EXECUTION COPY
HOUSEHOLD CONSUMER LOAN TRUST 1997-1,
as Issuer
AND
THE BANK OF NEW YORK,
as Indenture Trustee
_________________________________________
INDENTURE
Dated as of March 1, 1997
__________________________________________
HOUSEHOLD CONSUMER LOAN ASSET BACKED NOTES
SERIES 1997-1
TABLE OF CONTENTS
Section Page
ARTICLE I
Definitions
1.01. Definitions . . . . . . . . . . . . . . . . . . . 2
1.02. Incorporation by Reference of Trust Indenture
Act . . . . . . . . . . . . . . . . . . . . . . . 2
1.03. Rules of Construction.. . . . . . . . . . . . . . 2
ARTICLE II
Original Issuance of Notes
2.01. Form . . . . . . . . . . . . . . . . . . . . . . . 4
2.02. Execution, Authentication and Delivery . . . . . . 4
2.03. Opinions of Counsel. . . . . . . . . . . . . . . . 5
ARTICLE III
Covenants
3.01. Collection of Payments on the Series 1997-1
Participation Interest. . . . . . . . . . . . . . 6
3.02. Maintenance of Office or Agency. . . . . . . . . . 6
3.03. Money for Payments To Be Held in Trust; Paying
Agent; Certificate Paying Agent . . . . . . . . . 6
3.04. Existence. . . . . . . . . . . . . . . . . . . . . 9
3.05. Payment of Principal and Interest; Defaulted
Interest. . . . . . . . . . . . . . . . . . . . . 9
3.06. Protection of Indenture Trust Estate . . . . . . . 14
3.07. Opinions as to Indenture Trust Estate. . . . . . . 15
3.08. Performance of Obligations . . . . . . . . . . . . 16
3.09. Negative Covenants . . . . . . . . . . . . . . . . 16
3.10. Annual Statement as to Compliance. . . . . . . . . 17
3.11. Indenture Trust Estate; Related Documents. . . . . 17
3.12. Amendments to Pooling and Servicing Agreement. . . 18
3.13. Investment Company Act . . . . . . . . . . . . . . 18
3.14. Existence of Issuer; Issuer May Consolidate,
etc., Only on Certain Terms . . . . . . . . . . . 18
3.15. Successor or Transferee. . . . . . . . . . . . . . 20
3.16. No Other Business. . . . . . . . . . . . . . . . . 20
3.17. No Borrowing . . . . . . . . . . . . . . . . . . . 20
3.18. Guarantees, Loans, Advances and Other Liabil-
ities . . . . . . . . . . . . . . . . . . . . . . 21
3.19. Capital Expenditures . . . . . . . . . . . . . . . 21
3.20. Restricted Payments. . . . . . . . . . . . . . . . 21
3.21. Notice of Events of Default. . . . . . . . . . . . 21
3.22. Further Instruments and Acts . . . . . . . . . . . 21
3.23. Statements to Noteholders. . . . . . . . . . . . . 21
3.24. Determination of Note Rate and Certificate
Rate. . . . . . . . . . . . . . . . . . . . . . . 21
3.25. Optional Repurchase of the Series 1997-1
Participation Interest. . . . . . . . . . . . . . 22
ARTICLE IV
The Notes; Satisfaction and Discharge of Indenture
4.01. The Notes. . . . . . . . . . . . . . . . . . . . . 23
4.02. Registration of and Limitations on Transfer and
Exchange of Notes; Appointment of Certificate
Registrar . . . . . . . . . . . . . . . . . . . . 23
4.03. Mutilated, Destroyed, Lost or Stolen Notes . . . . 24
4.04. Persons Deemed Owners. . . . . . . . . . . . . . . 25
4.05. Cancellation . . . . . . . . . . . . . . . . . . . 26
4.06. Book-Entry Notes . . . . . . . . . . . . . . . . . 26
4.07. Notices to Depository. . . . . . . . . . . . . . . 27
4.08. Definitive Notes . . . . . . . . . . . . . . . . . 27
4.09. Tax Treatment. . . . . . . . . . . . . . . . . . . 28
4.10. Satisfaction and Discharge of Indenture. . . . . . 28
4.11. Application of Trust Money . . . . . . . . . . . . 29
4.12. Repayment of Moneys Held by Paying Agent . . . . . 29
ARTICLE V
Remedies
5.01. Event of Default; Acceleration of Maturity;
Rescission and Annulment. . . . . . . . . . . . . 30
5.02. Collection of Indebtedness and Suits for
Enforcement by Indenture Trustee. . . . . . . . . 30
5.03. Remedies; Priorities . . . . . . . . . . . . . . . 33
5.04. Optional Preservation of the Indenture Trust
Estate. . . . . . . . . . . . . . . . . . . . . . 35
5.05. Limitation of Suits. . . . . . . . . . . . . . . . 35
5.06. Unconditional Rights of Noteholders to Receive
Principal and Interest. . . . . . . . . . . . . . 36
5.07. Restoration of Rights and Remedies . . . . . . . . 36
5.08. Rights and Remedies Cumulative . . . . . . . . . . 36
5.09. Delay or Omission Not a Waiver . . . . . . . . . . 37
5.10. Control by Noteholders . . . . . . . . . . . . . . 37
5.11. Waiver of Past Defaults. . . . . . . . . . . . . . 37
5.12. Undertaking for Costs. . . . . . . . . . . . . . . 38
5.13. Waiver of Stay or Extension Laws . . . . . . . . . 38
5.14. Sale of Indenture Trust Estate . . . . . . . . . . 39
5.15. Action on Notes. . . . . . . . . . . . . . . . . . 40
5.16. Performance and Enforcement of Certain Obli-
gations . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE VI
The Indenture Trustee
6.01. Duties of Indenture Trustee. . . . . . . . . . . . 42
6.02. Rights of Indenture Trustee. . . . . . . . . . . . 43
6.03. Individual Rights of Indenture Trustee . . . . . . 44
6.04. Indenture Trustee's Disclaimer . . . . . . . . . . 44
6.05. Notice of Event of Default . . . . . . . . . . . . 44
6.06. Reports by Indenture Trustee . . . . . . . . . . . 44
6.07. Compensation and Indemnity . . . . . . . . . . . . 44
6.08. Replacement of Indenture Trustee . . . . . . . . . 45
6.09. Successor Indenture Trustee by Xxxxxx. . . . . . . 46
6.10. Appointment of Co-Indenture Trustee or Separate
Indenture Trustee . . . . . . . . . . . . . . . . 47
6.11. Eligibility; Disqualification. . . . . . . . . . . 48
6.12. Preferential Collection of Claims Against
Issuer. . . . . . . . . . . . . . . . . . . . . . 48
6.13. Representation and Warranty. . . . . . . . . . . . 49
6.14. Directions to Indenture Trustee. . . . . . . . . . 49
6.15. No Consent to Certain Acts of Seller . . . . . . . 49
ARTICLE VII
Noteholders' Lists and Reports
7.01. Issuer To Furnish Indenture Trustee Names and
Addresses of Noteholders. . . . . . . . . . . . . 50
7.02. Preservation of Information; Communications to
Noteholders . . . . . . . . . . . . . . . . . . . 50
7.03. Reports by Issuer. . . . . . . . . . . . . . . . . 50
7.04. Reports by Indenture Trustee . . . . . . . . . . . 51
ARTICLE VIII
Accounts, Disbursements and Releases
8.01. Collection of Money. . . . . . . . . . . . . . . . 52
8.02. Trust Accounts . . . . . . . . . . . . . . . . . . 52
8.03. Opinion of Counsel . . . . . . . . . . . . . . . . 52
8.04. Termination Upon Distribution to Noteholders . . . 53
8.05. Release of Indenture Trust Estate. . . . . . . . . 53
8.06. Surrender of Notes Upon Final Payment. . . . . . . 54
ARTICLE IX
Supplemental Indentures
9.01. Supplemental Indentures Without Consent of
Noteholders . . . . . . . . . . . . . . . . . . . 55
9.02. Supplemental Indentures With Consent of Note-
holders . . . . . . . . . . . . . . . . . . . . . 56
9.03. Execution of Supplemental Indentures . . . . . . . 58
9.04. Effect of Supplemental Indenture . . . . . . . . . 58
9.05. Conformity with Trust Indenture Act. . . . . . . . 59
9.06. Reference in Notes to Supplemental Indentures. . . 59
ARTICLE X
Miscellaneous
10.01. Compliance Certificates and Opinions, etc . . . . 60
10.02. Form of Documents Delivered to Indenture
Trustee . . . . . . . . . . . . . . . . . . . . . 61
10.03. Acts of Noteholders . . . . . . . . . . . . . . . 62
10.04. Notices, etc. to Indenture Trustee, Issuer, and
Rating Agencies . . . . . . . . . . . . . . . . . 63
10.05. Notices to Noteholders; Waiver. . . . . . . . . . 64
10.06. Alternate Payment and Notice Provisions . . . . . 64
10.07. Conflict with Trust Indenture Act . . . . . . . . 65
10.08. Effect of Headings. . . . . . . . . . . . . . . . 65
10.09. Successors and Assigns. . . . . . . . . . . . . . 65
10.10. Separability. . . . . . . . . . . . . . . . . . . 65
10.11. Benefits of Indenture . . . . . . . . . . . . . . 65
10.12. GOVERNING LAW . . . . . . . . . . . . . . . . . . 65
10.13. Counterparts. . . . . . . . . . . . . . . . . . . 65
10.14. Recording of Indenture. . . . . . . . . . . . . . 66
10.15. Issuer Obligation . . . . . . . . . . . . . . . . 66
10.16. No Petition . . . . . . . . . . . . . . . . . . . 66
10.17. Inspection. . . . . . . . . . . . . . . . . . . . 66
10.18. Authority of the Administrator. . . . . . . . . . 67
Signatures and Seals . . . . . . . . . . . . . . . . . . . . . 68
Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . 69
EXHIBITS
Exhibit A-1 - Form of Class A-1 Note
Exhibit A-2 - Form of Class A-2 Note
Exhibit A-3 - Form of Class A-3 Note
Exhibit B - Form of Class B Note
Appendix A - Definitions
This Indenture, dated as of March 1, 1997, between HOUSEHOLD
CONSUMER LOAN TRUST 1997-1, a Delaware business trust, as Issuer
(the "Issuer"), and The Bank of New York, a New York banking
corporation, as Indenture Trustee (the "Indenture Trustee"),
WITNESSETH THAT:
Each party hereto agrees as follows for the benefit of the
other party and for the benefit of the Holders of the Household
Consumer Loan Asset Backed Notes, Series 1997-1, Class A and
Class B Notes (collectively, the "Notes").
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the
Closing Date, as Indenture Trustee for the benefit of the Holders
of the Notes, all of the Issuer's right, title and interest in
and to whether now existing or hereafter created (a) the Series
1997-1 Participation Interest free and clear of any Liens, and
all monies and the collections and proceeds due thereon and any
part thereof which consists of general intangibles (as defined in
the UCC), (b) all rights of the Issuer as holder of the Series
1997-1 Participation Interest in and to the Pooling and Servicing
Agreement including without limitation, rights to consent,
receive notices and vote thereunder, (c) all funds on deposit
from time to time in the Payment Account and all proceeds
thereof, and (d) all present and future claims, demands, causes
and chooses 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 and
all payments on or under, and all proceeds of every kind and
nature whatsoever in the conversion thereof, voluntary or
involuntary, into cash or other liquid property, all cash
proceeds, accounts, accounts receivable, notes, drafts, accep-
tances, checks, deposit accounts, rights to payment of any and
every kind, and other forms of obligations and receivables,
instruments and other property which at any time constitute all
or part of or are included in the proceeds of any of the fore-
going (collectively, the "Indenture Trust Estate" or the
"Indenture Collateral").
The foregoing Grant is made in trust to secure the payment
of principal of and interest on, and any other amounts owing in
respect of, the Notes, and to secure compliance with the pro-
visions of this Indenture, all as provided in this Indenture.
The Indenture Trustee, as Indenture Trustee on behalf of the
Holders of the Notes, acknowledges such Xxxxx, accepts the trust
under this Indenture in accordance with the provisions hereof and
agrees to perform its duties as Indenture Trustee as required
herein.
ARTICLE I
Definitions
Section 1.01. Definitions. For all purposes of this Inden-
ture, except as otherwise expressly provided herein or unless the
context otherwise requires, capitalized terms not otherwise
defined herein shall have the meanings assigned to such terms in
the Definitions attached hereto as Appendix A which is incorpo-
rated by reference herein. All other capitalized terms used
herein shall have the meanings specified herein.
Section 1.02. Incorporation by Reference of Trust Indenture
Act. Whenever this Indenture refers to a provision of the TIA,
the provision is incorporated by reference in and made a part of
this Indenture. The following TIA terms used in this Indenture
have the following meanings:
"Commission" means the Securities and Exchange
Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means
the Indenture Trustee.
"obligor" on the indenture securities means the Issuer
and any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined
by the TIA, defined by TIA reference to another statute or
defined by Commission rule have the meaning assigned to them by
such definitions.
Section 1.03. Rules of Construction. Unless the context
otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally accepted
accounting principles as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and
words in the plural include the singular; and
(vi) any agreement, instrument or statute defined or
referred to herein or in any instrument or certificate
delivered in connection herewith means such agreement,
instrument or statute as from time to time amended, modified
or supplemented and includes (in the case of agreements or
instruments) references to all attachments thereto and
instruments incorporated therein; references to a Person are
also to its permitted successors and assigns.
ARTICLE II
Original Issuance of Notes
Section 2.01. Form. The Class A-1, Class A-2, Class A-3
and Class B Notes, together with the Indenture Trustee's certif-
icate of authentication, shall be in substantially the forms set
forth in Exhibits A-1, A-2, A-3 and B, respectively, with such
appropriate insertions, omissions, substitutions and other varia-
tions as are required or permitted by this Indenture and may have
such letters, numbers or other marks of identification and such
legends or endorsements placed thereon as may, consistently here-
with, be determined by the officers executing such Notes, as
evidenced by their execution of the Notes. Any portion of the
text of any Note may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Note.
The Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or
without steel engraved borders), all as determined by the Autho-
rized Officers executing such Notes, as evidenced by their execu-
tion of such Notes.
The terms of the Notes set forth in Exhibits A-1, A-2, A-3
and B are part of the terms of this Indenture.
Section 2.02. Execution, Authentication and Delivery. The
Notes shall be executed on behalf of the Issuer by any of its
Authorized Officers. The signature of any such Authorized
Officer on the Notes may be manual or facsimile.
Notes bearing the manual or facsimile signature of individ-
uals who were at any time Authorized Officers of the Issuer shall
bind the Issuer, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication
and delivery of such Notes or did not hold such offices at the
date of such Notes.
The Indenture Trustee shall upon Issuer Request authenticate
and deliver the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes
and Class B Notes for original issue in aggregate initial prin-
cipal amounts of $729,600,000, $48,000,000, $62,400,000 and
$45,600,000, respectively.
Each Note shall be dated the date of its authentication.
The Notes shall be issuable as registered Notes and the Notes
shall be issuable in the minimum initial Security Balances of
$100,000 and in integral multiples of $1,000 in excess thereof.
No Note shall be entitled to any benefit under this Inden-
ture or be valid or obligatory for any purpose, unless there
appears on such Note a certificate of authentication substan-
tially in the form provided for herein executed by the Indenture
Trustee by the manual signature of one of its authorized signa-
tories, 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 2.03. Opinions of Counsel. On the Closing Date,
the Indenture Trustee shall have received: (i) an Opinion of
Counsel, in form and substance reasonably satisfactory to the
Indenture Trustee and its counsel, with respect to securities law
matters; (ii) an Opinion of Counsel, in form and substance
reasonably satisfactory to the Indenture Trustee and its counsel,
with respect to the tax status of the arrangement created by the
Indenture; (iii) an Opinion of Counsel to the Issuer, in form and
substance reasonably satisfactory to the Indenture Trustee and
its counsel, with respect to the due authorization, valid
execution and delivery of this Indenture and with respect to its
binding effect on the Issuer; and (iv) an Opinion of Counsel to
the Issuer, in form and substance reasonably satisfactory to the
Indenture Trustee and its counsel, to the effect that the
Indenture creates in favor of the Indenture Trustee a first
priority perfected security interest in the Series 1997-1
Participation Interest and the other assets of the Indenture
Trust Estate.
ARTICLE III
Covenants
Section 3.01. Collection of Payments on the Series 1997-1
Participation Interest. The Indenture Trustee shall establish
and maintain with itself a trust account (the "Payment Account")
in which the Indenture Trustee shall, subject to the terms of
this paragraph, deposit, on the same day as it is received from
the Deposit Trustee, each remittance received by the Indenture
Trustee with respect to the Series 1997-1 Participation Interest.
The Indenture Trustee shall make all payments of principal of and
interest on the Notes, subject to Section 3.03 as provided in
Section 3.05 herein from moneys on deposit in the Payment
Account.
Section 3.02. Maintenance of Office or Agency. The Issuer
will maintain in the Borough of Manhattan, The City of New York,
an office or agency where, subject to satisfaction of conditions
set forth herein, 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 to serve as its agent for the foregoing purposes. 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 surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Indenture Trustee,
and the Issuer hereby appoints the Indenture Trustee as its agent
to receive all such surrenders, notices and demands.
Section 3.03. Money for Payments To Be Held in Trust;
Paying Agent; Certificate Paying Agent. (a) As provided in
Section 3.01, all payments of amounts due and payable with
respect to any Notes that are to be made from amounts withdrawn
from the Payment Account pursuant to Section 3.01 shall be made
on behalf of the Issuer by the Indenture Trustee or by the Paying
Agent, and no amounts so withdrawn from the Payment Account for
payments of Notes shall be paid over to the Issuer except as
provided in this Section 3.03.
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 3.03, that such Paying Agent will:
(i) hold all sums held by it for the payment of
amounts due with respect to the Notes in trust for the
benefit of the Persons entitled thereto until such sums
shall be paid to such Persons or otherwise disposed of as
herein provided and pay such sums to such Persons as herein
provided;
(ii) give the Indenture Trustee notice of any default
by the Issuer of which it has actual knowledge in the making
of any payment required to be made with respect to the
Notes;
(iii) at any time during the continuance of any such
default, upon the written request of the Indenture Trustee,
forthwith pay to the Indenture Trustee all sums so held in
trust by such Paying Agent;
(iv) immediately resign as 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 there-
on 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 Request 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 the sums were held by such Paying
Agent; and upon such payment by any Paying Agent to the Indenture
Trustee, such Paying Agent shall be released from all further
liability with respect to such money.
Subject to applicable laws with respect to escheat of funds,
any money held by the Indenture Trustee or any Paying Agent in
trust for the payment of any amount due with respect to any Note
and remaining unclaimed for two years after such amount has
become due and payable shall be discharged from such trust and be
paid to the Issuer on Issuer Request; and the Holder of such Note
shall thereafter, as an unsecured general creditor, look only to
the Issuer for payment thereof (but only to the extent of the
amounts so paid to the Issuer), and all liability of the Inden-
ture Trustee or such Paying Agent with respect to such trust
money shall thereupon cease; provided, however, that the Inden-
ture Trustee or such Paying Agent, before being required to make
any such repayment, shall at the expense and direction of the
Issuer cause to be published once, in an Authorized Newspaper
published in the English language, notice that such money remains
unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be repaid to
the Issuer. The Indenture Trustee shall also adopt and employ,
at the expense and direction of the Issuer, any other reasonable
means of notification of such repayment (including, but not
limited to, mailing notice of such repayment to Holders whose
Notes have been called but have not been surrendered for redemp-
tion or whose right to or interest in moneys due and payable but
not claimed is determinable from the records of the Indenture
Trustee or of any Paying Agent, at the last address of record for
each such Holder).
The Issuer hereby appoints The Bank of New York as
Certificate Paying Agent to make payments to Certificateholders
on behalf of the Issuer in accordance with the provisions of the
Certificates, Section 3.05 hereof and the provisions of the Trust
Agreement, and The Bank of New York hereby accepts such
appointment and further agrees that it will be bound by the
provisions of the Trust Agreement relating to the Certificate
Paying Agent and will:
(i) hold all sums held by it for the payment of
amounts due with respect to the Certificates 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 as provided in the Trust Agreement and
pay such sums to such Persons as herein and therein
provided;
(ii) give the Owner Trustee notice of any default by
the Issuer of which it has actual knowledge in the making of
any payment required to be made with respect to the
Certificates;
(iii) at any time during the continuance of any such
default, upon the written request of the Owner Trustee
forthwith pay to the Owner Trustee on behalf of the Issuer
all sums so held in Trust by such Certificate Paying Agent;
(iv) immediately resign as Certificate Paying Agent
and forthwith pay to the Owner Trustee on behalf of the
Issuer all sums held by it in trust for the payment of
Certificates if at any time it ceases to meet the standards
required to be met by the Certificate Paying Agent at the
time of its appointment;
(v) comply with all requirements of the Code with
respect to the withholding from any payments made by it on
any Certificates of any applicable withholding taxes imposed
thereon and with respect to any applicable reporting
requirements in connection therewith; and
(vi) deliver to the Owner Trustee a copy of the
report to Certificateholders prepared with respect to each
Payment Date by the Servicer pursuant to Article V of the
Pooling and Servicing Agreement.
