EXHIBIT 4.1
MASTER INDENTURE
between
SPIEGEL CREDIT CARD MASTER NOTE TRUST
Issuer,
and
THE BANK OF NEW YORK
Indenture Trustee
Dated as of December 1, 2000
TABLE OF CONTENTS
Page
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DEFINITIONS............................................................................................... 2
Section 1.1. Definitions..................................................................... 2
Section 1.2. Other Definitional Provisions................................................... 3
ARTICLE II
THE NOTES................................................................................................. 4
Section 2.1. Form Generally.................................................................. 4
Section 2.2. Denominations................................................................... 4
Section 2.3. Execution, Authentication and Delivery.......................................... 4
Section 2.4. Authenticating Agent............................................................ 5
Section 2.5. Registration of and Limitations on Transfer and Exchange of Notes............... 6
Section 2.6. Mutilated, Destroyed, Lost or Stolen Notes...................................... 8
Section 2.7. Persons Deemed Owners........................................................... 9
Section 2.8. Appointment of Paying Agent..................................................... 9
Section 2.9. Access to List of Noteholders' Names and Addresses.............................. 10
Section 2.10. Cancellation.................................................................... 11
Section 2.11. [Reserved]...................................................................... 11
Section 2.12. New Issuances................................................................... 11
Section 2.13. Book-Entry Notes................................................................ 12
Section 2.14. Notices to Clearing Agency or Foreign Clearing Agency........................... 14
Section 2.15. Definitive Notes................................................................ 14
Section 2.16. Global Note..................................................................... 14
Section 2.17. Meetings of Noteholders......................................................... 15
Section 2.18. Uncertificated Classes.......................................................... 15
ARTICLE III
REPRESENTATIONS AND COVENANTS OF ISSUER................................................................... 15
Section 3.1. Payment of Principal and Interest............................................... 15
Section 3.2. Maintenance of Office or Agency................................................. 16
Section 3.3. Money for Note Payments to Be Held in Trust..................................... 16
Section 3.4. Existence....................................................................... 17
Section 3.5. Protection of Collateral........................................................ 17
Section 3.6. Opinions as to Collateral....................................................... 18
Section 3.7. Performance of Obligations; Servicing of Receivables............................ 19
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TABLE OF CONTENTS
(Continued)
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Section 3.8. Negative Covenants.............................................................. 21
Section 3.9. Statements as to Compliance..................................................... 21
Section 3.10. Issuer May Consolidate, Etc., Only on Certain Terms............................. 22
Section 3.11. Successor Substituted........................................................... 24
Section 3.12. No Other Business............................................................... 24
Section 3.13. [Reserved]...................................................................... 24
Section 3.14. Servicer's Obligations.......................................................... 24
Section 3.15. Investments..................................................................... 24
Section 3.16. Capital Expenditures............................................................ 24
Section 3.17. Removal of Administrator........................................................ 24
Section 3.18. Restricted Payments............................................................. 25
Section 3.19. Notice of Events of Default..................................................... 25
Section 3.20. Further Instruments and Acts.................................................... 25
ARTICLE IV
SATISFACTION AND DISCHARGE............................................................................... 25
Section 4.1. Satisfaction and Discharge of this Indenture.................................... 25
Section 4.2. Application of Issuer Money..................................................... 27
ARTICLE V
PAY OUT EVENTS, DEFAULTS AND REMEDIES.................................................................... 27
Section 5.1. Pay Out Events.................................................................. 27
Section 5.2. Events of Default............................................................... 27
Section 5.3. Acceleration of Maturity; Rescission and Annulment.............................. 29
Section 5.4. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee...... 30
Section 5.5. Remedies; Priorities............................................................ 32
Section 5.6. Optional Preservation of the Collateral......................................... 34
Section 5.7. Limitation on Suits............................................................. 34
Section 5.8. Unconditional Rights of Noteholders to Receive Principal and Interest........... 35
Section 5.9. Restoration of Rights and Remedies.............................................. 35
Section 5.10. Rights and Remedies Cumulative.................................................. 35
Section 5.11. Delay or Omission Not Waiver.................................................... 36
Section 5.12. Rights of Noteholders to Direct Indenture Trustee............................... 36
Section 5.13. Waiver of Past Defaults......................................................... 36
Section 5.14. Undertaking for Costs........................................................... 37
Section 5.15. Waiver of Stay or Extension Laws................................................ 37
Section 5.16. Sale of Receivables............................................................. 37
Section 5.17. Action on Notes................................................................. 38
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TABLE OF CONTENTS
(Continued)
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ARTICLE VI
THE INDENTURE TRUSTEE.................................................................................... 38
Section 6.1. Duties of the Indenture Trustee................................................. 38
Section 6.2. Notice of Pay Out Event or Event of Default..................................... 40
Section 6.3. Rights of Indenture Trustee..................................................... 41
Section 6.4. Not Responsible for Recitals or Issuance of Notes............................... 42
Section 6.5. Restrictions on Holding Notes................................................... 42
Section 6.6. Money Held in Trust............................................................. 42
Section 6.7. Compensation, Reimbursement and Indemnification................................. 42
Section 6.8. Replacement of Indenture Trustee................................................ 43
Section 6.9. Successor Indenture Trustee by Merger........................................... 45
Section 6.10. Appointment of Co-Indenture Trustee or Separate Indenture Trustee............... 45
Section 6.11. Eligibility; Disqualification................................................... 46
Section 6.12. Preferential Collection of Claims Against....................................... 47
Section 6.13. Representations and Covenants of the Indenture Trustee.......................... 47
Section 6.14. Custody of the Collateral....................................................... 47
ARTICLE VII
NOTEHOLDERS' LIST AND REPORTS BY INDENTURE TRUSTEE AND ISSUER........................................... 48
Section 7.1. Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders.......... 48
Section 7.2. Preservation of Information; Communications to Noteholders...................... 48
Section 7.3. Reports by Issuer............................................................... 48
Section 7.4. Reports by Indenture Trustee.................................................... 49
ARTICLE VIII
ALLOCATION AND APPLICATION OF COLLECTIONS................................................................ 49
Section 8.1. Collection of Money............................................................. 49
Section 8.2. Rights of Noteholders........................................................... 50
Section 8.3. Establishment of Collection Account and Excess Funding Account.................. 50
Section 8.4. Collections and Allocations..................................................... 53
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TABLE OF CONTENTS
(Continued)
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Section 8.5. Shared Principal Collections.................................................... 55
Section 8.6. Excess Finance Charge Collections............................................... 56
Section 8.7. Allocation of Collateral to Series or Groups.................................... 56
Section 8.8. Release of Collateral; Eligible Loan Documents.................................. 57
Section 8.9. Opinion of Counsel.............................................................. 58
ARTICLE IX
DISTRIBUTIONS AND REPORTS TO NOTEHOLDERS................................................................. 58
ARTICLE X
SUPPLEMENTAL INDENTURES.................................................................................. 58
Section 10.1. Supplemental Indentures Without Consent of Noteholders.......................... 58
Section 10.2. Supplemental Indentures with Consent of Noteholders............................. 60
Section 10.3. Execution of Supplemental Indentures............................................ 62
Section 10.4. Effect of Supplemental Indenture................................................ 62
Section 10.5. Conformity With Trust Indenture Act............................................. 62
Section 10.6. Reference in Notes to Supplemental Indentures................................... 62
ARTICLE XI
TERMINATION.............................................................................................. 63
Section 11.1. Termination of Issuer........................................................... 63
Section 11.2. Final Distribution.............................................................. 63
Section 11.3. Issuer's Termination Rights..................................................... 64
ARTICLE XII
MISCELLANEOUS 64
Section 12.1. Compliance Certificates and Opinions etc........................................ 64
Section 12.2. Form of Documents Delivered to Indenture Trustee................................ 66
Section 12.3. Acts of Noteholders............................................................. 66
Section 12.4. Notices, Etc. to Indenture Trustee and Issuer................................... 67
Section 12.5. Notices to Noteholders; Waiver.................................................. 68
Section 12.6. Alternate Payment and Notice Provisions......................................... 68
Section 12.7. Conflict with Trust Indenture Act............................................... 68
Section 12.8. Effect of Headings and Table of Contents........................................ 69
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TABLE OF CONTENTS
(Continued)
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Section 12.9. Successors and Assigns.......................................................... 69
Section 12.10 Separability.................................................................... 69
Section 12.11.Benefits of Indenture........................................................... 69
Section 00.00.Xxxxx Holidays.................................................................. 69
Section 12.13.GOVERNING LAW................................................................... 69
Section 12.14.Counterparts.................................................................... 69
Section 12.15.Issuer Obligation............................................................... 69
Section 00.00.Xx Petition..................................................................... 70
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RECONCILIATION AND TIE BETWEEN TRUST INDENTURE
ACT OF 1939 AND INDENTURE PROVISIONS/1/
Trust Indenture
Act Section Indenture Section
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310(a)(1)...................................................... 6.11
(a)(2)...................................................... 6.11
(a)(3)...................................................... 6.10
(a)(4)...................................................... Not Applicable
(a)(5)...................................................... 6.11
(b)......................................................... 6.8, 6.11
(c)......................................................... Not Applicable
311(a)......................................................... 6.12
(b)......................................................... 6.12
(c)......................................................... Not Applicable
312(a)......................................................... 7.1, 7.2(a)
(b)......................................................... 7.2(b)
(c)......................................................... 7.2(c)
313(a)......................................................... 7.4
(b)......................................................... 7.4
(c)......................................................... 7.3, 7.4
(d)......................................................... 7.4
314(a)......................................................... 3.9, 7.3(a)
(b)......................................................... 3.6
(c)(1)...................................................... 8.9, 12.1(a)
(c)(2)...................................................... 8.9, 12.1(a)
(c)(3)...................................................... 8.9, 12.1(a)
(d)(1)...................................................... 8.9, 12.1(b)
(d)(2)...................................................... Not Applicable
(d)(3)...................................................... Not Applicable
(e)......................................................... 12.1(a)
315(a)......................................................... 6.1(b)
(b)......................................................... 6.2
(c)......................................................... 6.1(c)
(d)......................................................... 6.1(d)
(d)(1)...................................................... 6.1(d)
(d)(2)...................................................... 6.1(d)
(d)(3)...................................................... 6.1(d)
(e)......................................................... 5.14
316(a)(1)(A)................................................... 5.12
316(a)(1)(B)................................................... 5.13
316(a)(2)...................................................... Not Applicable
316(b)......................................................... 5.8
317(a)(1)...................................................... 5.4
317(a)(2)...................................................... 5.4(d)
__________________
/1/ This reconciliation and tie shall not, for any purpose, be deemed to be
part of the within indenture.
317(b)......................................................... 5.4(a)
318(a)......................................................... 12.7
MASTER INDENTURE, dated as of December 1, 2000 (the "Indenture"), between
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Spiegel Credit Card Master Note Trust, a trust organized under the laws of the
State of Illinois (the "Issuer"), and The Bank of New York, a New York banking
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corporation, as indenture trustee (the "Indenture Trustee"). This Indenture may
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be supplemented at any time and from time to time by an indenture supplement in
accordance with Article X (an "Indenture Supplement," and together with this
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Indenture and any amendments, the "Agreement"). If a conflict exists between the
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terms and provisions of this Indenture and any Indenture Supplement, the terms
and provisions of the Indenture Supplement shall be controlling with respect to
the related Series.
PRELIMINARY STATEMENT
The Issuer has duly authorized the execution and delivery of this Indenture
to provide for an issue of its asset backed notes as provided in this Indenture.
All covenants and agreements made by the Issuer herein are for the benefit and
security of the Noteholders. The Issuer is entering into this Indenture, and the
Indenture Trustee is accepting the trusts created hereby, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged.
Simultaneously with the delivery of this Indenture, the Issuer is entering
into a Transfer and Servicing Agreement with Spiegel Credit Corporation III, a
Delaware corporation, as Seller, and First Consumers National Bank, a national
banking association, as Servicer, pursuant to which (a) the Seller will convey
to the Issuer all of its right, title and interest in, to and under (i) the
Collateral Certificate, which the Seller will have received from Spiegel Master
Trust, and (ii) on and after the SMT Termination Date, the Receivables, which
the Seller will have received from First Consumers National Bank pursuant to a
Receivables Purchase Agreement and (b) the Servicer will agree to service the
Receivables and make collections thereon on behalf of the Noteholders.
Under the Receivables Purchase Agreement and the Transfer and Servicing
Agreement, Receivables arising in the Accounts from time to time will be
conveyed thereunder to the Issuer.
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee, for the benefit of the
Holders of the Notes and the Enhancement Providers, all of the Issuer's right,
title and interest, whether now owned or hereafter acquired, in, to and under
(a) the Collateral Certificate, (b) the Receivables, (c) Recoveries related to
and all money, instruments, investment property and other property distributed
or distributable in respect of (together with all earnings, dividends,
distributions, income, issues, and profits relating to) the Receivables pursuant
to the terms of the Transfer and Servicing Agreement, this Indenture and any
Indenture Supplement; (d) all Permitted Investments and all money,
investment property, instruments and other property on deposit from time to time
in, credited to or related to the Collection Account, the Series Accounts and
the Excess Funding Account (including any subaccounts of any such account), and
in all interest, dividends, earnings, income and other distributions from time
to time received, receivable or otherwise distributed or distributable thereto
or in respect thereof (including any accrued discount realized on liquidation of
any investment purchased at a discount); (e) all rights, remedies, powers,
privileges and claims of the Issuer under or with respect to any Series
Enhancement and the Transfer and Servicing Agreement (whether arising pursuant
to the terms of the Transfer and Servicing Agreement or otherwise available to
the Issuer at law or in equity), including the rights of the Issuer to enforce
the Transfer and Servicing Agreement, and to give or withhold any and all
consents, requests, notices, directions, approvals, extensions or waivers under
or with respect to the Transfer and Servicing Agreement to the same extent as
the Issuer could but for the assignment and security interest granted to the
Indenture Trustee for the benefit of the Noteholders; (f) all proceeds of any
Credit Insurance policies relating to the Receivables; (g) all proceeds of any
derivative contracts between the Issuer or FCNB and a counterparty, as described
in any Indenture Supplement; (h) all money, accounts, general intangibles,
chattel paper, instruments, documents, goods, investment property, deposit
accounts, certificates of deposit, letters of credit, and advices of credit
consisting of, arising from or related to the foregoing; (i) all other property
of the Issuer; (j) all present and future claims, demands, causes and choses in
action in respect of any or all of the foregoing and all payments on or under
and all proceeds of every kind and nature whatsoever in respect of any or all of
the foregoing, including all proceeds, products, rents, receipts or profits of
the conversion, voluntary or involuntary, into cash or other property, all cash
and non-cash proceeds, and other property consisting of, arising from or
relating to all or any part of any of the foregoing; and (k) any proceeds of the
foregoing (collectively, the "Collateral").
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LIMITED RECOURSE
The obligation of the Issuer to make payments of principal, interest and
other amounts in respect of the Notes is limited by recourse only to the
Collateral.
ARTICLE I
DEFINITIONS
Section 1.1. Definitions.
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Capitalized terms used herein are defined in Annex A.
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Section 1.2. Other Definitional Provisions.
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(a) All terms defined directly or by reference in this Indenture shall
have the defined meanings when used in any certificate or other document
delivered pursuant hereto unless otherwise defined therein. For purposes of this
Indenture and all such certificates and other documents, unless the context
otherwise requires: (i) accounting terms not otherwise defined in this
Indenture, and accounting terms partly defined in this Indenture to the extent
not defined, shall have the respective meanings given to them under generally
accepted accounting principles; (ii) terms defined in Article 9 of the UCC as in
effect in the State of Illinois and not otherwise defined in this Indenture are
used as defined in that Article; (iii) any reference to each Rating Agency shall
only apply to any specific rating agency if such rating agency is then rating
any outstanding Series; (iv) references to any amount as on deposit or
outstanding on any particular date means such amount at the close of business on
such day; (v) the words "hereof," "herein" and "hereunder" and words of similar
import refer to this Indenture (or the certificate or other document in which
they are used) as a whole and not to any particular provision of this Indenture
(or such certificate or document); (vi) references to any Section, Schedule or
Exhibit are references to Sections, Schedules and Exhibits in or to this
Indenture (or the certificate or other document in which the reference is made),
and references to any paragraph, Section, clause or other subdivision within any
Section or definition refer to such paragraph, subsection, clause or other
subdivision of such Section or definition; (vii) the term "including" means
"including without limitation"; (viii) references to any law or regulation refer
to that law or regulation as amended from time to time and include any successor
law or regulation; (ix) references to any Person include that Person's
successors and assigns; and (x) headings are for purposes of reference only and
shall not otherwise affect the meaning or interpretation of any provision
hereof.
(b) Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes
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"indenture security holder" means a Noteholder
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"indenture to be qualified" means this Indenture
-------------------------
"indenture trustee" or "institutional trustee" means the Indenture Trustee
----------------- ---------------------
"obligor" on the indenture securities means the Issuer and any other
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obligor on the indenture securities
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All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule have
the meanings assigned to them by such definitions.
ARTICLE II
THE NOTES
Section 2.1. Form Generally. Any Series or Class of Notes, together with
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the Indenture Trustee's certificate of authentication related thereto, may be
issued in bearer form (the "Bearer Notes") with attached interest coupons and a
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special coupon (collectively, the "Coupons") or in fully registered form (the
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"Registered Notes") and shall be in substantially the form of an exhibit to the
----------------
related Indenture Supplement with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture or such Indenture Supplement, and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon,
as may, consistently herewith, be determined by the officers executing such
Notes, as evidenced by their execution of such Notes. Any portion of the text of
any Note may be set forth on the reverse thereof, with an appropriate reference
thereto on the face of the Note. The terms of any Notes set forth in an exhibit
to the related Indenture Supplement are part of the terms of this Indenture, as
applicable.
The Definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods, all as determined by
the officers executing such Notes, as evidenced by their execution of such
Notes.
Each Note will be dated the Closing Date and each Definitive Note will be
dated as of the date of its authentication.
Section 2.2. Denominations. Except as otherwise specified in the related
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Indenture Supplement and the Notes, each class of Notes of each Series shall be
issued in fully registered form in minimum amounts of $1,000 and in integral
multiples of $1,000 in excess thereof (except that one Note of each Class may be
issued in a different amount, so long as such amount exceeds the applicable
minimum denomination for such Class), and shall be issued upon initial issuance
as one or more Notes in an aggregate original principal amount equal to the
applicable Collateral Amount for such Class or Series.
Section 2.3. Execution, Authentication and Delivery. Each Note shall be
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executed by manual or facsimile signature on behalf of the Issuer by an
Authorized Officer.
Notes bearing the manual or facsimile signature of an individual who was,
at the time when such signature was affixed, authorized to sign on behalf of the
Issuer shall
4
not be rendered invalid, notwithstanding the fact that such individual ceased to
be so authorized prior to the authentication and delivery of such Notes or does
not hold such office at the date of issuance of such Notes.
At any time and from time to time after the execution and delivery of this
Indenture, the Issuer may deliver Notes executed by the Issuer to the Indenture
Trustee for authentication and delivery, and the Indenture Trustee shall
authenticate at the written direction of the Issuer and deliver such Notes as
provided in this Indenture or the related Indenture Supplement and not
otherwise.
No Note shall be entitled to any benefit under this Indenture or the
applicable Indenture Supplement or be valid or obligatory for any purpose,
unless there appears on such Note a certificate of authentication substantially
in the form provided for herein or in the related Indenture Supplement executed
by or on behalf of the Indenture Trustee by the manual signature of a duly
authorized signatory, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder.
Section 2.4. Authenticating Agent.
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(a) The Indenture Trustee, at the expense of the Servicer, may appoint one
or more authenticating agents with respect to the Notes which shall be
authorized to act on behalf of the Indenture Trustee in authenticating the Notes
in connection with the issuance, delivery, registration of transfer, exchange or
repayment of the Notes. Whenever reference is made in this Indenture to the
authentication of Notes by the Indenture Trustee or the Indenture Trustee's
certificate of authentication, such reference shall be deemed to include
authentication on behalf of the Indenture Trustee by an authenticating agent and
a certificate of authentication executed on behalf of the Indenture Trustee by
an authenticating agent. Each authenticating agent must be acceptable to the
Issuer and the Servicer.
(b) Any institution succeeding to the corporate agency business of an
authenticating agent shall continue to be an authenticating agent without the
execution or filing of any power or any further act on the part of the Indenture
Trustee or such authenticating agent.
(c) An authenticating agent may at any time resign by giving written
notice of resignation to the Indenture Trustee, the Issuer and the Servicer. The
Indenture Trustee may at any time terminate the agency of an authenticating
agent by giving notice of termination to such authenticating agent and to the
Issuer and the Servicer. Upon receiving such a notice of resignation or upon
such a termination, or in case at any time an authenticating agent shall cease
to be acceptable to the Indenture Trustee or the Issuer and the Servicer, the
Indenture Trustee may promptly appoint a successor authenticating agent. Any
successor authenticating agent upon acceptance of its
5
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
authenticating agent. No successor authenticating agent shall be appointed
unless acceptable to the Issuer and the Servicer.
(d) The Issuer agrees to pay to each authenticating agent from time to
time reasonable compensation for its services under this Section 2.4.
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(e) The provisions of Sections 6.1 and 6.4 shall be applicable to any
------------ ---
authenticating agent.
(f) Pursuant to an appointment made under this Section 2.4, the Notes may
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have endorsed thereon, in lieu of or in addition to the Indenture Trustee's
certificate of authentication, an alternative certificate of authentication in
substantially the following form:
"This is one of the Notes described in the within-mentioned Agreement.
__________________________
__________________________
as Authenticating Agent
for the Indenture Trustee
By: ______________________
"Authorized Signatory"
Section 2.5. Registration of and Limitations on Transfer and Exchange of
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Notes. The Issuer shall cause to be kept a register (the "Note Register") in
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which the Issuer shall provide for the registration of Notes and the
registration of transfers of Notes. The Indenture Trustee initially shall be the
transfer agent and registrar (in such capacity, the "Transfer Agent and
------------------
Registrar") for the purpose of registering Notes and transfers of Notes as
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herein provided. Upon any resignation of any Transfer Agent and Registrar, the
Issuer shall promptly appoint a successor or, if it elects not to make such an
appointment, assume the duties of Transfer Agent and Registrar.
If a Person other than the Indenture Trustee is appointed by the Issuer as
Transfer Agent and Registrar, the Issuer will give the Indenture Trustee prompt
written notice of the appointment of a Transfer Agent and Registrar and of the
location, and any change in the location, of the Transfer Agent and Registrar
and Note Register. The Indenture Trustee shall have the right to inspect the
Note Register at all reasonable times and to obtain copies thereof, and the
Indenture Trustee shall have the right to
6
conclusively rely upon a certificate executed on behalf of the Transfer Agent
and Registrar by an officer thereof as to the names and addresses of the
Noteholders and the principal amounts and numbers of such Notes.
Upon surrender for registration of transfer of any Note at the office or
agency of the Transfer Agent and Registrar, to be maintained as provided in
Section 3.2, if the requirements of Section 8-401 of the UCC are met as
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certified by the Administrator to the Indenture Trustee, the Issuer shall
execute, and upon receipt of such surrendered Note the Indenture Trustee shall
authenticate and deliver to the Noteholder, in the name of the designated
transferee or transferees, one or more new Notes (of the same Series and Class)
in any authorized denominations of like aggregate principal amount.
At the option of a Noteholder, Notes may be exchanged for other Notes (of
the same Series and Class) in any authorized denominations and of like aggregate
principal amount, upon surrender of such Notes to be exchanged at the office or
agency of the Transfer Agent and Registrar. Whenever any Notes are so
surrendered for exchange, if the requirements of Section 8-401 of the UCC are
met as certified by the Administrator to the Indenture Trustee, the Issuer shall
execute, and upon receipt of such surrendered Note the Indenture Trustee shall
authenticate and deliver to the Noteholder, the Notes which the Noteholder
making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes
shall evidence the same obligations, evidence the same debt, and be entitled to
the same rights and privileges under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument of
transfer in a form satisfactory to the Indenture Trustee duly executed by, the
Noteholder thereof or its attorney-in-fact duly authorized in writing, and by
such other documents as the Indenture Trustee may reasonably require.
Any Note held by the Seller at any time after the date of its initial
issuance may be transferred or exchanged only upon the delivery to the Owner
Trustee and the Indenture Trustee of a Tax Opinion dated as of the date of such
transfer or exchange, as the case may be, with respect to such transfer or
exchange.
The registration of transfer of any Note shall be subject to the additional
requirements, if any, set forth in the related Indenture Supplement.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Issuer and the Transfer Agent and Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of such Notes.
7
All Notes surrendered for registration of transfer and exchange shall be
canceled by the Issuer and delivered to the Indenture Trustee for subsequent
destruction without liability on the part of either. The Indenture Trustee shall
destroy the Global Note upon its exchange in full for Definitive Notes and shall
deliver a certificate of destruction to the Seller. Such certificate shall also
state that a certificate or certificates of each Foreign Clearing Agency
referred to in the applicable Indenture Supplement was received with respect to
each portion of the Global Note exchanged for Definitive Notes.
The preceding provisions of this Section 2.5 notwithstanding, the Issuer
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shall not be required to make, and Transfer Agent and Registrar need not
register, transfers or exchanges of Notes for a period of twenty (20) days
preceding the due date for any payment with respect to the Note.
If and so long as any Series of Notes are listed on the Luxembourg Stock
Exchange and such exchange shall so require, the Issuer shall appoint a
co-transfer agent and co-registrar in Luxembourg or another European city. Any
reference in this Indenture to the Transfer Agent and Registrar shall include
any co-transfer agent and co-registrar unless the context otherwise requires.
The Indenture Trustee will enter into any appropriate agency agreement with any
co-transfer agent and co-registrar not a party to this Indenture, which will
implement the provisions of this Indenture that relate to such agent.
