution selected by the Issuer (unless an
Event of Default shall have occurred and not been waived, in which case, such
Eligible Financial Institution shall be selected by the Trustee). The Issuer
shall promptly (within two Business Days) notify the Trustee of any such
selection. Funds in the Renewal Reserve Account shall not be commingled with
any
other monies. All payments to be made from time to time by the Trustee to the
Noteholders out of funds in the Renewal Reserve Account pursuant to this
Indenture shall be made by the Trustee as Paying Agent. Funds on deposit in
the
Renewal Reserve Account shall be invested in Eligible Investments at the written
direction of the Issuer. On the day preceding each Payment Date, any interest
or
other earnings realized on funds on deposit in the Renewal Reserve Account
shall
be transferred and credited to the Collection Account. The maximum permissible
maturity or, if applicable, the latest redemption date of any Eligible
Investments made with amounts on deposit in the Renewal Reserve Account shall
be
not later than the Business Day preceding the next succeeding Payment Date
or
Redemption Date. All monies deposited from time to time in the Renewal Reserve
Account pursuant to this Indenture shall be held by the Trustee as part of
the
Collateral for the exclusive benefit of the Holders as herein provided. Monies
in the Renewal Reserve Account shall be subject to withdrawal pursuant to this
Indenture.
(f) Prepaid
Fee and Royalty Account.
The
Issuer shall establish with the Trustee and the Trustee shall maintain a
segregated trust account (the “Prepaid
Fee and Royalty Account”),
which
shall be in the name of the Trustee “as trustee on behalf of the Holders of the
IP Holdings LLC Asset-Backed Notes,” and which shall be in an Eligible Financial
Institution, for the receipt of funds deposited into the Prepaid Fee and Royalty
Account. The Trustee shall deposit to the Prepaid Fee and Royalty Account the
amounts referred to in Section 13.1(a). If the bank with which the Prepaid
Fee
and Royalty Account is held ceases to be an Eligible Financial Institution,
the
Trustee shall within five (5) days of obtaining actual knowledge of such
cessation and the identity of the replacement Eligible Financial Institution
selected by the Issuer, transfer the Prepaid Fee and Royalty Account to an
account maintained with a replacement Eligible Financial Institution selected
by
the Issuer (unless an Event of Default shall have occurred and not been waived,
in which case, such Eligible Financial Institution shall be selected by the
Trustee). The Issuer shall promptly (within two Business Days) notify the
Trustee of any such selection. Funds in the Prepaid Fee and Royalty Account
shall not be commingled with any other monies. All payments to be made from
time
to time by the Trustee to the Noteholders out of funds in the Prepaid Fee and
Royalty Account pursuant to this Indenture shall be made by the Trustee as
Paying Agent. Funds on deposit in the Prepaid Fee and Royalty Account shall
be
invested in Eligible Investments at the written direction of the Issuer. On
the
day preceding each Payment Date, any interest or other earnings realized on
funds on deposit in the Prepaid Fee and Royalty Account shall be transferred
and
credited to the Collection Account. The maximum permissible maturity or, if
applicable, the latest redemption date of any Eligible Investments made with
amounts on deposit in the Prepaid Fee and Royalty Account shall be not later
than the Business Day preceding the next succeeding Payment Date or Redemption
Date. All monies deposited from time to time in the Prepaid Fee and Royalty
Account pursuant to this Indenture shall be held by the Trustee as part of
the
Collateral for the exclusive benefit of the Holders as herein provided. Monies
in the Prepaid Fee and Royalty Account shall be subject to withdrawal pursuant
to this Indenture.
(g) Defeasance
Account.