Section 3.04. Existence. The Issuer will keep in full
effect its existence, rights and franchises as a business trust
under the laws of the State of Delaware (unless it becomes, or
any successor Issuer hereunder is or becomes, organized under the
laws of any other state or of the United States of America, in
which case the Issuer will keep in full effect its existence,
rights and franchises under the laws of such other jurisdiction)
and will obtain and preserve its qualification to do business in
each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this
Indenture, the Notes, the Series 1997-1 Participation Interest
and each other instrument or agreement included in the Indenture
Trust Estate.
Section 3.05. Payment of Principal and Interest; Defaulted
Interest. (a) On each Payment Date from amounts on deposit in
the Payment Account, the Paying Agent, on behalf of the Issuer,
shall pay to the Noteholders and the Certificate Paying Agent, on
behalf of the Issuer, shall pay to the Certificateholders and the
Indenture Trustee, in its capacity as agent for the Issuer, shall
pay to other Persons the amounts to which they are entitled as
set forth below:
(i) sequentially (a) to the Holders of the Class A-1
Notes, the related Class Interest Distribution, (b) to the
Holders of the Class A-2 Notes, the related Class Interest
Distribution, (c) to the Holders of the Class A-3 Notes, the
related Class Interest Distribution, (d) to the Holders of
the Class B Notes, the related Class Interest Distribution
and (e) subject to the proviso set forth following clause
(vii) below, to the Holders of the Certificates, the
Certificate Yield;
(ii) sequentially, up to the Optimum Monthly
Principal:
(a) to the Holders of the Class A-1 Notes, until
the Principal Balance of the Class A-1 Notes equals the
Class A-1 Targeted Principal Balance,
(b) to the Holders of the Class A-2 Notes, until
the Principal Balance of the Class A-2 Notes equals the
Class A-2 Targeted Principal Balance, to the extent the
related Adjusted Principal Balance for the Class A-2
Notes is not thereby reduced below the related Minimum
Adjusted Principal Balance for such Class of Notes,
(c) to the Holders of the Class A-3 Notes, until
the Principal Balance of the Class A-3 Notes equals the
Class A-3 Targeted Principal Balance, to the extent the
related Adjusted Principal Balance for the Class A-3
Notes is not thereby reduced below the related Minimum
Adjusted Principal Balance for such Class of Notes, and
(d) to the Holders of the Class B Notes, until
the Principal Balance of the Class B Notes equals the
Class B Targeted Principal Balance, to the extent the
related Adjusted Principal Balance for the Class B
Notes is not thereby reduced below the related Minimum
Adjusted Principal Balance for such Class of Notes;
(iii) to the Holders of the Certificates, up to the
remaining balance of the Optimum Monthly Principal, until
the Certificate Balance equals the Certificate Targeted
Balance, to the extent the Certificate Adjusted Security
Balance would not thereby be reduced below the Certificate
Minimum Adjusted Balance;
(iv) to HCLC, the initial Holder of the Designated
Certificate, or its transferee, up to the remaining balance
of the Optimum Monthly Principal; provided the
Overcollateralization Amount is not less than the
Overcollateralization Minimum Amount;
(v) sequentially, up to the Accelerated Principal
Payment Amount:
(a) to the Holders of the Class A-1 Notes, until
the Principal Balance of the Class A-1 Notes equals the
Class A-1 Targeted Principal Balance,
(b) to the Holders of the Class A-2 Notes, until
the Principal Balance of the Class A-2 Notes equals the
Class A-2 Targeted Principal Balance, to the extent the
related Adjusted Principal Balance for the Class A-2
Notes is not thereby reduced below the related Minimum
Adjusted Principal Balance for such Class of Notes,
(c) to the Holders of the Class A-3 Notes, until
the Principal Balance of the Class A-3 Notes equals the
Class A-3 Targeted Principal Balance, to the extent the
related Adjusted Principal Balance for the Class A-3
Notes is not thereby reduced below the related Minimum
Adjusted Principal Balance for such Class of Notes,
(d) to the Holders of the Class B Notes, until
the Principal Balance of the Class B Notes equals the
Class B Targeted Principal Balance, to the extent the
related Adjusted Principal Balance for the Class B
Notes is not thereby reduced below the related Minimum
Adjusted Principal Balance for such Class of Notes,
(e) to the Holders of the Class A-1 Notes, until
the Principal Balance on the Class A-1 Notes equals
zero,
(f) to the Holders of the Class A-2 Notes, until
the Principal Balance on the Class A-2 Notes equals
zero,
(g) to the Holders of the Class A-3 Notes, until
the Principal Balance on the Class A-3 Notes equals
zero, and
(h) to the Holders of the Class B Notes, until
the Principal Balance on the Class B Notes equals zero;
(vi) sequentially, up to the remaining balance of the
Optimum Monthly Principal:
(a) to the Holders of the Class A-1 Notes, until
the Principal Balance on the Class A-1 Notes equals
zero,
(b) to the Holders of the Class A-2 Notes, until
the Principal Balance on the Class A-2 Notes equals
zero,
(c) to the Holders of the Class A-3 Notes, until
the Principal Balance on the Class A-3 Notes equals
zero,
(d) to the Holders of the Class B Notes, until
the Principal Balance on the Class B Notes equals zero,
(e) to the Holders of the Certificates, until the
Certificate Balance equals the Certificate Minimum
Balance, or if the Series 1997-1 Participation Interest
Invested Amount is zero, then to the Holders of the
Certificates, until the Certificate Balance equals
zero, and
(f) to HCLC, the initial Holder of the Designated
Certificate, or its transferee provided the
Overcollateralization Amount is greater than zero; and
any remaining amounts to HCLC, the initial
Holder of the Designated Certificate or its transferee;
provided that, in the event (a) an Event of Default shall have
occurred and be continuing, (b) immediately prior to any
Distribution Date the Series 1997-1 Participation Interest
Invested Amount is less than the aggregate Security Balance of
the Class A and Class B Notes immediately prior to such related
Payment Date, or (c) the remittances on the Series 1997-1
Participation Interest for such Payment Date is less than the
aggregate amount to be paid pursuant to clause (i) above, the
amount to be paid pursuant to clause (i)(e) above will be paid
only after payments are made on the Notes pursuant to clause (ii)
for such Payment Date.
Amounts distributed pursuant to clauses (iv) and (vi)(f)
above shall be paid in the following order in respect of the
following amounts: (a) first to HCLC, the initial Holder of the
Designated Certificate, or its transferee to the extent of
Accelerated Principal Payments made on the Notes, and (b) second
to HCLC, the initial Holder of the Designated Certificate, or its
transferee in reduction of the Holdback Amount and (c) third,
once the Holdback Amount is reduced to zero, any remaining amount
to HCLC, as the initial Holder of the Designated Certificate, or
its transferee.
The amounts paid to Noteholders shall be paid to each Class
in accordance with the Class Percentage as set forth in paragraph
(b) below. Interest will accrue on the Notes during an Interest
Period on the basis of the actual number of days in such Interest
Period and a year assumed to consist of 360 days.
Any installment of interest or principal, if any, payable on
any Note that is punctually paid or duly provided for by the
Issuer on the applicable Payment Date shall, if such Holder holds
Notes of an aggregate initial Principal Balance of at least
$5,000,000 be paid to each Holder of record on the preceding
Record Date, by wire transfer to an account specified in writing
by such Holder reasonably satisfactory to the Indenture Trustee
as of the preceding Record Date or in all other cases or if no
such instructions have been delivered to the Indenture Trustee,
by check to such Noteholder mailed to such Xxxxxx's address as it
appears in the Note Register the amount required to be
distributed to such Holder on such Payment Date pursuant to such
Xxxxxx's Securities. Amounts to be paid to Certificateholders
and the owner of the Holdback Amount shall be paid by the
Certificate Paying Agent in the manner provided in the Trust
Agreement.
Neither the Indenture Trustee nor the Issuer shall pay to
such Holders any amount required to be withheld from a payment to
such Holder by the Code and any amounts so withheld shall be
deemed to have been paid.
(b) The principal of each Note shall be due and payable in
full on the Final Scheduled Payment Date as provided in the
related form of Note set forth in Exhibits A-1, A-2, A-3 and B.
All principal payments on each Class of Notes shall be made to
the Noteholders of such Class entitled thereto in accordance with
the Percentage Interests represented by such Notes. Upon notice
to the Indenture Trustee by the Issuer, the Indenture Trustee
shall notify the Person in whose name a Note is registered at the
close of business on the Record Date preceding the Final
Scheduled Payment Date or other final Payment Date. Such notice
shall be mailed no later than five Business Days prior to such
Final Scheduled Payment Date or other final Payment Date and
shall specify that payment of the principal amount and any
interest due with respect to such Note at the Final Scheduled
Payment Date or other final Payment Date will be payable only
upon presentation and surrender of such Note and shall specify
the place where such Note may be presented and surrendered for
such final payment.
(c) On any Payment Date with respect to which Series 1997-1
Participation Interest Charge-Offs were incurred during the
preceding Due Period and less than the Optimum Monthly Principal
is distributed in respect of principal on such Payment Date, such
amount that was not distributed shall be allocated in the
following order:
(i) (A) to HCLC, the initial Holder of the
Designated Certificate or its transferee to the extent of
Accelerated Principal Payments made on the Notes, and (B) to
HCLC, the initial Holder of the Designated Certificate or
its transferee to the extent of the Holdback Amount until
such amount equals zero.
(ii) to the Certificate Adjusted Security Balance
until the Certificate Adjusted Security Balance equals zero;
(iii) to the Class B Adjusted Principal Balance until
the Class B Adjusted Principal Balance equals zero; and
(iv) to the Class A-3 Adjusted Principal Balance
until the Class A-3 Adjusted Principal Balance equals zero;
(v) to the Class A-2 Adjusted Principal Balance
until the Class A-2 Adjusted Principal Balance equals zero;
and
(vi) to the Class A-1 Adjusted Principal Balance
until the Class A-1 Adjusted Principal Balance equals zero.
(d) On to any Payment Date in which a Reversal exists, it
shall be allocated in the following order of priority:
(i) to the Class A-1 Adjusted Principal Balance
until the Class A-1 Adjusted Principal Balance equals the
Principal Balance of the Class A-1 Notes;
(ii) to the Class A-2 Adjusted Principal Balance
until the Class A-2 Adjusted Principal Balance equals the
Principal Balance of the Class A-2 Notes;
(iii) to the Class A-3 Adjusted Principal Balance
until the Class A-3 Adjusted Principal Balance equals the
Principal Balance of the Class A-3 Notes;
(iv) to the Class B Adjusted Principal Balance until
the Class B Adjusted Principal Balance equals the Principal
Balance of the Class B Notes;
(v) to the Certificate Adjusted Security Balance
until the Certificate Adjusted Security Balance equals the
amount of the Security Balance of the Certificates; and
(vi) (A) first to the Holdback Amount to the extent
of any Series 1997-1 Participation Charge-Offs allocated to
the Holdback Amount pursuant to Section 3.05(c)(i) on prior
Payment Dates, and (B) second to HCLC, as the initial Holder
of the Designated Certificates, or its transferee to the
extent of any Series 1997-1 Participation Charge-Offs
allocated to the HCLC, the initial Holder of Designated
Certificate or its transferee pursuant to Section 3.05(c)(i)
on prior Payment Dates.
Section 3.06. Protection of Indenture Trust Estate. (a)
The Issuer will from time to time 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:
(i) in the case of the Series 1997-1 Participation
Interest, take physical delivery of the Series 1997-1
Participation Interest and cause it to be registered in the
name of the Indenture Trustee for the benefit of the Holders
of the Notes;
(ii) maintain or preserve the lien and security
interest (and the priority thereof) of this Indenture or
carry out more effectively the purposes hereof;
(iii) perfect, publish notice of or protect the
validity of any Grant made or to be made by this Indenture;
(iv) enforce Series 1997-1 Participation Interest in
the manner contemplated by Section 5.16; and
(v) preserve and defend title to the Indenture Trust
Estate and the rights of the Indenture Trustee and the
Noteholders in such Indenture Trust Estate against the
claims of all persons and parties.
(b) Except as otherwise provided in this Indenture, the
Indenture Trustee shall not remove any portion of the Indenture
Trust Estate that consists of money or is evidenced by an
instrument, certificate or other writing from the jurisdiction in
which it was held at the date of the most recent Opinion of
Counsel delivered pursuant to Section 3.07(b) (or from the
jurisdiction in which it was held as described in the Opinion of
Counsel delivered at the Closing Date pursuant to Section
3.07(a), if no Opinion of Counsel has yet been delivered pursuant
to Section 3.07(b)) unless the Trustee shall have first received
an Opinion of Counsel to the effect that the lien and security
interest created by this Indenture with respect to such property
will continue to be maintained after giving effect to such action
or actions.
The Issuer hereby designates the Indenture Trustee its agent
and attorney-in-fact to execute any financing statement, continu-
ation statement or other instrument required to be executed pur-
suant to this Section 3.06.
For so long as the Indenture Trustee holds the Indenture
Collateral, it shall also hold it as bailee for the Issuer for
the purpose of perfecting the Issuer's security interest in the
Indenture Collateral; provided that nothing in this sentence
shall limit any rights or remedies of the Indenture Trustee or
the Noteholders against the Issuer or the Indenture Collateral
under this Indenture.
Section 3.07. Opinions as to Indenture Trust Estate. (a)
On or promptly following the Closing Date, the Issuer shall
furnish to the Indenture Trustee, the Owner Trustee and to the
Administrator an Opinion of Counsel either stating that, in the
opinion of such counsel, such action has been taken with respect
to the delivery of the Series 1997-1 Participation Interest, 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 necessary to perfect and make
effective the lien and security interest of this Indenture and
reciting the details of such action, or stating that, in the
opinion of such counsel, no such action is necessary to make such
lien and security interest effective.
(b) On or before December 31 in each calendar year,
beginning in 1997, the Issuer shall furnish to the Indenture
Trustee and to the Administrator an Opinion of Counsel at the
expense of Issuer either stating that, in the opinion of such
counsel, such action has been taken with respect to the Series
1997-1 Participation Interest, the recording, filing, re-record-
ing 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 necessary to maintain the lien and security
interest created by this Indenture and reciting the details of
such action or stating that in the opinion of such counsel no
such action is necessary to maintain 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 lien and security
interest of this Indenture until December 31 in the following
calendar year.
Section 3.08. Performance of Obligations. (a) The Issuer
will punctually perform and observe all of its obligations and
agreements contained in this Indenture, the Basic Documents and
in the instruments and agreements included in the Indenture Trust
Estate. Except as otherwise expressly provided therein, the
Issuer shall not waive, amend, modify, supplement or terminate
any Basic Document, without the consent of the Indenture Trustee
or the Holders of at least a majority of the Security Balances of
the Notes. Upon the taking of any such action with respect to
any Basic Document the Issuer shall give written notice thereof
to the Rating Agencies.
(b) The Issuer may contract with other Persons to assist it
in performing its duties under this Indenture, and any perfor-
xxxxx 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 con-
tracted with the Administrator to assist the Issuer in performing
its duties under this Indenture.
(c) The Issuer will not take any action or permit any
action to be taken by others which would release any Person from
any of such Person's covenants or obligations under any of the
documents relating to the Series 1997-1 Participation Interest or
under any instrument included in the Indenture Trust Estate, or
which would result in the amendment, hypothecation,
subordination, termination or discharge of, or impair the
validity or effectiveness of, any of the documents relating to
the Series 1997-1 Participation Interest or any such instrument.
(d) The Issuer shall at all times retain an Administrator
and may enter into contracts with other Persons for the
performance of the Issuer's obligations hereunder, and perfor-
xxxxx of such obligations by such Persons shall be deemed to be
performance of such obligations by the Issuer.
Section 3.09. Negative Covenants. So long as any Notes are
Outstanding, the Issuer shall not:
(i) claim any credit on, or make any deduction from
the principal or interest payable in respect of, the Notes
(other than amounts properly withheld from such payments
under the Code) or assert any claim against any present or
former Noteholder by reason of the payment of the taxes
levied or assessed upon any part of the Indenture Trust
Estate; or
(A) 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, (B) 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 Indenture
Trust Estate or any part thereof or any interest therein or
the proceeds thereof or (C) permit the lien of this
Indenture not to constitute a valid first priority security
interest in the Indenture Trust Estate.
Section 3.10. Annual Statement 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 (commencing with the fiscal year 1997), 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
such year and of its performance under this Indenture has
been made under such Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowl-
edge, 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 its compliance
with any such condition or covenant, specifying each such
default known to such Authorized Officer and the nature and
status thereof.
Section 3.11. Indenture Trust Estate; Related Documents.
(a) When required by the provisions of this Indenture, the
Indenture Trustee 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 circum-
stances 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 III shall be bound
to ascertain the Indenture Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the applica-
tion of any moneys.
(b) The Indenture Trustee shall, at such time as there are
no Notes Outstanding, release all of the Indenture Trust Estate
to the Issuer (other than any cash held for the payment of the
Notes pursuant to Section 3.03 or 4.11), subject, however, to the
rights of the Indenture Trustee under Section 6.07.
Section 3.12. Amendments to Pooling and Servicing
Agreement. The Indenture Trustee may consent to any amendment or
supplement to the Pooling and Servicing Agreement only in
accordance with Section 13.01 of the Pooling and Servicing
Agreement if (i) it has received a letter from each Rating Agency
to the effect that such amendment will not result in the
reduction or withdrawal of the ratings then assigned to the Notes
or (ii) a majority in interest of Noteholders (by Security
Balance of the Notes) have instructed the Indenture Trustee to
consent to such amendment and if an Opinion of Counsel is
required to be delivered pursuant to Section 13.01 of the Pooling
and Servicing Agreement, such opinion shall be delivered to the
Indenture Trustee. The Indenture Trustee may, in its discretion,
decline to enter into or consent to any such supplement or
amendment if its own rights, duties or immunities shall be
adversely affected.
Section 3.13. Investment Company Act. The Issuer shall not
become an "investment company" or under the "control" of an
"investment company" as such terms are defined in the Investment
Company Act of 1940, as amended (or any successor or amendatory
statute), and the rules and regulations thereunder (taking into
account not only the general definition of the term "investment
company" but also any available exceptions to such general
definition); provided, however, that the Issuer shall be in
compliance with this Section 3.13 if it shall have obtained an
order exempting it from regulation as an "investment company" so
long as it is in compliance with the conditions imposed in such
order.
Section 3.14. Existence of Issuer; Issuer May Consolidate,
etc., Only on Certain Terms. (a) The Issuer shall at all times
while any Notes are outstanding maintain its existence except as
otherwise permitted by Subsections (b) or (c) below.
(b) The Issuer shall not consolidate or merge with or into
any other Person, unless:
(i) the Person (if other than the Issuer) formed by
or surviving such consolidation or merger shall be a Person
organized and existing under the laws of the United States
of America or any state or the District of Columbia and
shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Indenture Trustee, in form
reasonably satisfactory to the Indenture Trustee, the due
and punctual payment of the principal of and interest on all
Notes and the performance or observance of every agreement
and covenant of this Indenture on the part of the Issuer to
be performed or observed, all as provided herein;
(ii) immediately after giving effect to such trans-
action, no Event of Default shall have occurred and be
continuing;
(iii) each Rating Agency shall have notified the
Issuer that such transaction shall not cause the rating of
the Notes to be reduced, suspended or withdrawn;
(iv) the Issuer shall have received an Opinion of
Counsel (and shall have delivered copies thereof to the
Indenture Trustee) to the effect that such transaction will
not have any material adverse tax consequence to the Issuer
or any Noteholder;
(v) any action that is necessary to maintain the
lien and security interest created by this Indenture shall
have been taken; and
(vi) the Issuer shall have delivered to the Indenture
Trustee an Officer's Certificate and an Opinion of Counsel
each stating that such consolidation or merger and such
supplemental indenture comply with this Article III and that
all conditions precedent herein provided for relating to
such transaction have been complied with (including any
filing required by the Exchange Act).