Section 2.6. Mutilated, Destroyed, Lost or Stolen Notes. If (a) any
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mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (b) in case of destruction, loss, or theft there is delivered to the
Indenture Trustee such security or indemnity as may be required by it to hold
the Issuer, the Noteholders and the Indenture Trustee harmless, then, in the
absence of notice to the Issuer, the Transfer Agent and Registrar or the
Indenture Trustee that such Note has been acquired by a protected purchaser (as
defined in Section 8-303 of the UCC as in effect in the State of Illinois), the
Issuer shall execute, and the Indenture Trustee shall authenticate and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Note, a replacement Note of like tenor (including the same date of issuance) and
principal amount, bearing a number not contemporaneously outstanding; provided,
--------
however, that if any such mutilated, destroyed, lost or stolen Note shall have
-------
become or within seven (7) days shall be due and payable, or shall have been
selected or called for redemption, instead of issuing a replacement Note, the
Issuer may pay such Note without surrender thereof, except that any mutilated
Note shall be surrendered. If, after the delivery of such replacement Note or
payment of a destroyed, lost or stolen Note pursuant to the proviso to the
preceding sentence, a protected purchaser (as defined in Section 8-303 of the
UCC as in effect in the State of Illinois) of the original Note in lieu of which
such replacement Note was issued presents for payment such original Note, the
Issuer and the Indenture Trustee shall be entitled to recover such replacement
Note (or such
8
payment) from the Person to whom it was delivered or any Person taking such
replacement Note from such Person to whom such replacement Note was delivered or
any assignee of such Person, except a protected purchaser, and shall be entitled
to recover upon the security or indemnity provided therefor to the extent of any
loss, damage, cost or expense incurred by the Issuer or the Indenture Trustee in
connection therewith.
Upon the issuance of any replacement Note under this Section 2.6, the
-----------
Issuer may require the payment by the Holder of such Note of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Indenture Trustee or the Transfer Agent and Registrar) connected therewith.
Every replacement Note issued pursuant to this Section 2.6 in replacement
-----------
of any mutilated, destroyed, lost or stolen Note shall constitute complete and
indefeasible evidence of an obligation of the Trust, as if originally issued,
whether or not the mutilated, destroyed, lost or stolen Note shall be found at
any time, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section 2.6 are exclusive and shall preclude (to the
-----------
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.
Section 2.7. Persons Deemed Owners. Prior to due presentment for
---------------------
registration of transfer of any Note, the Issuer, the Seller, the Indenture
Trustee and any agent of the Issuer, the Seller or the Indenture Trustee shall
treat the Person in whose name any Note is registered as the owner of such Note
for the purpose of receiving distributions pursuant to the terms of the
applicable Indenture Supplement and for all other purposes whatsoever, whether
or not such Note is overdue, and neither the Issuer, the Seller, the Indenture
Trustee nor any agent of the Issuer, the Seller or the Indenture Trustee shall
be affected by any notice to the contrary.
Section 2.8. Appointment of Paying Agent.
---------------------------
(a) The Issuer reserves the right at any time to vary or terminate the
appointment of a Paying Agent for the Notes, and to appoint additional or other
Paying Agents, provided that it will at all times maintain the Indenture Trustee
as a Paying Agent.
If and so long as any Notes are listed on the Luxembourg Stock Exchange and
such exchange shall so require, the Indenture Trustee will appoint a co-paying
agent in Luxembourg or another European city. The Indenture Trustee will enter
into any
9
appropriate agency agreement with any co-paying agent not a party to this
Indenture, which will implement the provisions of this Indenture that relate to
such agent.
Notice of all changes in the identity or specified office of a Paying Agent
will be delivered promptly to the Noteholders by the Indenture Trustee.
(b) The Indenture Trustee shall cause each Paying Agent (other than
itself) to execute and deliver to the Indenture Trustee an instrument in which
such Paying Agent shall agree with the Indenture Trustee that such Paying Agent
will hold all sums, if any, held by it for payment to the Noteholders in trust
for the benefit of the Noteholders entitled thereto until such sums shall be
paid to such Noteholders and shall agree, and if the Indenture Trustee is the
Paying Agent it hereby agrees, that it shall comply with all requirements of the
Code regarding the withholding by the Indenture Trustee of payments in respect
of federal income taxes due from the Note Owners.
Section 2.9. Access to List of Noteholders' Names and Addresses.
--------------------------------------------------
(a) The Issuer will furnish or cause to be furnished to the Indenture
Trustee, the Servicer or the Paying Agent, within five (5) Business Days after
receipt by the Issuer of a written request therefor from the Indenture Trustee,
the Servicer or the Paying Agent, respectively, a list of the names and
addresses of the Noteholders. Unless otherwise provided in the related Indenture
Supplement, the Holders of not less than 10% of the principal balance of the
Outstanding Notes of any Series (the "Applicants") may apply in writing to the
----------
Indenture Trustee, and if such application states that the Applicants desire to
communicate with other Noteholders of any Series with respect to their rights
under this Indenture or under the Notes and is accompanied by a copy of the
communication which such Applicants propose to transmit, then the Indenture
Trustee, after having been adequately indemnified by such Applicants for its
costs and expenses, shall afford or shall cause the Transfer Agent and Registrar
to afford such Applicants access during normal business hours to the most recent
list of Noteholders held by the Indenture Trustee and shall give the Servicer
notice that such request has been made, within five (5) Business Days after the
receipt of such application. Such list shall be as of a date no more than
forty-five (45) days prior to the date of receipt of such Applicants' request.
(b) Every Noteholder, by receiving and holding a Note, agrees that none of
the Issuer, the Indenture Trustee, the Transfer Agent and Registrar and the
Servicer or any of their respective agents and employees shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Noteholders hereunder, regardless of the sources from which
such information was derived.
10
Section 2.10. Cancellation. All Notes surrendered for payment, registration
------------
of transfer, exchange or redemption shall, if surrendered to any Person other
than the Indenture Trustee, be delivered to the Indenture Trustee and shall be
promptly canceled by it. The Issuer may at any time deliver to the Indenture
Trustee for cancellation any Notes previously authenticated and delivered
hereunder which the Issuer may have acquired in any lawful manner whatsoever,
and all Notes so delivered shall be promptly canceled by the Indenture Trustee.
No Notes shall be authenticated in lieu of or in exchange for any Notes canceled
as provided in this Section 2.10, except as expressly permitted by this
------------
Indenture. All canceled Notes held by the Indenture Trustee shall be destroyed
unless the Issuer shall direct by a timely order that they be returned to it.
Section 2.11. [Reserved]
----------
Section 2.12. New Issuances.
-------------
(a) Pursuant to one or more Indenture Supplements, the Seller may from
time to time direct the Owner Trustee, on behalf of the Issuer, to issue one or
more new Series of Notes (a "New Issuance"). The Notes of all outstanding Series
------------
shall be equally and ratably entitled as provided herein to the benefits of this
Indenture without preference, priority or distinction, all in accordance with
the terms and provisions of this Indenture and the applicable Indenture
Supplement except, with respect to any Series or Class, as provided in the
related Indenture Supplement. Interest on and principal of the Notes of each
outstanding Series shall be paid as specified in the Indenture Supplement
relating to such outstanding Series.
(b) On or before the Closing Date relating to any new Series of Notes, the
parties hereto will execute and deliver an Indenture Supplement which will
specify the Principal Terms of such Series. The terms of such Indenture
Supplement may modify or amend the terms of this Indenture solely as applied to
such new Series. The obligation of the Owner Trustee to execute, on behalf of
the Issuer, the Notes of any Series and of the Indenture Trustee to authenticate
such Notes (other than any Series issued pursuant to an Indenture Supplement
dated as of the date hereof) and to execute and deliver the related Indenture
Supplement is subject to the satisfaction of the following conditions:
(i) on or before the fifth Business Day immediately preceding the
Closing Date the Seller shall have given the Owner Trustee, the Indenture
Trustee, the Servicer and each Rating Agency notice (unless such notice
requirement is otherwise waived) of such issuance and the Closing Date;
(ii) the Seller shall have delivered to the Owner Trustee and the
Indenture Trustee any related Indenture Supplement, in form satisfactory to
the Owner Trustee and the Indenture Trustee, executed by each party hereto
(other than the Indenture Trustee);
11
(iii) the Seller shall have delivered to the Owner Trustee and the
Indenture Trustee any related Enhancement Agreement executed by the Seller
and the Series Enhancer;
(iv) the Rating Agency Condition shall have been satisfied with
respect to such issuance;
(v) such issuance will not result in any Adverse Effect and the
Seller shall have delivered to the Owner Trustee and the Indenture Trustee
an Officer's Certificate, dated the Closing Date to the effect that the
Seller reasonably believes that such issuance will not, based on the facts
known to such officer at the time of such certification, have an Adverse
Effect;
(vi) the Seller shall have delivered to the Owner Trustee and the
Indenture Trustee (with a copy to each Rating Agency) (A) an Opinion of
Counsel, dated the Closing Date with respect to such issuance, to the
effect that, except as otherwise stated in the related Indenture
Supplement, the Notes of the new Series will be characterized as debt for
federal income tax purposes and (B) a Tax Opinion, dated the Closing Date
with respect to such issuance; and
(vii) the Aggregate Principal Balance shall not be less than the
Minimum Aggregate Principal Balance as of the Closing Date and after giving
effect to such issuance.
(c) Upon satisfaction of the above conditions, pursuant to Section 2.3,
-----------
the Owner Trustee, on behalf of the Issuer, shall execute and the Indenture
Trustee shall upon written direction of the Issuer authenticate and deliver the
Notes of such Series as provided in this Indenture and the applicable Indenture
Supplement.
(d) The Issuer may direct the Indenture Trustee in writing to deposit the
net proceeds from any New Issuance in the Excess Funding Account. The Issuer may
also specify that on any Transfer Date the proceeds from the sale of any new
Series may be withdrawn from the Excess Funding Account and treated as Shared
Principal Collections.
Section 2.13. Book-Entry Notes. Unless otherwise provided in any related
----------------
Indenture Supplement, the Notes, upon original issuance, shall be issued in the
form of typewritten or printed Notes representing the Book-Entry Notes to be
delivered to the depository specified in such Indenture Supplement which shall
be the Clearing Agency or Foreign Clearing Agency, by or on behalf of such
Series.
The Notes of each Series shall, unless otherwise provided in the related
Indenture Supplement, initially be registered in the Note Register in the name
of the
12
nominee of the Clearing Agency or Foreign Clearing Agency for such Book-Entry
Notes and shall be delivered to the Indenture Trustee or, pursuant to such
Clearing Agency's or Foreign Clearing Agency's instructions held by the
Indenture Trustee's agent as custodian for the Clearing Agency or Foreign
Clearing Agency.
Unless and until Definitive Notes are issued under the limited
circumstances described in Section 2.15, no Note Owner shall be entitled to
------------
receive a Definitive Note representing such Note Owner's interest in such Note.
Unless and until Definitive Notes have been issued to the Note Owners pursuant
to Section 2.15:
------------
(a) the provisions of this Section 2.13 shall be in full force and effect
------------
with respect to each such Series;
(b) the Indenture Trustee shall be entitled to deal with the Clearing
Agency or Foreign Clearing Agency and the Clearing Agency Participants for all
purposes of this Indenture (including the payment of principal of and interest
on the Notes of each such Series) as the authorized representatives of the Note
Owners;
(c) to the extent that the provisions of this Section 2.13 conflict with
------------
any other provisions of this Indenture, the provisions of this Section 2.13
------------
shall control with respect to each such Series;
(d) the rights of Note Owners of each such Series shall be exercised only
through the Clearing Agency or Foreign Clearing Agency and the applicable
Clearing Agency Participants and shall be limited to those established by law
and agreements between such Note Owners and the Clearing Agency or Foreign
Clearing Agency and/or the Clearing Agency Participants. Pursuant to the
depository agreement applicable to a Series, unless and until Definitive Notes
of such Series are issued pursuant to Section 2.15, the initial Clearing Agency
------------
shall make book-entry transfers among the Clearing Agency Participants and
receive and transmit distributions of principal and interest on the Notes to
such Clearing Agency Participants; and
(e) whenever this Indenture requires or permits actions to be taken based
upon instructions or directions of the Holders of Notes representing a specified
percentage of the Outstanding Amount, the Clearing Agency or Foreign Clearing
Agency shall be deemed to represent such percentage only to the extent that they
have received instructions to such effect from the Note Owners and/or Clearing
Agency Participants owning or representing, respectively, such required
percentage of the beneficial interest in the Notes and has delivered such
instructions to the Indenture Trustee.
13
Section 2.14. Notices to Clearing Agency or Foreign Clearing Agency.
-----------------------------------------------------
Whenever a notice or other communication to the Noteholders is required under
this Indenture, unless and until Definitive Notes shall have been issued to Note
Owners pursuant to Section 2.15, the Indenture Trustee shall give all such
------------
notices and communications specified herein to be given to Noteholders to the
Clearing Agency or Foreign Clearing Agency, as applicable, and shall have no
obligation to the Note Owners.
Section 2.15. Definitive Notes. If (i) (A) the Seller advises the Indenture
----------------
Trustee in writing that the Clearing Agency is no longer willing or able to
discharge properly its responsibilities as Clearing Agency with respect to the
Book-Entry Notes of a given Series and (B) the Indenture Trustee or Issuer is
unable to locate and reach an agreement on satisfactory terms with a qualified
successor, (ii) the Seller, at its option, advises the Indenture Trustee in
writing that it elects to terminate the book-entry system through the Clearing
Agency with respect to such Series or (iii) after the occurrence of a Servicer
Default, Note Owners of Notes evidencing more than 50% of the principal balance
of the Outstanding Notes (or such other percentage as specified in the related
Indenture Supplement) of such Series advise the Indenture Trustee and the
applicable Clearing Agency through the applicable Clearing Agency Participants
in writing that the continuation of a book-entry system is no longer in the best
interests of the Note Owners of such Series, the Clearing Agency shall notify
all Note Owners of such Series of the occurrence of such event and of the
availability of Definitive Notes to Note Owners of such Series requesting the
same. Upon surrender to the Indenture Trustee of the Notes of such Series,
accompanied by registration instructions from the applicable Clearing Agency,
the Issuer shall execute and the Indenture Trustee shall authenticate Definitive
Notes of such Series and shall recognize the registered holders of such
Definitive Notes as Noteholders under this Indenture. Neither the Issuer nor the
Indenture Trustee shall be liable for any delay in delivery of such
instructions, and the Issuer and the Indenture Trustee may conclusively rely on,
and shall be fully protected in relying on, such instructions. Upon the issuance
of Definitive Notes of such Series, all references herein to obligations imposed
upon or to be performed by the applicable Clearing Agency or Foreign Clearing
Agency shall be deemed to be imposed upon and performed by the Indenture
Trustee, to the extent applicable with respect to such Definitive Notes, and the
Indenture Trustee shall recognize the registered holders of the Definitive Notes
of such Series as Noteholders of such Series hereunder. Definitive Notes will be
transferable and exchangeable at the offices of the Transfer Agent and
Registrar.
Section 2.16. Global Note. If specified in the related Indenture Supplement
-----------
for any Series, Notes may be initially issued in the form of a single temporary
Global Note (the "Global Note") in bearer form, without interest coupons, in the
-----------
denomination of the initial principal amount and substantially in the form
attached to the related Indenture Supplement. Unless otherwise specified in the
related Indenture Supplement, the provisions of this Section 2.16 shall apply to
------------
such Global Note. The Global Note will
14
be authenticated by the Indenture Trustee upon the same conditions, in
substantially the same manner and with the same effect as the Definitive Notes.
The Global Note may be exchanged in the manner described in the related
Indenture Supplement for Registered Notes or Bearer Notes in definitive form.
Except as otherwise specifically provided in the Indenture Supplement, any Notes
that are issued in bearer form pursuant to this Indenture shall be issued in
accordance with the requirements of Code section 163(f)(2).
Section 2.17. Meetings of Noteholders. To the extent provided by the
-----------------------
Indenture Supplement for any Series issued in whole or in part in Bearer Notes,
the Servicer or the Indenture Trustee may at any time call a meeting of the
Noteholders of such Series, to be held at such time and at such place as the
Servicer and the Indenture Trustee, as the case may be, shall determine, for the
purpose of approving a modification or amendment to, or obtaining a waiver of,
any covenant or condition set forth in this Indenture with respect to such
Series or in the Notes of such Series, subject to Article X.
---------
Section 2.18. Uncertificated Classes. Notwithstanding anything to the
----------------------
contrary contained in this Article II or in Article XI, unless otherwise
---------- ----------
specified in any Indenture Supplement, any provisions contained in this Article
II and in Article XI relating to the registration, form, execution,
authentication, delivery, presentation, cancellation and surrender of Notes
shall not be applicable to any uncertificated Notes, provided, however, that,
-------- -------
except as otherwise specifically provided in the Indenture Supplement, any such
uncertificated Notes shall be issued in "registered form" within the meaning of
Code section 163(f)(1).
ARTICLE III
REPRESENTATIONS AND COVENANTS OF ISSUER
Section 3.1. Payment of Principal and Interest.
---------------------------------
(a) The Issuer will duly and punctually pay principal and interest in
accordance with the terms of the Notes as specified in the relevant Indenture
Supplement.
(b) The Noteholders of a Series as of the Record Date in respect of a
Distribution Date shall be entitled to the interest accrued and payable and
principal payable on such Distribution Date as specified in the related
Indenture Supplement. All payment obligations under a Note are discharged to the
extent such payments are made to the Noteholder of record.
15
Section 3.2. Maintenance of Office or Agency. The Issuer will maintain an
-------------------------------
office or agency within the State of New York and such other locations as may be
set forth in an Indenture Supplement where Notes may be presented or surrendered
for payment, where Notes may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Issuer in respect of the
Notes and this Indenture may be served. The Issuer hereby initially appoints the
Indenture Trustee at its Corporate Trust Office to serve as its agent for the
foregoing purposes. The Issuer will give prompt written notice to the Indenture
Trustee and the Noteholders of the location, and of any change in the location,
of any such office or agency. If at any time the Issuer shall fail to maintain
any such office or agency or shall fail to furnish the Indenture Trustee with
the address thereof, such presentations, surrenders, notices and demands may be
made or served at the Corporate Trust Office, and the Issuer hereby appoints the
Indenture Trustee at its Corporate Trust Office as its agent to receive all such
presentations, surrenders, notices and demands.
Section 3.3. Money for Note Payments to Be Held in Trust. As specified in
-------------------------------------------
Section 8.3(a) and (b) herein and in the related Indenture Supplement, all
-------------- ---
payments of amounts due and payable with respect to the Notes which are to be
made from amounts withdrawn from the Collection Account and the Excess Funding
Account shall be made on behalf of the Issuer by the Indenture Trustee or by the
Paying Agent, and no amounts so withdrawn from the Collection Account or the
Excess Funding Account shall be paid over to or at the direction of the Issuer
except as provided in this Section 3.3 and in the related Indenture Supplement.
-----------
The Issuer will cause each Paying Agent other than the Indenture Trustee to
execute and deliver to the Indenture Trustee an instrument in which such Paying
Agent shall agree with the Indenture Trustee (and if the Indenture Trustee acts
as Paying Agent, it hereby so agrees), subject to the provisions of this Section
-------
3.3, that such Paying Agent, in acting as Paying Agent, is an express agent of
---
the Issuer and, further, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and pay such sums to such Persons as herein provided;
(ii) give a Trustee Officer of the Indenture Trustee written
notice of any default by the Issuer (or any other obligor upon the Notes)
of which it has actual knowledge in the making of any payment required to
be made with respect to the Notes;
(iii) at any time during the continuance of any such default, upon
the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
16
(iv) immediately resign as a Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of Notes if
at any time it ceases to meet the standards required to be met by a Paying
Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the satisfaction and
discharge of this Indenture or for any other purpose, by Issuer Order direct any
Paying Agent to pay to the Indenture Trustee all sums held in trust by such
Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts
as those upon which such sums were held by such Paying Agent; and upon such
payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall be
released from all further liability with respect to such sums.
Section 3.4. Existence. The Issuer will keep in full effect its
---------
existence, rights and franchises as a common law trust under the laws of the
State of Illinois (unless it becomes, or any successor Issuer hereunder is or
becomes, organized under the laws of any other State or of the United States of
America, in which case the Issuer will keep in full effect its existence, rights
and franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
related instrument or agreement.
Section 3.5. Protection of Collateral. The Issuer will from time to time
------------------------
prepare, or cause to be prepared, execute and deliver all such supplements and
amendments hereto and all such financing statements, continuation statements,
instruments of further assurance and other instruments, and will take such other
action necessary or advisable to:
(a) grant more effectively all or any portion of the Collateral as
security for the Notes;
(b) maintain or preserve the lien (and the priority thereof) of this
Indenture or to carry out more effectively the purposes hereof;
(c) perfect, publish notice of, or protect the validity of any Grant
made or to be made under this Indenture;
17
(d) enforce any of the Collateral; or
(e) preserve and defend title to the Collateral securing the Notes and
the rights therein of the Indenture Trustee and the Noteholders secured thereby
against the claims of all persons and parties.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required pursuant to this Section 3.5, but the Indenture
-----------
Trustee shall not have any obligation to take any such action unless instructed
to do so by Noteholders in accordance with the terms hereof.
The Issuer shall pay or cause to be paid any taxes levied on all or any
part of the Receivables securing the Notes.
Section 3.6. Opinions as to Collateral.
-------------------------
(a) On the Closing Date relating to any new Series of Notes, the Issuer
shall furnish to the Indenture Trustee an Opinion of Counsel satisfactory to the
Rating Agencies either stating that, in the opinion of such counsel, such action
has been taken to perfect the lien and security interest of this Indenture,
including with respect to the recording and filing of this Indenture, any
indentures supplemental hereto, and any other requisite documents, and with
respect to the execution and filing of any financing statements and continuation
statements, as are so necessary and reciting the details of such action, or
stating that, in the opinion of such counsel, no such action is necessary to
maintain the perfection of such lien and security interest.
(b) On or before May 30 in each calendar year, beginning in 2001, the
Issuer shall furnish to the Indenture Trustee an Opinion of Counsel satisfactory
to the Rating Agencies either stating that, in the opinion of such counsel, such
action has been taken to perfect the lien and security interest of this
Indenture, including with respect to the recording, filing, re-recording and
refiling of this Indenture, any indentures supplemental hereto and any other
requisite documents and with respect to the execution and filing of any
financing statements and continuation statements as is so necessary and reciting
the details of such action or stating that in the opinion of such counsel no
such action is necessary to maintain the perfection of such lien and security
interest. Such Opinion of Counsel shall also describe the recording, filing,
re-recording and refiling of this Indenture, any indentures supplemental hereto
and any other requisite documents and the execution and filing of any financing
statements and continuation statements that will, in the opinion of such
counsel, be required to maintain the perfection of the lien and security
interest of this Indenture until May 30 in the following calendar year.
18
Section 3.7. Performance of Obligations; Servicing of Receivables.
----------------------------------------------------
(a) The Issuer will not take any action and will use its best efforts not
to permit any action to be taken by others that would release any Person from
any of such Person's material covenants or obligations under any instrument or
agreement included in the Collateral or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any such instrument or agreement, except as
expressly provided in this Indenture, the Transfer and Servicing Agreement or
such other instrument or agreement.
(b) The Issuer may contract with other Persons to assist it in performing
its duties under this Indenture, and any performance of such duties by a Person
identified to the Indenture Trustee in an Officer's Certificate of the Issuer
shall be deemed to be action taken by the Issuer. Initially, the Issuer has
contracted with the Administrator to assist the Issuer in performing its duties
under this Indenture.
(c) The Issuer will punctually perform and observe all of its obligations
and agreements contained in this Indenture, the other Transaction Documents and
in the instruments and agreements relating to the Collateral, including but not
limited to filing or causing to be filed all UCC financing statements and
continuation statements required to be filed by the terms of this Indenture and
the Transfer and Servicing Agreement in accordance with and within the time
periods provided for herein and therein.
(d) If the Issuer shall have knowledge of the occurrence of a Servicer
Default under the Transfer and Servicing Agreement, the Issuer shall cause the
Indenture Trustee to promptly notify the Rating Agencies thereof, and shall
cause the Indenture Trustee to specify in such notice the action, if any, being
taken with respect to such default. If a Servicer Default shall arise from the
failure of the Servicer to perform any of its duties or obligations under the
Transfer and Servicing Agreement with respect to the Receivables, the Issuer
shall take all reasonable steps available to it to remedy such failure.
(e) On and after the receipt by the Servicer of a Termination Notice
pursuant to Section 7.1 of the Transfer and Servicing Agreement, the Servicer
-----------
shall continue to perform all servicing functions under this Indenture until the
date specified in the Termination Notice or until a date mutually agreed upon by
the Servicer and the Indenture Trustee. As promptly as possible after the giving
of a Termination Notice to the Servicer, the Indenture Trustee shall appoint a
Successor Servicer, and such Successor Servicer shall accept its appointment by
a written assumption in a form acceptable to the Indenture Trustee. In the event
that a Successor Servicer has not been appointed and accepted its appointment at
the time when the Servicer ceases to act as Servicer, the Indenture Trustee in
accordance with Section 7.2 of the Transfer and Servicing Agreement without
-----------
further action shall automatically be appointed the
19
Successor Servicer. The Indenture Trustee may delegate any of its servicing
obligations to an Affiliate or agent in accordance with Section 3.1(b) and
--------------
Section 5.7 of the Transfer and Servicing Agreement. Notwithstanding the
-----------
foregoing, the Indenture Trustee shall, if it is legally unable so to act,
petition at the expense of the Servicer a court of competent jurisdiction to
appoint any established institution qualifying as an Eligible Servicer as the
Successor Servicer hereunder. The Indenture Trustee shall give prompt notice to
each Rating Agency and each Series Enhancer upon the appointment of a Successor
Servicer. Upon its appointment, the Successor Servicer shall be the successor in
all respects to the Servicer with respect to servicing functions under this
Indenture and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Servicer by the terms and provisions
hereof, and all references in this Indenture to the Servicer shall be deemed to
refer to the Successor Servicer. In connection with any Termination Notice, the
Indenture Trustee will review any bids which it obtains from Eligible Servicers
and shall be permitted to appoint any Eligible Servicer submitting such a bid as
a Successor Servicer for servicing compensation, subject to the limitations set
forth in Section 7.2 of the Transfer and Servicing Agreement. Notwithstanding
-----------
anything else herein to the contrary, in no event shall the Indenture Trustee be
liable for any servicing fee.