The
Issuer shall establish with the Trustee and the Trustee shall maintain a
segregated trust account (the “Defeasance
Account”),
which
shall be in the name of the Trustee “as trustee on behalf of the Holders of the
IP Holdings LLC Asset-Backed Notes,” and which shall be in an Eligible Financial
Institution, for the deposit of Defeasance Securities and the receipt of funds
therefrom. All payments relating Defeasance Securities shall be deposited by
the
Issuer into the Defeasance Account. If the bank with which the Defeasance
Account is held ceases to be an Eligible Financial Institution, the Trustee
shall within five (5) days of obtaining actual knowledge of such cessation
and
the identity of the replacement Eligible Financial Institution selected by
the
Issuer, transfer the Defeasance Account to an account maintained with a
replacement Eligible Financial Institution selected by the Issuer (unless an
Event of Default shall have occurred and not been waived, in which case, such
Eligible Financial Institution shall be selected by the Trustee). The Issuer
shall promptly (within two (2) Business Days) notify the Trustee of any such
selection. Funds in the Defeasance Account shall not be commingled with any
other monies. All payments to be made from time to time by the Trustee to the
Noteholders out of funds in the Defeasance Account pursuant to this Indenture
shall be made by the Trustee as Paying Agent. Funds on deposit in the Defeasance
Account shall be invested in Eligible Investments at the written direction
of
the Issuer. On the day preceding each Payment Date, any payments of interest
and
principal received in respect of Defeasance Securities shall be transferred
and
credited to the Collection Account. All monies deposited from time to time
in
the Defeasance Account pursuant to this Indenture shall be held by the Trustee
as part of the Collateral for the exclusive benefit of the Holders as herein
provided. All monies deposited from to time in the Defeasance Account shall
be
subject to withdrawal pursuant to Section 13.7 of this Indenture.
Section
12.3. Release
of Assets
(a) If
at any
time the Issuer, the Servicer or any Noteholder has actual knowledge (or if
the
Trustee has received notice) that a Release Event with respect to any particular
Asset has occurred, the party discovering such event shall notify the other
parties.
(b) Upon
receipt of notification or upon actual knowledge of a Release Event described
in
clause (a) of this Section 12.3, and if the Asset DSCR Test is not
met, the Issuer shall exercise commercially reasonable efforts to eliminate
or
otherwise cure such Release Event.
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(c) If
the
Issuer fails or is unable to eliminate or cure the Release Event within 60
days
of actual knowledge thereof, then the Issuer shall either (i) pay the Release
Price of the affected Asset on the Business Day next preceding the Redemption
Date next following the expiration of such 60 day period or (ii) acquire and
Grant Defeasance Securities with a principal balance and bearing an interest
rate such that, as determined by the Servicer, such securities will be
sufficient to provide principal and interest payments on each Payment Date
(beginning on the immediately following Payment Date until the Legal Maturity
Date) in an amount at least equal to the payments that would be required under
the portion of the Notes that would have been redeemed if the Issuer had elected
to pay the Release Price. Upon payment of the Release Price of such Asset (as
determined by the Servicer, which shall also be the Redemption Price of the
Notes) to the Collection Account, the Asset shall be released from the Lien
of
this Indenture. The Release Price for the release of the affected Asset shall
be
deposited in the Collection Account and shall be applied to the redemption
of
Notes on such Redemption Date in accordance with Section 10.1(a) of this
Indenture. The Issuer’s obligation to pay any Release Price shall be limited to
funds available therefor under the Contribution Agreement, the Xxx Xxxxx
Contribution Agreement, the Rampage Contribution Agreement, the Xxxx
Contribution Agreement or the London Fog Contribution Agreement, as applicable,
or this Indenture. Any Defeasance Securities shall be deposited to the
Defeasance Account and shall be part of the Collateral without any further
action by any party hereto. The Issuer and the Trustee hereby direct that all
principal and interest payments received in respect of the Defeasance Securities
be deposited directly into the Collection Account.
(d) The
Issuer, may, with the prior written consent of the Noteholders, such consent
to
be given in the Noteholders’ sole discretion, obtain a release of Asset(s) from
the Lien of this Indenture by providing at least 45 days’ prior written notice
(the “Issuer’s
Notice”)
to the
Trustee and the Noteholders setting forth (i) the Asset(s) to be released,
(ii)
the Redemption Date on which such Asset(s) will be released and (iii) an
estimate of the Release Price to be deposited on the Redemption Date specified
in such notice. Upon payment to the Collection Account of the Release Price
of
such Asset(s) (which shall also be the Redemption Price for the Notes) or the
Grant of Defeasance Securities, the Asset(s) specified in the Issuer’s Notice
shall be released from the Lien of this Indenture. The Release Price for the
release of such Asset(s) shall be applied to the redemption of Notes on such
Redemption Date in accordance with Section 10.1(a) of this Indenture.