(c) The Issuer shall not convey or transfer any of its
properties or assets, including those included in the Indenture
Trust Estate, to any Person, unless:
(i) the Person that acquires by conveyance or
transfer the properties and assets of the Issuer the
conveyance or transfer of which is hereby restricted shall
(A) be a United States citizen or a Person organized and
existing under the laws of the United States of America or
any state, (B) expressly assumes, by an indenture supple-
mental hereto, executed and delivered to the Indenture
Trustee, in form satisfactory to the Indenture Trustee, the
due and punctual payment of the principal of and interest on
all Notes and the performance or observance of every agree-
ment and covenant of this Indenture on the part of the
Issuer to be performed or observed, all as provided herein,
(C) expressly agrees by means of such supplemental indenture
that all right, title and interest so conveyed or trans-
ferred shall be subject and subordinate to the rights of
Holders of the Notes, (D) unless otherwise provided in such
supplemental indenture, expressly agrees 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 agrees by means of
such supplemental indenture that such Person (or if a group
of Persons, then one specified Person) shall make all fil-
ings with the Commission (and any other appropriate Person)
required by the Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such trans-
action, no Default or Event of Default shall have occurred
and be continuing;
(iii) each Rating Agency shall have notified the
Issuer that such transaction shall not cause the rating of
the Notes to be reduced, suspended or withdrawn;
(iv) the Issuer shall have received an Opinion of
Counsel (and shall have delivered copies thereof to the
Indenture Trustee) to the effect that such transaction will
not have any material adverse tax consequence to the Issuer
or any Noteholder;
(v) any action that is necessary to maintain the
lien and security interest created by this Indenture shall
have been taken; and
(vi) the Issuer shall have delivered to the Indenture
Trustee an Officer's Certificate and an Opinion of Counsel
each stating that such conveyance or transfer and such
supplemental indenture comply with this Article III and that
all conditions precedent herein provided for relating to
such transaction have been complied with (including any
filing required by the Exchange Act).
Section 3.15. Successor or Transferee. (a) Upon any
consolidation or merger of the Issuer in accordance with Section
3.14(b), the Person formed by or surviving such consolidation or
merger (if other than the Issuer) shall succeed to, and be sub-
stituted 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.
(b) Upon a conveyance or transfer of all the assets and
properties of the Issuer pursuant to Section 3.14(c), the Issuer
will be released from every covenant and agreement of this
Indenture to be observed or performed on the part of the Issuer
with respect to the Notes immediately upon the delivery of
written notice to the Indenture Trustee is to be so released.
Section 3.16. No Other Business. The Issuer shall not
engage in any business other than financing, purchasing, owning
and selling and managing the Series 1997-1 Participation Interest
in the manner contemplated by this Indenture and the Basic
Documents and all activities incidental thereto.
Section 3.17. No Borrowing. The Issuer shall not issue,
incur, assume, guarantee or otherwise become liable, directly or
indirectly, for any indebtedness except for the Notes.
Section 3.18. Guarantees, Loans, Advances and Other Liabil-
ities. Except as contemplated by this Indenture, the Issuer
shall not make any loan or advance or credit to, or guarantee
(directly or indirectly or by an instrument having the effect of
assuring another's payment or performance on any obligation or
capability of so doing or otherwise), endorse or otherwise become
contingently liable, directly or indirectly, in connection with
the obligations, stocks or dividends of, or own, purchase,
repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in,
or make any capital contribution to, any other Person.
Section 3.19. Capital Expenditures. The Issuer shall not
make any expenditure (by long-term or operating lease or other-
wise) for capital assets (either realty or personalty).
Section 3.20. Restricted Payments. The Issuer shall not,
directly or indirectly, (i) pay any dividend or make any distri-
bution (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, (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 to the Owner Trustee
and the Certificateholders as contemplated by, and to the extent
funds are available for such purpose under the Trust Agreement,
and (y) payments to the Indenture Trustee.
Section 3.21. Notice of Events of Default. The Issuer
shall give the Indenture Trustee and the Rating Agencies prompt
written notice of each Event of Default hereunder and under the
Trust Agreement.
Section 3.22. 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.
Section 3.23. Statements to Noteholders. The Indenture
Trustee and the Certificate Registrar shall forward by mail to
each Noteholder and Certificateholder, respectively, the Monthly
Servicing Report and the Monthly Security Statement delivered to
them pursuant to Article V of the Pooling and Servicing Agreement
and Section 6.06(b) hereof, respectively.
Section 3.24. Determination of Note Rate and Certificate
Rate. On the second LIBOR Business Day immediately preceding (i)
the Closing Date in the case of the first Interest Period and
(ii) the first day of each succeeding Interest Period, the Inden-
ture Trustee after consultation with the Servicer shall determine
LIBOR and the Note Rate and the Certificate Rate for such
Interest Period and shall inform the Issuer and the Seller at
their respective facsimile numbers given to the Indenture Trustee
in writing thereof.
Section 3.25. Optional Repurchase of the Series 1997-1
Participation Interest. (a) The Seller may, with 10 days prior
written notice to the Owner Trustee, Servicer and the Indenture
Trustee, purchase the entire Series 1997-1 Participation
Interest, on any Payment Date in which the Aggregate Security
Balance is equal to or less than ten percent of the initial
Aggregate Security Balance. The Seller shall deposit into the
Payment Account on the Business Day prior to the Payment Date on
which such purchase is to occur, an amount equal to the principal
balance of the Series 1997-1 Participation Interest and the
amount of interest and Certificate Yield to be distributed to the
Security holders pursuant to Section 3.05(a) as of such Payment
Date.
ARTICLE IV
The Notes; Satisfaction and Discharge of Indenture
Section 4.01. The Notes. (a) The Notes shall be
registered in the name of a nominee designated by the Depository.
Beneficial Owners will hold interests in the Notes through the
book-entry facilities of the Depository in minimum initial
Principal Balances of $100,000 and integral multiples of $1,000
in excess thereof.
The Indenture Trustee may for all purposes (including the
making of payments due on the Notes) deal with the Depository as
the authorized representative of the Beneficial Owners with
respect to the Notes for the purposes of exercising the rights of
Holders of Notes hereunder. Except as provided in the next
succeeding paragraph of this Section 4.01, the rights of
Beneficial Owners with respect to the Notes shall be limited to
those established by law and agreements between such Beneficial
Owners and the Depository and Depository Participants. Except as
provided in Section 4.08, Beneficial Owners shall not be entitled
to definitive certificates for the Notes as to which they are the
Beneficial Owners. Requests and directions from, and votes of,
the Depository as Holder of the Notes shall not be deemed
inconsistent if they are made with respect to different
Beneficial Owners. The Indenture Trustee may establish a
reasonable record date in connection with solicitations of
consents from or voting by Noteholders and give notice to the
Depository of such record date. Without the consent of the
Issuer and the Indenture Trustee, no Note may be transferred by
the Depository except to a successor Depository that agrees to
hold such Note for the account of the Beneficial Owners.
In the event the Depository Trust Company resigns or is
removed as Depository, the Indenture Trustee with the approval of
the Issuer may appoint a successor Depository. If no successor
Depository has been appointed within 30 days of the effective
date of the Depository's resignation or removal, each Beneficial
Owner shall be entitled to certificates representing the Notes it
beneficially owns in the manner prescribed in Section 4.08.
The Notes shall, on original issue, be executed on behalf of
the Issuer by the Owner Trustee, not in its individual capacity
but solely as Owner Trustee, authenticated by the Note Registrar
and delivered by the Indenture Trustee to or upon the order of
the Issuer.
Section 4.02. Registration of and Limitations on Transfer
and Exchange of Notes; Appointment of Certificate Registrar. The
Note Registrar shall cause to be kept at its Corporate Trust
Office a Note Register in which, subject to such reasonable regu-
lations as it may prescribe, the Note Registrar shall provide for
the registration of Notes and of transfers and exchanges of Notes
as herein provided.
Subject to the restrictions and limitations set forth below,
upon surrender for registration of transfer of any Note at the
Corporate Trust Office, the Owner Trustee on behalf of the Issuer
shall execute and the Note Registrar shall authenticate and
deliver, in the name of the designated transferee or transferees,
one or more new Notes in authorized initial Security Balances
evidencing the same aggregate Percentage Interests.
Subject to the foregoing, at the option of the Noteholders,
Notes may be exchanged for other Notes of like tenor or, in each
case in authorized initial Principal Balances evidencing the same
aggregate Percentage Interests upon surrender of the Notes to be
exchanged at the Corporate Trust Office of the Note Registrar.
Whenever any Notes are so surrendered for exchange, the Issuer
shall execute and the Note Registrar shall authenticate and
deliver the Notes which the Noteholder making the exchange is
entitled to receive. Each Note presented or surrendered for
registration of transfer or exchange shall (if so required by the
Note Registrar) be duly endorsed by, or be accompanied by a
written instrument of transfer in form reasonably satisfactory to
the Note Registrar duly executed by, the Holder thereof or his
attorney duly authorized in writing. Notes delivered upon any
such transfer or exchange will evidence the same obligations, and
will be entitled to the same rights and privileges, as the Notes
surrendered.
No service charge shall be made for any registration of
transfer or exchange of Notes, but the Note Registrar shall re-
quire payment of a sum sufficient to cover any tax or governmen-
tal charge that may be imposed in connection with any registra-
tion of transfer or exchange of Notes.
All Notes surrendered for registration of transfer and
exchange shall be cancelled by the Note Registrar and delivered
to the Indenture Trustee for subsequent destruction without
liability on the part of either.
The Issuer hereby appoints The Bank of New York as
Certificate Registrar to keep at its Corporate Trust Office a
Certificate Register pursuant to Section 3.09 of the Trust
Agreement in which, subject to such reasonable regulations as it
may prescribe, the Certificate Registrar shall provide for the
registration of Certificates, and of transfers and exchanges
thereof pursuant to Section 3.05 of the Trust Agreement. The
Bank of New York hereby accepts such appointment.
Section 4.03. Mutilated, Destroyed, Lost or Stolen Notes.
If (i) any mutilated Note is surrendered to the Indenture
Trustee, or the Indenture Trustee receives evidence to its satis-
faction of the destruction, loss or theft of any Note, and (ii)
there is delivered to the Indenture Trustee such security or
indemnity as may be required by it to hold the Issuer and the
Indenture Trustee harmless, then, in the absence of notice to the
Issuer, the Note Registrar or the Indenture Trustee that such
Note has been acquired by a bona fide purchaser, and provided
that the requirements of Section 8-405 of the UCC are met, the
Issuer shall execute, and upon its request 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 the same Class; provided, however, that if any such
destroyed, lost or stolen Note, but not a mutilated Note, shall
have become or within seven days shall be due and payable,
instead of issuing a replacement Note, the Issuer may pay such
destroyed, lost or stolen Note when so due or payable without
surrender thereof. If, after the delivery of such replacement
Note or payment of a destroyed, lost or stolen Note pursuant to
the proviso to the preceding sentence, a bona fide purchaser 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 replace-
ment Note (or such payment) from the Person to whom it was
delivered or any Person taking such replacement Note from such
Person to whom such replacement Note was delivered or any
assignee of such Person, except a bona fide purchaser, and shall
be entitled to recover upon the security or indemnity provided
therefor to the extent of any loss, damage, cost or expense
incurred by the Issuer or the Indenture Trustee in connection
therewith.
Upon the issuance of any replacement Note under this Section
4.03, 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) connected therewith.
Every replacement Note issued pursuant to this Section 4.03
in replacement of any mutilated, destroyed, lost or stolen Note
shall constitute an original additional contractual obligation of
the Issuer, whether or not the mutilated, destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and shall
be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued here-
under.
The provisions of this Section 4.03 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies
with respect to the replacement or payment of mutilated, destroy-
ed, lost or stolen Notes.
Section 4.04. Persons Deemed Owners. Prior to due present-
ment for registration of transfer of any Note, the Issuer, the
Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name any Note is registered
(as of the day of determination) as the owner of such Note for
the purpose of receiving payments of principal of and interest,
if any, on such Note and for all other purposes whatsoever,
whether or not such Note be overdue, and neither the Issuer, the
Indenture Trustee nor any agent of the Issuer or the Indenture
Trustee shall be affected by notice to the contrary.
Section 4.05. Cancellation. All Notes surrendered for
payment, registration of transfer, exchange or redemption shall,
if surrendered to any Person other than the Indenture Trustee, be
delivered to the Indenture Trustee and shall be promptly
cancelled by the Indenture Trustee. 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 manner whatsoever, and all Notes so
delivered shall be promptly cancelled by the Indenture Trustee.
No Notes shall be authenticated in lieu of or in exchange for any
Notes cancelled as provided in this Section 4.05, except as
expressly permitted by this Indenture. All cancelled Notes may
be held or disposed of by the Indenture Trustee in accordance
with its standard retention or disposal policy as in effect at
the time unless the Issuer shall direct by an Issuer Request that
they be returned to it; provided that such Issuer Request is
timely and the Notes have not been previously disposed of by the
Indenture Trustee.
Section 4.06. Book-Entry Notes. The Notes, upon original
issuance, will be issued in the form of typewritten Notes
representing the Book-Entry Notes, to be delivered to The
Depository Trust Company, the initial Depository, by, or on
behalf of, the Issuer. Such Notes shall initially be registered
on the Note Register in the name of Cede & Co., the nominee of
the initial Depository, and no Beneficial Owner will receive a
definitive Note representing such Beneficial Owner's interest in
such Note, except as provided in Section 4.08. Unless and until
definitive, fully registered Notes (the "Definitive Notes") have
been issued to Beneficial Owners pursuant to Section 4.08:
(i) the provisions of this Section 4.06 shall be in
full force and effect;
(ii) the Note Registrar and the Indenture Trustee
shall be entitled to deal with the Depository for all
purposes of this Indenture (including the payment of prin-
cipal of and interest on the Notes and the giving of
instructions or directions hereunder) as the sole holder of
the Notes, and shall have no obligation to the Noteholders;
(iii) to the extent that the provisions of this
Section 4.06 conflict with any other provisions of this
Indenture, the provisions of this Section 4.06 shall
control;
(iv) the rights of Beneficial Owners shall be
exercised only through the Depository and shall be limited
to those established by law and agreements between such
Beneficial Owners and the Depository and/or the Depository
Participants pursuant to the Note Depository Agreement.
Unless and until Definitive Notes are issued pursuant to
Section 4.08, the initial Depository will make book-entry
transfers among the Depository Participants and receive and
transmit payments of principal of and interest on the Notes
to such Depository Participants; and
(v) whenever this Indenture requires or permits
actions to be taken based upon instructions or directions of
Noteholders evidencing a specified percentage of the
Security Balances of the Notes, the Depository shall be
deemed to represent such percentage only to the extent that
it has received instructions to such effect from Beneficial
Owners and/or Depository Participants owning or represent-
ing, respectively, such required percentage of the benefi-
cial interest in the Notes and has delivered such instruc-
tions to the Indenture Trustee.
Section 4.07. Notices to Depository. Whenever a notice or
other communication to the Noteholders is required under this
Indenture, unless and until Definitive Notes shall have been
issued to Beneficial Owners pursuant to Section 4.08, the
Indenture Trustee shall give all such notices and communications
specified herein to be given to Holders of the Notes to the
Depository, and shall have no obligation to the Beneficial
Owners.
Section 4.08. Definitive Notes. If (i) the Administrator
advises the Indenture Trustee in writing that the Depository is
no longer willing or able to properly discharge its responsibil-
ities with respect to the Notes and the Administrator is unable
to locate a qualified successor, (ii) the Administrator at its
option advises the Indenture Trustee in writing that it elects to
terminate the book-entry system through the Depository or
(iii) after the occurrence of an Event of Default, Beneficial
Owners representing beneficial interests aggregating at least a
majority of the Security Balances of the Notes advise the
Depository in writing that the continuation of a book-entry
system through the Depository is no longer in the best interests
of the Beneficial Owners, then the Depository shall notify all
Beneficial Owners and the Indenture Trustee of the occurrence of
any such event and of the availability of Definitive Notes to
Beneficial Owners requesting the same. Upon surrender to the
Indenture Trustee of the typewritten Notes representing the Book-
Entry Notes by the Depository, accompanied by registration
instructions, the Issuer shall execute and the Indenture Trustee
shall authenticate the Definitive Notes in accordance with the
instructions of the Depository. None of the Issuer, the Note
Registrar or the Indenture Trustee shall be liable for any delay
in delivery of such instructions and may conclusively rely on,
and shall be protected in relying on, such instructions. Upon
the issuance of Definitive Notes, the Indenture Trustee shall
recognize the Holders of the Definitive Notes as Noteholders.
Section 4.09. Tax Treatment. The Issuer has entered into
this Indenture, and the Notes will be issued, with the intention
that, for all purposes, including, federal, state and local
income, single business and franchise tax purposes, the Notes
will qualify as indebtedness of the Issuer. The Issuer, by
entering into this Indenture, and each Noteholder, by its
acceptance of its Note (and each Beneficial Owner by its
acceptance of an interest in the applicable Book-Entry Note),
agree to treat the Notes for federal, state and local income,
single business and franchise tax purposes as indebtedness of the
Issuer.
Section 4.10. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect with respect
to the Notes except as to (i) rights of registration of transfer
and exchange, (ii) substitution of mutilated, destroyed, lost or
stolen Notes, (iii) rights of Noteholders to receive payments of
principal thereof and interest thereon, (iv) Sections 3.03, 3.04,
3.06, 3.09, 3.14, 3.16 and 3.17, (v) the rights, obligations and
immunities of the Indenture Trustee hereunder (including the
rights of the Indenture Trustee under Section 6.07 and the obli-
gations of the Indenture Trustee under Section 4.11) and (vi) the
rights of Noteholders as beneficiaries hereof with respect to the
property so deposited with the Indenture Trustee payable to all
or any of them, and the Indenture Trustee, on demand of and at
the expense of the Issuer, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture with
respect to the Notes, when
(A) either
(1) all Notes theretofore authenticated and delivered
(other than (i) Notes that have been destroyed, lost or
stolen and that have been replaced or paid as provided in
Section 4.03 and (ii) Notes for whose payment money has
theretofore been deposited in trust or segregated and held
in trust by the Issuer and thereafter repaid to the Issuer
or discharged from such trust, as provided in Section 3.03)
have been delivered to the Indenture Trustee for cancella-
tion; or
all Notes not theretofore delivered to the Inden-
ture Trustee for cancellation
a. have become due and payable, or
b. will become due and payable at the Final
Scheduled Payment Date within one year,
and the Issuer, in the case of a. or b. 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 pay-
able), in trust for such purpose, in an amount sufficient to
pay and discharge the entire indebtedness on such Notes then
outstanding not theretofore delivered to the Indenture
Trustee for cancellation when due on the Final Scheduled
Payment Date;
(B) the Issuer has paid or caused to be paid all other
sums payable hereunder by the Issuer.
Section 4.11. Application of Trust Money. All moneys
deposited with the Indenture Trustee pursuant to Section 4.10
hereof shall be held in trust and applied by it, in accordance
with the provisions of the Notes and this Indenture, to the pay-
ment, either directly or through any Paying Agent, as the Inden-
ture Trustee may determine, to the Holders of Notes, of all sums
due and to become due thereon for principal and interest; but
such moneys need not be segregated from other funds except to the
extent required herein or required by law.
Section 4.12. Repayment of Moneys Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture
with respect to the Notes, all moneys then held by any Admini-
strator other than the Indenture Trustee under the provisions of
this Indenture with respect to such Notes shall, upon demand of
the Issuer, be paid to the Indenture Trustee to be held and
applied according to Section 3.05 and thereupon such Paying Agent
shall be released from all further liability with respect to such
moneys.
ARTICLE V
Remedies
Section 5.01. Event of Default; Acceleration of Maturity;
Rescission and Annulment. The Issuer shall deliver to the
Indenture Trustee, within five days after the occurrence of any
event, which with the giving of notice and the lapse of time
would become an Event of Default under clause (iii) of the
definition of "Event of Default", written notice in the form of
an Officer's Certificate of such event, its status and what
action the Issuer is taking or proposes to take with respect
thereto. If an Event of Default should occur and be continuing,
then and in every such case the Indenture Trustee or the Holders
of Notes representing not less than a majority of the Security
Balances of all Notes may declare the Notes to be immediately due
and payable, by a notice in writing to the Issuer (and to the
Indenture Trustee if given 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.
At any time after such declaration of acceleration of
maturity has been made and before a judgment or decree for pay-
ment of the money due has been obtained by the Indenture Trustee
as hereinafter in this Article V provided, the Holders of Notes
representing a majority of the Security Balances of all Notes, by
written notice to the Issuer and the Indenture Trustee, may
rescind and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the
Indenture Trustee a sum sufficient to pay:
(A) all payments of principal of and interest on
the Notes and all other amounts that would then be due
hereunder or upon the Notes if the Event of Default
giving rise to such acceleration had not occurred; and
(B) 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 outside counsel; and
(ii) all Events of Default, other than the nonpayment
of the principal of the Notes that has become due solely by
such acceleration, have been cured or waived as provided in
Section 5.11.
No such rescission shall affect any subsequent default or
impair any right consequent thereto.