(f) Without derogating from the absolute nature of the assignment granted
to the Indenture Trustee under this Indenture or the rights of the Indenture
Trustee hereunder, the Issuer agrees (i) that it will not, without the prior
written consent of the Indenture Trustee and satisfaction of the Rating Agency
Condition, amend, modify, waive, supplement, terminate or surrender, or agree to
any amendment, modification, supplement, termination, waiver or surrender of,
the terms of any Collateral (except to the extent otherwise provided in the
Transfer and Servicing Agreement) or the Transaction Documents (except to the
extent otherwise provided in the Transaction Documents), or waive timely
performance or observance by the Servicer or the Seller under the Transfer and
Servicing Agreement; and (ii) that any such amendment shall not (A) increase or
reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on the Receivables or distributions that are required to
be made for the benefit of the Noteholders or (B) reduce the aforesaid
percentage of the Notes that is required to consent to any such amendment,
without the consent of the Holders of all the Outstanding Notes. If any such
amendment, modification, supplement or waiver shall be so consented to by the
Indenture Trustee and such Noteholders, the Issuer agrees, promptly following a
request by the Indenture Trustee to do so, to execute and deliver, in its own
name and at its own expense, such agreements, instruments, consents and other
documents as the Indenture Trustee may deem necessary or appropriate in the
circumstances.
20
Section 3.8. Negative Covenants. So long as any Notes are Outstanding,
------------------
the Issuer will not:
(a) sell, transfer, exchange, or otherwise dispose of any part of the
Collateral unless directed to do so by the Indenture Trustee, except as
expressly permitted by this Indenture and any Indenture Supplement, the
Receivables Purchase Agreement, the Trust Agreement or the Transfer and
Servicing Agreement;
(b) claim any credit on, or make any deduction from, the principal and
interest payable in respect of the Notes (other than amounts properly withheld
from such payments under the Code or applicable state law) or assert any claim
against any present or former Noteholder by reason of the payment of any taxes
levied or assessed upon any part of the Collateral;
(c) incur, assume, guarantee or otherwise become liable, directly or
indirectly, for any indebtedness other than incurred under the Notes and this
Indenture;
(d) (i) permit the validity or effectiveness of this Indenture to be
impaired, or permit the lien of this Indenture to be amended, hypothecated,
subordinated, terminated or discharged, or permit any Person to be released from
any covenants or obligations with respect to the Notes under this Indenture
except as may be expressly permitted hereby, (ii) permit any Lien, charge,
excise, claim, security interest, mortgage or other encumbrance (other than the
lien of this Indenture) to be created on or extend to or otherwise arise upon or
burden the Collateral or any part thereof or any interest therein or the
proceeds thereof or (iii) permit the lien of this Indenture not to constitute a
valid first priority security interest (other than with respect to a tax,
mechanics, or similar lien) in the Collateral; or
(e) voluntarily dissolve or liquidate in whole or in part.
Section 3.9. Statements as to Compliance. The Issuer will deliver to the
---------------------------
Indenture Trustee and the Rating Agencies, within 120 days after the end of each
fiscal year of the Issuer at the end of which any Notes are outstanding
(commencing within 120 days after the end of the fiscal year 2000), an Officer's
Certificate stating, as to the Authorized Officer signing such Officer's
Certificate, that
(i) a review of the activities of the Issuer during the 12-month
period ending at the end of such fiscal year and of performance under
this Indenture has been made under such Authorized Officer's
supervision, and
(ii) to the best of such Authorized Officer's knowledge, based on
such review, the Issuer has complied with all conditions and covenants
under this Indenture throughout such year, or, if there has been a
default in the
21
compliance of any such condition or covenant, specifying each such
default known to such Authorized Officer and the nature and status
thereof.
Section 3.10. Issuer May Consolidate, Etc., Only on Certain Terms.
---------------------------------------------------
(a) The Issuer shall not consolidate or merge with or into any
other Person, unless:
(1) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger (the "Surviving Person")
----------------
(i) is organized and existing under the laws of the United
States of America or any state or the District of Columbia,
(ii) is not subject to regulation as an "investment company"
under the Investment Company Act and (iii) expressly assumes,
by an indenture supplemental hereto, executed and delivered to
the Indenture Trustee, in a form satisfactory to the Indenture
Trustee, the obligation to make due and punctual payment of the
principal of and interest on all Notes and the performance of
every covenant of this Indenture on the part of the Issuer to
be performed or observed;
(2) immediately after giving effect to such
transaction, no Event of Default or Pay Out Event shall have
occurred and be continuing;
(3) the Issuer shall have delivered to the Indenture
Trustee an Officer's Certificate and an Opinion of Counsel each
stating that (i) such consolidation or merger and such
supplemental indenture comply with this Section 3.10, (ii) all
------------
conditions precedent in this Section 3.10 provided for relating
------------
to such transaction have been complied with (including any
filing required by the Exchange Act), and (iii) such
supplemental indenture is duly authorized, executed and
delivered and is valid, binding and enforceable against the
Surviving Person;
(4) the Rating Agency Condition shall have been
satisfied with respect to such transaction;
(5) the Issuer shall have received a Tax Opinion with
respect to such consolidation or merger; and
(6) any action that is necessary to maintain the lien
and security interest created by this Indenture shall have been
taken.
For the avoidance of doubt, this Section 3.10 shall not apply to the
------------
transfer of the Receivables and other assets to the Issuer on the SMT
Termination Date.
22
(b) The Issuer shall not convey or transfer any of its properties or
assets, including those included in the Collateral, substantially as an
entirety to any Person, unless:
(1) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of
which is hereby restricted (the "Acquiring Person") (A) is a
----------------
United States citizen or a Person organized and existing under
the laws of the United States of America or any state, or the
District of Columbia, (B) expressly assumes, by an indenture
supplemental hereto, executed and delivered to the Indenture
Trustee, in form satisfactory to the Indenture Trustee, the
obligation to make due and punctual payments of the principal of
and interest on all Notes and the performance of every covenant
of this Indenture on the part of the Issuer to be performed or
observed, (C) expressly agree by means of such supplemental
indenture that all right, title and interest so conveyed or
transferred shall be subject and subordinate to the rights of
Holders of the Notes, (D) unless otherwise provided in such
supplemental indenture, expressly agree to indemnify, defend and
hold harmless the Issuer against and from any loss, liability or
expense arising under or related to this Indenture and the Notes
and (E) expressly agree by means of such supplemental indenture
that such Person (or if a group of Persons, then one specified
Person) shall make all filings with the Commission (and any other
appropriate Person) required by the Exchange Act in connection
with the Notes;
(2) immediately after giving effect to such transaction, no
Event of Default or Pay Out Event shall have occurred and be
continuing;
(3) the Rating Agency Condition shall have been satisfied
with respect to such transaction;
(4) the Issuer shall have received a Tax Opinion with
respect to such transaction;
(5) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been
taken; and
(6) the Issuer shall have delivered to the Indenture
Trustee an Officer's Certificate and an Opinion of Counsel each
stating that (i) such conveyance or transfer and such
supplemental indenture comply with this Section 3.10, (ii) all
------------
conditions precedent herein provided for relating to such
transaction have been complied with (including any
23
filing required by the Exchange Act), and (iii) such supplemental
indenture is duly authorized, executed and delivered and is valid,
binding and enforceable against the Acquiring Person.
Section 3.11. Successor Substituted. Upon any consolidation or merger, or
---------------------
any conveyance or transfer of the properties and assets of the Issuer
substantially as an entirety in accordance with Section 3.10, the Surviving
------------
Person or the Acquiring Person, as the case may be, shall succeed to, and be
substituted for, and may exercise every right and power of, the Issuer under
this Indenture with the same effect as if such Person had been named as the
Issuer herein. In the event of any such conveyance or transfer, the Person named
as the Issuer in the first paragraph of this Indenture or any successor which
shall theretofore have become such in the manner prescribed in this Section 3.11
------------
shall be released from its obligations under this Indentures as issued
immediately upon the effectiveness of such conveyance or transfer, provided that
the Issuer shall not be released from any obligations or liabilities to the
Indenture Trustee or the Noteholders arising prior to such effectiveness.
Section 3.12. No Other Business. The Issuer shall not engage in any
-----------------
business other than (i) purchasing, owning and managing the Trust Assets and the
proceeds thereof in the manner contemplated by this Indenture and the other
Transaction Documents, (ii) issuing and making payments in respect of the Notes
and (iii) all activities related thereto.
Section 3.13. [Reserved].
Section 3.14. Servicer's Obligations. The Issuer shall cause the Servicer
----------------------
to comply with all of its obligations under the Transaction Documents.
Section 3.15. Investments. Except as contemplated by this Indenture or the
-----------
Transfer and Servicing Agreement, the Issuer shall not own, purchase, repurchase
or acquire (or agree contingently to do so) any stock, obligations, assets or
securities of, or any other interest in, or make any capital contribution to,
any other Person.
Section 3.16. Capital Expenditures. The Issuer shall not make any
--------------------
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
Section 3.17. Removal of Administrator. So long as any Notes are
------------------------
outstanding, the Issuer shall not remove the Administrator without cause unless
the Rating Agency Condition shall have been satisfied in connection with such
removal.
24
Section 3.18. Restricted Payments. The Issuer shall not, directly or
-------------------
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the Issuer or to the Servicer, (ii) redeem, purchase, retire or
otherwise acquire for value any such ownership or equity interest or security or
(iii) set aside or otherwise segregate any amounts for any such purpose;
provided, however, that the Issuer may make, or cause to be made, (x)
-------- -------
distributions as contemplated by, and to the extent funds are available for such
purpose under, the Transaction Documents and (y) payments to the Indenture
Trustee pursuant to Section 6.7. The Issuer will not, directly or indirectly,
-----------
make payments to or distributions from the Collection Account except in
accordance with the Transaction Documents.
Section 3.19. Notice of Events of Default. The Issuer agrees to give a
---------------------------
Trustee Officer of the Indenture Trustee and the Rating Agencies prompt written
notice of each Event of Default hereunder and, immediately after obtaining
knowledge of any of the following occurrences, written notice of each default on
the part of the Servicer or the Seller of its obligations under the Transfer and
Servicing Agreement and each default on the part of a Seller of its obligations
under the Receivables Purchase Agreement, as applicable.
Section 3.20. Further Instruments and Acts. Upon request of the Indenture
----------------------------
Trustee, the Issuer will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.1. Satisfaction and Discharge of this Indenture. This Indenture
--------------------------------------------
shall cease to be of further effect with respect to the Notes except as to (a)
rights of registration of transfer and exchange, (b) substitution of mutilated,
destroyed, lost or stolen Notes, (c) the rights of Noteholders to receive
payments of principal thereof and interest thereon, (d) Sections 3.3, 3.7, 3.8,
------------ --- ---
3.11, 3.12 and 12.16, (e) the rights and immunities of the Indenture Trustee
---- ---- -----
hereunder, including the rights of the Indenture Trustee under Section 6.7, and
-----------
the obligations of the Indenture Trustee under Section 4.2, and (f) the rights
-----------
of Noteholders as beneficiaries hereof with respect to the property so deposited
with the Indenture Trustee and payable to all or any of them, and the Indenture
Trustee, on written 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 when:
(i) either
25
(A) all Notes theretofore authenticated and delivered
(other than (1) Notes which have been destroyed, lost or stolen
and which have been replaced, or paid as provided in Section 2.6,
-----------
and (2) Notes for whose full 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 3.3) have been delivered to the
-----------
Indenture Trustee for cancellation; or
(B) all Notes not theretofore delivered to the Indenture
Trustee for cancellation:
(1) have become due and payable;
(2) will become due and payable at the Series Termination Date
for such Class or Series of Notes; or
(3) are to be called for redemption within one year under
arrangements satisfactory to the Indenture Trustee for the giving of
notice of redemption by the Indenture Trustee in the name, and at the
expense, of the Issuer;
(4) and the Issuer, in the case of (1), (2) or (3) above, has
irrevocably deposited or caused to be irrevocably deposited with the
Indenture Trustee cash or direct obligations of or obligations
guaranteed by the United States of America (which will mature prior to
the date such amounts are payable), in trust for such purpose, in an
amount sufficient to pay and discharge the entire indebtedness on such
Notes not theretofore delivered to the Indenture Trustee for
cancellation when due at the Series Termination Date for such Class or
Series of Notes or the Redemption Date (if Notes shall have been
called for redemption pursuant to the related Indenture Supplement),
as the case may be;
(ii) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer; and
(iii) the Issuer has delivered to the Indenture Trustee an Officer's
Certificate, an Opinion of Counsel and (if required by the TIA or the Indenture
Trustee) an Independent Certificate from a firm of certified public accountants,
each meeting the applicable requirements of Section 12.1(a) and each stating
---------------
that all conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with.
26
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Issuer to the Indenture Trustee under Section 6.7 and of the
-----------
Indenture Trustee to the Noteholders under Section 4.2 shall survive.
-----------
Section 4.2. Application of Issuer Money. All monies deposited with the
---------------------------
Indenture Trustee pursuant to Section 4.1 shall be held in trust and applied by
-----------
it, in accordance with the provisions of the Notes, this Indenture and the
applicable Indenture Supplement, to make payments, either directly or through
any Paying Agent to the Noteholders and for the payment in respect of which such
monies have been deposited with the Indenture Trustee, of all sums due and to
become due thereon for principal and interest; but such monies need not be
segregated from other funds except to the extent required herein or in the
Transfer and Servicing Agreement or required by law.
ARTICLE V
PAY OUT EVENTS, DEFAULTS AND REMEDIES
Section 5.1. Pay Out Events. If any one of the following events (each, a
--------------
"Trust Pay Out Event") shall occur:
-------------------
(a) the occurrence of an Insolvency Event relating to the Seller, Spiegel
or FCNB;
(b) a Transfer Restriction Event shall occur; or
(c) the Issuer shall become subject to regulation by the Commission as an
"investment company" within the meaning of the Investment Company Act;
then a Pay Out Event with respect to all Series of Notes shall occur without any
notice or other action on the part of the Indenture Trustee or the Noteholders
immediately upon the occurrence of such event.
Upon the occurrence of a Pay Out Event, payment on the Notes of each Series
will be made in accordance with the terms of the related Indenture Supplement.
Section 5.2. Events of Default. "Event of Default," wherever used herein,
----------------- ----------------
means with respect to any Series any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) default in the payment of the principal of any Note of that Series, if
and to the extent not previously paid, when the same becomes due and payable on
its Series Termination Date; or
27
(b) default in the payment of any interest on any Note of that Series when
the same becomes due and payable, and such default shall continue for a period
of thirty-five (35) days; or
(c) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer in an involuntary case
under any applicable federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, or appointing a receiver, conservator,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
the Issuer or ordering the winding-up or liquidation of the Issuer's affairs,
and such decree or order shall remain unstayed and in effect for a period of
sixty (60) consecutive days; or
(d) the commencement by the Issuer of a voluntary case under any applicable
federal or state bankruptcy, insolvency or other similar law now or hereafter in
effect, or the consent by the Issuer to the entry of an order for relief in an
involuntary case under any such law, or the consent by the Issuer to the
appointment of or the taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator, conservator or similar official of the Issuer,
or the making by the Issuer of any general assignment for the benefit of
creditors, or the failure by the Issuer generally to pay, or the admission in
writing by the Issuer of its inability to pay, its debts as such debts become
due, or the taking of action by the Issuer in furtherance of any of the
foregoing; or
(e) default in the observance or performance of any covenant or agreement
of the Issuer made in this Indenture made in respect of the Notes of such Series
(other than a covenant or agreement, a default in the observance or performance
of which is elsewhere in this Section 5.2 specifically dealt with) (all of such
-----------
covenants and agreements in the Indenture which are not expressly stated to be
for the benefit of a particular Series being deemed to be in respect of the
Notes of all Series for this purpose) and such default shall continue or not be
cured for a period of sixty (60) days after there shall have been given, by
registered or certified mail, return receipt requested to the Issuer by the
Indenture Trustee or to the Issuer and the Indenture Trustee by the Holders of
Notes representing at least 25% of the principal balance of the Outstanding
Notes of such Series, a written notice specifying such default and requiring it
to be remedied and stating that such notice is a "Notice of Default" hereunder
-----------------
and, as a result of such default, the interests of the Holders of the Notes are
materially and adversely affected and continue to be materially and adversely
affected during the 60-day period; or
(f) any additional events specified in the Indenture Supplement related to
such Series.
28
The Issuer shall deliver to a Trustee Officer of the Indenture Trustee,
within five (5) days after the occurrence thereof, written notice in the form of
an Officer's Certificate of any event which with the giving of notice and the
lapse of time would become an Event of Default, its status and what action the
Issuer is taking or proposes to take with respect thereto.
Section 5.3. Acceleration of Maturity; Rescission and Annulment. If an
--------------------------------------------------
Event of Default described in paragraph (a), (b) or (e) of Section 5.2 should
------------- --- --- -----------
occur and be continuing with respect to a Series, then and in every such case
the Indenture Trustee or the Holders of Notes representing more than 50% of the
principal balance of the Outstanding Notes of such Series may declare all the
Notes of such Series to be immediately due and payable, by a notice in writing
to the Issuer (and to a Trustee Officer of the Indenture Trustee if declared by
Noteholders), and upon any such declaration the unpaid principal amount of such
Notes, together with accrued and unpaid interest thereon through the date of
acceleration, shall become immediately due and payable.
If an Event of Default described in paragraph (c) or (d) of Section 5.2
--- --- -----------
should occur and be continuing, then the unpaid principal of the Notes, together
with accrued and unpaid interest thereon through the date of acceleration, shall
automatically become due and payable.
At any time after such declaration of acceleration of maturity has been
made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee as hereinafter provided in this Article V, the
---------
Holders of Notes representing more than 50% of the principal balance of the
Outstanding Notes of such Series, by written notice to the Issuer, a Trustee
Officer of the Indenture Trustee and the Rating Agencies, may rescind and annul
such declaration and its consequences; provided, that:
-------- ----
(a) the Issuer has paid or deposited with the Indenture Trustee a sum
sufficient to pay:
(i) all payments of principal of and interest on all Notes and all
other amounts that would then be due hereunder or upon such Notes if the
Event of Default giving rise to such acceleration had not occurred; and
(ii) all sums paid or advanced by the Indenture Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances of the
Indenture Trustee and its agents and counsel; and
(b) all Events of Default, other than the nonpayment of the principal of
the Notes that has become due solely by such acceleration, have been cured or
waived as provided in Section 5.13.
------------
29
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
Section 5.4. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Indenture Trustee.
-----------------
(a) The Issuer covenants that if (i) default is made in the payment of any
interest on any Note when the same becomes due and payable, and such default
continues for a period of thirty-five (35) days following the date on which such
interest became due and payable, or (ii) default is made in the payment of
principal of any Note, if and to the extent not previously paid, when the same
becomes due and payable on the Series Termination Date, the Issuer will, upon
demand of the Indenture Trustee, pay to it, for the benefit of the Holders of
the Notes of the affected Series, the whole amount then due and payable on such
Notes for principal and interest, with interest upon the overdue principal, and,
to the extent payment at such rate of interest shall be legally enforceable,
interest upon overdue installments of interest, as specified in the related
Indenture Supplement, and in addition thereto will pay such further amount as
shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee and its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Indenture Trustee, in its own name and as trustee of an express
trust, may institute a Proceeding for the collection of the sums so due and
unpaid, and may prosecute such Proceeding to judgment or final decree, and may
enforce the same against the Issuer or other obligor upon such Notes and collect
in the manner provided by law out of the property of the Issuer or other obligor
upon such Notes, wherever situated, the moneys adjudged or decreed to be
payable.
(c) If an Event of Default occurs and is continuing, the Indenture Trustee
may, as more particularly provided in Section 5.5, in its discretion, proceed to
-----------
protect and enforce its rights and the rights of the Noteholders of the affected
Series, by such appropriate Proceedings as the Indenture Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy or
legal or equitable right vested in the Indenture Trustee by this Indenture or by
law.
(d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes of the affected Series, or any Person having or claiming
an ownership interest in the Collateral, Proceedings under Title 11 of the
United States Code or any other applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or in case a
receiver, conservator, assignee or trustee in bankruptcy
30
or reorganization, liquidator, sequestrator, custodian or other similar official
shall have been appointed for or taken possession of the Issuer or its property
or such other obligor or Person, or in case of any other comparable judicial
Proceedings relative to the Issuer or other obligor upon the Notes of such
Series, or to the creditors or property of the Issuer or such other obligor, the
Indenture Trustee, irrespective of whether the principal of any Notes shall then
be due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Indenture Trustee shall have made any demand
pursuant to the provisions of this Section 5.4, shall be entitled and empowered,
-----------
by intervention in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount
of principal and interest owing and unpaid in respect of the Notes of
such Series and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Indenture
Trustee (including any claim for reasonable compensation to the
Indenture Trustee and each predecessor Indenture Trustee, and their
respective agents, attorneys and counsel, and for reimbursement of all
expenses and liabilities incurred, and all advances made, by the
Indenture Trustee and each predecessor Indenture Trustee, except as a
result of negligence or willful misconduct) and of the Noteholders of
such Series allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Holders of Notes of such Series in any election
of a trustee, a standby trustee or Person performing similar functions
in any such Proceedings;
(iii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute all
amounts received with respect to the claims of the Noteholders of such
Series and of the Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the
Indenture Trustee or the Holders of Notes of such Series allowed in
any judicial Proceedings relative to the Issuer, its creditors and its
property;
and any trustee, receiver, conservator, liquidator, custodian, assignee,
sequestrator or other similar official in any such Proceeding is hereby
authorized by each of such Noteholders to make payments to the Indenture
Trustee, and, in the event that the Indenture Trustee shall consent to the
making of payments directly to such Noteholders, to pay to the Indenture Trustee
such amounts as shall be sufficient to cover reasonable compensation to the
Indenture Trustee, each predecessor Indenture Trustee and their respective
agents, attorneys and counsel, and all other expenses and liabilities incurred,
and all advances made, by the Indenture Trustee and each predecessor Indenture
Trustee except as a result of negligence or willful misconduct.
31
(e) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture,
or under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such action or Proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
benefit of the Holders of the Notes of the affected Series as provided herein.
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Holders of the Notes of the affected Series, and it
shall not be necessary to make any such Noteholder a party to any such
Proceedings.
Section 5.5. Remedies; Priorities.
--------------------
(a) If an Event of Default shall have occurred and be continuing with
respect to any Series, and the Notes of such Series have been accelerated
pursuant to Section 5.3, the Indenture Trustee may do one or more of the
-----------
following (subject to Sections 5.6 and 12.16):
------------ -----
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the Notes
of the affected Series or under this Indenture with respect thereto,
whether by declaration or otherwise, enforce any judgment obtained, and
collect from the Issuer and any other obligor upon such Notes moneys
adjudged due;
(ii) take any other appropriate action to protect and enforce the
rights and remedies of the Indenture Trustee and the Holders of the Notes
of the affected Series;
(iii) cause the Issuer to sell Principal Receivables (or interests
therein) in an amount equal to the Collateral Amount of the accelerated
Series and the related Finance Charge Receivables in accordance with
Section 5.16;
------------
32
provided, however, that the Indenture Trustee may not exercise the remedy
-------- -------
described in subparagraph (iii) above unless (A) (1) the Holders of Notes
representing 100% of the principal balance of the Outstanding Notes of the
affected Series consent in writing thereto, (2) the Indenture Trustee determines
that any proceeds of such exercise distributable to the Noteholders of the
affected Series are sufficient to discharge in full all amounts then due and
unpaid upon the Notes for principal and interest and is directed to exercise
this remedy by at the direction of Holders of Notes representing more than 50%
of the principal balance of the Outstanding Notes of such Series, or (3) the
Indenture Trustee determines that the Collateral may not continue to provide
sufficient funds for the payment of principal of and interest on the Notes as
they would have become due if the Notes had not been declared due and payable,
and the Indenture Trustee obtains the consent of the Holders of Notes
representing at least 66-2/3% of the principal balance of the Outstanding Notes
of each Class of such Series and (B) the Indenture Trustee has obtained an
Opinion of Counsel to the effect that the exercise of such remedy complies with
applicable federal and state securities laws. In determining such sufficiency or
insufficiency with respect to clause (A)(2) and (3), the Indenture Trustee may,
but need not, obtain and conclusively rely upon an opinion of an Independent
investment banking or accounting firm of national reputation as to the
feasibility of such proposed action and as to the sufficiency of the Collateral
for such purpose.
The remedies provided in this Section 5.5(a) are the exclusive remedies
--------------
provided to the Noteholders with respect to the Collateral and each of the
Noteholders (by their acceptance of their respective interests in the Notes) or
the Indenture Trustee hereby expressly waive any other remedy that might have
been available under the applicable UCC.
(b) If the Indenture Trustee collects any money or property pursuant to
this Article V following the acceleration of the Notes of the affected Series
---------
pursuant to Section 5.3 (so long as such a declaration shall not have been
-----------
rescinded or annulled), it shall pay out the money or property in the following
order:
FIRST: to the Indenture Trustee for amounts due pursuant to Section 6.7;
-----------
and
SECOND: unless otherwise specified in the related Indenture Supplement, to
the Servicer for distribution in accordance with Article IV of the
----------
related Indenture Supplement with such amounts being deemed to be
Principal Collections and Finance Charge Collections in the same
proportion as (x) the outstanding principal balance of the Notes
bears to (y) the sum of the accrued and unpaid interest on the
Notes and other fees and expenses payable in connection therewith
under the applicable
33
Indenture Supplement, including the amounts payable under any
Enhancements with respect to such Series.