Section
12.4. Accounting
by Trustee to Issuer and the Noteholders
Within
five (5) Business Days following each Payment Date and Redemption Date, the
Trustee shall render to the Issuer and the Servicer an accounting (the
“Trustee
Report”),
certified by an authorized officer of the Trustee, of:
(i)
|
the
aggregate funds deposited in the Collection Account, the Liquidity
Reserve
Account, the Revenue Reduction Account, the Renewal Reserve Account
and
the Prepaid Fee and Royalty Account subsequent to the immediately
preceding Payment Date or Redemption Date, as
applicable;
|
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(ii)
|
the
amount of principal (the total amount of principal and each amount
allocable to the Candie’s/Xxx Xxxxx Principal Component, the Rampage
Principal Component, the Xxxx Principal Component and the London
Fog
Principal Component) and the amount of interest paid to the Holders
of the
Notes;
|
(iii)
|
any
funds remaining in the Collection Account, the Liquidity Reserve
Account,
the Revenue Reduction Account, the Renewal Reserve Account and the
Prepaid
Fee and Royalty Account after payments of interest and principal
as set
forth pursuant to clause (ii) above;
and
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(iv)
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any
discrepancy between the aggregate amount of principal remaining on
the
Notes after giving effect to the principal payment on the Notes on
such
Payment Date and the aggregate amount of principal remaining on the
Notes
as set forth on the Servicer’s
Report.
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Section
12.5. Collateral
(a) The
Trustee may, and when required by the provisions of Articles V, X and XII of
this Indenture or otherwise hereunder shall, execute instruments to release
property from the Lien of this Indenture, or convey the Trustee’s interest in
the same, in a manner and under circumstances which are not in violation of
the
provisions of this Indenture. No party relying upon an instrument executed
by
the Trustee as provided in this Article XII shall be bound to ascertain the
Trustee’s authority, inquire into the satisfaction of any conditions precedent
or see to the application of any monies.
(b) At
the
written request and expense of the Issuer and upon being supplied by the Issuer
with appropriate forms therefor, the Trustee shall, at such time as there are
no
Notes Outstanding and all amounts due under this Indenture have been paid and
the Lien of the Indenture has been discharged in accordance with Section 5.1
hereof, release the Collateral from the Lien of this Indenture and promptly
deliver all Collateral held by it to the Issuer.
Section
12.6. Opinion
of Counsel
The
Trustee shall be entitled to receive at least ten (10) days’ notice of any
action to be taken pursuant to Section 12.5(a), accompanied by copies of any
instruments involved, and the Servicer and the Noteholders shall also be
entitled to receive, upon request, an Opinion of Counsel, in form and substance
satisfactory to the Trustee, outlining the steps required to complete such
action and stating that such action is permitted hereunder. The Trustee shall
be
entitled to rely conclusively on any such Opinion of Counsel as to the opinions
expressed therein.
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ARTICLE
XIII.
Section
13.1. Disbursements
of Monies out of Collection Account
(a) On
each
Payment Date, the Trustee, shall, first, upon direction of the Manager withdraw
funds from the Collection Account and transfer such funds to the Advertising
Reserve Account in accordance with Section 13.3 hereof, shall, second, in
accordance with the Servicer’s Report, withdraw any Nonrecurring Fees or Prepaid
Royalty Amounts from the Collection Account and transfer the same to the Prepaid
Fee and Royalty Account, and shall, third, pursuant to the Servicer’s Report,
withdraw funds from the Collection Account, and pay the following amounts from
such funds in the following order of priority in all cases to the extent of
the
remaining Available Funds (except in the case of 13.1(a)(xi) which shall be
paid
exclusively from funds deposited in the Collection Account from the Renewal
Reserve Account pursuant to Section 13.5 hereof) in the Collection Account
on
such Payment Date:
(i)
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to
the Trustee, the Trustee Fee and all Trustee Costs up to $1,000 (the
“Capped Trustee Costs”);
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(ii)
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to
the Back-Up Manager, if then engaged, (A) the Back-Up Management
Fee and,
to the extent not previously distributed, the Back-Up Management
Fee due
on each prior Payment Date and (B) the Back-Up Manager Costs up to
$1,000
(the “Capped Back-Up Manager Costs”) and, to the extent not previously
distributed, the amount of Back-Up Manager Costs outstanding on each
prior
Payment Date;
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(iii)
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to
the Manager, (A) the Management Fee and, to the extent not previously
distributed, the Management Fee due on each prior Payment Date and
(B) the Manager Costs up to $1,000 (the “Capped Manager Costs”) and,
to the extent not previously distributed, the Manager Costs outstanding
on
each prior Payment Date;
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(iv)
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to
the Servicer, (A) the Servicing Fee and to the extent not previously
distributed, the Servicing Fee due on each prior Payment Date and
(B) to