Section 5.02. 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 five days, or (ii) default is made in the payment
of the principal of or any installment of the principal of any
Note when the same becomes due and payable, the Issuer will, upon
demand of the Indenture Trustee, pay to it, for the benefit of
the Holders of Notes, the whole amount then due and payable on
the Notes for principal and interest, with interest upon the
overdue principal, and in addition thereto such further amount as
shall be sufficient to cover the costs and expenses of collec-
tion, including the reasonable compensation, expenses, disburse-
ments and advances of the Indenture Trustee and its agents and
outside 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, subject to the provisions of
Section 10.16 hereof may institute a Proceeding for the collec-
tion 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 the Notes and collect in
the manner provided by law out of the property of the Issuer or
other obligor the Notes, wherever situated, the moneys adjudged
or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the
Indenture Trustee, subject to the provisions of Section 10.16
hereof may, as more particularly provided in Section 5.03, in its
discretion, proceed to protect and enforce its rights and the
rights of the Noteholders, 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 or any Person having or
claiming an ownership interest in the Indenture Trust Estate,
Proceedings under Title 11 of the United States Code or any other
applicable federal or state bankruptcy, insolvency or other
similar law, or in case a receiver, assignee or trustee in
bankruptcy or reorganization, liquidator, sequestrator or similar
official shall have been appointed for or taken possession of the
Issuer or its property or such other obligor or Person, or in
case of any other comparable judicial Proceedings relative to the
Issuer or other obligor upon the Notes, or to the creditors or
property of the Issuer or such other obligor, the 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,
shall be entitled and empowered, by intervention in such Proceed-
ings 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 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,
and outside counsel, and for reimbursement of all expenses
and liabilities incurred, and all advances made, by the
Indenture Trustee and each predecessor Indenture Trustee,
except as a result of negligence or bad faith) and of the
Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regula-
tions, to vote on behalf of the Holders of Notes in any
election of a trustee, a standby trustee or Person perform-
ing 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 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
allowed in any judicial proceedings relative to the Issuer,
its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar
official in any such Proceeding is hereby authorized by each of
such 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 predeces-
sor Indenture Trustee and their respective agents, and outside
counsel, and all other expenses and liabilities incurred, and all
advances made, by the Indenture Trustee and each predecessor
Indenture Trustee except as a result of negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize
the Indenture Trustee to authorize or consent to or vote for or
accept or adopt on behalf of any Noteholder any plan of reorgani-
zation, 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 Note-
holder 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 ratable benefit
of the Holders of the Notes.
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, and it shall not be necessary to make
any Noteholder a party to any such Proceedings.
Section 5.03. Remedies; Priorities. (a) If an Event of
Default shall have occurred and be continuing, the Indenture
Trustee, subject to the provisions of Section 10.16 hereof, may
do one or more of the following (subject to Section 5.04):
(i) institute Proceedings from time to time for the
complete or partial foreclosure of this Indenture with
respect to the Indenture Trust Estate;
(ii) exercise any remedies of a secured party under
the UCC and take any other appropriate action to protect and
enforce the rights and remedies of the Indenture Trustee and
the Holders of the Notes; and
(iii) sell the Indenture Trust Estate or any portion
thereof or rights or interest therein, at one or more public
or private sales called and conducted in any manner
permitted by law;
provided, however, that the Indenture Trustee may not sell or
otherwise liquidate the Indenture Trust Estate following an Event
of Default, unless (A) the Holders of 100% of the Security
Balances of the Notes consent thereto, (B) the proceeds of such
sale or liquidation distributable to Holders of the Notes are
sufficient to discharge in full all amounts then due and unpaid
upon the Notes for principal and interest or (C) the Indenture
Trustee determines that the Series 1997-1 Participation Interest
will 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 not less
than 66-2/3% of the Security Balances of the Notes. In deter-
mining such sufficiency or insufficiency with respect to clause
(B) and (C), the Indenture Trustee may, but need not, obtain and
rely upon an opinion of an Independent investment banking or
accounting firm of national reputation as to the feasibility of
such proposed action and as to the sufficiency of the Indenture
Trust Estate for such purpose.
(b) If the Indenture Trustee collects any money or property
pursuant to this Article V, it shall deposit such money into the
Payment Account and pay out the money in the following order:
FIRST: to the Indenture Trustee for amounts due
hereunder;
SECOND: to Holders of Class A-1 Notes for amounts due
and unpaid on such Class of Notes first for interest
and then for principal, and to each Noteholder of such
Class in each case ratably, without preference or
priority of any kind, according to the amounts due and
payable on such Class of Notes for interest and then
for principal, until all amounts of interest due have
been paid and the Security Balance of such Class of
Notes is reduced to zero;
THIRD: to Holders of Class A-2 Notes for amounts due
and unpaid on such Class of Notes first for interest
and then for principal, and to each Noteholder of such
Class in each case ratably, without preference or
priority of any kind, according to the amounts due and
payable on such Class of Notes for interest and then
for principal, until all amounts of interest due have
been paid and the Security Balance of such Class of
Notes is reduced to zero;
FOURTH: to Holders of Class A-3 Notes for amounts due
and unpaid on such Class of Notes first for interest
and then for principal, and to each Noteholder of such
Class in each case ratably, without preference or
priority of any kind, according to the amounts due and
payable on such Class of Notes for interest and then
for principal, until all amounts of interest due have
been paid and the Security Balance of such Class of
Notes is reduced to zero;
FIFTH: to Holders of Class B Notes for amounts due and
unpaid on such Class of Notes first for interest and
then for principal, and to each Noteholder of such
Class in each case ratably, without preference or
priority of any kind, according to the amounts due and
payable on such Class of Notes for interest and then
for principal, until all amounts of interest due have
been paid and the Security Balance of such Class of
Notes is reduced to zero;
SIXTH: to the Issuer for amounts required to be
distributed to the Certificateholders in respect of
Certificate Yield and reduction of the Certificate
Balance pursuant to the Trust Agreement;
SEVENTH: to the Issuer for amounts due under Article
VIII of the Trust Agreement; and
EIGHTH: to the payment of the remainder, if any to
HCLC, the initial Holder of the Designated Certificate
or its transferee.
The Indenture Trustee may fix a record date and payment date
for any payment to Noteholders pursuant to this Section 5.03. At
least 15 days before such record date, the Issuer shall mail to
each Noteholder and the Indenture Trustee a notice that states
the record date, the payment date and the amount to be paid.
Section 5.04. Optional Preservation of the Indenture Trust
Estate. If the Notes have been declared to be due and payable
under Section 5.01 following an Event of Default and such
declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may, but need not, elect to
maintain possession of the Indenture Trust Estate. 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 other obligations of the Issuer and the
Indenture Trustee shall take such desire into account when deter-
mining whether or not to maintain possession of the Indenture
Trust Estate. In determining whether to maintain possession of
the Indenture Trust Estate, the Indenture Trustee may, but need
not, obtain and rely upon an opinion of an Independent investment
banking or accounting firm of national reputation as to the
feasibility of such proposed action and as to the sufficiency of
the Indenture Trust Estate for such purpose.
Section 5.05. Limitation of Suits. No Holder of any Note
shall have any right to institute any Proceeding, judicial or
otherwise, with respect to this Indenture, or for the appointment
of a receiver or trustee, or for any other remedy hereunder,
unless and subject to the provisions of Section 10.16 hereof:
(i) such Holder has previously given written notice
to the Indenture Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Security
Balances of the Notes have made written request to the
Indenture Trustee to institute such Proceeding in respect of
such Event of Default in its own name as Indenture Trustee
hereunder;
(iii) such Holder or Holders have offered to the
Indenture Trustee reasonable indemnity against the costs,
expenses and liabilities to be incurred in complying with
such request;
the Indenture Trustee for 60 days after its
receipt of such notice, request and offer of indemnity has
failed to institute such Proceedings; and
(v) no direction inconsistent with such written
request has been given to the Indenture Trustee during such
60-day period by the Holders of a majority of the Security
Balances of the Notes.
It is understood and intended that no one or more Holders of
Notes shall have any right in any manner whatever by virtue of,
or by availing of, any provision of this Indenture to affect,
disturb or prejudice the rights of any other Holders of Notes or
to obtain or to seek to obtain priority or preference over any
other Holders 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 or more groups of
Holders of Notes, each representing less than a majority of the
Security Balances of the Notes, the Indenture Trustee in its sole
discretion may determine what action, if any, shall be taken,
notwithstanding any other provisions of this Indenture.
Section 5.06. Unconditional Rights of Noteholders to
Receive Principal and Interest. Notwithstanding any other pro-
visions in this Indenture, the Holder of any Note shall have the
right, which is absolute and unconditional, to receive payment of
the principal of and interest, if any, on such Note on or after
the respective due dates thereof expressed in such Note or in
this Indenture and to institute suit for the enforcement of any
such payment, and such right shall not be impaired without the
consent of such Holder.
Section 5.07. 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 for any reason 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 Noteholders shall, subject to any determination
in such Proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and
remedies of the Indenture Trustee and the Noteholders shall
continue as though no such Proceeding had been instituted.
Section 5.08. Rights and Remedies Cumulative. No right or
remedy herein conferred upon or reserved to the Indenture Trustee
or to the Noteholders is intended to be exclusive of any other
right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of
any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate
right or remedy.
Section 5.09. Delay or Omission Not a Waiver. No delay or
omission of the Indenture Trustee or any Holder of any Note to
exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of
any such Event of Default or an acquiescence therein. Every
right and remedy given by this Article V or by law to the Inden-
ture 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 5.10. Control by Noteholders. The Holders of a
majority of the Security Balances of Notes shall have the right
to direct the time, method and place of conducting any Proceeding
for any remedy available to the Indenture Trustee with respect to
the Notes or exercising any trust or power conferred on the
Indenture Trustee; provided that:
(i) such direction shall not be in conflict with any
rule of law or with this Indenture;
(ii) subject to the express terms of Section 5.03,
any direction to the Indenture Trustee to sell or liquidate
the Indenture Trust Estate shall be by Holders of Notes
representing not less than 100% of the Security Balances of
Notes;
(iii) if the conditions set forth in Section 5.04 have
been satisfied and the Indenture Trustee elects to retain
the Indenture Trust Estate pursuant to such Section, then
any direction to the Indenture Trustee by Holders of Notes
representing less than 100% of the Security Balances of
Notes to sell or liquidate the Indenture Trust Estate shall
be of no force and effect; and
(iv) the Indenture Trustee may take any other action
deemed proper by the Indenture Trustee that is not incon-
sistent with such direction.
Notwithstanding the rights of Noteholders set forth in this
Section, subject to Section 6.01, the Indenture Trustee need not
take any action that it determines might involve it in liability
or might materially adversely affect the rights of any Note-
holders not consenting to such action.
Section 5.11. Waiver of Past Defaults. Prior to the
declaration of the acceleration of the maturity of the Notes as
provided in Section 5.01, the Holders of Notes of not less than a
majority of the Security Balances of the Notes may waive any past
Event of Default and its consequences except an Event of Default
(a) with respect to payment of principal of or interest on any of
the Notes or (b) in respect of a covenant or provision hereof
which cannot be modified or amended without the consent of the
Holder of each Note. In the case of any such waiver, the Issuer,
the Indenture Trustee and the Holders of the Notes shall be
restored to their former positions and rights hereunder, respec-
tively; but no such waiver shall extend to any subsequent or
other Event of Default or impair any right consequent thereto.
Upon any such waiver, any Event of Default arising therefrom
shall be deemed to have been cured and not to have occurred, for
every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other Event of Default or impair any right
consequent thereto. The Indenture Trustee shall notify the
Rating Agencies of any such waiver pursuant to this Section 5.11.
Section 5.12. Undertaking for Costs. All parties to this
Indenture agree, and each Holder of any Note by such Xxxxxx's
acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of
any right or remedy under this Indenture, or in any suit against
the Indenture Trustee for any action taken, suffered or omitted
by it as Indenture Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant
in such suit, having due regard to the merits and good faith of
the claims or defenses made by such party litigant; but the
provisions of this Section 5.12 shall not apply to (a) any suit
instituted by the Indenture Trustee, (b) any suit instituted by
any Noteholder, or group of Noteholders, in each case holding in
the aggregate more than 10% of the Security Balances of the Notes
or (c) any suit instituted by any Noteholder for the enforcement
of the payment of principal of or interest on any Note on or
after the respective due dates expressed in such Note and in this
Indenture.
Section 5.13. 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 whatso-
ever, claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this
Indenture; and the Issuer (to the extent that it may lawfully do
so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Indenture Trustee,
but will suffer and permit the execution of every such power as
though no such law had been enacted.
Section 5.14. Sale of Indenture Trust Estate. (a) The
power to effect any sale or other disposition (a "Sale") of any
portion of the Indenture Trust Estate pursuant to Section 5.03 is
expressly subject to the provisions of Section 5.04 and this
Section 5.14. The power to effect any such Sale shall not be
exhausted by any one or more Sales as to any portion of the
Indenture Trust Estate remaining unsold, but shall continue
unimpaired until the entire Indenture Trust Estate shall have
been sold or all amounts payable on the Notes and under this
Indenture shall have been paid. The Indenture Trustee may from
time to time postpone any public 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 shall not in any private Sale
sell the Indenture Trust Estate, or any portion thereof, unless
(1) the Holders of all Notes consent to or direct the
Indenture Trustee to make, such Sale, or
(2) the proceeds of such Sale would be not less than
the entire amount which would be payable to the Noteholders under
the Notes in full payment thereof in accordance with Section
5.01, on the Payment Date next succeeding the date of such Sale,
or
(3) The Indenture Trustee determines or is advised
that the conditions for retention of the Indenture Trust Estate
set forth in Section 5.04 cannot be satisfied (in making any such
determination, the Indenture Trustee may rely upon an opinion of
an Independent investment banking firm obtained and delivered as
provided in Section 5.04), and the Holders representing at least
66-2/3% of the Note Balances of the Notes consent to such Sale.
The purchase by the Indenture Trustee of all or any portion of
the Indenture Trust Estate at a private Sale shall not be deemed
a Sale or other disposition thereof for purposes of this Section
5.14(b).
(c) Unless the Holders of the Notes have otherwise consent-
ed or directed the Indenture Trustee, at any public Sale of all
or any portion of the Indenture Trust Estate at which a minimum
bid equal to or greater than the amount described in paragraph
(2) of subsection (b) of this Section 5.14 has not been estab-
lished by the Indenture Trustee and no Person bids an amount
equal to or greater than such amount, the Indenture Trustee shall
bid an amount at least $1.00 more than the highest other bid.
(d) In connection with a Sale of all or any portion of the
Indenture Trust Estate
(1) any Holder or Holders of Notes may bid for and
purchase the property offered for sale, and upon compliance with
the terms of sale may hold, retain and possess and dispose of
such property, without further accountability, and may, in paying
the purchase money therefor, deliver any Notes or claims for
interest thereon in lieu of cash up to the amount which shall,
upon distribution of the net proceeds of such sale, be payable
thereon, and such Notes, in case the amounts so payable thereon
shall be less than the amount due thereon, shall be returned to
the Holders thereof after being appropriately stamped to show
such partial payment;
(2) the Indenture Trustee may bid for and acquire the
property offered for Sale in connection with any Sale thereof,
and, subject to any requirements of, and to the extent permitted
by, applicable law in connection therewith, may purchase all or
any portion of the Indenture Trust Estate in a private sale, and,
in lieu of paying cash therefor, may make settlement for the
purchase price by crediting the gross Sale price against the sum
of (A) the amount which would be distributable to the Holders of
the Notes in accordance with Section 5.03 on the Payment Date
next succeeding the date of such Sale and (B) the expenses of the
Sale and of any Proceedings in connection therewith which are
reimbursable to it, without being required to produce the Notes
in order to complete any such Sale or in order for the net Sale
price to be credited against such Notes, and any property so
acquired by the Indenture Trustee shall be held and dealt with by
it in accordance with the provisions of this Indenture;
(3) the Indenture Trustee shall execute and deliver an
appropriate instrument of conveyance transferring its interest in
any portion of the Indenture Trust Estate in connection with a
Sale thereof;
(4) the Indenture Trustee is hereby irrevocably
appointed the agent and attorney-in-fact of the Issuer to trans-
fer and convey its interest in any portion of the Indenture Trust
Estate in connection with a Sale thereof, and to take all action
necessary to effect such Sale; and
(5) no purchaser or transferee at such a 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 moneys.
Section 5.15. 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, obtaining or
application of any other relief under or with respect to this
Indenture. Neither the lien of this Indenture nor any rights or
remedies of the 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 Indenture Trust Estate or upon
any of the assets of the Issuer. Any money or property collected
by the Indenture Trustee shall be applied in accordance with
Section 5.03(b).
Section 5.16. Performance and Enforcement of Certain Obli-
gations. (a) Promptly following a request from the Indenture
Trustee to do so and at the Administrator's expense, the Issuer
shall take all such lawful action as the Indenture Trustee may
request to compel or secure the performance and observance by the
Deposit Trust in its obligations to the Issuer under or in
connection with the Pooling and Servicing Agreement, and upon the
occurrence and continuance of a "Servicer Default" under the
Pooling and Servicing Agreement to exercise any and all rights,
remedies, powers and privileges lawfully available to the Issuer
under or in connection with the Pooling and Servicing Agreement
to the extent and in the manner directed by the Indenture
Trustee, including the transmission of notices of default on the
part of the Seller or the Servicer thereunder and the institution
of legal or administrative actions or proceedings to compel or
secure performance by the Seller or the Servicer of each of their
obligations under the Receivables Purchase Agreement and the
Pooling and Servicing Agreement.
(b) If an Event of Default has occurred and is continuing,
the Indenture Trustee may, and at the direction (which direction
shall be in writing or by telephone (confirmed in writing
promptly thereafter)) of the Holders of 66-2/3% of the Security
Balances of the Notes shall, exercise all rights, remedies,
powers, privileges and claims of the Issuer against the Deposit
Trust under or in connection with the Pooling and Servicing
Agreement, including the right or power to take any action to
compel or secure performance or observance by the Deposit
Trustee, of its obligations to the Issuer thereunder and to give
any consent, request, notice, direction, approval, extension or
waiver under the Pooling and Servicing Agreement and any right of
the Issuer to take such action shall not be suspended.
ARTICLE VI
The Indenture Trustee
Section 6.01. Duties of Indenture Trustee. (a) If an
Event of Default has occurred and is continuing, 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
(ii) in the absence of bad faith 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; however, the Indenture Trustee shall examine the
certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liabil-
ity for its own negligent action, its own negligent failure to
act or its own willful misconduct, except that:
(i) this paragraph (c) does not limit the effect of
paragraph (b) of this Section 6.01;
(ii) the Indenture Trustee shall not be liable for
any error of judgment made in good faith by a Responsible
Officer unless it is 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 it takes or omits to take in good
faith in accordance with a direction received by it pursuant
to Section 5.10.
(d) Every provision of this Indenture that in any way
relates to the Indenture Trustee is subject to paragraphs (a),
(b), (c) and (g) of this Section 6.01.
(e) The Indenture Trustee shall not be liable for interest
on any money received by it except as the Indenture Trustee may
agree in writing with the Issuer.
Money held in trust by the Indenture Trustee need not
be segregated from other funds except to the extent required by
law or the terms of this Indenture.
(g) No provision of this Indenture shall require the
Indenture Trustee to expend or risk its own funds or otherwise
incur financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers, if
it shall have reasonable grounds to believe that repayment of
such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
(h) Every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to
the Indenture Trustee shall be subject to the provisions of this
Section and to the provisions of the TIA.
Section 6.02. Rights of Indenture Trustee. (a) The Inden-
ture Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper
person. The Indenture Trustee need not investigate any fact or
matter stated in the document.
(b) Before the Indenture Trustee acts or refrains from
acting, it may require an Officer's Certificate or an Opinion of
Counsel. The Indenture Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on an
Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly
or by or through agents or attorneys or a custodian or nominee,
and the Indenture Trustee shall not be responsible for any
misconduct or negligence on the part of, or for the supervision
of, any such agent, attorney, custodian or nominee appointed with
due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any
action it takes or omits to take in good faith which it believes
to be authorized or within its rights or powers; provided,
however, that the Indenture Trustee's conduct does not constitute
willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the
advice or opinion of counsel with respect to legal matters relat-
ing to this Indenture and the Notes shall be full and complete
authorization and protection from liability in respect to any
action taken, omitted or suffered by it hereunder in good faith
and in accordance with the advice or opinion of such counsel.
Section 6.03. Individual Rights of Indenture Trustee. The
Indenture Trustee in its individual or any other capacity may
become the owner or pledgee of Notes and may otherwise deal with
the Issuer or its Affiliates with the same rights it would have
if it were not Indenture Trustee. Any Administrator, Note Regis-
trar, co-registrar or co-paying agent may do the same with like
rights. However, the Indenture Trustee must comply with Sections
6.11 and 6.12.
Section 6.04. Indenture Trustee's Disclaimer. The Inden-
ture Trustee shall not be responsible for and makes no represen-
tation as to the validity or adequacy of this Indenture or the
Notes, it shall not be accountable for the Issuer's use of the
proceeds from the Notes, and it shall not be responsible for any
statement of the Issuer in the Indenture or in any document
issued in connection with the sale of the Notes or in the Notes
other than the Indenture Trustee's certificate of authentication.