(c) The Indenture Trustee may, upon notification to the Issuer, fix a
record date and payment date for any payment to Noteholders of the affected
Series pursuant to this Section 5.5. At least fifteen (15) days before such
-----------
record date, the Indenture Trustee shall mail or send by facsimile, at the
expense of the Servicer, to each such Noteholder a notice that states the record
date, the payment date and the amount to be paid.
Section 5.6. Optional Preservation of the Collateral. If the Notes of any
---------------------------------------
Series have been declared to be due and payable under Section 5.3 following an
-----------
Event of Default and such declaration and its consequences have not been
rescinded and annulled, and the Indenture Trustee has not received directions
from the Noteholders pursuant to Section 5.12, the Indenture Trustee may, but
------------
need not, elect to maintain possession of the portion of the Collateral which
secures such Notes and apply proceeds of the Collateral to make payments on such
Notes to the extent such proceeds are available therefor. It is the desire of
the parties hereto and the Noteholders that there be at all times sufficient
funds for the payment of principal of and interest on the Notes, and the
Indenture Trustee shall take such desire into account when determining whether
or not to maintain possession of the Collateral. In determining whether to
maintain possession of the Collateral, the Indenture Trustee may, but need not,
obtain and conclusively rely upon an opinion of an Independent investment
banking or accounting firm of national reputation as to the feasibility of such
proposed action and as to the sufficiency of the Trust Assets for such purpose.
Section 5.7. Limitation on Suits. No Noteholder shall have any right to
-------------------
institute any proceedings, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(a) the Holders of Notes representing not less than 25% of the principal
balance of the Outstanding Notes of each affected Series have made written
request to the Indenture Trustee to institute such proceeding in its own name as
indenture trustee;
(b) such Noteholder or Noteholders has previously given written notice to
the Indenture Trustee of a continuing Event of Default;
(c) such Noteholder or Noteholders has offered to the Indenture Trustee
indemnity satisfactory to it against the costs, expenses and liabilities to be
incurred in compliance with such request;
(d) the Indenture Trustee for sixty (60) days after its receipt of such
request and offer of indemnity has failed to institute any such Proceeding; and
34
(e) no direction inconsistent with such written request has been given to
the Indenture Trustee during such 60-day period by the Holders of Notes
representing more than 50% of the principal balance of the Outstanding Notes of
such Series;
it being understood and intended that no one or more Noteholders of the affected
Series shall have any right in any manner whatever by virtue of, or by availing
of, any provision of this Indenture to affect, disturb or prejudice the rights
of any other Noteholders of such Series or to obtain or to seek to obtain
priority or preference over any other Noteholders of such Series or to enforce
any right under this Indenture, except in the manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two (2) or more groups of Noteholders
of such affected Series, each representing no more than 50% of the principal
balance of the Outstanding Notes of such Series, the Indenture Trustee in its
sole discretion may determine what action, if any, shall be taken,
notwithstanding any other provisions of this Indenture.
Section 5.8. Unconditional Rights of Noteholders to Receive Principal and
------------------------------------------------------------
Interest. Notwithstanding any other provision in this Indenture, each Noteholder
--------
shall have the right which is absolute and unconditional to receive payment of
the principal of and interest in respect of such Note as such principal and
interest becomes due and payable and to institute suit for the enforcement of
any such payment, and such right shall not be impaired without the consent of
such Noteholder.
Section 5.9. Restoration of Rights and Remedies. If the Indenture Trustee
----------------------------------
or any Noteholder has instituted any Proceeding to enforce any right or remedy
under this Indenture and such Proceeding has been discontinued or abandoned, or
has been determined adversely to the Indenture Trustee or to such Noteholder,
then and in every such case the Issuer, the Indenture Trustee and the Noteholder
shall, subject to any determination in such Proceeding, be restored severally
and respectively to their former positions hereunder, and thereafter all rights
and remedies of the Indenture Trustee and the Noteholders shall continue as
though no such Proceeding had been instituted.
Section 5.10. Rights and Remedies Cumulative. No right, remedy, power or
------------------------------
privilege herein conferred upon or reserved to the Indenture Trustee or to the
Noteholders is intended to be exclusive of any other right, remedy, power or
privilege, and every right, remedy, power or privilege shall, to the extent
permitted by law, be cumulative and in addition to every other right, remedy,
power or privilege given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or exercise of any right or remedy shall not
preclude any other further assertion or the exercise of any other appropriate
right or remedy.
35
Section 5.11. Delay or Omission Not Waiver. No failure to exercise and no
----------------------------
delay in exercising, on the part of the Indenture Trustee or of any Noteholder
or other Person, any right or remedy occurring hereunder upon any Event of
Default shall impair any such right or remedy or constitute a waiver thereof of
any such Event of Default or an acquiescence therein. Every right and remedy
given by this Article V or by law to the Indenture Trustee or to the Noteholders
---------
may be exercised from time to time, and as often as may be deemed expedient, by
the Indenture Trustee or by the Noteholders, as the case may be.
Section 5.12. Rights of Noteholders to Direct Indenture Trustee. The
-------------------------------------------------
Holders of Notes representing more than 50% of the principal balance of the
Outstanding Notes of any affected Series shall have the right to direct in
writing the time, method and place of conducting any Proceeding for any remedy
available to the Indenture Trustee with respect to such Series or exercising any
trust or power conferred on the Indenture Trustee with respect to such Series;
provided, however, that subject to Section 6.1:
-------- ------- -----------
(a) Indenture Trustee shall have the right to decline any such direction if
the Indenture Trustee, after being advised by counsel, determines that the
action so directed is in conflict with any rule of law or with this Indenture,
and
(b) the Indenture Trustee shall have the right to decline any such
direction if the Indenture Trustee in good faith shall, by a Trustee Officer of
the Indenture Trustee, determine that the Proceedings so directed would be
illegal or involve the Indenture Trustee in personal liability or be unjustly
prejudicial to the Noteholders not parties to such direction.
Section 5.13. Waiver of Past Defaults. Prior to the declaration of the
-----------------------
acceleration of the maturity of the Notes of the affected Series as provided in
Section 5.3, Holders of Notes representing more than 50% of the principal
-----------
balance of the Outstanding Notes of such Series (or with respect to any such
Series with two or more Classes, of each Class) may, on behalf of all such
Noteholders, waive in writing any past default, with written notice to the
Indenture Trustee, with respect to such Notes and its consequences, except a
default:
(a) in the payment of the principal or interest in respect of any Note of
such Series, or
(b) in respect of a covenant or provision hereof that under Section 10.2
------------
cannot be modified or amended without the consent of the Noteholder of each
Outstanding Note affected.
Upon any such written waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of
36
this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
Section 5.14. Undertaking for Costs. All parties to this Indenture agree,
---------------------
and each Noteholder by its acceptance thereof shall be deemed to have agreed,
that any court may in its discretion require, in any suit for the enforcement of
any right or remedy under this Indenture, or in any suit against the Indenture
Trustee for any action taken, suffered or omitted by it as Indenture Trustee,
the filing by any party litigant in such suit of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorney's fees, against any party litigant (other than the
Indenture Trustee) 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 5.14 shall not apply to any suit instituted by the Indenture
------------
Trustee, to any suit instituted by any Noteholder, or group of Noteholders (in
compliance with Section 5.8), holding Notes representing more than 10% of the
-----------
principal balance of the Outstanding Notes of the affected Series, or to any
suit instituted by any Noteholder for the enforcement of the payment of the
principal or interest in respect of any Note on or after the Distribution Date
on which any of such amounts was due (or, in the case of redemption, on or after
the applicable Redemption Date).
Section 5.15. Waiver of Stay or Extension Laws. The Issuer covenants (to
--------------------------------
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, which may adversely affect the covenants or the performance of this
Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Indenture Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
Section 5.16. Sale of Receivables.
--------------------
(a) The method, manner, time, place and terms of any sale of Receivables
pursuant to Section 5.5(a)(iii) shall be commercially reasonable. The Indenture
-------------------
Trustee may from time to time postpone any sale by public announcement made at
the time and place of such sale. The Indenture Trustee hereby expressly waives
its right to any amount fixed by law as compensation for any sale.
(b) The Indenture Trustee is hereby irrevocably appointed the agent and
attorney-in-fact of the Issuer in connection with any sale of Receivables
pursuant to Section 5.5(a)(iii). No purchaser or transferee at any such sale
-------------------
shall be bound to ascertain the Indenture Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the application of any
monies.
37
(c) In its exercise of the foreclosure remedy pursuant to Section
-------
5.5(a)(iii), the Indenture Trustee shall solicit bids for the sale of Principal
-----------
Receivables in any amount equal to the Collateral Amount of the affected Series
of Notes at the time of sale and the related Finance Charge Receivables (or
interests therein). The Seller or any of its affiliates shall be entitled to
participate in, and to receive from the Indenture Trustee a copy of each other
bid submitted in connection with, such bidding process; provided that (i) at
--------
least one participant other than the Seller and any of its affiliates must
submit a bona fide offer, and (ii) the Seller and any of its affiliates are
prohibited from bidding an amount which exceeds fair value for the transferred
assets. The Indenture Trustee shall sell such Receivables (or interests therein)
to the bidder with the highest cash purchase offer. The proceeds of any such
sale shall be applied as specified in the applicable Indenture Supplement.
Section 5.17. Action on Notes. The Indenture Trustee's right to seek and
---------------
recover judgment on the Notes or under this Indenture shall not be affected by
the seeking or obtaining of or application for any other relief under or with
respect to this Indenture. Neither the lien of this Indenture nor any rights or
remedies of the Indenture Trustee or the Noteholders shall be impaired by the
recovery of any judgment by the Indenture Trustee against the Issuer or by the
levy of any execution under such judgment upon any portion of the Collateral or
upon any of the assets of the Issuer. Any money or property collected by the
Indenture Trustee shall be applied as specified in the applicable Indenture
Supplement.
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.1. Duties of the Indenture Trustee.
-------------------------------
(a) If an Event of Default has occurred and is continuing and a Trustee
Officer shall have actual knowledge or written notice of such Event of Default,
the Indenture Trustee shall exercise the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture against
the Indenture Trustee; and
38
(ii) in the absence of bad faith or negligence on its part, the
Indenture Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; provided, however, the Indenture Trustee,
-------- -------
upon receipt of any resolutions, certificates, statements, opinions,
reports, documents, orders or other instruments furnished to the Indenture
Trustee which are specifically required to be furnished pursuant to any
provision of this Indenture or any Indenture Supplement, shall examine them
to determine whether they substantially conform to the requirements of this
Indenture or any Indenture Supplement.
(c) In case a Pay Out Event has occurred and is continuing and a Trustee
Officer shall have actual knowledge or written notice of such Pay Out Event, the
Indenture 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
such person's own affairs.
(d) No provision of this Indenture shall be construed to relieve the
Indenture Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
(i) this Section (d) shall not be construed to limit the effect
-----------
of Section (a) of this Section 6.1;
---------- -----------
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Trustee Officer, unless it shall be proved
that the Indenture Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Indenture Trustee shall not be liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the Indenture and/or the direction of the Holders of Notes
or for exercising any trust or power conferred upon the Indenture Trustee,
under this Indenture. The Indenture Trustee shall not be liable for any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of the Servicer, the Seller or the Trust in
compliance with the terms of this Indenture or any Indenture Supplement.
(e) No provision of this Indenture shall require the Indenture Trustee to
expend or risk its own funds or otherwise incur any liability, financial or
otherwise, 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
39
or indemnity satisfactory to it against such risk or liability is not reasonably
assured to it.
(f) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to this Section 6.1.
------------
(g) Except as expressly provided in this Indenture, the Indenture Trustee
shall have no power to vary the Collateral, including by (i) accepting any
substitute payment obligation for a Receivable initially transferred to the
Trust under the Transfer and Servicing Agreement, (ii) adding any other
investment, obligation or security to the Trust or (iii) withdrawing from the
Issuer any Receivable (except as otherwise provided in the Transfer and
Servicing Agreement).
(h) The Indenture Trustee shall have no responsibility or liability for
investment losses on Permitted Investments (other than Permitted Investments on
which the institution acting as Indenture Trustee is an obligor). The Indenture
Trustee shall have no obligation to invest and reinvest any cash held in the
absence of timely and specific written investment direction from the Issuer. In
no event shall the Indenture Trustee be liable for the selection of investments
or for investment losses incurred thereon. The Indenture Trustee shall have no
liability in respect of losses incurred as a result of the liquidation of any
investment prior to its stated maturity or the failure of the Issuer to provide
timely written investment direction.
(i) The Indenture Trustee shall notify each Rating Agency (i) of any change
in any rating of the Notes by any other Rating Agency of which a Trustee Officer
of the Indenture Trustee has actual knowledge, and (ii) immediately of the
occurrence of any Event of Default or Pay Out Event of which a Trustee Officer
of the Indenture Trustee has actual knowledge of or has actual notice from the
Servicer of potential Pay Out Events or Events of Default.
(j) For all purposes under this Indenture, the Indenture Trustee shall not
be deemed to have notice or knowledge of any Event of Default, Pay Out Event or
Servicer Default unless a Trustee Officer assigned to and working in the
Corporate Trust Office of the Indenture Trustee has actual knowledge thereof or
has received written notice thereof. For purposes of determining the Indenture
Trustee's responsibility and liability hereunder, any reference to an Event of
Default, Pay Out Event or Servicer Default shall be construed to refer only to
such event of which the Indenture Trustee is deemed to have notice as described
in this Section 6.1(j).
--------------
Section 6.2. Notice of Pay Out Event or Event of Default. Upon the
-------------------------------------------
occurrence of any Pay Out Event or Event of Default of which a Trustee Officer
has actual knowledge or has received written notice thereof, the Indenture
Trustee shall transmit by mail to all Noteholders as their names and addresses
appear on the Note Register and the Rating Agencies, notice of such Pay Out
Event or Event of Default
40
hereunder known to the Indenture Trustee within thirty (30) days after it occurs
or within ten (10) Business Days after it receives such notice or obtains actual
notice, if later.
Section 6.3. Rights of Indenture Trustee. Except as otherwise provided in
---------------------------
Section 6.1:
-----------
(a) the Indenture Trustee may conclusively rely and shall fully be
protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, note or other paper or document reasonably believed by it to be
genuine and to have been signed or presented by the proper party or parties;
(b) whenever in the administration of this Indenture the Indenture Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Indenture Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, conclusively rely upon an Officer's Certificate of the Issuer. The
Issuer shall provide a copy of such Officer's Certificate to the Noteholders at
or prior to the time the Indenture Trustee receives such Officer's Certificate;
(c) as a condition to the taking, suffering or omitting of any action by it
hereunder, the Indenture Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(d) the Indenture Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture or to honor the request or
direction of any of the Noteholders pursuant to this Indenture, unless such
Noteholders shall have offered to the Indenture Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(e) the Indenture Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
note or other paper or document, but the Indenture Trustee at the written
direction of one or more of the Noteholders and at the expense of the
Noteholders, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Indenture Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Issuer and the
Servicer, personally or by agent or attorney;
41
(f) the Indenture Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents,
attorneys, custodians or nominees and the Indenture Trustee shall not be
responsible for any (i) misconduct or negligence on the part of any agent,
attorney, custodians or nominees appointed with due care by it hereunder or (ii)
the supervision of such agents, attorneys, custodians or nominees after such
appointment with due care;
(g) the Indenture Trustee shall not be liable for any actions taken,
suffered or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights conferred upon the Indenture Trustee by this
Indenture; and
(h) in the event that the Indenture Trustee is also acting as Paying Agent
and Transfer Agent and Registrar and Successor Servicer, if it becomes Successor
Servicer pursuant of Section 7.2 of the Transfer and Servicing Agreement, the
-----------
rights and protections afforded to the Indenture Trustee pursuant to this
Article VI shall also be afforded to such Paying Agent and Transfer Agent and
----------
Registrar and Successor Servicer, if it becomes Successor Servicer pursuant of
Section 7.2 of the Transfer and Servicing Agreement.
-----------
Section 6.4. Not Responsible for Recitals or Issuance of Notes. The
-------------------------------------------------
recitals contained herein and in the Notes, except the certificate of
authentication of the Indenture Trustee, shall be taken as the statements of the
Issuer, and the Indenture Trustee assumes no responsibility for their
correctness. Neither the Indenture Trustee nor any of its agents makes any
representation as to the validity or sufficiency of the Agreement, the Notes, or
any related document. The Indenture Trustee shall not be accountable for the use
or application by the Issuer of the proceeds from the Notes.
Section 6.5. Restrictions on Holding Notes. The Indenture Trustee shall
-----------------------------
not in its individual capacity, but may in a fiduciary capacity, become the
owner or pledgee of Notes and may otherwise deal with the Issuer with the same
rights it would have if it were not Indenture Trustee, Paying Agent, Transfer
Agent and Registrar or such other agent. Any Paying Agent, Transfer Agent and
Registrar that is not also the Indenture Trustee or any other agent of the
Issuer, in its individual or any other capacity, may become the owner or pledgee
of Notes and may otherwise deal with the Issuer with the same rights it would
have if it were not Indenture Trustee, Paying Agent, Transfer Agent and
Registrar or such other agent.
Section 6.6. Money Held in Trust. Money held by the Indenture Trustee in
-------------------
trust hereunder need not be segregated from other funds held by the Indenture
Trustee in trust hereunder except to the extent required herein or required by
law. The Indenture Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed upon in writing by the
Indenture Trustee and the Issuer.
42
Section 6.7. Compensation, Reimbursement and Indemnification. The Servicer
-----------------------------------------------
shall pay to the Indenture Trustee from time to time reasonable compensation for
all services rendered by the Indenture Trustee and the Authenticating Agent
under this Agreement (which compensation shall not be limited by any law on
compensation of a trustee of an express trust). The Servicer shall reimburse the
Indenture Trustee for all reasonable out-of-pocket expenses incurred or made by
it, including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Indenture Trustee's agents, counsel,
accountants and experts. The Issuer shall direct the Servicer to indemnify,
defend and hold harmless, and the Servicer shall indemnify the Indenture Trustee
and its officers, directors, employees and agents against any and all loss,
liability, expense, damage or claim (including the fees of either in-house
counsel or outside counsel) incurred by it in connection with the administration
of this trust and the performance of its duties hereunder and under any other
Transaction Document, including any claim arising from any failure by Issuer,
Seller or FCNB to pay when due any sales, excise, transfer or personal taxes
relating to the Receivables. The Indenture Trustee shall notify the Issuer and
the Servicer promptly of any claim for which it may seek indemnity. Failure by
the Indenture Trustee to so notify the Issuer and the Servicer shall not relieve
the Issuer or the Servicer of its obligations hereunder unless such loss,
liability or expense could have been avoided with such prompt notification and
then only to the extent of such loss, expense or liability which could have been
so avoided. The Servicer shall defend any claim against the Indenture Trustee,
the Indenture Trustee may have separate counsel and, if it does, the Servicer
shall pay the fees and expenses of such counsel. Neither the Issuer nor the
Servicer need reimburse any expense or indemnify against any loss, liability or
expense incurred by the Indenture Trustee through the Indenture Trustee's own
willful misconduct or negligence.
The Servicer's payment obligations to the Indenture Trustee pursuant to
this Section 6.7 shall survive the discharge of this Indenture or earlier
-----------
resignation or removal of the Indenture Trustee. When the Indenture Trustee
incurs expenses after the occurrence of a Default specified in Section 5.2(c) or
--------------
(d) with respect to the Issuer, the expenses are intended to constitute expenses
---
of administration under Title 11 of the United States Code or any other
applicable federal or state bankruptcy, insolvency or similar law.
To secure the Servicer's and Issuer's payment obligations in this Section
-------
6.7, the Indenture Trustee shall have a lien prior to the Notes on all money or
---
property held or collected by the Indenture Trustee, in its capacity as
Indenture Trustee, except money or property held in trust to pay principal of,
and interest on, the Notes.
43
Section 6.8. Replacement of Indenture Trustee. No resignation or removal of
--------------------------------
the Indenture Trustee and no appointment of a successor Indenture Trustee shall
become effective until the acceptance of appointment by the successor Indenture
Trustee pursuant to this Section 6.8. The Indenture Trustee may resign at any
-----------
time by giving thirty (30) days written notice to the Issuer and the Rating
Agencies. The Holders of Notes representing more than 66 2/3% of the Outstanding
Amount may remove the Indenture Trustee by so notifying the Indenture Trustee in
writing and may appoint a successor Indenture Trustee. The Administrator shall
remove the Indenture Trustee upon written notice if:
(i) the Indenture Trustee fails to comply with Section 6.11;
------------
(ii) the Indenture Trustee is adjudged a bankrupt or insolvent;
(iii) a receiver of the Indenture Trustee or of its property shall
be appointed, or any public officer takes charge of the Indenture Trustee
or its property or its affairs for the purpose of rehabilitation,
conservation or liquidation; or
(iv) the Indenture Trustee otherwise becomes legally unable to
act. If the Indenture Trustee resigns or is removed or if a vacancy exists
in the office of Indenture Trustee for any reason (the Indenture Trustee in
such event being referred to herein as the retiring Indenture Trustee), the
Administrator shall promptly appoint a successor Indenture Trustee.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee, the Servicer and to the Issuer.
Thereupon the resignation or removal of the retiring Indenture Trustee shall
become effective, and the successor Indenture Trustee shall have all the rights,
powers and duties of the Indenture Trustee under this Indenture. The successor
Indenture Trustee shall mail a notice of its succession to Noteholders. The
retiring Indenture Trustee shall promptly transfer all property held by it as
Indenture Trustee to the successor Indenture Trustee, subject to the payment of
any an all amounts then due and owing to the Indenture Trustee.
If a successor Indenture Trustee does not take office within sixty (60)
days after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Holders of Notes representing more than 50%
of the Outstanding Amount may petition any court of competent jurisdiction for
the appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any Noteholder
------------
may petition any court of competent jurisdiction for the removal of the
Indenture Trustee and the appointment of a successor Indenture Trustee.
44
Notwithstanding the replacement of the Indenture Trustee pursuant to this
Section 6.8, the Issuer's obligations under Section 6.7 shall continue for the
----------- -----------
benefit of the retiring Indenture Trustee.
The Administrator shall notify the Rating Agencies of any replacement of
the Indenture Trustee pursuant to this Section 6.8.
-----------
Section 6.9. Successor Indenture Trustee by Merger. If the Indenture
-------------------------------------
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another corporation
or banking association, the resulting, surviving or transferee corporation
without any further act shall be the successor Indenture Trustee; provided that
such corporation or banking association shall be otherwise qualified and
eligible under Section 6.11. The Indenture Trustee shall provide the Rating
------------
Agencies prior written notice of any such transaction.
In case at the time such successor or successors by merger, conversion,
consolidation or transfer to the Indenture Trustee shall succeed to the trusts
created by this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the certificate
of authentication of any predecessor Indenture Trustee and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes in the name of the successor to the Indenture Trustee; and in all such
cases such certificates shall have the full force which it is anywhere in the
Notes or in this Indenture provided that the certificate of the Indenture
Trustee shall have.
Section 6.10. Appointment of Co-Indenture Trustee or Separate Indenture
---------------------------------------------------------
Trustee.
-------
(a) Notwithstanding any other provisions of this Indenture, at any time,
for the purpose of meeting any legal requirement of any jurisdiction in which
any part of the Collateral may at the time be located, the Indenture Trustee
shall have the power and may execute and deliver all instruments to appoint one
or more Persons to act as a co- trustee or co-trustees, or separate trustee or
separate trustees, of all or any part of the Collateral, and to vest in such
Person or Persons, in such capacity and for the benefit of the Noteholders, such
title to the Collateral, or any part hereof, and, subject to the other
provisions of this Section 6.10, such powers, duties, obligations, rights and
------------
trusts as the Indenture Trustee may consider necessary or desirable. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 6.11 and no notice to
------------
Noteholders of the appointment of any co-trustee or separate trustee shall be
required under Section 6.8
.
-----------
(b) Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
45
(i) all rights, powers, duties and obligations conferred or imposed
upon the Indenture Trustee shall be conferred or imposed upon and exercised
or performed by the Indenture Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed
the Indenture Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Collateral or any portion thereof in
any such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the
Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of any
act or omission of any other trustee hereunder;
(iii) the Indenture Trustee may at any time accept the resignation of
or remove any separate trustee or co-trustee; and
(iv) the Indenture Trustee shall not be liable for any act or failure
to act on the part of any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Indenture and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time appoint the
Indenture Trustee as its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Indenture on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
46
Section 6.11. Eligibility; Disqualification. The Indenture Trustee shall at
-----------------------------
all times satisfy the requirements of TIA (S)310(a). The Indenture Trustee shall
have a combined capital and surplus of at least $50,000,000 as set forth in its
most recent published annual report of condition and either its long-term
unsecured debt shall be rated at least A3 by Moody's and BBB- by Standard &
Poor's or its short-term debt shall be rated at least P-2 by Moody's or A-2 by
Standard & Poor's. The Indenture Trustee shall comply with TIA (S)310(b),
including the optional provision permitted by the second sentence of TIA
(S)310(b)(9); provided, however, that there shall be excluded from the operation
of TIA (S)310(b)(1) any indenture or indentures under which other securities of
the Issuer are outstanding if the requirements for such exclusion set forth in
TIA (S)310(b)(1) are met.
Section 6.12. Preferential Collection of Claims Against. The Indenture
-----------------------------------------
Trustee shall comply with TIA (S)311(a), excluding any creditor relationship
listed in TIA (S)311(b). An Indenture Trustee who has resigned or been removed
shall be subject to TIA (S)311(a) to the extent indicated.