the Servicer, the Servicer Costs up to $1,000 (the “Capped Services
Costs”) and to the extent not previously distributed, the amount of
Servicer Costs outstanding on each prior Payment Date;
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(v)
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to
the Noteholders, interest accrued on the Notes for the related Interest
Period plus any accrued interest thereon remaining unpaid from any
previous Interest Period, and interest on such overdue interest to
the
date such payment is made, at the Note Interest Rate, but only to
the
extent that payment of such interest on interest shall be legally
enforceable;
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(vi)
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(A)
prior to the Payment Date occurring in August 2012, to the Noteholders,
the amount referred to in clause (i) of the definition of the term
“Note
Principal Payment” for such Payment Date in reduction of the Note
Principal Balance of the Notes and (B) on and after the Payment Date
occurring in August 2012 after giving effect to payments in respect
of
principal from the Liquidity Reserve Account pursuant to Section
13.2(b),
all Available Funds until the Note Principal Balance of the Notes
is
reduced to zero;
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(vii)
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to
the Manager for application in accordance with Licenses all Advertising
Royalties received and on deposit in the Collection
Account;
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(viii)
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to
the Trustee, the Back-Up Manager, the Manager and the Servicer, in
that
order of priority, the positive difference, if any, for such Payment
Date,
between the Trustee Costs and the Capped Trustee Costs, the Back-Up
Manager Costs and the Capped Back-Up Manager Costs, the Manager Costs
and
the Capped Manager Costs and the Servicer Costs and the Capped Servicer
Costs, respectively;
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(ix)
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to
the Liquidity Reserve Account, the Liquidity Reserve Deposit Amount,
if
any;
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(x)
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upon
the occurrence of the Renewal Trigger Event until the earliest to
occur of
(A) the date the Renewal Trigger Event has been cured and is no longer
continuing, (B) the receipt by the Trustee and the Noteholders of
a
Non-Cure Notice or (C) the expiration of the Renewal Cure Period,
to the
Renewal Reserve Account, the Renewal Reserve Deposit
Amount;
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(xi)
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if
amounts on deposit in the Renewal Reserve Account are withdrawn therefrom
in accordance with the provisions of Section 13.5(a), such amounts
shall
be applied in reduction of the Candie’s/Xxx Xxxxx Note Principal
Balance;
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(xii) |
on
each Payment Date after the Payment Date disbursement made pursuant
to
clause (xi) above, and prior to the date the Noteholders deliver
a written
notice to the Trustee stating that the Issuer has cured the Renewal
Trigger Event, an amount equal to the applicable Quarterly Reserve
Cap
Amount
shall be applied to reduce the Candie’s/Xxx Xxxxx Note Principal Balance
of the Notes; provided,
however,
that the sum of the amounts disbursed pursuant to clause (xi) above
and
this clause (xii) shall not exceed $26,250,000;
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(xiii)
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[Reserved]
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(xiv)
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to
the Structuring Agent, the Structuring Fee;
and
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(xv)
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to
the Issuer or such party as the Issuer may direct, all remaining
Available
Funds.
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(b) The
foregoing provisions of this Section 13.1 notwithstanding, any monies deposited
in the Collection Account for purposes of redeeming Notes pursuant to Article
X
shall, subject to Section 11.3, remain in the Collection Account until paid
for
the purpose of such redemption.
(a) |
(i) In
the event that on any Payment Date Available Funds in the Collection
Account are not sufficient to make the payments specified in clauses
(i)
through (vi) of Section 13.1(a), the Paying Agent, shall, on such
Payment
Date, (x) withdraw funds from the Liquidity Reserve Account, to the
extent
funds are available therein and (y) apply the funds so withdrawn
to such
payments due on such Payment Date pursuant to and in the order of
clauses
(i) through (vi) of Section
13.1(a).
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(ii) On
each
Payment Date on which the Notes are being amortized in connection with Section
13.1(a)(xi) or (xii), the Trustee shall withdraw the Liquidity Reserve
Withdrawal Amount from the Liquidity Reserve Account and deposit such amount
into the Collection Account.
(iii) In
connection with a Management Transition, the Trustee shall withdraw amounts
from
the Liquidity Reserve Account to pay related Management Transition Expenses
up
to but not in excess of the Management Transition Expense Cap Amount. The
Trustee shall thereupon disburse such amounts in payment of such Management
Transition Expenses in accordance with a written direction of the Issuer that
is
approved in writing by an Act of Noteholders.