Section 6.05. Notice of Event of Default. If an Event of
Default occurs and is continuing and if it is known to a Respon-
sible Officer of the Indenture Trustee, the Indenture Trustee
shall mail to each Noteholder notice of the Event of Default
within 90 days after it occurs. Except in the case of an Event
of Default in payment of principal of or interest on any Note,
the Indenture Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines
that withholding the notice is in the interests of Noteholders.
Section 6.06. Reports by Indenture Trustee. (a) The
Indenture Trustee shall deliver to each Noteholder such
information as may be required to enable such holder to prepare
its federal and state income tax returns. In addition, upon the
Issuer's written request, the Indenture Trustee shall promptly
furnish information reasonably requested by the Issuer that is
reasonably available to the Indenture Trustee to enable the
Issuer to perform its federal and state income tax reporting
obligations.
(b) Within 10 days of each Payment Date, the Indenture
Trustee will prepare and forward to each Holder of the Notes and
each Rating Agency, a Monthly Security Report, a form of which is
attached hereto as Exhibit C.
Section 6.07. Compensation and Indemnity. The Issuer shall
or shall cause the Administrator to pay to the Indenture Trustee
from time to time compensation for its services as previously
agreed to by the Administrator on behalf of the Issuer and the
Indenture Trustee. The Indenture Trustee's compensation shall
not be limited by any law on compensation of a trustee of an
express trust. The Issuer shall or shall cause the Administrator
to 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, outside counsel, accountants and experts. The Issuer
shall or shall cause the Administrator to indemnify the Indenture
Trustee against any and all loss, liability, damages or claims or
expense (including attorneys' fees) incurred by it in connection
with the administration of this trust and the performance of its
duties hereunder. The Indenture Trustee shall notify the Issuer
and the Administrator promptly of any claim for which it may seek
indemnity. Failure by the Indenture Trustee to so notify the
Issuer and the Administrator shall not relieve the Issuer or the
Administrator of its obligations hereunder. The Issuer shall or
shall cause the Administrator to defend any such claim, and the
Indenture Trustee may have separate counsel and the Issuer shall
or shall cause the Administrator to pay the fees and expenses of
such counsel. Neither the Issuer nor the Administrator need
reimburse any expense or indemnify against any loss, liability or
expense incurred by the Indenture Trustee through the Indenture
Trustee's own willful misconduct, negligence or bad faith.
The Issuer's payment obligations to the Indenture Trustee
pursuant to this Section 6.07 shall survive the discharge of this
Indenture and the resignation or removal of the Indenture
Trustee. When the Indenture Trustee incurs expenses after the
occurrence of an Event of Default with respect to the Issuer, the
expenses are intended to constitute expenses of administration
under Title 11 of the United States Code or any other applicable
federal or state bankruptcy, insolvency or similar law.
Section 6.08. Replacement of Indenture Trustee. No resig-
nation 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 6.08. The Indenture Trustee may resign
at any time by so notifying the Seller and the Issuer. The
Holders of a majority of Security Balances of the Notes may
remove the Indenture Trustee by so notifying the Indenture
Trustee and may appoint a successor Indenture Trustee. The
Issuer shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with
Section 6.11;
(ii) the Indenture Trustee is adjudged a bankrupt or
insolvent;
(iii) a receiver or other public officer takes charge
of the Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes
incapable of acting.
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 Issuer shall promptly
appoint a successor Indenture Trustee by notice thereof to the
Noteholders.
A successor Indenture Trustee shall deliver a written
acceptance of its appointment to the retiring Indenture Trustee
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.
If a successor Indenture Trustee does not take office within
30 days after the retiring Indenture Trustee resigns or is
removed, the retiring Indenture Trustee, the Issuer or the
Holders of a majority of Security Balances of the Notes may
petition any court of competent jurisdiction for the appointment
of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11,
any Noteholder may petition any court of competent jurisdiction
for the removal of the Indenture Trustee and the appointment of a
successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee
pursuant to this Section, the Issuer's and the Administrator's
obligations under Section 6.07 shall continue for the benefit of
the retiring Indenture Trustee.
Section 6.09. Successor Indenture Trustee by Xxxxxx. If
the Indenture Trustee consolidates with, merges or converts into,
or transfers all or substantially all its corporate trust busi-
ness 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 and shall not be an
Affiliate of the Owner Trustee. 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 or consolidation 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 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 either in the name of any
predecessor hereunder or 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 pro-
visions of this Indenture, at any time, for the purpose of meet-
ing any legal requirement of any jurisdiction in which any part
of the Indenture Trust Estate 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 Trust, and to vest in such
Person or Persons, in such capacity and for the benefit of the
Noteholders, such title to the Indenture Trust Estate, or any
part hereof, and, subject to the other provisions of this
Section, such powers, duties, obligations, rights and trusts as
the Indenture Trustee may consider necessary or desirable. No
co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under
Section 6.11 and no notice to Noteholders of the appointment of
any co-trustee or separate trustee shall be required under
Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the
extent permitted by law, be appointed and act subject to the
following provisions and conditions:
(i) all rights, powers, duties and obligations
conferred or imposed upon the Indenture Trustee shall be
conferred or imposed upon and exercised or performed by the
Indenture Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the
Indenture Trustee joining in such act), except to the extent
that under any law of any jurisdiction in which any particu-
lar 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 obli-
gations (including the holding of title to the Indenture
Trust Estate or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by
such separate trustee or co-trustee, but solely at the
direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable
by reason of any act or omission of any other trustee
hereunder; and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the
Indenture Trustee shall be deemed to have been given to each of
the then separate trustees and co-trustees, as effectively as if
given to each of them. Every instrument appointing any separate
trustee or co-trustee shall refer to this Agreement 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 pro-
visions of this Indenture, specifically including every provision
of this Indenture relating to the conduct of, affecting the
liability of, or affording protection to, the Indenture Trustee.
Every such instrument shall be filed with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time
constitute the Indenture Trustee, its agent or attorney-in-fact
with full power and authority, to the extent not prohibited by
law, to do any lawful act under or in respect of this Agreement
on its behalf and in its name. If any separate trustee or co-
trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and
trusts shall vest in and be exercised by the Indenture Trustee,
to the extent permitted by law, without the appointment of a new
or successor trustee.
Section 6.11. Eligibility; Disqualification. The Indenture
Trustee shall at all times satisfy the requirements of TIA
Section 310(a). The Indenture Trustee shall not be an affiliate of the
Owner Trustee. 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 it or its
parent shall have a long-term debt rating of Baa3 or better by
Xxxxx'x. The Indenture Trustee shall comply with TIA Section 310(b),
including the optional provision permitted by the second sentence
of TIA Section 310(b)(9); provided, however, that there shall be
excluded from the operation of TIA Section 310(b)(1) any indenture or
indentures under which other securities of the Issuer are
outstanding if the requirements for such exclusion set forth in
TIA Section 310(b)(1) are met.
Section 6.12. Preferential Collection of Claims Against
Issuer. The Indenture Trustee shall comply with TIA Section 311(a),
excluding any creditor relationship listed in TIA Section 311(b). An
Indenture Trustee who has resigned or been removed shall be
subject to TIA Section 311(a) to the extent indicated.
Section 6.13. Representation and Warranty. The Indenture
Trustee represents and warrants to the Issuer, for the benefit of
the Noteholders, that this Indenture has been executed and
delivered by one of its Responsible Officers who is duly autho-
rized to execute and deliver such document in such capacity on
its behalf.
Section 6.14. Directions to Indenture Trustee. The Inden-
ture Trustee is hereby directed:
(a) to accept assignment of the Series 1997-1 Participation
Interest and hold the assets of the Indenture Trust Estate in
trust for the Noteholders;
(b) to authenticate the Notes on behalf of the Issuer sub-
stantially in the forms prescribed by Exhibits A-1, A-2, A-3 and
B in accordance with the terms of this Indenture; and
(c) to take all other actions as shall be required to be
taken by the terms of this Indenture.
Section 6.15. No Consent to Certain Acts of Seller. The
Seller shall not request that the Indenture Trustee consent to,
nor shall the Indenture Trustee consent to any action proposed to
be taken by the Seller pursuant to Article FOURTEENTH or Article
FIFTEENTH of the Seller's Articles of Incorporation.
ARTICLE VII
Noteholders' Lists and Reports
Section 7.01. Issuer To Furnish Indenture Trustee Names and
Addresses of Noteholders. The Issuer will furnish or cause to be
furnished to the Indenture Trustee (a) not more than five days
after each Record Date, a list, in such form as the Indenture
Trustee may reasonably require, of the names and addresses of the
Holders of Notes as of such Record Date, (b) at such other times
as the Indenture Trustee may request in writing, within 30 days
after receipt by the Issuer of any such request, a list of
similar form and content as of a date not more than 10 days prior
to the time such list is furnished; provided, however, that so
long as the Indenture Trustee is the Note Registrar, no such list
shall be required to be furnished.
Section 7.02. Preservation of Information; Communications
to Noteholders. (a) The Indenture Trustee shall preserve, in as
current a form as is reasonably practicable, the names and
addresses of the Holders of Notes contained in the most recent
list furnished to the Indenture Trustee as provided in Section
7.01 and the names and addresses of Holders of Notes received by
the Indenture Trustee in its capacity as Note Registrar. The
Indenture Trustee may destroy any list furnished to it as pro-
vided in such Section 7.01 upon receipt of a new list so
furnished.
(b) Noteholders may communicate pursuant to TIA Section 312(b)
with other Noteholders with respect to their rights under this
Indenture or under the Notes.
(c) The Issuer, the Indenture Trustee and the Note Regis-
trar shall have the protection of TIA Section 312(c).
Section 7.03. Reports by Issuer. (a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days
after the Issuer is required to file the same with the
Commission, copies of the annual reports and of the informa-
tion, 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) that 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 Commis-
sion in accordance with rules and regulations prescribed
from time to time by the Commission such additional infor-
mation, documents and reports with respect to compliance by
the Issuer with the conditions and covenants of this Inden-
ture as may be required from time to time by such rules and
regulations; and
(iii) supply to the Indenture Trustee (and the
Indenture Trustee shall transmit by mail to all Noteholders
described in TIA Section 313(c)) such summaries of any
information, documents and reports required to be filed by
the Issuer pursuant to clauses (i) and (ii) of this Section
7.03(a) and by rules and regulations prescribed from time to
time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year
of the Issuer shall end on December 31 of each year.
Section 7.04. Reports by Indenture Trustee. If required by
TIA Section 313(a), within 60 days after each January 1 beginning with
January 1, 1998, the Indenture Trustee shall mail to each Note-
holder as required by TIA Section 313(c) a brief report dated as of
such date that complies with TIA Section 313(a). The Indenture Trustee
also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Note-
holders shall be filed by the Indenture Trustee with the Commis-
sion 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.
ARTICLE VIII
Accounts, Disbursements and Releases
Section 8.01. Collection of Money. Except as otherwise
expressly provided herein, 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 apply all such money received by it
as provided in this Indenture. Except as otherwise expressly
provided in this Indenture, if any default occurs in the making
of any payment or performance under any agreement or instrument
that is part of the Indenture Trust Estate, the Indenture Trustee
may take such action as may be appropriate to enforce such
payment or performance, including the institution and prosecution
of appropriate Proceedings. Any such action shall be without
prejudice to any right to claim a Default or Event of Default
under this Indenture and any right to proceed thereafter as
provided in Article V.
Section 8.02. Trust Accounts. (a) On or prior to the
Closing Date, the Issuer shall (i) cause the Indenture Trustee to
establish and maintain, in the name of the Indenture Trustee, for
the benefit of the Noteholders, the Payment Account as provided
in Section 3.01 of this Indenture and (ii) pursuant to Article V
of the Supplement for Series 1997-1, irrevocably direct the
Deposit Trustee to make all payments in respect of the Series
1997-1 Participation Interest into the Payment Account for so
long as the Notes are outstanding.
(b) All moneys deposited from time to time in the Payment
Account are for the benefit of the Noteholders.
On each Payment Date, the Indenture Trustee shall distribute
all amounts on deposit in the Payment Account (including any
investment income thereon) to Noteholders in respect of the Notes
and in its capacity as Certificate Paying Agent to
Certificateholders in the order of priority set forth in Section
3.05.
The Designated Certificateholder may direct the Indenture
Trustee to invest any funds in the Payment Account in Eligible
Investments maturing no later than each Payment Date and such
Eligible Investments shall not be sold or disposed of prior to
the maturity.
Section 8.03. Opinion of Counsel. The Indenture Trustee
shall receive at least seven days notice when requested by the
Issuer to take any action pursuant to Section 8.05(a), accom-
panied by copies of any instruments to be executed, and the
Indenture Trustee shall also require, as a condition to such
action, an Opinion of Counsel, in form and substance 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 material-
ly 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
Indenture Trust Estate. Counsel rendering any such opinion may
rely, without independent investigation, on the accuracy and
validity of any certificate or other instrument delivered to the
Indenture Trustee in connection with any such action.
Section 8.04. Termination Upon Distribution to Noteholders.
This Indenture and the respective obligations and responsibili-
ties of the Issuer and the Indenture Trustee created hereby shall
terminate upon the distribution to Noteholders, Certificate-
holders, and the Indenture Trustee of all amounts required to be
distributed pursuant to Article III; provided, however, that in
no event shall the trust created hereby continue beyond the
expiration of 21 years from the death of the survivor of the
descendants of Xxxxxx X. Xxxxxxx, the late ambassador of the
United States to the Court of St. Xxxxx, living on the date
hereof.
Section 8.05. Release of Indenture Trust Estate. (a)
Subject to the payment of its fees and expenses, the Indenture
Trustee may, and when required by the provisions of this
Indenture shall, execute instruments to release property from the
lien of this Indenture, or convey the Indenture Trustee's
interest in the same, in a manner and under circumstances that
are not inconsistent with the provisions of this Indenture. No
party relying upon an instrument executed by the Indenture
Trustee as provided in Article IV hereunder 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 moneys.
(b) The Indenture Trustee shall, at such time as (i) there
are no Notes Outstanding and (ii) all sums due the Indenture
Trustee pursuant to this Indenture have been paid, release any
remaining portion of the Indenture Trust Estate that secured the
Notes from the lien of this Indenture. The Indenture Trustee
shall release property from the lien of this Indenture pursuant
to this Section 8.05 only upon receipt of an request from the
Issuer accompanied by an Officers' Certificate, an Opinion of
Counsel, and (if required by the TIA) Independent Certificates in
accordance with TIA Section 314(c) and 314(d)(1) meeting the applicable
requirements as described herein.
Section 8.06. Surrender of Notes Upon Final Payment. By
acceptance of any Note, the Holder thereof agrees to surrender
such Note to the Indenture Trustee promptly, prior to such Note-
holder's receipt of the final payment thereon.
ARTICLE IX
Supplemental Indentures
Section 9.01. Supplemental Indentures Without Consent of
Noteholders. (a) Without the consent of the Holders of any
Notes but with prior notice to the Rating Agencies, the Issuer
and the Indenture Trustee, when authorized by an Issuer Request,
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 Trust Indenture Act 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
the applicable provisions hereof, of another person to the
Issuer, and the assumption by any such successor of the
covenants of the Issuer herein and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the
benefit of the Holders of the Notes, or to surrender any
right or power herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge
any property to or with the Indenture Trustee;
(v) to 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 trustee with
respect to the Notes and to add to or change any of the
provisions of this Indenture as shall be necessary to
facilitate the administration of the trusts hereunder by
more than one trustee, pursuant to the requirements of
Article VI; or
(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;
provided, however, that no such indenture supplements shall be
entered into unless the Indenture Trustee shall have received an
Opinion of Counsel that entering into such indenture supplement
will not have any material adverse tax consequences to the Note-
holders.
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 Request, may, also without the consent of any of the
Holders of the Notes but with prior notice to the Rating
Agencies, 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 such
action shall not, as evidenced by an Opinion of Counsel, (i)
adversely affect in any material respect the interests of any
Noteholder or (ii) cause the Issuer to be subject to an entity
level tax or be classified as a taxable mortgage pool within the
meaning of Section 7701(i) of the Code.
Section 9.02. Supplemental Indentures With Consent of Note-
holders. (a) The Issuer and the Indenture Trustee, when autho-
rized by an Issuer Request, also may, with prior notice to the
Rating Agencies and with the consent of the Holders of not less
than a majority of the Security Balances of each Class of Notes
affected thereby, or if all Classes are affected, by majority of
the aggregate of Security Balances of the Notes, by act of such
Holders delivered to the Issuer and the Indenture Trustee, enter
into an indenture or indentures supplemental hereto for the pur-
pose 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, except in the limited
circumstances described in paragraph (b) below, that no such
supplemental indenture shall, without the consent of the Holder
of each Note affected thereby:
(i) change the date of payment of any installment of
principal of or interest on any Note, or reduce the prin-
cipal amount thereof or the interest rate thereon, change
the provisions of this Indenture relating to the application
of collections on, or the proceeds of the sale of, the
Indenture Trust Estate to payment of principal of or inter-
est on the Notes, or change any place of payment where, or
the coin or currency in which, any Note or the interest
thereon is payable, or 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;
(ii) reduce the percentage of the Security Balances
of the Notes, 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 provided
for in this Indenture;
(iii) modify or alter the provisions of the proviso to
the definition of the term "Outstanding" or modify or alter
the exception in the definition of the term "Holder";
(iv) reduce the percentage of the Security Balances
of the Notes required to direct the Indenture Trustee to
direct the Issuer to sell or liquidate the Indenture Trust
Estate pursuant to Section 5.03;
(v) modify any provision of this Section 9.02 except
to increase any percentage specified herein or to provide
that certain additional provisions of this Indenture or the
Basic Documents cannot be modified or waived without the
consent of the Holder of each Note affected thereby;
(vi) modify any of the provisions of this Indenture
in such manner as to affect the calculation of the amount of
any payment of interest or principal due on any Note on any
Payment Date (including the calculation of any of the
individual components of such calculation); or
(vii) permit the creation of any lien ranking prior to
or on a parity with the lien of this Indenture with respect
to any part of the Indenture Trust Estate or, except as
otherwise permitted or contemplated herein, terminate the
lien of this Indenture on any property at any time subject
hereto or deprive the Holder of any Note of the security
provided by the lien of this Indenture; provided, that such
action shall not, as evidenced by an Opinion of Counsel,
cause the Issuer to be subject to an entity level tax or be
classified as a taxable mortgage pool within the meaning of
Section 7701(i) of the Code.
(b) At the time of any sale of any Class B Note to a Person
that is not an Affiliate of the Seller, the Class B Noteholders
and the Issuer may agree, without the consent of any Class A
Noteholder, to amend the per annum percentage that is added to
LIBOR to calculate the Note Rate related to the Class B Notes to
an amount not exceeding 0.875% per annum.
(c) 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 authen-
ticated and delivered hereunder. The Indenture Trustee shall not
be liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders under
this Section 9.02 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
9.02, the Indenture Trustee shall mail to the Holders of the
Notes to which such amendment or supplemental indenture relates a
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 9.03. Execution of Supplemental Indentures. In
executing, or permitting the additional trusts created by, any
supplemental indenture permitted by this Article IX or the modi-
fication thereby of the trusts created by this Indenture, the
Indenture Trustee shall be entitled to receive, and subject to
Sections 6.01 and 6.02, shall be fully protected in relying upon,
an Opinion of Counsel stating that the execution of such supple-
mental indenture is authorized or permitted by this Indenture.
The Indenture Trustee may, but shall not be obligated to, enter
into any such supplemental indenture that affects the Indenture
Trustee's own rights, duties, liabilities or immunities under
this Indenture or otherwise.
Section 9.04. Effect of Supplemental Indenture. Upon the
execution of any supplemental indenture pursuant to the pro-
visions hereof, this Indenture shall be and shall be deemed to be
modified and amended in accordance therewith with respect to the
Notes affected thereby, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under
this Indenture of the Indenture Trustee, the Issuer and the
Holders of the Notes shall thereafter be determined, exercised
and enforced hereunder subject in all respects to such modifica-
tions and amendments, and all the terms and conditions of any
such supplemental indenture shall be and be deemed to be part of
the terms and conditions of this Indenture for any and all
purposes.
Section 9.05. Conformity with Trust Indenture Act. Every
amendment of this Indenture and every supplemental indenture
executed pursuant to this Article IX shall conform to the require-
ments of the Trust Indenture Act as then in effect so long as
this Indenture shall then be qualified under the Trust Indenture
Act.
Section 9.06. Reference in Notes to Supplemental Inden-
tures. Notes authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article IX 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 or the Inden-
ture Trustee 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 Outstanding Notes.