Section 6.13. Representations and Covenants of the Indenture Trustee. The
------------------------------------------------------
Indenture Trustee represents, warrants and covenants that:
(i) the Indenture Trustee is a banking corporation duly organized
and validly existing under the laws of the State of New York;
(ii) The Indenture Trustee has full power and authority to deliver
and perform this Indenture and has taken all necessary action to authorize
the execution, delivery and performance by it of this Indenture and other
Transaction Documents to which it is a party; and
(iii) Each of this Indenture and the other Transaction Documents to
which it is a party has been duly executed and delivered by the Indenture
Trustee and constitutes its legal, valid and binding obligation in
accordance with its terms.
Section 6.14. Custody of the Collateral. The Indenture Trustee shall hold
-------------------------
such of the Trust Estate as consists of instruments, deposit accounts,
negotiable documents, money, goods, letters of credit, and advices of credit in
the State of Illinois. The Indenture Trustee shall hold such of the Trust Estate
as constitutes investment property through a securities intermediary, which
securities intermediary shall agree with the Indenture Trustee that (a) such
investment property shall at all times be credited to a securities account of
the Indenture Trustee, (b) such securities intermediary shall treat the
Indenture Trustee as entitled to exercise the rights that comprise each
financial asset credited to such securities account, (c) all property credited
to such securities account shall be treated as a financial asset, (d) such
securities intermediary shall comply with entitlement orders originated by the
Indenture Trustee without the further consent of any
47
other person or entity, (e) such securities intermediary will not agree with any
person or entity other than the Indenture Trustee to comply with entitlement
orders originated by such other person or entity, (f) such securities accounts
and the property credited thereto shall not be subject to any lien, security
interest, or right of set-off in favor of such securities intermediary or anyone
claiming through it (other than the Indenture Trustee), and (g) such agreement
shall be governed by the laws of the State of Illinois. Terms used in the
preceding sentence that are defined in the Illinois UCC and not otherwise
defined herein shall have the meaning set forth in the Illinois UCC. Except as
permitted by this Section 6.14, the Indenture Trustee shall not hold any part of
------------
the Trust Estate through an agent or a nominee.
ARTICLE VII
NOTEHOLDERS' LIST AND REPORTS BY
INDENTURE TRUSTEE AND ISSUER
Section 7.1. Issuer to Furnish Indenture Trustee Names and Addresses of
----------------------------------------------------------
Noteholders. The Issuer will furnish or cause to be furnished to the Indenture
-----------
Trustee (a) upon each transfer of a Note, a list, in such form as the Indenture
Trustee may reasonably require, of the names, addresses and taxpayer
identification numbers of the Noteholders as they appear on the Note Register as
of such Record Date, and (b) at such other times, as the Indenture Trustee may
request in writing, within ten (10) days after receipt by the Issuer of any such
request, a list of similar form and content as of a date not more than ten (10)
days prior to the time such list is furnished; provided, however, that for so
-------- -------
long as the Indenture Trustee is the Transfer Agent and Registrar, the Indenture
Trustee shall furnish to the Issuer such list in the same manner prescribed in
clause (b) above.
Section 7.2. Preservation of Information; Communications to Noteholders.
----------------------------------------------------------
(a) The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Noteholders contained in
the most recent list furnished to the Indenture Trustee as provided in Section
-------
7.1 and the names, addresses and taxpayer identification numbers of the
---
Noteholders received by the Indenture Trustee in its capacity as Transfer Agent
and Registrar. The Indenture Trustee may destroy any list furnished to it as
provided in Section 7.1 upon receipt of a new list so furnished.
-----------
(b) Noteholders may communicate, pursuant to TIA (S)312(b), with other
Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Indenture Trustee and the Transfer Agent and
Registrar shall have the protection of TIA (S)312(c).
48
Section 7.3. Reports by Issuer.
-----------------
(a) The Issuer shall:
(i) file with the Indenture Trustee, within fifteen (15) days after
the Issuer is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Issuer may be
required to file with the Commission pursuant to Section 13 or 15(d) of the
---------- -----
Exchange Act;
(ii) file with the Indenture Trustee and the Commission in accordance
with rules and regulations prescribed from time to time by the Commission
such additional information, documents and reports with respect to
compliance by the Issuer with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee shall
transmit by mail to all Noteholders described in TIA (S)313(c)) such
summaries of any information, documents and reports required to be filed by
the Issuer pursuant to clauses (i) and (ii) of this Section 7.3(a) as may
--------------
be required by rules and regulations prescribed from time to time by the
Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the Issuer
shall end on December 31 of each year.
(c) Delivery of such reports, information and documents to the Indenture
Trustee is for informational purposes only and the Indenture Trustee's receipt
of such shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the
Issuer's compliance with any of the covenants hereunder.
Section 7.4. Reports by Indenture Trustee. If required by TIA (S)313(a),
----------------------------
within sixty (60) days after each March 31 beginning with March 31, 2001, the
Indenture Trustee shall mail to each Noteholder as required by TIA (S)313(c) a
brief report dated as of such date that complies with TIA (S)313(a). The
Indenture Trustee also shall comply with TIA (S)313(b).
A copy of each report at the time of its mailing to Noteholders shall be
filed by the Indenture Trustee with the Commission and each stock exchange, if
any, on which the Notes are listed. The Issuer shall notify the Indenture
Trustee if and when the Notes are listed on any stock exchange.
49
ARTICLE VIII
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 8.1. Collection of Money. Except as otherwise expressly provided
-------------------
herein and in the related Indenture Supplement, the Indenture Trustee may demand
payment or delivery of, and shall receive and collect, directly and without
intervention or assistance of any fiscal agent or other intermediary, all money
and other property payable to or receivable by the Indenture Trustee pursuant to
this Indenture. The Indenture Trustee shall hold all such money and property
received by it in trust for the Noteholders and shall apply it as provided in
this Indenture. Except as otherwise expressly provided in this Indenture, if any
default occurs in the making of any payment or performance under the Transfer
and Servicing Agreement or any other Transaction Document, the Indenture Trustee
may, and upon the written request of the Holders of Notes representing more than
50% of the principal balance of the Outstanding Notes of the affected Series
shall, subject to Sections 6.1(e) and 6.3(d) take such action as may be
--------------- ------
appropriate to enforce such payment or performance, including the institution
and prosecution of appropriate Proceedings. Any such action shall be without
prejudice to any right to claim a Pay Out Event or a Default or Event of Default
under this Indenture and to proceed thereafter as provided in Article V.
---------
Section 8.2. Rights of Noteholders. The Collateral shall secure the rights
---------------------
of the Holders of the Notes of each Series to receive the portion of Collections
allocable to the Noteholders of such Series pursuant to this Indenture and the
related Indenture Supplement, funds and other property credited to the
Collection Account and the Excess Funding Account (or any subaccount thereof)
allocable to the Noteholders of such Series pursuant to this Indenture and such
Indenture Supplement, funds and other property credited to any related Series
Account and funds available pursuant to any related Series Enhancement, it being
understood that, except as specifically set forth in the Indenture Supplement
with respect thereto, the Notes of any Series or Class shall not be secured by
any interest in any Series Account or Series Enhancement pledged for the benefit
of any other Series or Class.
Section 8.3. Establishment of Collection Account and Excess Funding
------------------------------------------------------
Account.
-------
(a) The Servicer, for the benefit of the Noteholders, shall establish and
maintain with the Indenture Trustee or its nominee in the name of the Indenture
Trustee, on behalf of the Issuer, a Qualified Account (including any subaccount
thereof) bearing a designation clearly indicating that the funds and other
property credited thereto are held for the benefit of the Noteholders (the
"Collection Account"). The Indenture Trustee shall possess all right, title and
------------------
interest in all monies, instruments, investment property, documents,
certificates of deposit and other property credited from time to
50
time to the Collection Account and in all proceeds, earnings, income, revenue,
dividends and distributions thereof for the benefit of the Noteholders.
The Collection Account shall be under the sole dominion and control of the
Indenture Trustee for the benefit of the Noteholders. Except as expressly
provided in this Indenture and the Transfer and Servicing Agreement, the
Servicer agrees that it shall have no right of setoff or banker's lien against,
and no right to otherwise deduct from, any funds held in the Collection Account
for any amount owed to it by the Indenture Trustee, the Issuer, any Noteholder
or any Series Enhancer. If, at any time, the Collection Account ceases to be a
Qualified Account and the same is actually known to a Trustee Officer of the
Indenture Trustee, the Indenture Trustee (or the Servicer on its behalf) shall
within ten (10) Business Days (or such longer period, not to exceed thirty (30)
calendar days, as to which each Rating Agency may consent) establish a new
Collection Account meeting the conditions specified above, transfer any monies,
documents, instruments, investment property, certificates of deposit and other
property to such new Collection Account and from the date such new Collection
Account is established, it shall be the "Collection Account." Pursuant to the
------------------
authority granted to the Servicer in Section 3.1(b) of the Transfer and
--------------
Servicing Agreement, the Servicer shall have the power, revocable by the
Indenture Trustee, to make withdrawals and payments from the Collection Account
and to instruct the Indenture Trustee in writing to make withdrawals and
payments from the Collection Account for the purposes of carrying out the
Servicer's or the Indenture Trustee's duties hereunder and under the Transfer
and Servicing Agreement, as applicable. The Servicer shall reduce deposits into
the Collection Account payable by the Seller on any Deposit Date to the extent
the Seller is entitled to receive funds from the Collection Account on such
Deposit Date.
Funds on deposit in the Collection Account (other than investment earnings
and amounts deposited pursuant to Section 2.6, 6.1, or 7.1 of the Transfer and
----------- --- ---
Servicing Agreement or Section 11.2 of this Indenture) shall at the written
------------
direction of the Servicer be invested by the Indenture Trustee or its nominee in
Permitted Investments selected by the Servicer. All such Permitted Investments
shall be held by the Indenture Trustee for the benefit of the Noteholders
pursuant to Section 6.14 and 6.1(h). Investments of funds representing
------------ ------
Collections collected during any Monthly Period shall be invested in Permitted
Investments that will mature so that such funds will be available no later than
the close of business on each monthly Transfer Date following such Monthly
Period in amounts sufficient to the extent of such funds to make the required
distributions on the following Distribution Date. No such Permitted Investment
shall be disposed of prior to its maturity; provided, however, that the
-------- -------
Indenture Trustee may sell, liquidate or dispose of any such Permitted
Investment before its maturity, at the written direction of the Servicer, if
such sale, liquidation or disposal would not result in a loss of all or part of
the principal portion of such Permitted Investment or if, prior to the maturity
of such Permitted Investment, a default occurs in the payment of principal,
interest or any other amount with respect to such Permitted Investment. Unless
directed by the Servicer in writing, funds deposited in the Collection Account
51
on a Transfer Date with respect to the immediately succeeding Distribution Date
are not required to be invested overnight. On each Distribution Date, all
interest and other investment earnings (net of losses and investment expenses)
on funds on deposit in the Collection Account shall be treated as Collections of
Finance Charge Receivables with respect to the last day of the related Monthly
Period, except as otherwise specified in any Indenture Supplement. The Indenture
Trustee shall bear no responsibility or liability for any losses resulting from
investment or reinvestment of any funds in accordance with this Section 8.3 nor
-----------
for the selection of Permitted Investments in accordance with the provisions of
this Indenture and any Indenture Supplement.
(b) The Servicer, for the benefit of the Noteholders, shall establish and
maintain with the Indenture Trustee or its nominee in the name of the Indenture
Trustee, on behalf of the Issuer, a Qualified Account (including any subaccounts
thereof) bearing a designation clearly indicating that the funds and other
property credited thereto are held for the benefit of the Noteholders (the
"Excess Funding Account"). The Indenture Trustee shall possess all right, title
----------------------
and interest in all monies, instruments, investment property, documents,
certificates of deposit and other property credited from time to time to the
Excess Funding Account and in all proceeds, dividends distributions, earnings,
income and revenue thereof for the benefit of the Noteholders. The Excess
Funding Account shall be under the sole dominion and control of the Indenture
Trustee for the benefit of the Noteholders. Except as expressly provided in this
Indenture and the Transfer and Servicing Agreement, the Servicer agrees that it
shall have no right of setoff or banker's lien against, and no right to
otherwise deduct from, any funds and other property held in the Excess Funding
Account for any amount owed to it by the Indenture Trustee, the Issuer, any
Noteholder or any Series Enhancer. If, at any time, the Excess Funding Account
ceases to be a Qualified Account and the same is actually known to a Trustee
Officer of the Indenture Trustee, the Indenture Trustee (or the Servicer on its
behalf) shall within ten (10) Business Days (or such longer period, not to
exceed thirty (30) calendar days, as to which each Rating Agency may consent)
establish a new Excess Funding Account meeting the conditions specified above,
transfer any monies, documents, instruments, investment property, certificates
of deposit and other property to such new Excess Funding Account and from the
date such new Excess Funding Account is established, it shall be the "Excess
Funding Account."
Funds on deposit in the Excess Funding Account shall at the written
direction of the Servicer be invested by the Indenture Trustee in Permitted
Investments selected by the Servicer. All such Permitted Investments shall be
held by the Indenture Trustee or its nominee (including any securities
intermediary) for the benefit of the Noteholders pursuant to Section 6.14 and
------------
6.1(h). Funds on deposit in the Excess Funding Account on any Distribution Date
------
will be invested in Permitted Investments that will mature so that such funds
will be available no later than the close of business on the next succeeding
Transfer Date. No such Permitted Investment shall be disposed of prior to its
maturity; provided, however, that the Indenture Trustee may sell, liquidate or
-------- -------
dispose of an Permitted Investment before its maturity, at the written direction
of the Servicer,
52
if such sale, liquidation or disposal would not result in a loss of all or part
of the principal portion of such Permitted Investment or if, prior to the
maturity of such Permitted Investment, a default occurs in the payment of
principal, interest or any other amount with respect to such Permitted
Investment. Unless directed by the Servicer in writing, funds deposited in the
Excess Funding Account on a Transfer Date with respect to the immediately
succeeding Distribution Date are not required to be invested overnight. On each
Distribution Date, all interest and other investment earnings (net of losses and
investment expenses) on funds on deposit in the Excess Funding Account shall be
treated as Collections of Finance Charge Receivables with respect to the last
day of the related Monthly Period except as otherwise specified in the related
Indenture Supplement.
Section 8.4. Collections and Allocations. From and after the SMT
---------------------------
Termination Date:
(a) Collections. The Servicer will apply or will instruct the Indenture
-----------
Trustee in writing to apply all funds on deposit in the Collection Account as
described in this Article VIII and in each Indenture Supplement. Except as
------------
otherwise provided below, the Servicer shall deposit Collections into the
Collection Account as promptly as possible after the Date of Processing of such
Collections, but in no event later than the second Business Day following the
Date of Processing. Subject to the express terms of any Indenture Supplement,
but notwithstanding anything else in this Indenture or the Transfer and
Servicing Agreement to the contrary, for so long as FCNB shall remain the
Servicer and no Servicer Default has occurred and is continuing and (a) (i) the
Servicer provides to the Indenture Trustee a letter of credit or other
arrangement covering risk of collection of the Servicer and (ii) the Servicer
shall have satisfied the Rating Agency Condition with respect to such
arrangement or (b) the Servicer (unless the Rating Agency shall have notified
the Servicer that making monthly deposits will result in the reduction or
withdrawal of its then-existing rating of the Notes) shall have and maintain a
certificate of deposit or short-term deposit rating of P-1 by Moody's and of at
least A-1 by Standard & Poor's and deposit insurance as required by law and by
the FDIC, the Servicer need not make the daily deposits of Collections into the
Collection Account as provided in the preceding sentence, but may make a single
deposit in the Collection Account in immediately available funds not later than
1:00 p.m., New York City time, on the Distribution Date following the Monthly
Period with respect to which such deposit relates. Subject to the first proviso
in Section 8.5, but notwithstanding anything else in this Indenture or the
-----------
Transfer and Servicing Agreement to the contrary, with respect to any Monthly
Period, whether the Servicer is required to make deposits of Collections
pursuant to the first or the second preceding sentence, (i) the Servicer will
only be required to deposit Collections into the Collection Account up to the
aggregate amount of Collections required to be deposited into any Series Account
or, without duplication, distributed on or prior to the related Distribution
Date to Noteholders or to any Series Enhancer pursuant to the terms of any
Indenture Supplement or Enhancement Agreement, but the Servicer shall account
for Collections
53
as if the full deposit had been made and (ii) if at any time prior to such
Distribution Date the amount of Collections deposited in the Collection Account
exceeds the amount required to be deposited pursuant to clause (i) above, the
----------
Servicer will be permitted to withdraw the excess from the Collection Account
and pay such amount to the Holder of the Seller Interest. Subject to the
immediately preceding sentence, the Servicer may retain its Servicing Fee with
respect to a Series and shall not be required to deposit it in the Collection
Account.
(b) Series and Seller Allocations. Finance Charge Collections, Collections
-----------------------------
of Principal Receivables and Defaulted Receivables will be allocated to each
Series of Notes and to the Holders of the Seller Interest in accordance with
this Article VIII and each Indenture Supplement, and amounts so allocated to any
------------
Series will not, except as specified in the related Indenture Supplement, be
available to the Noteholders of any other Series. All Finance Charge
Collections, Collections of Principal Receivables and Defaulted Receivables not
so allocated to any Series of Notes shall be allocated and (in the case of
Collections) paid to the Holder of the Seller Interest, except as otherwise
provided in Section 8.4(g).
--------------
(c) Allocation of Collections Between Finance Charge Receivables and
----------------------------------------------------------------
Principal Receivables. On each Business Day, the Servicer shall allocate
---------------------
Collections processed on the Accounts as Finance Charge Collections, or, in the
case of Discount Option Receivables, Collections as set forth in Section 2.8(b)
--------------
of the Transfer and Servicing Agreement. In addition all Collections which
constitute Net Recoveries, investment earnings (net of investment expenses and
losses) on the Collection Account and the Excess Funding Account and Merchant
Fees deposited into the Collection Account pursuant to Section 3.8 of the
-----------
Transfer and Servicing Agreement shall be treated as Finance Charge Collections
and allocated accordingly. The balance of the Collections processed on any
Business Day shall be allocated to Principal Receivables.
(d) Allocation of Collections of Recoveries and Defaulted Accounts. On
--------------------------------------------------------------
each Determination Date, the Servicer shall calculate the Investor Default
Amount and the amount of Net Recoveries, if any, for the preceding Monthly
Period with respect to each Series.
(e) Adjustments for Miscellaneous Credits. The Servicer shall be obligated
-------------------------------------
to reduce or adjust, as the case may be, on a net basis, the aggregate amount of
Principal Receivables used to calculate the Seller Amount as provided in this
Section 8.4(e) (a "Credit Adjustment") with respect to any Principal Receivable
-------------- -----------------
(i) which was created in respect of merchandise refused or returned by the
Obligor thereunder, (ii) which is reduced by the Servicer by any rebate, refund,
chargeback or adjustment, (iii) as to which the Obligor thereunder has asserted
a counterclaim or defense and either (x) the Servicer has agreed such
counterclaim or defense is valid or (y) a final nonappealable judgment or decree
has been entered in favor of such Obligor in respect of such counterclaim or
defense by a court or arbitral body having jurisdiction thereof, or (iv)
54
which the Servicer has determined was created through a fraudulent or
counterfeit charge, but only if and to the extent such fraudulent or counterfeit
charges are not included as charge-offs under the Charge Account Guidelines.
In the event that the exclusion of the amount of a Credit Adjustment from
the calculation of the Seller Amount would cause the Seller Amount to be less
than the Minimum Seller Amount, Seller shall make a deposit, no later than the
Business Day following the Date of Processing of such Credit Adjustment, in the
Collection Account in immediately available funds, in an amount equal to the
Shortfall Amount, after giving effect to such exclusion. Such deposit shall be
applied in accordance with this Article VIII and the Indenture Supplements and
------------
treated as a Principal Collection for all purposes hereof and thereof.
(f) Net Payments. So long as FCNB is the Servicer and FCNB, as Servicer,
------------
is making daily deposits to the Collection Account in accordance with Section
8.4(a), FCNB, acting as Servicer and as agent for the Holder of the Seller
Interest, may make a net payment to the Collection Account on each Deposit Date
in the amount of all Collections received by the Servicer since the previous
Deposit Date, minus all amounts payable to the Holder of the Seller Interest on
or before such day in accordance with this Article VIII and the Indenture
------------
Supplements.
(g) Unallocated Collections; Excess Funding Account. On each Business Day,
-----------------------------------------------
Collections allocable to the Seller Interest (including Shared Principal
Collections and Excess Finance Charge Collections payable to the Holders of the
Seller Interest) in an aggregate amount equal to the Shortfall Amount shall be
deposited in the Excess Funding Account. Thereafter, amounts in the Excess
Funding Account shall be treated as Shared Principal Collections to the extent
that, after giving effect to the application of such amount as Shared Principal
Collections to the extent provided in any Supplement, the Seller Amount would
equal or exceed the Minimum Seller Amount.
(h) Allocation of Deposit Obligations. If the Seller or the Servicer shall
---------------------------------
fail to make any Deposit Obligation, the amount thereof shall first be allocated
to reduce the Seller Amount until the Seller Amount equals the Minimum Seller
Amount. Any remaining shortfall shall be allocated to each Series ratably based
upon a fraction the numerator of which is the Allocation Percentage used by such
Series to allocate Finance Charge Collections and the denominator of which is
the sum of all such numerators of all Series outstanding (such allocated amount,
the "Series Share" of such shortfall). The Series Share of each series that
------------
specifies a Minimum Seller Percentage greater than zero shall be allocated to
reduce the Minimum Seller Amount and any Collections otherwise allocable to the
Seller Amount shall be available on a ratable basis to such Series to cover any
shortfalls arising from such failure. The Series Share of each Series that
specifies a Minimum Seller Percentage of zero shall be allocated to such series.
55
Section 8.5. Shared Principal Collections. On each Distribution Date, (a)
----------------------------
the Servicer shall allocate Shared Principal Collections (as described below) to
each Principal Sharing Series, pro rata, in proportion to the Principal
Shortfalls, if any, with respect to each such Series and (b) the Servicer shall
withdraw from the Collection Account an amount equal to the excess, if any, of
(i) the aggregate amount for all outstanding Series of Collections of Principal
Receivables which the related Indenture Supplements specify are to be treated as
"Shared Principal Collections" for such Distribution Date over (ii) the
----------------------------
aggregate amount for all outstanding Series which the related Indenture
Supplements specify are "Principal Shortfalls" for such Series and for such
--------------------
Distribution Date and shall (A) deposit such funds into the Excess Funding
Account in an aggregate amount equal to the Shortfall Amount in accordance with
Section 8.4(g) and (B) pay any remaining amount to the Holders of the Seller
--------------
Interest. The Seller may, at its option, instruct the Indenture Trustee in
writing to deposit Shared Principal Collections which are otherwise payable to
the Holders of the Seller Interest pursuant to the provisions set forth above
into the Excess Funding Account.
Section 8.6. Excess Finance Charge Collections. On each Distribution Date,
---------------------------------
(a) the Servicer shall allocate Excess Finance Charge Collections (as described
below) to each Excess Allocation Series, pro rata, in proportion to the Finance
Charge Shortfalls (as described below), if any, with respect to each such Series
and (b) the Servicer shall withdraw from the Collection Account an amount equal
to the excess, if any, of (x) the aggregate amount for all outstanding Series of
Collections of Finance Charge Receivables which the related Supplements specify
are to be treated as "Excess Finance Charge Collections" for such Distribution
---------------------------------
Date over (y) the aggregate amount for all outstanding Series which the related
Supplements specify are "Finance Charge Shortfalls" for such Series and such
-------------------------
Distribution Date and shall (A) deposit such funds into the Excess Funding
Account in an aggregate amount equal to the Shortfall Amount in accordance with
Section 8.4(g) and (B) pay any remaining amount to the Holders of the Seller
--------------
Interest; provided, however, that the sharing of Excess Finance Charge
-------- -------
Collections among Series will continue only until such time, if any, at which
the Seller shall deliver to the Indenture Trustee an Officer's Certificate to
the effect that, in the reasonable belief of the Seller, the continued sharing
of Excess Finance Charge Collections among Series would have adverse regulatory
implications with respect to the Seller. Notwithstanding the foregoing, a Group
of Series may specify in their related Indenture Supplements that Excess Finance
Charge Collections from such Series shall be allocated as provided above but
only among the Series in such Group.
Section 8.7. Allocation of Collateral to Series or Groups. To the extent
--------------------------------------------
so provided in the Indenture Supplement for any Series or in an Indenture
Supplement otherwise executed pursuant to Section 10.1, Receivables conveyed to
------------
the Issuer pursuant to Section 2.1 of the Transfer and Servicing Agreement and
-----------
Receivables conveyed to the Issuer pursuant to Section 2.9 of the Transfer and
-----------
Servicing Agreement and all Collections received with respect thereto may be
allocated or applied in whole or in part to one or more Series or Groups as may
be provided in such Indenture
56
Supplement; provided, however, that any such allocation or application shall be
-------- -------
effective only upon satisfaction of the following conditions:
(i) on or before the fifth Business Day immediately preceding such
allocation, the Servicer shall have given the Indenture Trustee and each
Rating Agency written notice of such allocation;
(ii) the Rating Agency Condition shall have been satisfied with
respect to such allocation; and
(iii) the Servicer shall have delivered to the Indenture Trustee an
Officer's Certificate, dated the date of such allocation, to the effect
that the Servicer reasonably believes that such allocation will not have an
Adverse Effect.
Any such Indenture Supplement may provide that (i) such allocation to one
or more particular Series or Groups may terminate upon the occurrence of certain
events specified therein and (ii) that upon the occurrence of any such event,
such assets and any Collections with respect thereto, shall be reallocated to
other Series or Groups or to all Series, all as shall be provided in such
Indenture Supplement.
Section 8.8. Release of Collateral; Eligible Loan Documents.
----------------------------------------------
(a) Upon the written direction of the Issuer, the Indenture Trustee may,
and when required by the provisions of this Indenture shall, execute instruments
to release property from the lien of this Indenture, or convey the Indenture
Trustee's interest in the same, in a manner and under circumstances which are
not inconsistent with the provisions of this Indenture. No party relying upon an
instrument executed by the Indenture Trustee as provided in this Article VIII
------------
shall be bound to ascertain the Indenture Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the application of any
monies.