(b) On
the
Payment Date on or after which (i) the amount on deposit in the Liquidity
Reserve Account, together with all other funds available to the Trustee is
equal
to or greater than the sum of (x) the Redemption Price of all Notes
Outstanding on the next Redemption Date for which a proper Redemption Notice
can
be given plus (y) all other obligations of the Company under this Indenture
that will be due and owing from such Payment Date through such Redemption Date,
and (ii) all payments to be made on such date pursuant to Section 13.1(a) hereof
have been paid or funds for their payment have been reserved and are on deposit
with the Trustee, the Trustee shall, on such date, withdraw funds from the
Liquidity Reserve Account and transfer them to the Collection Account to redeem
all of the Notes then Outstanding pursuant to Section 10.2(b) of this Indenture.
If all of the Notes have not been redeemed pursuant to the immediately preceding
sentence on or prior to the Payment Date occurring in August 2012, the Trustee
shall, on such date, withdraw funds on deposit in the Liquidity Reserve Account
and transfer them to the Collection Account to be allocated to the payment
of
the Note Principal Balance in accordance with Section
13.2(a)(vi).
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(c) At
such
time as no Notes remain Outstanding and the Lien of this Indenture has been
discharged in accordance with Section 5.1 hereof, upon the request of the
Issuer, the Trustee shall withdraw from the Liquidity Reserve Account any excess
funds remaining after payment of all other amounts required under this Indenture
and remit any such excess to or at the direction of the Issuer.
Section
13.3. Advertising
Reserve Account
(a) Prior
to
any other disbursements from the Collection Account, the Trustee shall withdraw
from the Collection Account and set aside in a separate trust account which
the
Issuer hereby establishes with the Trustee, the “Advertising Reserve Account,”
the advertising and marketing expenses for advertising contributions collected
from the Issuer’s Licensees that, pursuant to the provisions of the applicable
contract, require mandatory expense of their advertising contribution (the
“Advertising
Cost Reimbursement”).
Any
such deposit shall be based upon a written instruction from the Manager and
confirmed by the Servicer in the Servicer Report. Amounts on deposit in the
Advertising Reserve Account shall be paid out by the Trustee on each Payment
Date as directed by the Manager in a writing that also certifies that all such
amounts paid out to the Manager on the immediately preceding Payment Date have
been fully applied as required.
(b) At
such
time as no Notes remain Outstanding and the Lien of this Indenture has been
discharged in accordance with Section 5.1 hereof, upon the request of the
Issuer, the Trustee shall withdraw from the Advertising Reserve Account any
excess funds remaining after payment of all other amounts required under this
Indenture and remit any such excess to or at the direction of the Issuer.
Section
13.4. Disbursements
of Monies out of the Lockbox Account
Collateral
funds on deposit in the Lockbox Account which are collected funds at the end
of
each Business Day shall be swept to and deposited in the Collection Account
at
such time.
(a) Upon
the
earlier to occur of (i) receipt by the Trustee and the Noteholders of a Non-Cure
Notice from the Issuer or (ii) the failure of the Issuer to have cured the
Renewal Trigger Event on or before the expiration of the Renewal Cure Period,
then all amounts on deposit in the Renewal Reserve Account shall be withdrawn
therefrom and deposited into the Collection Account for application in
accordance with Section 13.1(a)(xi).
(b) If
the
Issuer cures the Renewal Trigger Event, upon receipt by the Trustee of written
notice from the Noteholders stating that such cure has been effected, provided
no Event of Default shall have occurred and has not been waived, the Trustee
shall withdraw funds on deposit in the Renewal Reserve Account and deposit
the
same in the Collection Account.
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(a) On
each
Payment Date, the Trustee, shall (x) withdraw any Nonrecurring Release Amounts
and the Prepaid Release Amounts from the Prepaid Fee and Royalty Account, as
set
forth in the Servicer’s report, to the extent funds are available therein, and
(y) deposit such funds in the Collection Account for application to payments
due
on such Payment Date in accordance with Section 13.1(a).
(b) At
such
time as no Notes remain Outstanding, all amounts due under this Indenture have
been paid and the Lien of this Indenture has been discharged in accordance
with
Section 5.1 hereof, upon the request of the Issuer, the Trustee shall
withdraw from the Prepaid Fee and Royalty Account any excess funds remaining
after payment of all other amounts required under this Indenture and remit
any
such excess to or at the direction of the Issuer.
Section
13.7 Disbursement
of Monies out of the Defeasance Account
If
an
Event of Default has occurred and the Notes are accelerated in accordance with
Section 6.2 (but before any Sale of the Collateral has been made or a judgment
or decree for the money has been obtained by the Trustee), the Trustee shall,
on
such date, withdraw all assets on deposit in the Defeasance Account and transfer
them to the Collection Account and distribute all such assets in accordance
with
Section 6.6 in satisfaction of all Outstanding amounts due on the Notes.