ARTICLE X
Miscellaneous
Section 10.01. Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer to the Inden-
ture Trustee to take any action under any provision of this
Indenture, the Issuer shall furnish to the Indenture Trustee
(i) an Officer's Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, (ii) an Opinion of
Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with and
(iii) (if required by the TIA) an Independent Certificate from a
firm of certified public accountants meeting the applicable
requirements of this Section 10.01, 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:
(1) a statement that each signatory of such certif-
icate or opinion has read or has caused to be read such
covenant or condition and the definitions herein relating
thereto;
(2) 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;
(3) 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
(4) a statement as to whether, in the opinion of each
such signatory, such condition or covenant has been complied
with; and
(5) if the signer of such Certificate or Opinion is
required to be Independent, the Statement required by the
definition of the term "Independent".
(b) (i) Prior to the deposit of any Indenture Collateral
or other property or securities with the Indenture Trustee that
is to be made the basis for the release of any property or
securities subject to the lien of this Indenture, the Issuer
shall, in addition to any obligation imposed in Section 10.01(a)
or elsewhere in this Indenture, furnish to the Indenture Trustee
an Officer's Certificate certifying or stating the opinion of
each person signing such certificate as to the fair value (within
90 days of such deposit) to the Issuer of the Indenture
Collateral or other property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to
the Indenture Trustee an Officer's Certificate certifying or
stating the opinion of any signer thereof as to the matters
described in clause (i) above, the Issuer shall also deliver to
the Indenture Trustee an Independent Certificate as to the same
matters, if the fair value to the Issuer of the securities to be
so deposited and of all other such securities made the basis of
any such withdrawal or release since the commencement of the
then-current fiscal year of the Issuer, as set forth in the
certificates delivered pursuant to clause (i) above and this
clause (ii), is 10% or more of the Security Balances of the
Notes, but such a certificate need not be furnished with respect
to any securities so deposited, if the fair value thereof to the
Issuer as set forth in the related Officer's Certificate is less
than $25,000 or less than one percent of the Security Balances of
the Notes.
(iii) Whenever any property or securities are to be
released from the lien of this Indenture, the Issuer shall also
furnish to the Indenture Trustee an Officer's Certificate
certifying or stating the opinion of each person signing such
certificate as to the fair value (within 90 days of such release)
of the property or securities proposed to be released and stating
that in the opinion of such person the proposed release will not
impair the security under this Indenture in contravention of the
provisions hereof.
(iv) Whenever the Issuer is required to furnish to
the Indenture Trustee an Officer's Certificate certifying or
stating the opinion of any signer thereof as to the matters
described in clause (iii) above, the Issuer shall also furnish to
the Indenture Trustee an Independent Certificate as to the same
matters if the fair value of the property or securities and of
all other property, other than property as contemplated by clause
(v) below or securities released from the lien of this Indenture
since the commencement of the then-current calendar year, as set
forth in the certificates required by clause (iii) above and this
clause (iv), equals 10% or more of the Security Balances of the
Notes, but such certificate need not be furnished in the case of
any release of property or securities if the fair value thereof
as set forth in the related Officer's Certificate is less than
$25,000 or less than one percent of the then Security Balances of
the Notes.
Section 10.02. Form of Documents Delivered to Indenture
Trustee. In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person,
it is not necessary that all such matters be certified by, or
covered by the opinion of, only one such Person, or that they be
so certified or covered by only one document, but one such Person
may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such
Person may certify or give an opinion as to such matters in one
or several documents.
Any certificate or opinion of an Authorized Officer of the
Issuer may be based, insofar as it relates to legal matters, upon
a certificate or opinion of, or representations by, counsel,
unless such officer knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion
is based are erroneous. Any such certificate of an Authorized
Officer or Opinion of Counsel may be based, insofar as it relates
to factual matters, upon a certificate or opinion of, or repre-
sentations by, an officer or officers of the Seller, the Issuer
or the Administrator, stating that the information with respect
to such factual matters is in the possession of the Seller, the
Issuer or the Administrator, unless such counsel knows, or in the
exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements,
opinions or other instruments under this Indenture, they may, but
need not, be consolidated and form one instrument.
Whenever in this Indenture, in connection with any applica-
tion or certificate or report to the Indenture Trustee, it is
provided that the Issuer shall deliver any document as a condi-
tion 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 applica-
tion or at the effective date of such certificate or report (as
the case may be), of the facts and opinions stated in such docu-
ment shall in such case be conditions precedent to the right of
the Issuer to have such application granted or to the sufficiency
of such certificate or report. The foregoing shall not, however,
be construed to affect the Indenture Trustee's right to rely upon
the truth and accuracy of any statement or opinion contained in
any such document as provided in Article VI.
Section 10.03. Acts of Noteholders. (a) Any request,
demand, authorization, direction, notice, consent, waiver or
other action provided by this Indenture to be given or taken by
Noteholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Note-
holders in person or by agents duly appointed in writing; and
except as herein otherwise expressly provided such action shall
become effective when such instrument or instruments are deliver-
ed 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 some-
times referred to as the "Act" of the Noteholders signing such
instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to
Section 6.01) conclusive in favor of the Indenture Trustee and
the Issuer, if made in the manner provided in this Section 10.03.
(b) The fact and date of the execution by any person of any
such instrument or writing may be proved in any manner that 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 of every Note issued upon the registration
thereof or in exchange therefor or in lieu thereof, in respect of
anything done, omitted or suffered to be done by the Indenture
Trustee or the Issuer in reliance thereon, whether or not
notation of such action is made upon such Note.
Section 10.04. Notices, etc. to Indenture Trustee, Issuer,
and Rating Agencies. Any request, demand, authorization,
direction, notice, consent, waiver or Act of Noteholders or other
documents provided or permitted by this Indenture shall be in
writing and if such request, demand, authorization, direction,
notice, consent, waiver or act of Noteholders is to be made upon,
given or furnished to or filed with:
(i) 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 or with the
Indenture Trustee at the Corporate Trust Office, or
(ii) 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: Household Consumer Loan Trust 1997-1,
in care of the Administrator, Owner Trustee and the Seller,
or at any other address previously furnished in writing to
the Indenture Trustee by the Issuer or the Administrator.
The Issuer shall promptly transmit any notice received by it
from the Noteholders to the Indenture Trustee.
Notices required to be given to the Rating Agencies by the
Issuer, the Indenture Trustee or the Owner Trustee shall be in
writing, personally delivered or mailed by certified mail, return
receipt requested, to (i) in the case of Moody's, at the follow-
ing address: Xxxxx'x Investors Service, Inc., ABS Monitoring
Department, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, (ii) in
the case of Standard & Poor's, at the following address:
Standard & Poor's, 00 Xxxxxxxx (00xx Xxxxx), Xxx Xxxx, Xxx Xxxx
00000, Attention of Asset Backed Surveillance Department, (iii)
in the case of Duff & Xxxxxx, at the following address: Duff &
Xxxxxx Credit Rating Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx,
00000, and (iv) in the case of Fitch at the following address:
Fitch Investors Service LP, Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Xxxxxxxx Xxxx or as to each of the
foregoing, at such other address as shall be designated by
written notice to the other parties.
Section 10.05. Notices to Noteholders; Waiver. Where this
Indenture provides for notice to Noteholders of any event, such
notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class, post-
age prepaid to each Noteholder affected by such event, at his
address as it appears on the Note Register, not later than the
latest date, and not earlier than the earliest date, prescribed
for the giving of such notice. In any case where notice to
Noteholders is given by mail, neither the failure to mail such
notice nor any defect in any notice so mailed to any particular
Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in
the manner 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 a waiver.
In case, by reason of the suspension of regular mail service
as a result of a strike, work stoppage or similar activity, it
shall be impractical to mail notice of any event to Noteholders
when such notice is required to be given pursuant to any pro-
vision 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 the Rating
Agencies, failure to give such notice shall not affect any other
rights or obligations created hereunder, and shall not under any
circumstance constitute an Event of Default.
Section 10.06. Alternate Payment and Notice Provisions.
Notwithstanding any provision of this Indenture or any of the
Notes to the contrary, the Issuer 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 Administrator to such
Holder, that is different from the methods provided for in this
Indenture for such payments or notices. The Issuer will furnish
to the Indenture Trustee a copy of each such agreement and the
Indenture Trustee will cause payments to be made and notices to
be given in accordance with such agreements.
Section 10.07. Conflict with Trust Indenture Act. If any
provision hereof limits, qualifies or conflicts with another
provision hereof that is required to be included in this Inden-
ture by any of the provisions of the Trust Indenture Act, such
required provision shall control.
The provisions of TIA Sections 310 through 317 that impose duties
on any person (including the provisions automatically deemed
included herein unless expressly excluded by this Indenture) are
a part of and govern this Indenture, whether or not physically
contained herein.
Section 10.08. Effect of Headings. The Article and Section
headings herein are for convenience only and shall not affect the
construction hereof.
Section 10.09. Successors and Assigns. All covenants and
agreements in this Indenture and the Notes by the Issuer shall
bind its successors and assigns, whether so expressed or not.
All agreements of the Indenture Trustee in this Indenture shall
bind its successors, co-trustees and agents.
Section 10.10. Separability. In case any provision in this
Indenture or in the Notes shall be invalid, illegal or unenforce-
able, the validity, legality, and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Section 10.11. 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, and any other party secured
hereunder, and any other Person with an ownership interest in any
part of the Indenture Trust Estate, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
Section 10.12. GOVERNING LAW. THIS INDENTURE SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10.13. 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 10.14. Recording of Indenture. If this Indenture
is subject to recording in any appropriate public recording
offices, such recording is to be effected by the Issuer and at
its expense accompanied by an Opinion of Counsel (which may be
counsel to the Indenture Trustee or any other counsel reasonably
acceptable to the Indenture Trustee) to the effect that such
recording is necessary either for the protection of the Note-
holders or any other Person secured hereunder or for the enforce-
ment of any right or remedy granted to the Indenture Trustee
under this Indenture.
Section 10.15. Issuer Obligation. No recourse may be
taken, directly or indirectly, with respect to the obligations of
the Issuer, the Seller, 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) the Seller or any other owner of a
beneficial interest in the Issuer or the Seller 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 Article VI, VII and VIII
of the Trust Agreement.
Section 10.16. 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 Seller, the Issuer, the Administrator or
the Servicer, or join in any institution against the Seller or
the Issuer of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under
any United States federal or state bankruptcy or similar law in
connection with any obligations relating to the Notes, this
Indenture or any of the Basic Documents.
Section 10.17. Inspection. The Issuer agrees that, on
reasonable prior notice, it will permit any representative of the
Indenture Trustee, during the Issuer's normal business hours, to
examine all the books of account, records, reports and other
papers of the Issuer, to make copies and extracts therefrom, to
cause such books to be audited by Independent certified public
accountants, and to discuss the Issuer's affairs, finances and
accounts with the Issuer's officers, employees, and Independent
certified public accountants, all at such reasonable times and as
often as may be reasonably requested. The Indenture Trustee
shall and shall cause its representatives to hold in confidence
all such information except to the extent disclosure may be
required by law (and all reasonable applications for confidential
treatment are unavailing) and except to the extent that the
Indenture Trustee may reasonably determine that such disclosure
is consistent with its obligations hereunder.
Section 10.18. Authority of the Administrator. Each of the
parties to this Indenture acknowledges that the Issuer has
appointed the Administrator to act as its agent to perform the
duties and obligations of the Issuer hereunder. Unless otherwise
instructed by the Owner Trustee, copies of all notices, requests,
demands and other documents to be delivered to the Issuer or the
Owner Trustee pursuant to the terms hereof also shall be
delivered to the Administrator. Unless otherwise instructed by
the Owner Trustee, all notices, requests, demands and other
documents to be executed or delivered, and any action to be
taken, by the Issuer pursuant to the terms hereof may be
executed, delivered and/or taken by the Administrator pursuant to
the Administration Agreement.
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee
have caused their names to be signed hereto by their respective
officers thereunto duly authorized, all as of the day and year
first above written.
HOUSEHOLD CONSUMER LOAN TRUST 1997-1,
as Issuer
By: CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity
but solely as Owner Trustee
By:___________________________________
Name: Xxxx X. Xxxxxx
Title: Senior Trust Officer
THE BANK OF NEW YORK,
as Indenture Trustee, as Paying Agent
and as Note Registrar
By:___________________________________
Name:
Title:
THE BANK OF NEW YORK,
xxxxxx accepts the appointment
as Certificate Paying Agent
pursuant to Section 3.03 hereof
and as Certificate Registrar
pursuant to Section 4.02 hereof.
By:______________________________
Name:
Title:
STATE OF DELAWARE )
) ss.:
COUNTY OF )
On this _______ day of March 1997, before me personally ap-
peared Xxxx Xxxxxx, to me known, who being by me duly sworn, did
depose and say, that he resides at ____________________________,
____________________, that he is the ________________________ of
Chase Manhattan Bank Delaware, as Owner Trustee, one of the
corporations described in and which executed the above instru-
ment; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so
affixed by order of the Board of Directors of said corporation;
and that he signed his name thereto by like order.
___________________________
Notary Public
[NOTARIAL SEAL]
STATE OF ILLINOIS )
) ss.:
COUNTY OF COOK )
On this _______ day of March 1997, before me personally ap-
peared to me known, who
being by me duly sworn, did depose and say, that he resides at
, that he is the
of The Bank of New York, as
Indenture Trustee, one of the corporations described in and which
executed the above instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by order of the Board of
Directors of said corporation; and that he signed his/her name
thereto by like order.
___________________________
Notary Public
[NOTARIAL SEAL]
STATE OF ILLINOIS )
) ss.:
COUNTY OF COOK )
On this _______ day of March 1997, before me personally ap-
peared to me known, who
being by me duly sworn, did depose and say, that he resides at
, that he is the
of The Bank of New York, as
Indenture Trustee, one of the corporations described in and which
executed the above instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by order of the Board of
Directors of said corporation; and that he signed his/her name
thereto by like order.
___________________________
Notary Public
[NOTARIAL SEAL]
Exhibit A-1
Unless this Note is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to
the Issuer or its agent for registration of transfer, exchange or
payment, and any Note issued is registered in the name of Cede &
Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative
of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the regis-
tered owner hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE
AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
HOUSEHOLD CONSUMER LOAN TRUST 1997-1
Household Consumer Loan Asset Backed Notes, Series 1997-1
Class: Class A-1
Registered Principal Amount: $[ ]
Percentage Interest: [ ]%
Note Rate: Floating
No.
CUSIP No.
Household Consumer Loan Trust 1997-1, a business trust
duly organized and existing under the laws of the State of Delaware
(herein referred to as the "Issuer"), for value received, hereby
promises to pay to Cede & Co. or registered assigns, the principal
sum of [ ]
DOLLARS, payable on each Payment Date in an amount equal to the
Percentage Interest specified above of the aggregate amount, if
any, payable from the Payment Account in respect of principal on
the Class A-1 Notes pursuant Section 3.05 of the Indenture dated as
of March 1, 1997 (the "Indenture") between the Issuer and The Bank
of New York, as Indenture Trustee (the "Indenture Trustee");
provided, however, that the entire unpaid principal amount of this
Note shall be due and payable on the March 2007 Payment Date.
Capitalized terms used but not defined herein are defined in
Article I of the Indenture, which also contains rules as to
construction that shall be applicable herein.
The Issuer will pay interest on this Note on each Payment
Date at a rate per annum equal to LIBOR plus 0.125% on the
principal amount of this Class A-1 Note on the preceding Payment
Date (after giving effect to all payments of principal made on such
preceding Payment Date); provided, however, that in no event shall
the Note Rate on this Note with respect to any Interest Period
exceed 12.5% for such Interest Period. LIBOR for each applicable
Interest Period will be determined on the second LIBOR Business Day
prior to the first day of such Interest Period or in the case of
the first Interest Period, two days prior to the Closing Date as
set forth in the Indenture. All determinations of LIBOR by the
Indenture Trustee shall, in the absence of manifest error, be
conclusive for all purposes, and each holder of this Class A-1
Note, by accepting this Class A-1 Note, agrees to be bound by such
determination. Interest on this Class A-1 Note will accrue for
each Payment Date from the most recent Payment Date on which
interest has been paid (in the case of the first Payment Date, from
the Closing Date) to but excluding such Payment Date. Interest
will be computed on the basis of the actual number of days in each
Interest Period and a year assumed to consist of 360 days.
Principal of and interest on this Class A-1 Note shall be paid in
the manner specified on the reverse hereof.
Principal of and interest on this Note are payable in
such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private
debts. All payments made by the Issuer with respect to this Note
shall be applied first to interest due and payable on this Note as
provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note
set forth on the reverse hereof, which shall have the same effect
as though fully set forth on the face of this Note.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by
manual signature, this Note shall not be entitled to any benefit
under the Indenture referred to on the reverse hereof, or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the
Issuer and not in its individual capacity, has caused this Note to
be duly executed.
HOUSEHOLD CONSUMER LOAN TRUST 1997-1
By CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity
but solely as Owner Trustee
By
Authorized Signatory
Certificate of Authentication
This is one of the Class A-1 Notes referred to in the within men-
tioned Indenture.
THE BANK OF NEW YORK,
not in its individual capacity but
solely as Indenture Trustee
Dated: March ___, 1997
By
Authorized Signatory
[REVERSE OF NOTE]
This Class A-1 Note is one of a duly authorized issue of
Class A-1 Notes of the Issuer, designated as its Household Consumer
Loan Asset Backed Notes, Series 1997-1 (herein called the "Class
A-1 Notes"), all issued under the Indenture, to which Indenture and
all indentures supplemental thereto reference is hereby made for a
statement of the respective rights and obligations thereunder of
the Issuer, the Indenture Trustee and the holders of the Notes.
The Notes are subject to all terms of the Indenture.
The Class A-1 Notes and the Class A-2 Notes, the Class
A-3 Notes and the Class B Notes, also issued under the Indenture
(collectively, the "Notes") are and will be secured by the
collateral pledged as security therefor as provided in the
Indenture.
Principal of and interest on this Class A-1 Note will be
payable on each Payment Date, commencing on April 15, 1997, as
described in the Indenture. "Payment Date" means the fifteenth day
of each month, or, if any such day is not a Business Day, then the
next Business Day.
The entire unpaid principal amount of this Class A-1 Note
shall be due and payable in full on the Payment Date in March 2007
pursuant to the Indenture. Notwithstanding the foregoing, if an
Event of Default shall have occurred and be continuing, then the
Indenture Trustee or the holders of Notes representing not less
than a majority of the Security Balances of all the Notes may
declare the Notes to be immediately due and payable in the manner
provided in Section 5.01 of the Indenture. On each Payment Date,
principal payments on the Class A-1 Notes shall be payable in the
amounts as provided in Section 3.05 of the Indenture.
Payments of interest on this Class A-1 Note due and
payable on each Payment Date, together with the installment of
principal, if any, to the extent not in full payment of this Note,
shall be made by check mailed to the Person whose name appears as
the Registered Holder of this Note on the Note Register as of the
close of business on each Record Date, except that with respect to
Notes registered on the Record Date in the name of the nominee of
the Depository Agency (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available
funds to the account designated by such nominee. Such checks shall
be mailed to the Person entitled thereto at the address of such
Person as it appears on the Note Register as of the applicable
Record Date without requiring that this Note be submitted for
notation of payment. Any reduction in the principal amount of this
Note effected by any payments made on any Payment Date shall be
binding upon all future holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or
in lieu hereof, whether or not noted hereon. If funds are expected
to be available, as provided in the Indenture, for payment in full
of the then remaining unpaid principal amount of this Note on a
Payment Date, then the Indenture Trustee, in the name of and on
behalf of the Issuer, will notify the Person who was the Registered
Holder hereof as of the Record Date preceding such Payment Date by
notice mailed or transmitted by facsimile prior to such Payment
Date, and the amount then due and payable shall be payable only
upon presentation and surrender of this Note at the address
specified in such notice of final payment.
As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Note may be
registered on the Note Register upon surrender of this Note for
registration of transfer at the Corporate Trust Office, duly
endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Indenture Trustee duly executed by, the
holder hereof or such holder's attorney duly authorized in writing,
with such signature guaranteed by an "eligible guarantor institu-
tion" meeting the requirements of the Note Registrar, which
requirements include membership or participation in the Securities
Transfer Agent's Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended,
and thereupon one or more new Notes in authorized denominations and
in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Note,
but the Note Registrar shall require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in
connection with any registration of transfer or exchange of this
Note.
Each holder or Beneficial Owner of a Note, by acceptance
of a Note or, in the case of a Beneficial Owner of a Note, a
beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee, the Administrator,
the Seller, the Servicer or the Indenture Trustee on the Notes or
under the Indenture or any certificate or other writing delivered
in connection 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 or employee of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder
of a beneficial interest in the Issuer, the Owner Trustee, the
Administrator 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.
Each holder or Beneficial Owner of a Note, by acceptance
of a Note or, in the case of a Beneficial Owner of a Note, a
beneficial interest in a Note, covenants and agrees by accepting
the benefits of the Indenture that such holder or Beneficial Owner
of a Note will not at any time institute against the Seller, the
Administrator, the Servicer or the Issuer, or join in any institu-
tion against the Seller, the Administrator, the Servicer or the
Issuer of, any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations
relating to the Notes, the Indenture or the Basic Documents.