(b) In order to facilitate the servicing of the Receivables by the
Servicer, the Indenture Trustee upon Issuer Order shall authorize the Servicer
to execute in the name and on behalf of the Indenture Trustee instruments of
satisfaction or cancellation, or of partial or full release or discharge, and
other comparable instruments with respect to the Receivables (and the Indenture
Trustee shall execute any such documents on written request of the Servicer),
subject to the obligations of the Servicer under the Transfer and Servicing
Agreement.
(c) The Indenture Trustee shall, at such time as there are no Notes
outstanding, release and transfer, without recourse, all of the Collateral that
secured the Notes (other than any cash held for the payment of the Notes
pursuant to Section 4.2). The Indenture Trustee shall release property from the
------------
lien of this Indenture pursuant to
57
this Section 8.9(c) only upon receipt of an Issuer Order accompanied by an
-------------
Officer's Certificate, an Opinion of Counsel and (if required by the TIA)
Independent Certificates in accordance with TIA (S)314(c) and 314(d)(1) meeting
the applicable requirements of Section 12.1.
-------------
(d) Notwithstanding anything to the contrary in this Indenture, the
Transfer and Servicing Agreement and the Trust Agreement, immediately prior to
the release of any portion of the Collateral or any funds on deposit in the
Series Accounts pursuant to this Indenture, the Indenture Trustee shall at the
written request of the Issuer remit to the Seller for its own account any funds
that, upon such release, would otherwise be remitted to the Issuer.
Section 8.9. Opinion of Counsel. The Indenture Trustee shall receive at
------------------
least seven (7) days notice when requested by the Issuer to take any action
pursuant to Section 8.8(a), accompanied by copies of any instruments involved,
--------------
and the Indenture Trustee shall also require, as a condition to such action, an
Opinion of Counsel, in form and substance reasonably satisfactory to the
Indenture Trustee, stating the legal effect of any such action, outlining the
steps required to complete the same, and concluding that all conditions
precedent to the taking of such action have been complied with and such action
will not materially and adversely impair the security for the Notes or the
rights of the Noteholders in contravention of the provisions of this Indenture;
provided, however, that such Opinion of Counsel shall not be required to express
-------- -------
an opinion as to the fair value of the Collateral. The Indenture Trustee and
counsel rendering any such opinion may conclusively rely, without independent
investigation, on the accuracy and validity of any certificate or other
instrument delivered to the Indenture Trustee in connection with any such
action.
ARTICLE IX
DISTRIBUTIONS AND REPORTS TO NOTEHOLDERS
Distributions shall be made to, and reports shall be provided to,
Noteholders as set forth in the applicable Indenture Supplement. The identity of
the Noteholders with respect to distributions and reports shall be determined
according to the immediately preceding Record Date.
ARTICLE X
SUPPLEMENTAL INDENTURES
58
Section 10.1. Supplemental Indentures Without Consent of Noteholders.
------------------------------------------------------
(a) Without the consent of the Holders of any Notes but with prior notice
to each Rating Agency with respect to the Notes of all Series rated by such
Rating Agency, the Issuer and the Indenture Trustee, when authorized by an
Issuer Order, at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the TIA
as in force at the date of the execution thereof), in form satisfactory to the
Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at any
time subject to the lien of this Indenture, or better to assure, convey and
confirm unto the Indenture Trustee any property subject or required to be
subjected to the lien of this Indenture, or to subject to the lien of this
Indenture additional property;
(ii) to evidence the succession, in compliance with Section 3.11, of
------------
another person to the Issuer, and the assumption by any such successor of
the covenants of the Issuer contained herein and in the Notes;
(iii) to add to the covenants of the Issuer, for the benefit of the
Holders of the Notes, or to surrender any right or power herein conferred
upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property to
or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any provision
herein or in any supplemental indenture that may be inconsistent with any
other provision herein or in any supplemental indenture or to make any
other provisions with respect to matters or questions arising under this
Indenture or in any supplemental indenture; provided that such action shall
--------
not adversely affect the interests of the Holders of the Notes;
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor indenture trustee with respect to the Notes and to
add to or change any of the provisions of this Indenture as shall be
necessary to facilitate the administration of the trusts hereunder by more
than one indenture trustee, pursuant to the requirements of Article VI;
----------
(vii) to modify, eliminate or add to the provisions of this Indenture
to such extent as shall be necessary to effect the qualification of this
Indenture under the TIA or under any similar federal statute hereafter
enacted and to add to this Indenture such other provisions as may be
expressly required by the TIA;
59
(viii) to provide for the issuance of one or more new Series of Notes,
in accordance with the provisions of Section 2.12; or
------------
(ix) to provide for the termination of any interest rate swap
agreement or other form of credit enhancement or maturity guarantee
agreement in accordance with the provisions of the related Indenture
Supplement.
The Indenture Trustee is hereby authorized to join in the execution of any
such supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, may, also without the consent of any Noteholders of any Series then
Outstanding but upon satisfaction of the Rating Agency Condition with respect to
the Notes of all Series, enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture or of modifying in any
manner the rights of the Holders of the Notes under this Indenture; provided,
--------
however that the Seller shall have delivered to the Owner Trustee and the
------
Indenture Trustee an Officer's Certificate, dated the date of any such action,
stating that all requirements for such amendments contained in the Agreement
have been met and the Seller reasonably believes that such action will not have
an Adverse Effect. Additionally, notwithstanding the preceding sentence, the
Issuer and the Indenture Trustee, when authorized by an Issuer Order, may,
without the consent of any Noteholders of any Series then Outstanding or the
Series Enhancers for any Series, enter into an indenture or indentures
supplemental hereto to add, modify or eliminate such provisions as may be
necessary or advisable in order to enable all or a portion of the Issuer (i) to
qualify as, and to permit an election to be made to cause the Issuer to be
treated as, a "financial asset securitization investment trust" as described in
the provisions of Section 860L of the Code, and (ii) to avoid the imposition of
state or local income or franchise taxes imposed on the Issuer's property or its
income; provided, however, that (i) the Seller delivers to the Indenture Trustee
-------- -------
and the Owner Trustee an Officer's Certificate to the effect that the proposed
amendments meet the requirements set forth in this Section 10.1(b), (ii) the
---------------
Rating Agency Condition will have been satisfied and (iii) such amendment does
not affect the rights, duties, protections, indemnities, immunities or
obligations of the Indenture Trustee or the Owner Trustee hereunder. The
amendments which the Seller may make without the consent of Noteholders pursuant
to the preceding sentence may include the addition or sale of Receivables.
Section 10.2. Supplemental Indentures with Consent of Noteholders. The
---------------------------------------------------
Issuer and the Indenture Trustee, when authorized by an Issuer Order, also may,
upon satisfaction of the Rating Agency Condition and with the consent of the
Holders of Notes representing more than 66 2/3% of the principal balance of the
Outstanding Notes of each adversely affected Series, by Act of such Holders
delivered to the Issuer and the
60
Indenture Trustee, enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to, changing in any manner or eliminating
any of the provisions of this Indenture or of modifying in any manner the rights
of such Noteholders under this Indenture; provided, however that no such
-------- -------
supplemental indenture shall, without the consent of the Holder of each
outstanding Note affected thereby:
(a) change the due date of any installment of principal of or interest on
any Note, or reduce the principal amount thereof, the interest rate specified
thereon or the redemption price with respect thereto or change any place of
payment where, or the coin or currency in which, any Note or any interest
thereon is payable;
(b) impair the right to institute suit for the enforcement of the
provisions of this Indenture requiring the application of funds available
therefor, as provided in Article V, to the payment of any such amount due on the
---------
Notes on or after the respective due dates thereof (or, in the case of
redemption, on or after the Redemption Date);
(c) reduce the percentage of the Outstanding Amount of any Series the
consent of the Holders of which is required for any such supplemental indenture,
or the consent of the Holders of which is required for any waiver of compliance
with certain provisions of this Indenture or certain defaults hereunder and
their consequences as provided for in this Indenture;
(d) reduce the percentage of the Outstanding Amount of any Series, the
consent of the Holders of which is required to direct the Indenture Trustee to
sell or liquidate the Collateral if the proceeds of such sale would be
insufficient to pay the principal amount and accrued but unpaid interest on the
outstanding Notes of such Series;
(e) decrease the percentage of the Outstanding Amount required to amend
the sections of this Indenture which specify the applicable percentage of the
Outstanding Amount of the Notes of any Series necessary to amend the Indenture
or any Transaction Documents which require such consent;
(f) modify or alter the provisions of this Indenture prohibiting the
voting of Notes held by the Issuer, any other Obligor on the Notes, a Seller or
any affiliate thereof; or
(g) permit the creation of any Lien ranking prior to or on a parity with
the lien of this Indenture with respect to any part of the Collateral for any
Notes or, except as otherwise permitted or contemplated herein, terminate the
Lien of this Indenture on any such Collateral at any time subject hereto or
deprive the Holder of any Note of the security provided by the Lien of this
Indenture.
61
Satisfaction of the Rating Agency Condition shall not be required with
respect to the execution of any supplemental indenture pursuant to this Section
-------
10.2 for which the consent of all the affected Noteholders is required.
----
The Indenture Trustee may in its discretion determine whether or not any
Notes would be affected by any supplemental indenture and any such determination
shall be conclusive upon the Holders of all Notes, whether theretofore or
thereafter authenticated and delivered hereunder. The Indenture Trustee shall
not be liable for any such determination made in good faith. Notwithstanding
anything in this Section 10.2 to the contrary, no amendment may be made to this
------------
Agreement which would adversely affect the interests of any Series Enhancer
without the consent of such Series Enhancer.
Satisfaction of the Rating Agency Condition shall not be required with
respect to the execution of any supplemental indenture pursuant to this Section
-------
10.2 for which consent of all affected Noteholders is required.
----
It shall not be necessary for any Act of Noteholders under this Section
-------
10.2 to approve the particular form of any proposed supplemental indenture, but
----
it shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee of any
supplemental indenture pursuant to this Section 10.2, the Indenture Trustee
------------
shall mail to the Holders of the Notes to which such amendment or supplemental
indenture relates written notice setting forth in general terms the substance of
such supplemental indenture. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
Section 10.3. Execution of Supplemental Indentures. In executing, or
------------------------------------
permitting the additional trusts created by, any supplemental indenture
permitted by this Article X or the modification thereby of the trusts created by
---------
this Indenture, the Indenture Trustee shall be entitled to receive, and shall be
fully protected in relying upon, an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by this
Indenture and stating that all requisite consents have been obtained or that no
consents are required and stating that such supplemental indenture or
modification constitutes the legal, valid and binding obligation of the Issuer
in accordance with its terms. The Indenture Trustee may, but shall not be
obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties, liabilities or immunities under this
Indenture or otherwise.
62
Section 10.4. Effect of Supplemental Indenture. Upon the execution of any
--------------------------------
supplemental indenture under this Article X, this Indenture shall be modified in
---------
accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes, and every Holder of Notes theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby. This Section 10.4
------------
does not apply to Indenture Supplements.
Section 10.5. Conformity With Trust Indenture Act. Every amendment of this
----------------------------------
Indenture and every supplemental indenture executed pursuant to this Article X
---------
shall conform to the requirements of the TIA as then in effect so long as this
Indenture shall then be qualified under the TIA.
Section 10.6. Reference in Notes to Supplemental Indentures. Notes
---------------------------------------------
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article X may, and if required by the Indenture Trustee shall,
---------
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer shall so determine,
new Notes so modified as to conform, in the opinion of the Indenture Trustee and
the Issuer, to any such supplemental indenture may be prepared and executed by
the Issuer and authenticated and delivered by the Indenture Trustee in exchange
for the outstanding Notes.
ARTICLE XI
TERMINATION
Section 11.1. Termination of Issuer. The Issuer and the respective
---------------------
obligations and responsibilities of the Indenture Trustee created hereby (other
than the obligation of the Indenture Trustee to make payments to Noteholders as
hereinafter set forth) shall terminate, except with respect to the duties
described in Section 11.2(b), as provided in the Trust Agreement.
---------------
Section 11.2. Final Distribution.
------------------
(a) The Servicer shall give the Indenture Trustee and the Rating Agencies
at least thirty (30) days prior written notice of the Distribution Date on which
the Noteholders of any Series or Class may surrender their Notes for payment of
the final distribution on and cancellation of such Notes (or, in the event of a
final distribution resulting from the application of Section 2.6 of the Transfer
-----------
and Servicing Agreement, notice of such Distribution Date promptly after the
Servicer has determined that a final distribution will occur, if such
determination is made less than thirty (30) days prior to such Distribution
Date). Such notice shall be accompanied by an Officer's Certificate setting
forth the information specified in Section 3.5 of the Transfer and Servicing
-----------
Agreement covering the period during the then-current calendar year through the
date of such notice. Not later than the fifth day of the month in which the
final distribution
63
in respect of such Series or Class is payable to Noteholders, the Indenture
Trustee shall provide notice to Noteholders of such Series or Class specifying
(i) the date upon which final payment of such Series or Class will be made upon
presentation and surrender of Notes of such Series or Class at the office or
offices therein designated, (ii) the amount of any such final payment and (iii)
that the Record Date otherwise applicable to such payment date is not
applicable, payments being made only upon presentation and surrender of such
Notes at the office or offices therein specified (which in the case of Bearer
Notes shall be outside the United States). The Indenture Trustee shall give such
notice to the Transfer Agent and Registrar and the Paying Agent at the time such
notice is given to Noteholders.
(b) Notwithstanding a final distribution to the Noteholders of any Series
or Class (or the termination of the Issuer), except as otherwise provided in
this paragraph, all funds then on deposit in the Collection Account and any
Series Account allocated to such Noteholders shall continue to be held in trust
for the benefit of such Noteholders and the Paying Agent or the Indenture
Trustee shall pay such funds to such Noteholders upon surrender of their Notes,
if certificated (and any excess shall be paid in accordance with the terms of
any Enhancement Agreement). In the event that all such Noteholders shall not
surrender their Notes for cancellation within six (6) months after the date
specified in the notice from the Indenture Trustee described in paragraph (a),
the Indenture Trustee shall give a second notice to the remaining such
Noteholders to surrender their Notes for cancellation and receive the final
distribution with respect thereto (which surrender and payment, in the case of
Bearer Notes, shall be outside the United States). If within one year after the
second notice all such Notes shall not have been surrendered for cancellation,
the Indenture Trustee may take appropriate steps, or may appoint an agent to
take appropriate steps, to contact the remaining such Noteholders concerning
surrender of their Notes, and the cost thereof shall be paid out of the funds in
the Collection Account or any Series Account held for the benefit of such
Noteholders. The Indenture Trustee and, upon the written request of the
Servicer, the Paying Agent shall pay to the Issuer any monies held by them for
the payment of principal or interest that remains unclaimed for two (2) years.
After payment to the Issuer, Noteholders entitled to the money must look to the
Issuer for payment as general creditors unless an applicable abandoned property
law designates another Person.
Section 11.3. Issuer's Termination Rights. Upon the termination of the
---------------------------
Issuer pursuant to the terms of the Trust Agreement and upon the written
direction of the Issuer, the Indenture Trustee shall assign and convey to the
Holders of the Seller Interest or any of their designees, without recourse,
representation or warranty, all right, title and interest of the Issuer in the
Receivables, whether then existing or thereafter created, all Recoveries related
thereto all monies due or to become due and all amounts received or receivable
with respect thereto (including all moneys then held in the Collection Account
or any Series Account) and all proceeds thereof, except for amounts held by the
Indenture Trustee pursuant to Section 11.2(b). The Indenture Trustee shall
--------------
execute and deliver such instruments of transfer and assignment, in each case
without recourse,
64
as shall be reasonably requested in writing by the Holders of the Seller
Interest to vest in the Holders of the Seller Interest or any of their designees
all right, title and interest which the Indenture Trustee had in the Collateral
and such other property.
ARTICLE XII
MISCELLANEOUS
Section 12.1. Compliance Certificates and Opinions etc.
----------------------------------------
(a) Upon any application or request by the Issuer to the Indenture Trustee
to take any action under any provision of this Indenture, the Issuer shall
furnish to the Indenture Trustee (i) an Officer's Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, and (ii) (if required by the TIA) an
Independent Certificate from a firm of certified public accountants meeting the
applicable requirements of this Section 12.1, except that, in the case of any
------------
such application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or opinion
has read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) Other than with respect to the release of any Receivables in Removed
Accounts, whenever any property or investment property is to be released from
the lien of this Indenture, the Issuer shall also furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of each
person signing such certificate as to
65
the fair value (within ninety (90) days of such release) of the property or
securities proposed to be released and stating that in the opinion of such
person the proposed release will not impair the security under this Indenture in
contravention of the provisions hereof.
(i) Notwithstanding Section 2.11 or any other provision of this
------------
Section 12.1, the Issuer may (A) collect, liquidate, sell or otherwise
------------
dispose of Receivables as and to the extent permitted or required by the
Transaction Documents and (B) make cash payments out of the Series Accounts
as and to the extent permitted or required by the Transaction Documents.
Section 12.2. Form of Documents Delivered to Indenture Trustee. In any
------------------------------------------------
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of a Responsible Officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such officer's certificate or opinion is
based are erroneous. Any such certificate of a Responsible Officer or Opinion of
Counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Servicer, a Seller, the Issuer or the Administrator, stating that the
information with respect to such factual matters is in the possession of the
Servicer, a Seller, the Issuer or the Administrator, unless such Responsible
Officer or Counsel has actual knowledge that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two (2) or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at th8e effective date of such certificate or report (as the case may be), of
the facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
66
construed to affect the Indenture Trustee's right to conclusively rely upon the
truth and accuracy of any statement or opinion contained in any such document as
provided in Article VI.
----------
Section 12.3. Acts of Noteholders.
-------------------
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Noteholders
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Noteholders in person or by their agents duly
appointed in writing and satisfying any requisite percentages as to minimum
number or dollar value of outstanding principal amount represented by such
Noteholders; and, except as herein otherwise expressly provided, such action
shall become effective when such instrument or instruments are delivered to the
Indenture Trustee, and, where it is hereby expressly required, to the Issuer.
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Noteholders
---
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and conclusive in favor of the Indenture Trustee and
the Issuer, if made in the manner provided in this Section 12.3.
------------
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Notes shall bind the Holder (and any
transferee thereof) of every Note issued upon the registration thereof in
exchange therefor or in lieu thereof, in respect of anything done, omitted or
suffered to be done by the Indenture Trustee or the Issuer in reliance thereon,
whether or not notation of such action is made upon such Note.
Section 12.4. Notices, Etc. to Indenture Trustee and Issuer. Any request,
---------------------------------------------
demand, authorization, direction, notice, consent, waiver or Act of Noteholders
or other documents provided or permitted by the Agreement to be made upon, given
or furnished to, or filed with:
(a) the Indenture Trustee by any Noteholder or by the Issuer shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to a Trustee Officer, by facsimile transmission or by other means
acceptable to the Indenture Trustee to or with the Indenture Trustee at its
Corporate Trust Office; or
67
(b) the Issuer by the Indenture Trustee or by any Noteholder shall be
sufficient for every purpose hereunder if in writing and mailed, first-class
postage prepaid, to the Issuer addressed to it and received by it c/o Bankers
Trust Company, Four Albany Street, 10th Floor, New York, New York 10006, Attn:
Corporate Trust and Agency Services, or at any other address previously
furnished in writing to the Indenture Trustee by the Issuer. A copy of each
notice to the Issuer shall be sent in writing and mailed, first-class postage
prepaid, to the Administrator at First Consumers National Bank, X.X. Xxx 0000,
Xxxxxxxx, Xxxxxx 00000, Attn: President.
Section 12.5. Notices to Noteholders; Waiver. Where the Indenture provides
------------------------------
for notice to Noteholders of any event, such notice shall be sufficiently given
(unless otherwise herein expressly provided) if in writing and mailed by
registered or certified mail or first class postage prepaid or national
overnight courier service to each Noteholder affected by such event, at its
address as it appears on the Note Register, not later than the latest date, and
not earlier than the earliest date, prescribed for the giving of such notice. In
any case where notice to Noteholders is given by mail, neither the failure to
mail such notice, nor any defect in any notice so mailed, to any particular
Noteholder shall affect the sufficiency of such notice with respect to other
Noteholders, and any notice which is mailed in the manner herein provided shall
conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by any Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Noteholders shall be filed with the Indenture Trustee but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In the event that, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.
Where this Indenture provides for notice to any Rating Agency, failure to
give such notice shall not affect any other rights or obligations created
hereunder and shall not under any circumstance constitute a Default or Event of
Default.
Section 12.6. Alternate Payment and Notice Provisions. Notwithstanding any
---------------------------------------
provision of this Indenture or any of the Notes to the contrary, the Issuer,
with the prior written consent of the Indenture Trustee, may enter into any
agreement with any Holder of a Note providing for a method of payment, or notice
by the Indenture Trustee or any Paying Agent to such Holder, that is different
from the methods provided for in this Indenture for such payments or notices.
The Issuer will furnish to the Indenture Trustee
68
a copy of each such agreement and the Indenture Trustee will cause payments to
be made and notices to be given in accordance with such agreements.
Section 12.7. Conflict with Trust Indenture Act. If any provision hereof
---------------------------------
limits, qualifies or conflicts with another provision hereof that is required to
be included in this indenture by any of the provisions of the TIA, such required
provision shall control.
The provisions of TIA ss.ss.310 through 317 that impose duties on any
person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
Section 12.8. Effect of Headings and Table of Contents. The Article and
----------------------------------------
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 12.9. Successors and Assigns. All covenants and agreements in this
----------------------
Indenture by the Issuer shall bind its successors and assigns, whether so
expressed or not.
Section 12.10. Separability. In case any provision in this Indenture or in
------------
the Notes shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
Section 12.11. Benefits of Indenture. Nothing in this Indenture or in the
---------------------
Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the Noteholders, the Servicer and the
Seller, any benefit.
Section 12.12. Legal Holidays. In any case where the date on which any
--------------
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
Section 12.13. GOVERNING LAW. THIS INDENTURE AND EACH NOTE SHALL BE
-------------
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN, PROVIDED, HOWEVER,
-------- -------
THAT THE DUTIES AND OBLIGATIONS OF THE INDENTURE TRUSTEE SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO ITS CHOICE OF LAW PROVISIONS.
69
Section 12.14. Counterparts. This Indenture may be executed in any number
------------
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.
Section 12.15. Issuer Obligation. No recourse may be taken, directly or
-----------------
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Indenture Trustee or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all purposes of
this Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Articles V, VI and VII of the Trust Agreement.
---------- -- ---
Section 12.16. No Petition. The Indenture Trustee, by entering into this
-----------
Indenture, and each Noteholder, by accepting a Note, hereby covenant and agree
that they will not at any time institute against the Issuer, the Seller, the
Servicer or Spiegel Master Trust, or join in instituting against the Issuer, the
Seller, the Servicer or Spiegel Master Trust any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any United States federal or state bankruptcy or similar law.
70
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers thereunto
duly authorized and attested, all as of the day and year first above
written.
SPIEGEL CREDIT CARD MASTER NOTE
TRUST, as Issuer
By: Bankers Trust Company,
not in its individual capacity,
but solely as Owner Trustee
Name: /s/ Xxxxxx X. Xxxxxx
Title: Vice President
THE BANK OF NEW YORK,
as Indenture Trustee
Name: /s/ Xxxxxxxxx Xxxxx
Title: Assistant Treasuer
Acknowledged and Accepted:
FIRST CONSUMERS NATIONAL BANK,
as Servicer
Name: /s/ Xxxx X. Xxxxxx
Title: Treasurer
Acknowledged and Accepted:
SPIEGEL CREDIT CORPORATION III,
as Seller
Name: /s/ Xxxx X. Xxxxxx
Title: Treasurer
Signature Page to
Master Indenture
71
ANNEX A
to
MASTER INDENTURE
DEFINITIONS
-----------
72
ANNEX A TO MASTER INDENTURE
DEFINITIONS
"Account" means each charge account established pursuant to a Charge
-------
Account Agreement, and which is designated as an "Account" pursuant to (and as
defined in) the Pooling and Servicing Agreement on or prior to the SMT
Termination Date. The term "Account" shall also be deemed to refer to an
Additional Account, but only from and after the Addition Date with respect
thereto, and the term "Account" shall be deemed to refer to any Removed Account
prior to but not after the Removal Date with respect thereto.
"Acquiring Person" is defined in Section 3.10(b) of the Indenture.
---------------- ---------------
"Act" is defined in Section 12.3(a) of the Indenture.
--- ---------------
"Addition Date" means, with respect to any Additional Accounts, either the
-------------
date five Business Days after the period or date when such Additional Accounts
are required or permitted to be added as Accounts pursuant to Section 2.6(a) or
--------------
(b) of the Transfer and Servicing Agreement, or the date on which such
---
Additional Accounts are automatically added as Accounts pursuant to Section
-------
2.6(e) of the Transfer and Servicing Agreement.
------
"Additional Accounts" means the Accounts the receivables arising under
-------------------
which are transferred to the Issuer in accordance with the procedures set forth
in Section 2.6 of the Transfer and Servicing Agreement.
-----------
"Adjusted Collateral Amount" is defined, with respect to any Series (if
--------------------------
applicable to that Series), in the related Indenture Supplement, or if no
meaning for such term is specified in such Supplement, shall mean the Collateral
Amount for such Series.
"Administration Agreement" means the Administration Agreement, dated as of
------------------------
December 1, 2000 between the Issuer and the Administrator, as the same may be
amended, supplemented or otherwise modified from time to time.
"Administrator" means FCNB, its capacity as administrator, under the
-------------
Administration Agreement, and any successor in that capacity.
"Adverse Effect" means, with respect to any action, that such action will
--------------
(a) result in the occurrence of a Pay Out Event or an Event of Default or (b)
materially
and adversely affect the amount or timing of distributions to be made
to the Noteholders of any Series or Class pursuant to the Transaction Documents.