Section
13.8. Eligible
Investments
Upon
an
Issuer Order, the Trustee shall invest the funds in the Collection Account,
the
Lockbox Account, the Revenue Reduction Account, the Liquidity Reserve Account,
the Renewal Reserve Account and the Prepaid Fee and Royalty Account and in
Eligible Investments; provided,
however,
that,
unless the Issuer and the Trustee shall receive an opinion of counsel selected
by the Issuer to the effect that the limitation is not necessary for the Issuer
to avoid registration under the Investment Company Act, at no time may the
Issuer allow the total aggregate principal amount of the Tested Securities
to
exceed the Investment Company Act Limit. In the event, at the close of each
Business Day, the Trustee has not received an Issuer Order, or is not in
possession of a standing Issuer Order, the Trustee may invest such funds in
the
type of Eligible Investment specified in clause (i) or clause (v) of
the definition of Eligible Investments. No Eligible Investment shall mature
later than the Business Day preceding the next following Payment
Date.
Any
income or other realized gain from Eligible Investments in the Collection
Account, the Liquidity Reserve Account, the Revenue Reduction Account, the
Renewal Reserve Account or the Prepaid Fee and Royalty Account shall be
transferred and credited to the Collection Account. The Trustee shall not be
liable for any loss incurred on any funds invested in Eligible Investments
pursuant to the provisions of this Section 13.8.
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The
Trustee shall have no liability in respect of losses incurred as a result of
the
liquidation of any Eligible Investment prior to its stated maturity or the
failure of the Issuer to provide timely written investment
direction.
ARTICLE
XIV.
Section
14.1. Continued
Existence; Organizational Documents
IP
Holdings and Management Corporation (“IPHM”) shall keep in full effect its
existence, rights and franchises as a special purpose corporation under the
laws
of the State of Delaware, shall operate in accordance with, and subject to
the
limitations set forth in, its Organizational Documents and shall obtain and
preserve its qualification to do business as a foreign corporation in each
jurisdiction in which the failure to be so qualified shall have a material
adverse effect on IPHM.
Section
14.2. Negative
Covenant
IPHM
shall not amend its Organizational Documents without receiving approval thereof
by Act of the Noteholders (which may not be unreasonably withheld).
Section
14.3. No
Bankruptcy Petition.
The
Trustee and the Noteholders by entering into this Agreement covenants and agrees
that, prior to the date which is one year and one day after the payment in
full
of the Notes, it will not institute against, or join any other Person in
instituting, against IPHM, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any federal
or
state bankruptcy or similar law.
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IP HOLDINGS LLC, as Issuer | ||
By:
IP Holdings and Management Corporation, as
Manager
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||
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By: | /s/ Xxxxxxx X. Xxxxxx | |
Name: Xxxxxxx X. Xxxxxx |
||
Title: Secretary |
WILMINGTON TRUST COMPANY, not in its individual capacity, but solely as Trustee | ||
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By: | /s/ Xxxxxxx X. Xxxxx | |
Name: Xxxxxxx X. Xxxxx |
||
Title: Financial Services Officer |
[FIFTH AMENDED AND RESTATED INDENTURE]
IP HOLDINGS AND MANAGEMENT CORPORATION | ||
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By: | /s/ Xxxxxxx X. Xxxxxx | |
Name: Xxxxxxx X. Xxxxxx |
||
Title: Secretary |
[FIFTH
AMENDED AND RESTATED INDENTURE]
List
of Omitted Appendices and Exhibits
APPENDIX
A - Standard Definitions
EXHIBIT
A
- Form of Assignment of Note
EXHIBIT
B
- Form of Servicer’s Report
EXHIBIT
C
- Form of Investment Letter
EXHIBIT
D
- Substitute Form W-9
EXHIBIT
E
- Assets
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EXHIBIT
E-1: Trademarks
|
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EXHIBIT
E-1A: Registered Trademarks
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EXHIBIT
E-1B: Unregistered Trademarks
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EXHIBIT
E-1C: Additional Registrations and Pending Applications
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EXHIBIT
E-2: Licenses
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EXHIBIT
E-3: Copyrights
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EXHIBIT
E-4: Patents
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EXHIBIT
E-5: Pending Intent-to-Use Applications
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EXHIBIT
E-6: Trademarks Subject to
Litigation
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EXHIBIT
F
- Claims
F-1