The Issuer has entered into the Indenture and this Note
is issued with the intention that, for federal, state and local
income, single business and franchise tax purposes, the Notes will
qualify as indebtedness of the Issuer. Each holder of a Note, by
acceptance of a Note (and each Beneficial Owner of a Note by
acceptance of a beneficial interest in a Note), agrees to treat the
Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer
of this Note, the Issuer, the Indenture Trustee and any agent of
the Issuer or the Indenture Trustee may treat the Person in whose
name this Note (as of the day of determination or as of such other
date as may be specified in the Indenture) is registered as the
owner hereof for all purposes, whether or not this Note be overdue,
and none of the Issuer, the Indenture Trustee or any such agent
shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights
and obligations of the Issuer and the rights of the holders of the
Notes under the Indenture at any time by the Issuer with the
consent of the holders of Notes representing a majority of the
Security Balances of all Notes at the time Outstanding. The
Indenture also contains provisions permitting the holders of Notes
representing specified percentages of the Security Balances of all
Notes, on behalf of the holders of all the Notes, to waive
compliance by the Issuer with certain provisions of the Indenture
and certain past defaults under the Indenture and their consequenc-
es. Any such consent or waiver by the holder of this Note shall be
conclusive and binding upon such holder and upon all future holders
of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or
not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Indenture Trustee to amend or waive
certain terms and conditions set forth in the Indenture without the
consent of holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any
successor to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of
the Indenture Trustee and the holders of Notes under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain
limitations therein set forth.
This Note and the Indenture shall be construed in
accordance with the laws of the State of New York, without
reference to its conflict of law provisions, and the obligations,
rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture and no provision of
this Note or of the Indenture shall alter or impair the obligation
of the Issuer, which is absolute and unconditional, to pay the
principal of and interest on this Note at the times, place and
rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except
as expressly provided in the Basic Documents, none of Chase
Manhattan Bank Delaware in its individual capacity, The Bank of New
York in its individual capacity, any owner of a beneficial interest
in the Issuer, or any of their respective partners, beneficiaries,
agents, officers, directors, employees or successors or assigns
shall be personally liable for, nor shall recourse be had to any of
them for, the payment of principal of or interest on this Note or
performance of, or omission to perform, any of the covenants,
obligations or indemnifications contained in the Indenture. The
holder of this Note by its acceptance hereof agrees that, except as
expressly provided in the Basic Documents, in the case of an Event
of Default under the Indenture, the holder shall have no claim
against any of the foregoing for any deficiency, loss or claim
therefrom; provided, however, that nothing contained herein shall
be taken to prevent recourse to, and enforcement against, the
assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of
assignee:
FOR VALUE RECEIVED, the undersigned hereby sells, assigns
and transfers unto
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints
, attorney, to transfer said Note
on the books kept for registration thereof, with full power of
substitution in the premises.
Dated: */
Signature Guaranteed:
*/
________________________
*/ NOTICE: The signature to this assignment must correspond with
the name of the registered owner as it
appears on the face of the within Note in every particular,
without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible
guarantor institution" meeting the
requirements of the Note Registrar, which requirements include
membership or participation in STAMP
or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to,
or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Exhibit A-2
Unless this Note is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to
the Issuer or its agent for registration of transfer, exchange or
payment, and any Note issued is registered in the name of Cede &
Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative
of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the regis-
tered owner hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE
AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS CLASS A-2 NOTE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
CLASS A-1 NOTES AS DESCRIBED IN THE INDENTURE REFERRED TO BELOW.
HOUSEHOLD CONSUMER LOAN TRUST 1997-1
Household Consumer Loan Asset Backed Notes, Series 1997-1
Class: Class A-2
Registered Principal Amount: $[ ]
Percentage Interest: [ ]%
Note Rate: Floating
No.
CUSIP No.
Household Consumer Loan Trust 1997-1, a business trust
duly organized and existing under the laws of the State of Delaware
(herein referred to as the "Issuer"), for value received, hereby
promises to pay to Cede & Co. or registered assigns, the principal
sum of [ ]
DOLLARS, payable on each Payment Date in an amount equal to the
Percentage Interest specified above of the aggregate amount, if
any, payable from the Payment Account in respect of principal on
the Class A-2 Notes pursuant Section 3.05 of the Indenture dated as
of March 1, 1997 (the "Indenture") between the Issuer and The Bank
of New York, as Indenture Trustee (the "Indenture Trustee");
provided, however, that the entire unpaid principal amount of this
Note shall be due and payable on the March 2007 Payment Date.
Capitalized terms used but not defined herein are defined in
Article I of the Indenture, which also contains rules as to
construction that shall be applicable herein.
The Issuer will pay interest on this Note on each Payment
Date at a rate per annum equal to LIBOR plus 0.250% on the
principal amount of this Class A-2 Note on the preceding Payment
Date (after giving effect to all payments of principal made on such
preceding Payment Date); provided, however, that in no event shall
the Note Rate on this Note with respect to any Interest Period
exceed 14.0% for such Interest Period. LIBOR for each applicable
Interest Period will be determined on the second LIBOR Business Day
prior to the first day of such Interest Period or in the case of
the first Interest Period, two days prior to the Closing Date as
set forth in the Indenture. All determinations of LIBOR by the
Indenture Trustee shall, in the absence of manifest error, be
conclusive for all purposes, and each holder of this Class A-2
Note, by accepting this Class A-2 Note, agrees to be bound by such
determination. Interest on this Class A-2 Note will accrue for
each Payment Date from the most recent Payment Date on which
interest has been paid (in the case of the first Payment Date, from
the Closing Date) to but excluding such Payment Date. Interest
will be computed on the basis of the actual number of days in each
Interest Period and a year assumed to consist of 360 days.
Principal of and interest on this Class A-2 Note shall be paid in
the manner specified on the reverse hereof.
Principal of and interest on this Note are payable in
such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private
debts. All payments made by the Issuer with respect to this Note
shall be applied first to interest due and payable on this Note as
provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note
set forth on the reverse hereof, which shall have the same effect
as though fully set forth on the face of this Note.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by
manual signature, this Note shall not be entitled to any benefit
under the Indenture referred to on the reverse hereof, or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the
Issuer and not in its individual capacity, has caused this Note to
be duly executed.
HOUSEHOLD CONSUMER LOAN TRUST 1997-1
By CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity
but solely as Owner Trustee
By
Authorized Signatory
Certificate of Authentication
This is one of the Class A-2 Notes referred to in the within men-
tioned Indenture.
THE BANK OF NEW YORK,
not in its individual capacity but
solely as Indenture Trustee
Dated: March ___, 1997
By
Authorized Signatory
[REVERSE OF NOTE]
This Class A-2 Note is one of a duly authorized issue of
Class A-2 Notes of the Issuer, designated as its Household Consumer
Loan Asset Backed Notes, Series 1997-1 (herein called the "Class
A-2 Notes"), all issued under the Indenture, to which Indenture and
all indentures supplemental thereto reference is hereby made for a
statement of the respective rights and obligations thereunder of
the Issuer, the Indenture Trustee and the holders of the Notes.
The Notes are subject to all terms of the Indenture.
The Class A-2 Notes and the Class A-1 Notes, the Class
A-3 Notes and the Class B Notes, also issued under the Indenture
(collectively, the "Notes") are and will be secured by the
collateral pledged as security therefor as provided in the
Indenture.
Principal of and interest on this Class A-2 Note will be
payable on each Payment Date, commencing on April 15, 1997, as
described in the Indenture. "Payment Date" means the fifteenth day
of each month, or, if any such day is not a Business Day, then the
next Business Day.
The entire unpaid principal amount of this Class A-2 Note
shall be due and payable in full on the Payment Date in March 2007
pursuant to the Indenture. Notwithstanding the foregoing, if an
Event of Default shall have occurred and be continuing, then the
Indenture Trustee or the holders of Notes representing not less
than a majority of the Security Balances of all the Notes may
declare the Notes to be immediately due and payable in the manner
provided in Section 5.01 of the Indenture. On each Payment Date,
principal payments on the Class A-2 Notes shall be payable in the
amounts as provided in Section 3.05 of the Indenture.
Payments of interest on this Class A-2 Note due and
payable on each Payment Date, together with the installment of
principal, if any, to the extent not in full payment of this Note,
shall be made by check mailed to the Person whose name appears as
the Registered Holder of this Note on the Note Register as of the
close of business on each Record Date, except that with respect to
Notes registered on the Record Date in the name of the nominee of
the Depository Agency (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available
funds to the account designated by such nominee. Such checks shall
be mailed to the Person entitled thereto at the address of such
Person as it appears on the Note Register as of the applicable
Record Date without requiring that this Note be submitted for
notation of payment. Any reduction in the principal amount of this
Note effected by any payments made on any Payment Date shall be
binding upon all future holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or
in lieu hereof, whether or not noted hereon. If funds are expected
to be available, as provided in the Indenture, for payment in full
of the then remaining unpaid principal amount of this Note on a
Payment Date, then the Indenture Trustee, in the name of and on
behalf of the Issuer, will notify the Person who was the Registered
Holder hereof as of the Record Date preceding such Payment Date by
notice mailed or transmitted by facsimile prior to such Payment
Date, and the amount then due and payable shall be payable only
upon presentation and surrender of this Note at the address
specified in such notice of final payment.
As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Note may be
registered on the Note Register upon surrender of this Note for
registration of transfer at the Corporate Trust Office, duly
endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Indenture Trustee duly executed by, the
holder hereof or such holder's attorney duly authorized in writing,
with such signature guaranteed by an "eligible guarantor institu-
tion" meeting the requirements of the Note Registrar, which
requirements include membership or participation in the Securities
Transfer Agent's Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended,
and thereupon one or more new Notes in authorized denominations and
in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Note,
but the Note Registrar shall require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in
connection with any registration of transfer or exchange of this
Note.
Each holder or Beneficial Owner of a Note, by acceptance
of a Note or, in the case of a Beneficial Owner of a Note, a
beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee, the Administrator,
the Seller, the Servicer or the Indenture Trustee on the Notes or
under the Indenture or any certificate or other writing delivered
in connection 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 or employee of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder
of a beneficial interest in the Issuer, the Owner Trustee, the
Administrator 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.
Each holder or Beneficial Owner of a Note, by acceptance
of a Note or, in the case of a Beneficial Owner of a Note, a
beneficial interest in a Note, covenants and agrees by accepting
the benefits of the Indenture that such holder or Beneficial Owner
of a Note will not at any time institute against the Seller, the
Administrator, the Servicer or the Issuer, or join in any institu-
tion against the Seller, the Administrator, the Servicer or the
Issuer of, any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations
relating to the Notes, the Indenture or the Basic Documents.
The Issuer has entered into the Indenture and this Note
is issued with the intention that, for federal, state and local
income, single business and franchise tax purposes, the Notes will
qualify as indebtedness of the Issuer. Each holder of a Note, by
acceptance of a Note (and each Beneficial Owner of a Note by
acceptance of a beneficial interest in a Note), agrees to treat the
Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer
of this Note, the Issuer, the Indenture Trustee and any agent of
the Issuer or the Indenture Trustee may treat the Person in whose
name this Note (as of the day of determination or as of such other
date as may be specified in the Indenture) is registered as the
owner hereof for all purposes, whether or not this Note be overdue,
and none of the Issuer, the Indenture Trustee or any such agent
shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights
and obligations of the Issuer and the rights of the holders of the
Notes under the Indenture at any time by the Issuer with the
consent of the holders of Notes representing a majority of the
Security Balances of all Notes at the time Outstanding. The
Indenture also contains provisions permitting the holders of Notes
representing specified percentages of the Security Balances of all
Notes, on behalf of the holders of all the Notes, to waive
compliance by the Issuer with certain provisions of the Indenture
and certain past defaults under the Indenture and their consequenc-
es. Any such consent or waiver by the holder of this Note shall be
conclusive and binding upon such holder and upon all future holders
of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or
not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Indenture Trustee to amend or waive
certain terms and conditions set forth in the Indenture without the
consent of holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any
successor to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of
the Indenture Trustee and the holders of Notes under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain
limitations therein set forth.
This Note and the Indenture shall be construed in
accordance with the laws of the State of New York, without
reference to its conflict of law provisions, and the obligations,
rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture and no provision of
this Note or of the Indenture shall alter or impair the obligation
of the Issuer, which is absolute and unconditional, to pay the
principal of and interest on this Note at the times, place and
rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except
as expressly provided in the Basic Documents, none of Chase
Manhattan Bank Delaware in its individual capacity, The Bank of New
York in its individual capacity, any owner of a beneficial interest
in the Issuer, or any of their respective partners, beneficiaries,
agents, officers, directors, employees or successors or assigns
shall be personally liable for, nor shall recourse be had to any of
them for, the payment of principal of or interest on this Note or
performance of, or omission to perform, any of the covenants,
obligations or indemnifications contained in the Indenture. The
holder of this Note by its acceptance hereof agrees that, except as
expressly provided in the Basic Documents, in the case of an Event
of Default under the Indenture, the holder shall have no claim
against any of the foregoing for any deficiency, loss or claim
therefrom; provided, however, that nothing contained herein shall
be taken to prevent recourse to, and enforcement against, the
assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of
assignee:
FOR VALUE RECEIVED, the undersigned hereby sells, assigns
and transfers unto
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints
, attorney, to transfer said Note
on the books kept for registration thereof, with full power of
substitution in the premises.
Dated: */
Signature Guaranteed:
*/
________________________
*/ NOTICE: The signature to this assignment must correspond with
the name of the registered owner as it
appears on the face of the within Note in every particular,
without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible
guarantor institution" meeting the
requirements of the Note Registrar, which requirements include
membership or participation in STAMP
or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to,
or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Exhibit A-3
Unless this Note is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to
the Issuer or its agent for registration of transfer, exchange or
payment, and any Note issued is registered in the name of Cede &
Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative
of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the regis-
tered owner hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE
AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS CLASS A-3 NOTE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
CLASS A-1 AND CLASS A-2 NOTES AS DESCRIBED IN THE INDENTURE
REFERRED TO BELOW.
HOUSEHOLD CONSUMER LOAN TRUST 1997-1
Household Consumer Loan Asset Backed Notes, Series 1997-1
Class: Class A-3
Registered Principal Amount: $[ ]
Percentage Interest: [ ]%
Note Rate: Floating
No.
CUSIP No.
Household Consumer Loan Trust 1997-1, a business trust
duly organized and existing under the laws of the State of Delaware
(herein referred to as the "Issuer"), for value received, hereby
promises to pay to Cede & Co. or registered assigns, the principal
sum of [ ]
DOLLARS, payable on each Payment Date in an amount equal to the
Percentage Interest specified above of the aggregate amount, if
any, payable from the Payment Account in respect of principal on
the Class A-3 Notes pursuant Section 3.05 of the Indenture dated as
of March 1, 1997 (the "Indenture") between the Issuer and The Bank
of New York, as Indenture Trustee (the "Indenture Trustee");
provided, however, that the entire unpaid principal amount of this
Note shall be due and payable on the March 2007 Payment Date.
Capitalized terms used but not defined herein are defined in
Article I of the Indenture, which also contains rules as to
construction that shall be applicable herein.
The Issuer will pay interest on this Note on each Payment
Date at a rate per annum equal to LIBOR plus 0.350% on the
principal amount of this Class A-3 Note on the preceding Payment
Date (after giving effect to all payments of principal made on such
preceding Payment Date); provided, however, that in no event shall
the Note Rate on this Note with respect to any Interest Period
exceed 14.0% for such Interest Period. LIBOR for each applicable
Interest Period will be determined on the second LIBOR Business Day
prior to the first day of such Interest Period or in the case of
the first Interest Period, two days prior to the Closing Date as
set forth in the Indenture. All determinations of LIBOR by the
Indenture Trustee shall, in the absence of manifest error, be
conclusive for all purposes, and each holder of this Class A-3
Note, by accepting this Class A-3 Note, agrees to be bound by such
determination. Interest on this Class A-3 Note will accrue for
each Payment Date from the most recent Payment Date on which
interest has been paid (in the case of the first Payment Date, from
the Closing Date) to but excluding such Payment Date. Interest
will be computed on the basis of the actual number of days in each
Interest Period and a year assumed to consist of 360 days.
Principal of and interest on this Class A-3 Note shall be paid in
the manner specified on the reverse hereof.
Principal of and interest on this Note are payable in
such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private
debts. All payments made by the Issuer with respect to this Note
shall be applied first to interest due and payable on this Note as
provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note
set forth on the reverse hereof, which shall have the same effect
as though fully set forth on the face of this Note.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by
manual signature, this Note shall not be entitled to any benefit
under the Indenture referred to on the reverse hereof, or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the
Issuer and not in its individual capacity, has caused this Note to
be duly executed.
HOUSEHOLD CONSUMER LOAN TRUST 1997-1
By CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity
but solely as Owner Trustee
By
Authorized Signatory
Certificate of Authentication
This is one of the Class A-3 Notes referred to in the within men-
tioned Indenture.
THE BANK OF NEW YORK,
not in its individual capacity but
solely as Indenture Trustee
Dated: March ___, 1997
By
Authorized Signatory
[REVERSE OF NOTE]
This Class A-3 Note is one of a duly authorized issue of
Class A-3 Notes of the Issuer, designated as its Household Consumer
Loan Asset Backed Notes, Series 1997-1 (herein called the "Class
A-3 Notes"), all issued under the Indenture, to which Indenture and
all indentures supplemental thereto reference is hereby made for a
statement of the respective rights and obligations thereunder of
the Issuer, the Indenture Trustee and the holders of the Notes.
The Notes are subject to all terms of the Indenture.
The Class A-3 Notes and the Class A-1 Notes, the Class
A-2 Notes and the Class B Notes, also issued under the Indenture
(collectively, the "Notes") are and will be secured by the
collateral pledged as security therefor as provided in the
Indenture.
Principal of and interest on this Class A-3 Note will be
payable on each Payment Date, commencing on April 15, 1997, as
described in the Indenture. "Payment Date" means the fifteenth day
of each month, or, if any such day is not a Business Day, then the
next Business Day.
The entire unpaid principal amount of this Class A-3 Note
shall be due and payable in full on the Payment Date in March 2007
pursuant to the Indenture. Notwithstanding the foregoing, if an
Event of Default shall have occurred and be continuing, then the
Indenture Trustee or the holders of Notes representing not less
than a majority of the Security Balances of all the Notes may
declare the Notes to be immediately due and payable in the manner
provided in Section 5.01 of the Indenture. On each Payment Date,
principal payments on the Class A-3 Notes shall be payable in the
amounts as provided in Section 3.05 of the Indenture.
Payments of interest on this Class A-3 Note due and
payable on each Payment Date, together with the installment of
principal, if any, to the extent not in full payment of this Note,
shall be made by check mailed to the Person whose name appears as
the Registered Holder of this Note on the Note Register as of the
close of business on each Record Date, except that with respect to
Notes registered on the Record Date in the name of the nominee of
the Depository Agency (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available
funds to the account designated by such nominee. Such checks shall
be mailed to the Person entitled thereto at the address of such
Person as it appears on the Note Register as of the applicable
Record Date without requiring that this Note be submitted for
notation of payment. Any reduction in the principal amount of this
Note effected by any payments made on any Payment Date shall be
binding upon all future holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or
in lieu hereof, whether or not noted hereon. If funds are expected
to be available, as provided in the Indenture, for payment in full
of the then remaining unpaid principal amount of this Note on a
Payment Date, then the Indenture Trustee, in the name of and on
behalf of the Issuer, will notify the Person who was the Registered
Holder hereof as of the Record Date preceding such Payment Date by
notice mailed or transmitted by facsimile prior to such Payment
Date, and the amount then due and payable shall be payable only
upon presentation and surrender of this Note at the address
specified in such notice of final payment.
As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Note may be
registered on the Note Register upon surrender of this Note for
registration of transfer at the Corporate Trust Office, duly
endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Indenture Trustee duly executed by, the
holder hereof or such holder's attorney duly authorized in writing,
with such signature guaranteed by an "eligible guarantor institu-
tion" meeting the requirements of the Note Registrar, which
requirements include membership or participation in the Securities
Transfer Agent's Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended,
and thereupon one or more new Notes in authorized denominations and
in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Note,
but the Note Registrar shall require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in
connection with any registration of transfer or exchange of this
Note.
Each holder or Beneficial Owner of a Note, by acceptance
of a Note or, in the case of a Beneficial Owner of a Note, a
beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee, the Administrator,
the Seller, the Servicer or the Indenture Trustee on the Notes or
under the Indenture or any certificate or other writing delivered
in connection 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 or employee of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder
of a beneficial interest in the Issuer, the Owner Trustee, the
Administrator 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.
Each holder or Beneficial Owner of a Note, by acceptance
of a Note or, in the case of a Beneficial Owner of a Note, a
beneficial interest in a Note, covenants and agrees by accepting
the benefits of the Indenture that such holder or Beneficial Owner
of a Note will not at any time institute against the Seller, the
Administrator, the Servicer or the Issuer, or join in any institu-
tion against the Seller, the Administrator, the Servicer or the
Issuer of, any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations
relating to the Notes, the Indenture or the Basic Documents.