"Affiliate" means, with respect to any specified Person, any other Person
---------
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" means the power to direct the
management and policies of a Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Aggregate Allocation Percentage" with respect to Principal Receivables,
-------------------------------
Finance Charge Receivables and Receivables in Defaulted Accounts, as the case
may be, means, as of any date of determination, the sum of such Allocation
Percentages of all Series issued and outstanding on such date of determination;
provided, however, that the Aggregate Allocation Percentage shall not exceed
-------- -------
100%.
"Aggregate Collateral Amount" means, as of any date of determination, the
---------------------------
sum of the Adjusted Collateral Amounts of all Series issued and outstanding on
such date of determination that have Adjusted Collateral Amounts and the
Collateral Amounts of all other Series issued and outstanding on such date of
determination.
"Aggregate Principal Balance" means, as of any time of determination, the
---------------------------
sum of (a) the Aggregate Principal Receivables, (b) the amount on deposit in the
Excess Funding Account (exclusive of any investment earnings on such amount) and
(c) the amount on deposit in the Principal Collection Subaccount (exclusive of
any investment earnings on such amount), in each case as of such time.
"Aggregate Principal Receivables" means, as of any date of determination,
-------------------------------
the aggregate amount of Principal Receivables as of such date.
"Allocation Percentage" is defined, for any Series, with respect to
---------------------
Principal Receivables, Finance Charge Receivables and Receivables in Defaulted
Accounts, in the related Indenture Supplement.
"Annual Account Additions" means on any date of determination falling in
------------------------
any calendar year, the number of Accounts the Receivables of which have been
added to the Receivables Trust pursuant to Section 2.6(b) and (e) of the
-------------- ---
Transfer and Servicing Agreement or the corresponding sections of the Pooling
and Servicing Agreement, from and including the first day of that calendar year
of determination, plus the number of Accounts, if any, the Receivables of which
have been designated to be added to the Receivables Trust pursuant to Section
-------
2.6(a) of the Transfer and Servicing Agreement, from and including the first day
------
of the eleventh Monthly Period preceding such date of determination.
-2-
"Annual Quotient" is defined in Section 2.6(c)(ii)(1) of the Transfer and
--------------- ---------------------
Servicing Agreement.
"Applicants" is defined in Section 2.9 of the Indenture.
---------- -----------
"Assignee Seller" is defined in Section 6.6 of the Receivables Purchase
--------------- -----------
Agreement.
"Assignor Seller" is defined in Section 6.6 of the Receivables Purchase
--------------- -----------
Agreement.
"Assignment Agreement" is defined in Section 2.6(b)(iii) of the Transfer
-------------------- -------------------
and Servicing Agreement.
"Authorized Newspapers" means each newspaper of general circulation in New
---------------------
York, New York, or in any other place specified by Seller, printed in the
English language and customarily published on each Business Day, whether or not
published on Saturdays, Sundays or holidays.
"Authorized Officer" means:
------------------
(a) with respect to the Issuer, any officer of the Owner Trustee who
is authorized to act for the Owner Trustee in matters relating to the
Issuer and who is identified on the list of Authorized Officers, containing
the specimen signature of each such Person, delivered by the Owner Trustee
to the Indenture Trustee on the Closing Date (as such list may be modified
or supplemented from time to time thereafter) and any Vice President or
more senior officer of the Administrator who is authorized to act for the
Administrator in matters relating to the Issuer and to be acted upon by the
Administrator pursuant to the Administration Agreement and who is
identified on the list of Authorized Officers (containing the specimen
signatures of such officers) delivered by the Administrator to the
Indenture Trustee on the Closing Date (as such list may be modified or
supplemented from time to time thereafter);
(b) with respect to the Seller, any officer of the Seller who is
authorized to act for the Seller in matters relating to the Seller and who
is identified on the list of Authorized Officers, containing the specimen
signature of each such Person, delivered by the Seller to the Indenture
Trustee on the Closing Date (as such list may be modified or supplemented
from time to time thereafter); and
(c) with respect to the Servicer, any officer of the Servicer who is
authorized to act for the Servicer in matters relating to the Servicer and
-3-
who is identified on the list of Authorized Officers, containing the
specimen signature of each such Person, delivered by the Servicer to the
Indenture Trustee on the Closing Date (as such list may be modified or
supplemented from time to time thereafter).
"Base Amount" means, at any date of determination, with reference to Annual
-----------
Account Additions or Quarterly Account Additions, the number of Accounts
included in the Receivables Trust on the first day of the relevant measurement
period before giving effect to any Accounts added to the Receivables Trust on
such first day.
"Base Rate" is defined, with respect to any Series, in the related
---------
Indenture Supplement.
"Bearer Note" is defined in Section 2.1 of the Indenture.
----------- -----------
"Book-Entry Notes" means beneficial interests in the Notes, ownership and
----------------
transfers of which shall be made through book entries by a Clearing Agency or
Foreign Clearing Agency as described in Section 2.13 of the Indenture.
------------
"Business Day" means each day which is neither a Saturday, a Sunday nor any
------------
other day on which banking institutions in New York, New York, Portland, Oregon
or Chicago, Illinois (or, with respect to any Series, any additional city
specified in the related Indenture Supplement) are authorized or obligated by
law or required by executive order to be closed.
"Buyer" means Spiegel Credit Corporation III, a Delaware corporation.
-----
"Charge Account Agreement" means the agreement (and the related
------------------------
application) for an FCNB Preferred Charge account or other Designated Account
Type between any Obligor and FCNB, as the same may be amended, modified or
otherwise changed from time to time. In the case of Designated Account Types,
FCNB may be an assignee of another originator of the account.
"Charge Account Fees" means, with respect to any Account, any fees
-------------------
specified in the Charge Account Agreement applicable to such Account, including
annual fees, over limit charges, cash advance fees, late charges, returned check
fees, and reinstatement charges.
"Charge Account Guidelines" means FCNB's policies and procedures relating
-------------------------
to the operation of its Preferred Charge account business and any other
Designated Account Types, including the FCNB Credit Policy and Operations Manual
or such other of its policies and procedures for determining the
creditworthiness of charge account customers, the extension of credit to charge
-4-
account customers, the terms on which repayments are required to be made, and
relating to the maintenance of charge accounts and collection of charge account
receivables, as said manual and such policies and procedures, as applicable, may
be amended from time to time.
"Class" means, with respect to any Series, any one of the classes of Notes
-----
of that Series.
"Clearing Agency" means an organization registered as a "clearing agency"
---------------
pursuant to Section 17A of the Securities Exchange Act of 1934.
"Clearing Agency Participant" means a broker, dealer, bank, other financial
---------------------------
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
"Clearstream" means Clearstream Banking, societe anonyme, a professional
-----------
depository incorporated under the laws of Luxembourg, and its successors.
"Closing Date" means, with respect to any Series, the closing date
------------
specified in the related Indenture Supplement.
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Collateral" is defined in the Granting Clause of the Indenture.
----------
"Collateral Amount" is defined, with respect to any Series, in the related
-----------------
Indenture Supplement.
"Collateral Certificate" means the certificate, representing an undivided
----------------------
interest in the assets held in the Spiegel Master Trust, issued pursuant to the
Pooling and Servicing Agreement and the Collateral Series Supplement, dated as
of December 1, 2000, to the Pooling and Servicing Agreement.
"Collection Account" is defined in Section 8.3 of the Indenture.
------------------ -----------
"Collections" means (i) all payments (including Insurance Proceeds and
-----------
Recoveries) received by the Servicer or by Seller in respect of the Collateral
Certificate and the Receivables, in the form of cash, checks, wire transfers,
ATM transfers, or other form of payment, and (ii) all amounts deposited by FCNB
pursuant to Section 3.8 of the Transfer and Servicing Agreement on account of
-----------
Merchant Fees. A Collection processed in respect of an Account (other than a
Defaulted Account) in excess of the aggregate amount of Receivables in such
Account as of the Date of Processing of such Collection shall be deemed to be a
payment in respect of Principal Receivables to the extent of such excess.
-5-
"Commission" means the Securities and Exchange Commission.
----------
"Conveyance Papers" is defined in Section 4.1(b) of the Receivables
-----------------
Purchase Agreement.
"Corporate Trust Office" means
----------------------
(a) for the Indenture Trustee, the principal office at which at any
particular time its corporate trust business shall be administered, which
office at date of the execution of the Indenture is located at 0 Xxxxx
XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000 Attention: Structured
Finance Services, or at such other address as the Indenture Trustee may
designate from time to time by notice to the Noteholders and the Seller, or
the principal corporate trust office of any successor Indenture Trustee
(the address of which the successor Indenture Trustee will notify the
Noteholders and the Seller);
(b) for the Owner Trustee, the principal office at which at any
particular time its corporate trust business shall be administered, which
office at date of the execution of the Indenture is located at Four Xxxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn: Corporate Trust and
Agency Services.
"Coupon" is defined in Section 2.1 of the Indenture.
------ -----------
"Credit Adjustment" is defined in Section 8.4(e) of the Indenture.
----------------- --------------
"Credit Insurance" means life, accident, health, disability, involuntary
----------------
unemployment or other insurance of an Obligor to Seller to insure payment of any
amount owing by such Obligor under an Account and which proceeds of such
insurance are payable to Seller upon such Obligor's death, disability or
involuntary unemployment.
"Daily Report" is defined in Section 3.4(a) of the Transfer and Servicing
------------ --------------
Agreement.
"Date of Processing" means, with respect to any transaction, the date on
------------------
which such transaction is first recorded on the Servicer's computer master file
of accounts (without regard to the effective date of such recordation).
"Debtor Relief Laws" means the Bankruptcy Code of the United States of
------------------
America and all other applicable liquidation, conservatorship, bankruptcy,
fraudulent conveyance, moratorium, rearrangement, receivership, insolvency,
reorganization, suspension of payments, or similar debtor relief laws from time
to time in effect
-6-
affecting the rights of creditors (including creditors of national banking
associations) generally.
"Default" means any occurrence that is, or with notice or the lapse of time
-------
or both would become, an Event of Default.
"Default Amount" means, with respect to any Monthly Period, the excess, if
--------------
any, of (i) the aggregate amount of Principal Receivables in Defaulted Accounts
charged off during such Monthly Period over (ii) Recoveries with respect to such
Monthly Period.
"Defaulted Account" means each Account with respect to which, in accordance
-----------------
with the Charge Account Guidelines or the Servicer's customary and usual
servicing procedures for servicing charge account receivables comparable to the
Receivables, the Servicer has charged off the Receivables in such Account as
uncollectible; an Account shall become a Defaulted Account on the day on which
such Receivables are recorded as charged off on the Servicer's computer master
file of accounts (regardless of whether such Receivables are charged off before
or after the Initial SMT Cut-Off Date or Addition Date of such Account, as the
case may be).
"Definitive Notes" means Notes in definitive, fully registered form.
----------------
"Demand Note" is defined in Section 2.9 of the Transfer and Servicing
-----------
Agreement.
"Deposit Date" means each day on which the Servicer deposits Collections in
------------
the Collection Account.
"Deposit Obligation" means the obligation of the Seller to make any deposit
------------------
to the Excess Funding Account or the Collection Account pursuant to Section
-------
2.4(d) of the Transfer and Servicing Agreement or Section 8.4(g) of the
------ --------------
Indenture.
"Designated Account Type" means any type of charge or credit account (other
-----------------------
than an FCNB Preferred Charge account) that the Seller has proposed for
inclusion in the Accounts, but only if (and to the extent that) the Rating
Agency Condition has been satisfied as to such inclusion.
"Determination Date" means with respect to any Monthly Period, any Business
------------------
Day occurring in the first ten days of the succeeding calendar month as selected
from time to time by the Servicer.
"Discount Option Date" means each date on which a Discount Percentage
--------------------
designated by the Seller pursuant to Section 2.8 of the Transfer and Servicing
-----------
Agreement takes effect.
-7-
"Discount Option Receivable Collections" means on any Date of Processing
--------------------------------------
occurring in any Monthly Period succeeding the Monthly Period in which the
Discount Option Date occurs, the product of (a) a fraction the numerator of
which is the Discount Option Receivables and the denominator of which is the sum
of the Principal Receivables and the Discount Option Receivables in each case
(for both the numerator and the denominator) at the end of the prior Date of
Processing and (b) Collections of Original Principal Receivables on such Date of
Processing.
"Discount Option Receivables" is defined in Section 2.8 of the Transfer and
--------------------------- -----------
Servicing Agreement. The aggregate amount of Discount Option Receivables
outstanding on any Date of Processing occurring on or after the Discount Option
Date shall equal the result of (a) the aggregate Discount Option Receivables at
the end of the prior Date of Processing (which amount, prior to the Discount
Option Date, shall be zero) plus (b) any new Discount Option Receivables created
on such Date of Processing minus (c) any Discount Option Receivables Collections
received on such Date of Processing. Discount Option Receivables created on any
Date of Processing mean the product of the amount of any Original Principal
Receivables created on such Date of Processing and the Discount Percentage.
"Discount Percentage" is defined in Section 2.8 of the Transfer and
------------------- -----------
Servicing Agreement.
"Distribution Date" means, unless otherwise specified in the Indenture
----------------
Supplement for a Series, the fifteenth day of each month or, if such fifteenth
day is not a Business Day, the next succeeding Business Day.
"Dollars," "$" or "U.S. $" means United States dollars.
------- - ------
"DTC" means The Depository Trust Company.
---
"Eligible Account" means, as of the Initial SMT Cut-Off Date (or, with
----------------
respect to Additional Accounts, as of the relevant Notice Date in respect of
Additional Accounts added pursuant to Section 2.6 (a) or (b) of the Transfer and
--------------- ---
Servicing Agreement or the fifth Business Day prior to the relevant Addition
Date in respect of Additional Accounts added pursuant to Section 2.6(e) of the
--------------
Transfer and Servicing Agreement), each Account established pursuant to a Charge
Account Agreement:
(a) which is payable in United States dollars;
(b) the Obligor on which has provided, as its initial billing address,
an address which is located in the United States or its territories or
possessions;
-8-
(c) which the Servicer has not finally determined to be counterfeit
or fraudulent;
(d) which is not a Defaulted Account as of the Initial SMT Cut-Off
Date or, with respect to Additional Accounts, as of the relevant Notice
Date or Addition Date;
(e) which was originated by FCNB in the ordinary course of business,
unless the Rating Agency Condition has otherwise been satisfied with
respect to such Account;
(f) as to which the Seller has good title, and which has not been
sold or pledged to any other party; and
(g) which does not have receivables which have been sold or pledged
to any party other than Seller pursuant to the Receivables Purchase
Agreement.
"Eligible Institution" means any depository institution (which may be the
--------------------
Owner Trustee or the Indenture Trustee) organized under the laws of the United
States or any one of the states thereof, including the District of Columbia (or
any domestic branch of a foreign bank), which depository institution at all
times (a) has FDIC deposit insurance and (b) has (i) a long-term unsecured debt
rating acceptable to the Rating Agencies, which in the case of Standard and
Poor's shall be a rating of AAA or (ii) a certificate of deposit rating
acceptable to the Rating Agencies, which in the case of Standard and Poor's
shall be a rating of A-1+. Notwithstanding the previous sentence, any
institution the appointment of which satisfies the Rating Agency Condition shall
be considered an Eligible Institution. If so qualified, the Servicer may be
considered an Eligible Institution for the purposes of this definition.
"Eligible Receivable" means each Receivable:
-------------------
(a) which has arisen under an Eligible Account;
(b) which was created in compliance, in all material respects, with
all Requirements of Law applicable to Spiegel or FCNB pursuant to a Charge
Account Agreement which complies, in all material respects, with all
Requirements of Law applicable to FCNB;
(c) with respect to which all consents, licenses, approvals or
authorizations of, or registrations or declarations with, any Governmental
Authority required to be obtained, effected or given by FCNB or Seller in
connection with the creation of such Receivable or the execution, delivery
and performance by FCNB of the Charge Account Agreement pursuant to
-9-
which such Receivable was created, have been duly obtained, effected or
given and are in full force and effect as of such date of creation;
(d) as to which, immediately prior to the transfer of same to the
Receivables Trust by Seller, Seller had good title thereto free and clear
of all Liens arising under or through FCNB, Seller or their respective
Affiliates (other than Liens permitted pursuant to Section 2.5(b) of the
--------------
Transfer and Servicing Agreement);
(e) which is the legal, valid and binding payment obligation of the
Obligor thereon, enforceable against such Obligor in accordance with its
terms, except as such enforceability may be limited by applicable Debtor
Relief Laws, and except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in equity);
(f) which constitutes an "account," a "general intangible" or
"chattel paper" under and as defined in Article 9 of the UCC as then in
effect in the State of Illinois;
(g) which, at the time of transfer to the Receivables Trust, has not
been waived or modified except for a Receivable which has been waived or
modified as permitted in accordance with the Charge Account Guidelines and
which waiver or modification is reflected in the Servicer's computer files;
(h) which, at the time of transfer to the Receivables Trust, is not
(to the knowledge of Seller or the Servicer) subject to any right of
rescission, set-off, counterclaim or any other defense (including defenses
arising out of violations or usury laws) of the Obligor, which requires
that such Receivable be charged off in accordance with the Charge Account
Guidelines, other than defenses arising out of applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights in general;
(i) as to which, at the time of transfer to the Receivables Trust,
each of the Seller and FCNB has satisfied all its obligations required to
be satisfied by such time;
(j) which has been the subject of either a valid transfer and
assignment from the Seller to the Issuer of the Seller's right, title and
interest therein (including any proceeds thereof), or the grant by the
Seller to the Issuer of a valid first priority perfected security interest
therein (and the proceeds thereof); and
-10-
(k) as to which at the time of transfer to the Issuer, the Seller has
not taken any action, or omitted to take any action, that would impair the
rights of the Issuer or the Noteholders.
"Eligible Servicer" means the Indenture Trustee or, if the Indenture
-----------------
Trustee is not acting as Servicer, an entity which, at the time of its
appointment as Servicer, (a) is servicing a portfolio of revolving credit card
accounts, (b) is legally qualified and has the capacity to service the Accounts,
(c) has demonstrated the ability to service professionally and competently a
portfolio of similar accounts in accordance with high standards of skill and
care, (d) is qualified to use the software that is then being used to service
the Accounts or obtains the right to use or has its own software which is
adequate to perform its duties under this Agreement and (e) has a net worth of
at least $50,000,000 as of the end of its most recent fiscal quarter.
"Enhancement" means, with respect to any Series, the cash collateral
-----------
account, letter of credit, surety bond, guaranteed rate agreement, maturity
guaranty facility, tax protection agreement, interest rate swap or any other
contract, arrangement or agreement for the benefit of the Noteholders of such
Series (or Noteholders of a Class within such Series), as designated in the
applicable Indenture Supplement.
"Enhancement Agreement" means any agreement, instrument or document
----------------------
governing the terms of any Series Enhancement or pursuant to which any Series
Enhancement is issued or outstanding.
"Enhancement Increase Condition" is defined, with respect to any Series, in
-------------------------------
the related Indenture Supplement.
"Enhancement Provider" means, with respect to any Series, the Person, if
--------------------
any, designated as such in the related Indenture Supplement.
"Euroclear Operator" means Xxxxxx Guaranty Trust Company of New York,
------------------
Brussels office, as operator of the Euroclear System.
"Event of Default" is defined in Section 5.2 of the Indenture.
----------------
"Excess Allocation Series" means a Series that, pursuant to the Indenture
------------------------
Supplement therefor, is entitled to receive certain excess Collections of
Finance Charge Receivables, as more specifically set forth in such Indenture
Supplement. If so specified in the Indenture Supplement for a Group of Series,
such Series may be Excess Allocation Series only for the Series in such Group.
-11-
"Excess Finance Charge Collections" is defined in Section 8.6 of the
--------------------------------- -----------
Indenture.
"Excess Funding Account" is defined in Section 8.3 of the Indenture.
---------------------- -----------
"Excess Funding Amount" means the amount on deposit in the Excess Funding
---------------------
Account.
"Exchange Act" means the Securities Exchange Act of 1934.
------------
"Expenses" is defined in Section 7.2 of the Trust Agreement.
-------- -----------
"FCNB" means First Consumers National Bank, a national banking association.
----
"FDIC" means the Federal Deposit Insurance Corporation.
----
"Finance Charges" means, as of any day, the amount of interest as
---------------
determined by the periodic finance charge rate assessed on the Cycle Billing
Date on or next preceding such day pursuant to the Charge Account Agreements.
"Finance Charge Collections" means, for any period, the amount of
--------------------------
Collections allocated to Finance Charge Receivables during such period plus
Discount Option Receivables Collections for such period. Payments on account of
Merchant Fees and Investor Net Recoveries shall also be treated as Finance
Charge Collections.
"Finance Charge Receivables" means, with respect to any Monthly Period, all
--------------------------
amounts billed to Obligors on any Account during such Monthly Period in respect
of Finance Charges and Charge Account Fees plus the aggregate amount of Discount
Option Receivables outstanding at the end of such period.
"Finance Charge Shortfalls" is defined in Section 8.6 of the Indenture.
------------------------- -----------
"Finance Charge Subaccount" means the finance charge subaccount of the
-------------------------
Collections Account.
"Fitch" means Fitch, Inc.
-----
"Foreign Clearing Agency" means Clearstream and the Euroclear Operator.
-----------------------
"GAAP" means generally accepted accounting principles in the United States
----
of America in effect from time to time.
-12-
"Global Note" is defined in Section 2.16 of the Indenture.
----------- ------------
"Governmental Authority" means the United States of America, any state or
----------------------
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Grant" means to mortgage, pledge, bargain, warrant, alienate, remise,
-----
release, convey, assign, transfer, create, and xxxxx x xxxx upon and a security
interest in and right of set-off against, deposit, set over and confirm pursuant
to this Indenture. A Grant of the Collateral or of any other agreement or
instrument shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including if available the
immediate and continuing right to claim for, collect, receive and give receipt
for principal and interest payments in respect of the Collateral and all other
moneys payable thereunder, to give and receive notices and other communications,
to make waivers or other agreements, to exercise all rights and options, to
bring Proceedings in the name of the Granting party or otherwise and generally
to do and receive anything that the Granting party is or may be entitled to do
or receive thereunder or with respect thereto.
"Group" means, with respect to any Series, the group of Series, if any, in
-----
which the related Indenture Supplement specifies such Series is to be included.
"Indebtedness" means, with respect to any Person at any date, (a) all
------------
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (other than current liabilities incurred in the
ordinary course of business and payable in accordance with customary trade
practices) or which is evidenced by a note, bond, debenture or similar
instrument, (b) all obligations of such Person under capital leases, (c) all
obligations of such Person in respect of acceptances issued or created for the
account of such Person and (d) all liabilities secured by any Lien on any
property owned by such Person even though such Person has not assumed or
otherwise become liable for the payment thereof.
"Indemnified Parties" is defined in Section 7.2 of the Trust Agreement.
------------------- -----------
"Indenture" means the Master Indenture, dated as of December 1, 2000,
---------
between the Issuer and the Indenture Trustee, as the same may be amended,
supplemented or otherwise modified from time to time.
"Indenture Supplement" means, with respect to any Series, a supplement to
--------------------
this Indenture, executed and delivered in connection with the original issuance
of the Notes of such Series pursuant to Section 2.12 of the Indenture, and an
------------
amendment to this Indenture executed pursuant to Sections 10.1 or 10.2 of the
------------- ----
Indenture, and, in either case, including all amendments thereof and supplements
thereto.
-13-
"Indenture Trustee" means The Bank of New York, in its capacity as trustee
-----------------
under this Indenture, its successors in interest and any successor indenture
trustee under this Indenture.
"Independent" means, when used with respect to any specified Person, that
-----------
the Person (a) is in fact independent of the Issuer, any other obligor upon the
Notes, the Seller and any Affiliate of any of the foregoing Persons, (b) does
not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Seller or any Affiliate of
any of the foregoing Persons and (c) is not connected with the Issuer, any such
other obligor, the Seller or any Affiliate of any of the foregoing Persons as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
"Independent Certificate" means a certificate or opinion to be delivered to
-----------------------
the Indenture Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 12.1 of the Indenture,
------------
made by an Independent appraiser or other expert appointed by an Issuer Order,
and such opinion or certificate shall state that the signer has read the
definition of "Independent" in this Indenture and that the signer is Independent
within the meaning thereof.
"Indirect Participant" means other Persons such as securities brokers and
--------------------
dealers, banks and trust companies that clear or maintain a custodial
relationship with a participant of DTC, either directly or indirectly.
"Ineligible Receivables" is defined: (a) for purposes of the Transfer and
----------------------
Servicing Agreement in Section 2.4(d) of that Agreement; and (b) for purposes of
--------------
the Receivables Purchase Agreement, in Section 6.1 of that Agreement.
-----------
"Initial Closing Date" means December 19, 2000.
--------------------
"Initial SMT Cut-Off Date" means August 31, 1994.
------------------------
"Insolvency Event" is defined in Section 6.1 of the Transfer and Servicing
---------------- -----------
Agreement.
"Insurance Proceeds" means any amounts received pursuant to the payment of
------------------
benefits under any credit life insurance policies, credit disability or
unemployment insurance policies covering any Obligor with respect to Receivables
under such Obligor's Account.
"Investment Company Act" means the Investment Company Act of 1940.
----------------------
"Investor Monthly Servicing Fee" is defined in Section 3.2 of the Transfer
------------------------------ -----------
and Servicing Agreement.
-14-
"Issuer" means the Spiegel Credit Card Master Note Trust, which is
------
established by the Trust Agreement.
"Issuer Order" and "Issuer Request" means a written order or request signed
------------ --------------
in the name of the Issuer by any one of its Authorized Officers and delivered to
the Indenture Trustee.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
----
assignment, deposit arrangement, encumbrance, lien (statutory or other), equity
interest, participation interest, preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever including
any conditional sale or other title retention agreement, any financing lease
having substantially the same economic effect as any of the foregoing and the
filing of any financing statement under the UCC (other than any such financing
statement filed for informational purposes only) or comparable law of any
jurisdiction to evidence any of the foregoing; provided, however, that any
-------- -------
assignment pursuant to the Indenture shall not be deemed to constitute a Lien.
"Merchant Fees" means amounts payable (whether by discount or direct
-------------
payment) to FCNB by Spiegel or any of its merchandising Affiliates in respect of
charges made to Accounts.
"Minimum Aggregate Principal Balance" means, on any Determination Date, the
-----------------------------------
greater of (a) the sum of the collateral amounts of all series outstanding on
the Determination Date plus the Minimum Seller Amount and (b) the sum of the
numerators used to determine the Allocation Percentages for Principal
Collections of all series outstanding on that Determination Date.
"Minimum Average Seller Percentage" means the weighted average (by
---------------------------------
Collateral Amount) Minimum Seller Percentages for all Series then outstanding.
"Minimum Seller Amount" means, on any Determination Date, the Aggregate
---------------------
Collateral Amount at the end of the day prior to such Determination Date, times
the Minimum Average Seller Percentage; provided that if such percentage is zero,
-------- ----
the Minimum Seller Amount shall be zero.
"Minimum Seller Percentage" is defined, for any Series, in the related
-------------------------
Indenture Supplement.
"Monthly Period" means the period from and including the first day of the
--------------
calendar month preceding a related Determination Date to and including the last
day of such calendar month.
-15-
"Monthly Seller Servicing Fee" is defined in Section 3.2 of the Transfer
---------------------------- -----------
and Servicing Agreement.
"Monthly Servicing Fee" is defined in Section 3.2 of the Transfer and
--------------------- -----------
Servicing Agreement.
"Moody's" means Xxxxx'x Investors Service, Inc.
-------
"Net Recoveries" means, with respect to any Monthly Period, the excess, if
--------------
any, of Recoveries with respect to such Monthly Period over the aggregate amount
of Principal Receivables in Accounts that have become Defaulted Accounts during
such Monthly Period.
"New Issuance" is defined in Section 2.12(a) of the Indenture.
------------ ---------------
"Note Interest Rate" means, as of any particular date of determination and
------------------
with respect to any Series or Class, the interest rate as of such date specified
therefor in the related Indenture Supplement.
"Note Owner" means, with respect to a Book-Entry Note, the Person who is
----------
the owner of such Book-Entry Note, as reflected on the books of the Clearing
Agency, or on the books of a Person maintaining an account with such Clearing
Agency (directly as a Clearing Agency Participant or as an Indirect Participant,
in accordance with the rules of such Clearing Agency).
"Note Principal Balance" means, as of any particular date of determination
----------------------
and with respect to any Series or Class, the amount specified therefor in the
related Indenture Supplement.
"Note Register" is defined in Section 2.5 of the Indenture.
------------- -----------
"Noteholder" or "Holder" means the Person in whose name a Note is
---------- ------
registered on the Note Register and, if applicable, the holder of any Global
Note, or Coupon, as the case may be, or such other Person deemed to be a
"Noteholder" or "Holder" in any related Indenture Supplement.
"Notes" means all Series of Notes issued by the Issuer pursuant to this
-----
Indenture and the applicable Indenture Supplements.
"Notices" is defined in Section 9.4(a) of the Transfer and Servicing
------- --------------
Agreement.
"Notice Date" is defined in Section 2.6(c) of the Transfer and Servicing
----------- --------------
Agreement.
-16-
"Obligor" means, with respect to any Account, the Person or Persons
-------
obligated to make payments with respect to such Account, including any guarantor
thereof.
"Officer's Certificate" means a certificate signed by any officer of Seller
---------------------
or the Servicer and delivered to the Indenture Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
------------------
for Seller or the Servicer and who shall be reasonably acceptable to the
Indenture Trustee, provided that a Tax Opinion shall be an opinion of Xxxxx,
--------
Xxxxx and Xxxxx or other nationally recognized tax counsel.
"Original Principal Receivables" means Principal Receivables determined
------------------------------
without giving effect to any reduction thereof attributable to Discount Option
Receivables.
"Outstanding" means, as of the date of determination, all Notes theretofore
-----------
authenticated and delivered under this Indenture except:
(i) Notes theretofore canceled by the Note Registrar or delivered to
the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Indenture Trustee
or any Paying Agent in trust for the Holders of such Notes (provided,
--------
however, that if such Notes are to be redeemed, notice of such redemption
-------
has been duly given pursuant to this Indenture or provision therefor,
satisfactory to the Indenture Trustee, has been made); and
(iii) Notes in exchange for or in lieu of other Notes which have been
authenticated and delivered pursuant to this Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Notes are
held by a protected purchaser;
provided that in determining whether the Holders of Notes representing the
--------
requisite Outstanding Notes have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Notes owned by the Issuer, any
other obligor upon the Notes, the Seller, the Servicer or any Affiliate of any
of the foregoing Persons shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Indenture Trustee shall be protected in
relying upon any such request, demand, authorization, direction, notice, consent
or waiver, only Notes that a Trust Officer of the Indenture Trustee actually
knows to be so owned shall be so disregarded. Notes so owned that have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Indenture Trustee
-17-
the pledgee's right so to act with respect to such Notes and that the pledgee is
not the Issuer, any other obligor upon the Notes, the Seller, the Servicer or
any Affiliate of any of the foregoing Persons. In making any such determination,
the Indenture Trustee may conclusively rely on the representations of the
pledgee and shall not be required to undertake any independent investigation.
"Outstanding Amount" means the aggregate principal amount of all Notes
------------------
Outstanding at the date of determination.
"Owner" means Seller, as the holder of the beneficial ownership interest in
-----
the Issuer and any successor or assign in that capacity.
"Owner Trustee" means Bankers Trust Company, in its capacity as owner
-------------
trustee under the Trust Agreement, its successors in interest and any successor
owner trustee under the Trust Agreement.
"Paired Series" means (i) each Series which has been paired with another
-------------
Series (which Series may be prefunded or partially prefunded), such that the
reduction of the Collateral Amount or Adjusted Collateral Amount of such Series
results in the increase of the Collateral Amount of such other Series, as
described in the related Indenture Supplements, and (ii) such other Series.
"Paying Agent" means any paying agent appointed pursuant to Section 2.8 of
------------ -----------
the Indenture and shall initially be the Indenture Trustee; provided that if the
--------
Indenture Supplement for a Series so provides, a separate or additional Paying
Agent may be appointed with respect to such Series.
"Pay Out Event" means, with respect to any Series, a Series Pay Out Event
-------------
relating to that Series or a Trust Pay Out Event.
"Permitted Assignee" means any Person who, if it were to purchase
------------------
Receivables (or interests therein) in connection with a sale thereof pursuant to
Sections 5.5(a) and 5.16 of the Indenture, would not cause the Trust to be
--------------- ----
taxable as a publicly traded partnership for federal income tax purposes.
"Permitted Investments" means negotiable instruments or securities or other
---------------------
investments (a) which, except in the case of demand or time deposits,
investments in money market funds and Repurchase Obligations, are represented by
instruments in bearer or registered form or ownership of which is represented by
book entries by a Clearing Agency or by a Federal Reserve Bank in favor of
depository institutions eligible to have an account with such Federal Reserve
Bank who hold such investments on behalf of their customers and (b) which
evidence:
-18-
(i) direct obligations of, and obligations fully guaranteed as to
full and timely payment by, the United States of America;
(ii) demand deposits, time deposits or certificates of deposit of
depository institutions or trust companies incorporated under the laws of
the United States of America or any state thereof and subject to
supervision and examination by federal or state banking or depository
institution authorities; provided, however, that at the time of the
-------- -------
Receivables Trust's investment or contractual commitment to invest therein,
the commercial paper, if any, and short-term unsecured debt obligations
(other than such obligation whose rating is based on the credit of a Person
other than such institution or trust company) of such depository
institution or trust company shall have a credit rating from the Rating
Agency in the highest investment category granted by such Rating Agency in
the case of commercial paper (which in the case of Standard & Poor's means
A-1+);
(iii) commercial paper having, at the time of the Receivables Trust's
investment or contractual commitment to invest therein, a rating in the
highest investment category granted by the Rating Agency (which in the case
of Standard & Poor's means A-1+);
(iv) bankers' acceptances issued by any depository institution or
trust company referred to in (ii) above;
(v) investments in money market funds having a rating of the highest
investment category from the Rating Agency or otherwise approved in writing
by the Rating Agency (which in the case of Standard & Poor's means A-1+);
(vi) time deposits (having maturities of not more than 30 days) or
notes which are payable on demand by an entity the commercial paper of
which has a rating of the highest investment category granted by the Rating
Agency (which in the case of Standard & Poor's means A-1+); and
(vii) Repurchase Obligations.
"Permitted Transaction" mean any transaction or series of related
---------------------
transactions pursuant to which the Seller finances an interest in the Trust
Assets and (i) as to which the Rating Agency Condition is satisfied and (ii)
which in the reasonable judgment of the Seller as evidenced by an Officer's
Certificate, will not have a material adverse effect on the interests of the
Noteholders.
-19-
"Person" means any legal person, including any individual, corporation,
------
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, governmental entity or other entity of similar
nature.
"Pooling and Servicing Agreement" means the Amended and Restated Pooling
-------------------------------
and Servicing Agreement, dated as of December 13, 1994 and heretofore amended,
among SCCIII, FCNB and Xxxxxx Trust and Savings Bank, as trustee.
"Portfolio Yield" is defined, with respect to any Series, in the related
---------------
Indenture Supplement.
"Principal Collections" means all Collections that are not Finance Charge
---------------------
Collections.
"Principal Collections Subaccount" means the principal collections
--------------------------------
subaccount of the Collections Account.
"Principal Receivable" means each Receivable other than Finance Charge
--------------------
Receivables and Receivables in Defaulted Accounts. A Principal Receivable shall
be deemed to have been created at the end of the day on the Date of Processing
of such Receivable. In calculating the aggregate amount of Principal Receivables
on any day, the amount of Principal Receivables shall be reduced by the
aggregate amount of credit balances in the Accounts on such day. Any Principal
Receivables which Seller is unable to transfer as provided in Section 2.5(c) of
--------------
the Transfer and Servicing Agreement shall not be included in calculating the
aggregate amount of Principal Receivables.
"Principal Sharing Series" means a Series that, pursuant to the Indenture
------------------------
Supplement therefor, is entitled to receive Shared Principal Collections.
"Principal Shortfalls" is defined in Section 8.5 of the Indenture.
-------------------- -----------
"Principal Terms" means, with respect to any Series, (a) the name or
---------------
designation; (b) the initial principal amount (or method for calculating such
amount), the Collateral Amount and the Seller Amount; (c) the Note Interest Rate
for each Class of Notes of such Series (or method for the determination
thereof); (d) the payment date or dates and the date or dates from which
interest shall accrue; (e) the method for allocating Collections to Noteholders;
(f) the designation of any Series Accounts and the terms governing the operation
of any such Series Accounts; (g) the Servicing Fee; (h) the terms of any form of
Series Enhancements with respect thereto; (i) the terms on which the Notes of
such Series may be exchanged for Notes of another Series, repurchased by the
Seller or remarketed to other investors; (j) the Series Termination Date; (k)
the number of Classes of Notes of such Series and, if more than one Class, the
rights and priorities of each such Class; (l) the extent to
-20-
which the Notes of such Series will be issuable in temporary or permanent global
form (and, in such case, the depositary for such global note or notes, the terms
and conditions, if any, upon which such global note or notes may be exchanged,
in whole or in part, for Definitive Notes, and the manner in which any interest
payable on a temporary or global note will be paid); (m) whether the Notes of
such Series may be issued in bearer form and any limitations imposed thereon;
(n) the priority of such Series with respect to any other Series; (o) whether
such Series will be part of a Group; (p) whether such Series will be a Principal
Sharing Series and whether such Series is entitled to share Shared Seller
Principal Collections; (q) whether such Series will be an Excess Allocation
Series; (r) the Distribution Date; (s) the legal final maturity date on which
the rights of the Noteholders of such Series to receive payments from the Trust
will terminate, which shall not be later than the Scheduled Trust Termination
Date; and (t) whether such Series will or may be a Paired Series and the Series,
with which it will be paired, if applicable.
"Proceeding" means any suit in equity, action at law or other judicial or
----------
administrative proceeding.
"Purchase Price" is defined in Section 3.1 of the Receivables Purchase
-------------- -----------
Agreement.
"Qualified Account" means either (a) a non-interest bearing segregated
-----------------
account with an Eligible Institution, or (b) a non-interest bearing segregated
trust account with the corporate trust department of a depository institution
organized under the laws of the United States or any one of the states thereof,
including the District of Columbia (or any domestic branch of a foreign bank),
and acting as a trustee for funds deposited in such account, so long as any of
the securities of such depository institution shall have a credit rating from
each Rating Agency in one of its generic credit rating categories that signifies
investment grade.
"Quarterly Account Additions" means on any Determination Date, the number
---------------------------
of Accounts the Receivables of which have been added to the Receivables Trust
pursuant to Section 2.6(b) and (e) of the Transfer and Servicing Agreement
-------------- ---
during the current calendar quarter plus the number of Accounts, if any, the
Receivables of which have been designated to be added to the Receivables Trust
during such calendar quarter pursuant to Section 2.6(a) of the Transfer and
--------------
Servicing Agreement.
"Quarterly Quotient" is defined in Section 2.6(c)(ii)(2) of the Transfer
------------------ ---------------------
and Servicing Agreement.
"Rating Agency" means, with respect to any outstanding Series or Class,
-------------
each rating agency, as specified in the applicable Indenture Supplement,
selected by the Seller to rate the Notes of such Series or Class.
-21-
"Rating Agency Condition" means, with respect to any action or series of
-----------------------
related actions or proposed transaction or series of related proposed
transactions, that each Rating Agency shall have notified Seller and the
Indenture Trustee in writing that such action or series of related actions or
the consummation of such proposed transaction or series of related transactions
will not result in a reduction or withdrawal of the rating of any outstanding
Series or Class with respect to which it is a Rating Agency.
"Reassignment Agreement" is defined in Section 2.7(b)(ii) of the Transfer
---------------------- ------------------
and Servicing Agreement.
"Receivable" means any amount owing by an Obligor under an Account
----------
(including amounts in Defaulted Accounts) from time to time, including amounts
owing for the purchase of goods and services, Finance Charges, Charge Account
Fees, and premiums for Credit Insurance, if any.
"Receivables Purchase Agreement" means (a) prior to the SMT Termination
------------------------------
Date, the Receivables Purchase Agreement dated as of September 20, 1994, among
Seller, FCNB and Spiegel Acceptance Corporation, and (b) after the SMT
Termination Date, the Receivables Purchase Agreement dated on or about the SMT
Termination Date, among Seller, FCNB and Spiegel Acceptance Corporation, in each
case as amended from time to time, and includes any receivables purchase
agreement substantially in the form of such agreement entered into between the
Seller and FCNB.
"Receivables Trust" means (a) prior to the SMT Termination Date, the
-----------------
Spiegel Master Trust and (b) on and after the SMT Termination Date, the Issuer.
"Reconveyance" means an instrument substantially in the form and upon the
------------
terms of Exhibit B to the Receivables Purchase Agreement.
---------
"Record Date" means, with respect to any Distribution Date, the last day of
-----------
the calendar month immediately preceding such Distribution Date unless otherwise
specified for a Series in the related Indenture Supplement.
"Recoveries" means, with respect to any Monthly Period, all amounts
----------
recorded as recoveries by the Servicer during such Monthly Period with respect
to Receivables which have previously been charged off as uncollectible.
"Redemption Date" means, with respect to any Series, the date or dates
---------------
specified in the related Indenture Supplement.
"Registered Notes" is defined in Section 2.1 of the Indenture.
---------------- -----------
-22-
"Removal Date" is defined in Section 2.7 of the Transfer and Servicing
------------ -----------
Agreement.
"Removed Accounts" is defined in Section 2.7(a) of the Transfer and
---------------- --------------
Servicing Agreement.
"Removal Notice Date" means the fifth Business Day prior to a Removal Date.
-------------------
"Repurchase Date" is defined in Section 6.2 of the Receivables Purchase
--------------- -----------
Agreement.
"Repurchase Notice Date" is defined in Section 6.2 of the Receivables
------------------------ -----------
Purchase Agreement.
"Repurchase Obligations" means repurchase obligations with respect to any
----------------------
security that is a direct obligation of, or fully guaranteed by, the United
States of America or any agency or instrumentality thereof the obligations of
which are backed by the full faith and credit of the United States of America,
in either case entered into with a depository institution or trust company
(acting as principal) described in clause (b)(ii) of the definition of Permitted
-------------
Investments.
"Repurchase Price" means the Repurchase Price specified in Section 6.1(c)
---------------- --------------
or 6.2(a), as the case may be, of the Receivables Purchase Agreement.
------
"Requirements of Law" for any Person means the certificate of incorporation
-------------------
or articles of association and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation, or order or
determination of an arbitrator or Governmental Authority, in each case
applicable to or binding upon such Person or to which such Person is subject,
whether Federal, state or local (including usury laws, the Federal Truth in
Lending Act and Regulation Z and Regulation B of the Board of Governors of the
Federal Reserve System).
"Responsible Officer" means, as to the Issuer, the Chairman or any Vice
-------------------
Chairman of the Board of Directors or Trustees of the Administrator, the
Chairman or Vice Chairman of the Executive or Standing Committee of the Board of
Directors or Trustees or Treasurer of the Administrator, the President, any
Executive Vice President, Senior Vice President, Vice President, any Assistant
Vice President, the Secretary, any Assistant Secretary, the Treasurer, any
Assistant Treasurer, the Cashier, any Assistant or Deputy Cashier, the
Controller and any Assistant Controller or any other officer of the Issuer
customarily performing functions similar to those performed by any of the
above-designated officers. The term "Responsible Officer", when used herein with
respect to any Person other than the Issuer, means
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an officer or employee of such Person corresponding to any officer or employee
described in the preceding sentence.
"Revolving Period" is defined, with respect to each Series, in the related
----------------
Indenture Supplement.
"RPA Seller" means, collectively, FCNB and SAC, either one of which is
----------
sometimes referred to individually as an "RPA Seller."
----------
"SAC" means Spiegel Acceptance Corporation, a Delaware corporation.
---
"SCCIII" means Spiegel Credit Corporation III, a Delaware corporation.
------
"Scheduled Trust Termination Date" means December 31, 2050.
--------------------------------
"Securities Act" means the Securities Act of 1933.
--------------
"Seller" means SCCIII.
------
"Seller Amount" means, on any Determination Date, the Aggregate Principal
-------------
Balance at the end of the day immediately prior to such Determination Date,
minus the Aggregate Collateral Amount at the end of such day. The Seller Amount
may be a negative number.
"Seller Certificate Supplement" shall have the meaning specified in Section
-----------------------------
3.4 of the Trust Agreement.
"Seller Interest" means the interest of the Seller or its assigns in the
---------------
Issuer and the Receivables, which entitles the Seller or its assigns to receive
the various amounts specified in the Transaction Documents to be paid or
transferred to the Holder(s) of the Seller Interest.
"Seller Percentage" means, on any date of determination, when used with
-----------------
respect to Principal Receivables, Finance Charge Receivables and Receivables in
Defaulted Accounts, a percentage equal to 100% minus the Aggregate Allocation
Percentage with respect to such category of Receivables.
"Series" means any series of Notes, which may include within any such
------
Series a Class or Classes of Notes subordinate to another such Class or Classes
of Notes.
"Series Account" means, with respect to any Series, any of the accounts
--------------
established and designated as such pursuant to the related Indenture Supplement.
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"Series Enhancement" means the rights and benefits provided to the Issuer
------------------
or the Noteholders of any Series or Class pursuant to any letter of credit,
surety bond, cash collateral account, collateral interest, spread account,
reserve account, cash collateral guaranty, insurance policy, tax protection
agreement, interest rate swap agreement, interest rate cap agreement, cross
support feature or other similar arrangement. The subordination of any Series or
Class to another Series or Class shall be deemed to be a Series Enhancement.
"Series Enhancer" means the Person or Persons providing any Series
---------------
Enhancement, other than (except to the extent otherwise provided with respect to
any Series in the Indenture Supplement for such Series) any account or deposits
therein or the Noteholders of any Series or Class which is subordinated to
another Series or Class.
"Series Pay Out Event" is defined, with respect to any Series, in the
--------------------
related Indenture Supplement.
"Series Share" is defined in Section 8.4(h) of the Indenture.
------------ --------------
"Series Termination Date" means, with respect to any Series, the
-----------------------
termination date for such Series specified in the related Indenture Supplement.
"Servicer" means initially FCNB, and thereafter any Person appointed as
--------
successor as herein provided to service the Receivables.
"Servicer Default" is defined in Section 7.1 of the Transfer and Servicing
---------------- -----------
Agreement.
"Servicing Fee Rate" means, with respect to any Series, the Series
------------------
servicing fee percentage specified in the related Indenture Supplement.
"Servicing Officer" means any employee of the Servicer involved in, or
-----------------
responsible for, the administration and servicing of the Receivables whose name
appears on a list of servicing officers furnished to the Indenture Trustee by
the Servicer, as such list may from time to time be amended.
"Settlement Date" is defined in Section 3.4 of the Receivables Purchase
--------------- -----------
Agreement.
"Settlement Statement" means a document substantially in the form of
--------------------
Exhibit C to the Receivables Purchase Agreement.
---------
"Shared Finance Charge Collections" means, with respect to any Distribution
---------------------------------
Date, the aggregate amount for all outstanding Series that the related Indenture
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Supplements specify are to be treated as "Shared Finance Charge Collections" for
such Distribution Date.
"Shared Principal Collections" is defined in Section 8.5 of the Indenture.
---------------------------- -----------
"Shortfall Amount" means, on any Determination Date, the amount, if any, by
----------------
which the Minimum Seller Amount exceeds the Seller Amount.
"SMT Termination Date" means the date on which the Spiegel Master Trust is
--------------------
terminated and all of the Receivables held by Spiegel Master Trust are
transferred to the Issuer.
"SMT Trustee" means the trustee under the Pooling and Servicing Agreement.
-----------
"Special Fees" means Receivables consisting of fees which are not now but
------------
may from time to time be assessed on the Accounts.
"Spiegel" means Spiegel, Inc., a Delaware corporation.
-------
"Spiegel Master Trust" means the trust formed by the Pooling and Servicing
--------------------
Agreement.
"Standard & Poor's" means Standard & Poor's Ratings Services, or its
-----------------
successor.
"Successor Servicer" is defined in Section 7.2(a) of the Transfer and
------------------ --------------
Servicing Agreement.
"Supplemental Certificate" is defined in Section 3.4 of the Trust
------------------------ -----------
Agreement.
"Supplemental Conveyance" means an instrument substantially in the form and
-----------------------
upon the terms of Exhibit A to the Receivables Purchase Agreement.
---------
"Surviving Person" is defined in Section 3.10(a) of the Indenture.
---------------- ---------------
"Tax Opinion" means, with respect to any action, an Opinion of Counsel to
-----------
the effect that, for federal income tax purposes, (a) such action will not
adversely affect the tax characterization as debt of the Notes of any
outstanding Series or Class that were characterized as debt at the time of their
issuance, (b) such action will not cause the Issuer to be deemed to be an
association (or publicly traded partnership) taxable as a corporation and (c)
such action will not cause or constitute an event in which gain or loss would be
recognized by any Noteholder.
-26-
"Termination Notice" is defined in Section 7.1 of the Transfer and
------------------ -----------
Servicing Agreement.
"Transaction Documents" means the Master Indenture, Indenture Supplements,
---------------------
Transfer and Servicing Agreement, Receivables Purchase Agreement, Trust
Agreement, Administration Agreement and, until the SMT Termination Date, the
Pooling and Servicing Agreement and the Collateral Series Supplement, and any
other documents related to this transaction.
"Transfer Agent and Registrar" is defined in Section 2.5 of the Indenture.
---------------------------- -----------
"Transfer and Servicing Agreement" means the Transfer and Servicing
--------------------------------
Agreement, dated as of December 1, 2000, among SCCIII, FCNB and the Receivables
Trust, as Issuer.
"Transfer Date" means the Business Day immediately preceding each
-------------
Distribution Date or each Distribution Date.
"Transfer Restriction Event" means any event that prevents the Seller from
--------------------------
transferring Receivables to the Issuer.
"Trust" means the Spiegel Credit Card Master Note Trust.
-----
"Trust Agreement" means the Trust Agreement relating to the Receivables
---------------
Trust, dated as of December 1, 2000, between SCCIII and the Owner Trustee, as
the same may be amended, supplemented or otherwise modified from time to time.
"Trust Assets" is defined in Section 2.1 of the Transfer and Servicing
------------ -----------
Agreement.
"Trust Estate" means all right, title and interest of the Trust in and to
------------
the property and rights assigned to the Trust pursuant to Section 2.5 of the
-----------
Trust Agreement and Section 2.1 of the Transfer and Servicing Agreement, all
-----------
monies, investment property, instruments and other property on deposit from time
to time in the Collection Account, the Series Accounts and the Excess Funding
Account and all other property of the Trust from time to time, including any
rights of the Owner Trustee and the Trust pursuant to the Transaction Documents.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939.
------------------- ---
"Trust Pay Out Event" is defined, with respect to each Series, in Section
------------------- -------
5.1 of the Indenture.
---
-27-
"Trustee Officer" means, with respect to the Indenture Trustee any officer
---------------
assigned to the Corporate Trust Office, including any managing director, vice
president, assistant vice president, assistant treasurer, assistant secretary or
any other officer of the Indenture Trustee customarily performing functions
similar to those performed by any of the above designated officers and having
direct responsibility for the administration of the applicable Transaction
Documents, and also, with respect to a particular matter, any other officer, to
whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
"UCC" means the Uniform Commercial Code, as in effect in any specified
---
jurisdiction.
-28-