The Issuer has entered into the Indenture and this Note
is issued with the intention that, for federal, state and local
income, single business and franchise tax purposes, the Notes will
qualify as indebtedness of the Issuer. Each holder of a Note, by
acceptance of a Note (and each Beneficial Owner of a Note by
acceptance of a beneficial interest in a Note), agrees to treat the
Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer
of this Note, the Issuer, the Indenture Trustee and any agent of
the Issuer or the Indenture Trustee may treat the Person in whose
name this Note (as of the day of determination or as of such other
date as may be specified in the Indenture) is registered as the
owner hereof for all purposes, whether or not this Note be overdue,
and none of the Issuer, the Indenture Trustee or any such agent
shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights
and obligations of the Issuer and the rights of the holders of the
Notes under the Indenture at any time by the Issuer with the
consent of the holders of Notes representing a majority of the
Security Balances of all Notes at the time Outstanding. The
Indenture also contains provisions permitting the holders of Notes
representing specified percentages of the Security Balances of all
Notes, on behalf of the holders of all the Notes, to waive
compliance by the Issuer with certain provisions of the Indenture
and certain past defaults under the Indenture and their consequenc-
es. Any such consent or waiver by the holder of this Note shall be
conclusive and binding upon such holder and upon all future holders
of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or
not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Indenture Trustee to amend or waive
certain terms and conditions set forth in the Indenture without the
consent of holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any
successor to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of
the Indenture Trustee and the holders of Notes under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain
limitations therein set forth.
This Note and the Indenture shall be construed in
accordance with the laws of the State of New York, without
reference to its conflict of law provisions, and the obligations,
rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture and no provision of
this Note or of the Indenture shall alter or impair the obligation
of the Issuer, which is absolute and unconditional, to pay the
principal of and interest on this Note at the times, place and
rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except
as expressly provided in the Basic Documents, none of Chase
Manhattan Bank Delaware in its individual capacity, The Bank of New
York in its individual capacity, any owner of a beneficial interest
in the Issuer, or any of their respective partners, beneficiaries,
agents, officers, directors, employees or successors or assigns
shall be personally liable for, nor shall recourse be had to any of
them for, the payment of principal of or interest on this Note or
performance of, or omission to perform, any of the covenants,
obligations or indemnifications contained in the Indenture. The
holder of this Note by its acceptance hereof agrees that, except as
expressly provided in the Basic Documents, in the case of an Event
of Default under the Indenture, the holder shall have no claim
against any of the foregoing for any deficiency, loss or claim
therefrom; provided, however, that nothing contained herein shall
be taken to prevent recourse to, and enforcement against, the
assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of
assignee:
FOR VALUE RECEIVED, the undersigned hereby sells, assigns
and transfers unto
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints
, attorney, to transfer said Note
on the books kept for registration thereof, with full power of
substitution in the premises.
Dated: */
Signature Guaranteed:
*/
________________________
*/ NOTICE: The signature to this assignment must correspond with
the name of the registered owner as it
appears on the face of the within Note in every particular,
without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible
guarantor institution" meeting the
requirements of the Note Registrar, which requirements include
membership or participation in STAMP
or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to,
or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Exhibit B
Unless this Note is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to
the Issuer or its agent for registration of transfer, exchange or
payment, and any Note issued is registered in the name of Cede &
Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative
of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the regis-
tered owner hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE
AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS CLASS B NOTE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS
A-1, CLASS A-2 AND CLASS A-3 NOTES AS DESCRIBED IN THE INDENTURE
REFERRED TO BELOW.
HOUSEHOLD CONSUMER LOAN TRUST 1997-1
Household Consumer Loan Asset Backed Notes, Series 1997-1
Class: Class B
Registered Principal Amount: $[ ]
Percentage Interest: [ ]%
Note Rate: Floating
No.
CUSIP No.
Household Consumer Loan Trust 1997-1, a business trust
duly organized and existing under the laws of the State of Delaware
(herein referred to as the "Issuer"), for value received, hereby
promises to pay to Cede & Co. or registered assigns, the principal
sum of [ ]
DOLLARS, payable on each Payment Date in an amount equal to the
Percentage Interest specified above of the aggregate amount, if
any, payable from the Payment Account in respect of principal on
the Class B Notes pursuant Section 3.05 of the Indenture dated as
of March 1, 1997 (the "Indenture") between the Issuer and The Bank
of New York, as Indenture Trustee (the "Indenture Trustee");
provided, however, that the entire unpaid principal amount of this
Note shall be due and payable on the March 2007 Payment Date.
Capitalized terms used but not defined herein are defined in
Article I of the Indenture, which also contains rules as to
construction that shall be applicable herein.
The Issuer will pay interest on this Note on each Payment
Date at a rate per annum equal to LIBOR plus an amount specified in
the Indenture not to exceed 0.875% on the principal amount of this
Class B Note on the preceding Payment Date (after giving effect to
all payments of principal made on such preceding Payment Date);
provided, however, that in no event shall the Note Rate on this
Note with respect to any Interest Period exceed 14.0% for such
Interest Period. LIBOR for each applicable Interest Period will be
determined on the second LIBOR Business Day prior to the first day
of such Interest Period or in the case of the first Interest
Period, two days prior to the Closing Date as set forth in the
Indenture. All determinations of LIBOR by the Indenture Trustee
shall, in the absence of manifest error, be conclusive for all
purposes, and each holder of this Class B Note, by accepting this
Class B Note, agrees to be bound by such determination. Interest
on this Class B Note will accrue for each Payment Date from the
most recent Payment Date on which interest has been paid (in the
case of the first Payment Date, from the Closing Date) to but
excluding such Payment Date. Interest will be computed on the
basis of the actual number of days in each Interest Period and a
year assumed to consist of 360 days. Principal of and interest on
this Class B Note shall be paid in the manner specified on the
reverse hereof.
Principal of and interest on this Note are payable in
such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private
debts. All payments made by the Issuer with respect to this Note
shall be applied first to interest due and payable on this Note as
provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note
set forth on the reverse hereof, which shall have the same effect
as though fully set forth on the face of this Note.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by
manual signature, this Note shall not be entitled to any benefit
under the Indenture referred to on the reverse hereof, or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the
Issuer and not in its individual capacity, has caused this Note to
be duly executed.
HOUSEHOLD CONSUMER LOAN TRUST 1997-1
By CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity
but solely as Owner Trustee
By
Authorized Signatory
Certificate of Authentication
This is one of the Class B Notes referred to in the within men-
tioned Indenture.
THE BANK OF NEW YORK,
not in its individual capacity but
solely as Indenture Trustee
Dated: March ___, 1997
By
Authorized Signatory
[REVERSE OF NOTE]
This Class B Note is one of a duly authorized issue of
Class B Notes of the Issuer, designated as its Household Consumer
Loan Asset Backed Notes, Series 1997-1 (herein called the "Class B
Notes"), all issued under the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a
statement of the respective rights and obligations thereunder of
the Issuer, the Indenture Trustee and the holders of the Notes.
The Notes are subject to all terms of the Indenture.
The Class B Notes and the Class A-1 Notes, Class A-2
Notes and Class A-3 Notes, also issued under the Indenture
(collectively, the "Notes") are and will be secured by the
collateral pledged as security therefor as provided in the
Indenture.
Principal of and interest on this Class B Note will be
payable on each Payment Date, commencing on April 15, 1997, as
described in the Indenture. "Payment Date" means the fifteenth day
of each month, or, if any such day is not a Business Day, then the
next Business Day.
The entire unpaid principal amount of this Class B Note
shall be due and payable in full on the Payment Date in March 2007
pursuant to the Indenture. Notwithstanding the foregoing, if an
Event of Default shall have occurred and be continuing, then the
Indenture Trustee or the holders of Notes representing not less
than a majority of the Security Balances of all the Notes may
declare the Notes to be immediately due and payable in the manner
provided in Section 5.01 of the Indenture. On each Payment Date,
principal payments on the Class B Notes shall be payable in the
amounts as provided in Section 3.05 of the Indenture.
Payments of interest on this Class B Note due and payable
on each Payment Date, together with the installment of principal,
if any, to the extent not in full payment of this Note, shall be
made by check mailed to the Person whose name appears as the
Registered Holder of this Note on the Note Register as of the close
of business on each Record Date, except that with respect to Notes
registered on the Record Date in the name of the nominee of the
Depository Agency (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available
funds to the account designated by such nominee. Such checks shall
be mailed to the Person entitled thereto at the address of such
Person as it appears on the Note Register as of the applicable
Record Date without requiring that this Note be submitted for
notation of payment. Any reduction in the principal amount of this
Note effected by any payments made on any Payment Date shall be
binding upon all future holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or
in lieu hereof, whether or not noted hereon. If funds are expected
to be available, as provided in the Indenture, for payment in full
of the then remaining unpaid principal amount of this Note on a
Payment Date, then the Indenture Trustee, in the name of and on
behalf of the Issuer, will notify the Person who was the Registered
Holder hereof as of the Record Date preceding such Payment Date by
notice mailed or transmitted by facsimile prior to such Payment
Date, and the amount then due and payable shall be payable only
upon presentation and surrender of this Note at the address
specified in such notice of final payment.
As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Note may be
registered on the Note Register upon surrender of this Note for
registration of transfer at the Corporate Trust Office, duly
endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Indenture Trustee duly executed by, the
holder hereof or such holder's attorney duly authorized in writing,
with such signature guaranteed by an "eligible guarantor institu-
tion" meeting the requirements of the Note Registrar, which
requirements include membership or participation in the Securities
Transfer Agent's Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended,
and thereupon one or more new Notes in authorized denominations and
in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Note,
but the Note Registrar shall require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in
connection with any registration of transfer or exchange of this
Note.
Each holder or Beneficial Owner of a Note, by acceptance
of a Note or, in the case of a Beneficial Owner of a Note, a
beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee, the Administrator,
the Seller, the Servicer or the Indenture Trustee on the Notes or
under the Indenture or any certificate or other writing delivered
in connection 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 or employee of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder
of a beneficial interest in the Issuer, the Owner Trustee, the
Administrator 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.
Each holder or Beneficial Owner of a Note, by acceptance
of a Note or, in the case of a Beneficial Owner of a Note, a
beneficial interest in a Note, covenants and agrees by accepting
the benefits of the Indenture that such holder or Beneficial Owner
of a Note will not at any time institute against the Seller, the
Administrator, the Servicer or the Issuer, or join in any institu-
tion against the Seller, the Administrator, the Servicer or the
Issuer of, any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations
relating to the Notes, the Indenture or the Basic Documents.
The Issuer has entered into the Indenture and this Note
is issued with the intention that, for federal, state and local
income, single business and franchise tax purposes, the Notes will
qualify as indebtedness of the Issuer. Each holder of a Note, by
acceptance of a Note (and each Beneficial Owner of a Note by
acceptance of a beneficial interest in a Note), agrees to treat the
Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer
of this Note, the Issuer, the Indenture Trustee and any agent of
the Issuer or the Indenture Trustee may treat the Person in whose
name this Note (as of the day of determination or as of such other
date as may be specified in the Indenture) is registered as the
owner hereof for all purposes, whether or not this Note be overdue,
and none of the Issuer, the Indenture Trustee or any such agent
shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights
and obligations of the Issuer and the rights of the holders of the
Notes under the Indenture at any time by the Issuer with the
consent of the holders of Notes representing a majority of the
Security Balances of all Notes at the time Outstanding. The
Indenture also contains provisions permitting the holders of Notes
representing specified percentages of the Security Balances of all
Notes, on behalf of the holders of all the Notes, to waive
compliance by the Issuer with certain provisions of the Indenture
and certain past defaults under the Indenture and their consequenc-
es. Any such consent or waiver by the holder of this Note shall be
conclusive and binding upon such holder and upon all future holders
of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or
not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Indenture Trustee to amend or waive
certain terms and conditions set forth in the Indenture without the
consent of holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any
successor to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of
the Indenture Trustee and the holders of Notes under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain
limitations therein set forth.
This Note and the Indenture shall be construed in
accordance with the laws of the State of New York, without
reference to its conflict of law provisions, and the obligations,
rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture and no provision of
this Note or of the Indenture shall alter or impair the obligation
of the Issuer, which is absolute and unconditional, to pay the
principal of and interest on this Note at the times, place and
rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except
as expressly provided in the Basic Documents, none of Chase
Manhattan Bank Delaware, in its individual capacity, The Bank of
New York in its individual capacity, any owner of a beneficial
interest in the Issuer, or any of their respective partners,
beneficiaries, agents, officers, directors, employees or successors
or assigns shall be personally liable for, nor shall recourse be
had to any of them for, the payment of principal of or interest on
this Note or performance of, or omission to perform, any of the
covenants, obligations or indemnifications contained in the
Indenture. The holder of this Note by its acceptance hereof agrees
that, except as expressly provided in the Basic Documents, in the
case of an Event of Default under the Indenture, the holder shall
have no claim against any of the foregoing for any deficiency, loss
or claim therefrom; provided, however, that nothing contained
herein shall be taken to prevent recourse to, and enforcement
against, the assets of the Issuer for any and all liabilities,
obligations and undertakings contained in the Indenture or in this
Note.
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of
assignee:
FOR VALUE RECEIVED, the undersigned hereby sells, assigns
and transfers unto
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints
, attorney, to transfer said Note
on the books kept for registration thereof, with full power of
substitution in the premises.
Dated: */
Signature Guaranteed:
*/
________________________
*/ NOTICE: The signature to this assignment must correspond with
the name of the registered owner as it
appears on the face of the within Note in every particular,
without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible
guarantor institution" meeting the
requirements of the Note Registrar, which requirements include
membership or participation in STAMP
or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to,
or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Exhibit C
FORM OF MONTHLY SECURITY REPORT
Date:
To:
From: [INDENTURE TRUSTEE]
Series 1997-1 Participation Interest Balance . . . . . $_________
Prime minus 1.50%. . . . . . . . . . . . . . . . . . . .________%
Series 1997-1 Participation Interest
Distribution Amount. . . . . . . . . . . . . . . . . . $_________
Securities Interest Distribution Amount
- Class A-1 . . . . . . . . . . . . . . . . . . . . . $_________
- Class A-2 . . . . . . . . . . . . . . . . . . . . . $_________
- Class A-3 . . . . . . . . . . . . . . . . . . . . . $_________
- Class B . . . . . . . . . . . . . . . . . . . . . . $_________
- Certificates. . . . . . . . . . . . . . . . . . . . $_________
Amounts per $1,000
Accelerated Principal Distribution Amount. . . . . . . $_________
Series 1997-1 Principal Distribution Amount. . . . . . $_________
Optimal principal distribution amount. . . . . . . . . $_________
Class A-1 principal distribution . . . . . . . . . . . $_________
Class A-2 principal distribution . . . . . . . . . . . $_________
Class A-3 principal distribution . . . . . . . . . . . $_________
Class B principal distribution . . . . . . . . . . . . $_________
Certificate distribution . . . . . . . . . . . . . . . $_________
OC Distribution. . . . . . . . . . . . . . . . . . . . $_________
Balance of Class A-1 . . . . . . . . . . . . . . . . . $_________
Balance of Class A-2 . . . . . . . . . . . . . . . . . $_________
Balance of Class A-3 . . . . . . . . . . . . . . . . . $_________
Balance of Class B . . . . . . . . . . . . . . . . . . $_________
Balance of Certificates. . . . . . . . . . . . . . . . $_________
Balance of OC. . . . . . . . . . . . . . . . . . . . . $_________
Net Charge-Offs applied to each class. . . . . . . . . $_________
Reversals applied to each class. . . . . . . . . . . . $_________
Excess to Issuer . . . . . . . . . . . . . . . . . . . $_________
Subordination available to each class. . . . . . . . . $_________
Overcollateralization as %
of Participation Interest
Invested Amount. . . . . . . . . . . . . . . . . . . . $_________
APPENDIX A
EXECUTION COPY
DEFINITIONS
The definitions contained herein are incorporated into and
made a part of the Trust Agreement and Indenture, each as defined
below.
Accelerated Principal Payment Amount: With respect to any
Payment Date, the lesser of (i) the Excess Interest reduced by the
amount of the Net Charge-Off and (ii) one-twelfth of the Series
1997-1 Participation Interest Invested Amount as of the beginning
of the related Interest Period multiplied for each Payment Date
occurring prior to April 1998, by 0.75%, and for each Payment Date
occurring in April 1998 or thereafter, by 0.25%.
Act: The meaning assigned to such term in Section 10.03 of
the Indenture.
Adjusted Principal Balance: With respect to the Class A-1
Notes, Class A-2 Notes, Class A-3 Notes and Class B Notes, the
Class A-1 Adjusted Principal Balance, Class A-2 Adjusted Principal
Balance, Class A-3 Adjusted Principal Balance and Class B Adjusted
Principal Balance, respectively.
Adjusted Security Balance: With respect to any Payment Date,
the sum of the Class A Adjusted Principal Balance, the Class B
Adjusted Principal Balance and the Certificate Adjusted Security
Balance.
Administration Agreement: The Administration Agreement dated
as of March 1, 1997 among the Issuer, the Indenture Trustee and
HFC, as Administrator, as it may be amended from time to time.
Administrator: HFC, as administrator under the Administration
Agreement or any successor Administrator appointed pursuant to the
terms of the Administration Agreement.
Affiliate: The meaning assigned to such term in the Pooling
and Servicing Agreement.
Aggregate Security Balance: With respect to any Payment Date,
the aggregate of the Principal Balances of all Securities as of
such date.
Amortization Event: The meaning assigned to such term in the
Pooling and Servicing Agreement.
Authorized Newspaper: A newspaper of general circulation in
the Borough of Manhattan, The City of New York, printed in the
English language and customarily published on each Business Day,
whether or not published on Saturdays, Sundays or holidays.
Authorized Officer: 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 delivered by the Owner Trustee to the Inden-
ture Trustee on the Closing Date (as such list may be modified or
supplemented from time to time thereafter) and, so long as the
Administration Agreement is in effect, any Responsible 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 Adminis-
trator pursuant to the Administration Agreement and who is identi-
fied on the list of Authorized Officers delivered by the Adminis-
trator to the Indenture Trustee on the Closing Date (as such list
may be modified or supplemented from time to time thereafter).
Available Investor Principal Collections: The meaning
assigned to such term in the Pooling and Servicing Agreement.
Basic Documents: The Trust Agreement, the Certificate of
Trust, the Indenture, Receivables Purchase Agreement, the Admin-
istration Agreement, the Pooling and Servicing Agreement, and the
other documents and certificates delivered in connection with any
of the above.
Beneficial Owner: With respect to any Note, the Person who is
the beneficial owner of such Note as reflected on the books of the
Depositary or on the books of a Person maintaining an account with
such Depositary (directly as a Depositary Participant or indirectly
through a Depositary Participant, in accordance with the rules of
such Depositary).
Book-Entry Notes: Beneficial interests in the Notes, owner-
ship and transfers of which shall be made through book entries by
the Seller as described in Section 4.06 of the Indenture.
Business Day: Any day other than (i) a Saturday or a Sunday
or (ii) a day on which banking institutions in the State of New
York or Illinois are required or authorized by law to be closed.
Business Trust Statute: Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Sections 3801 et seq., as the same may be
amended from time to time.
Certificate Adjusted Security Balance: With respect to any
Payment Date, the Certificate Balance after giving effect to any
distributions thereon pursuant to Section 3.05(a)(iii) and (vi) of
the Indenture on all Payment Dates including the current Payment
Date less all Net Charge-Offs allocated to the Certificates after
giving effect to any such allocation to be made on such Payment
Date.
Certificate Balance: With respect to any Payment Date, the
Initial Certificate Balance, reduced by all distributions thereon
other than distributions in respect of the Certificate Yield, prior
to such Payment Date.
Certificate of Trust: The Certificate of Trust filed for the
Trust pursuant to Section 3810(a) of the Business Trust Statute.
Certificateholder: The Person in whose name a Certificate is
registered in the Certificate Register except that, any Certificate
registered in the name of the Seller, the Owner Trustee or the
Indenture Trustee or any Affiliate of any of them shall be deemed
not to be outstanding and the registered holder will not be
considered a Certificateholder or a holder for purposes of giving
any request, demand, authorization, direction, notice, consent or
waiver under the Indenture or the Trust Agreement provided that, in
determining whether the Indenture Trustee or the Owner Trustee
shall be protected in relying upon any such request, demand, autho-
rization, direction, notice, consent or waiver, only Certificates
that the Indenture Trustee or the Owner Trustee knows to be so
owned shall be so disregarded. Owners of Certificates that have
been pledged in good faith may be regarded as Holders if the
pledgee establishes to the satisfaction of the Indenture Trustee or
the Owner Trustee, as the case may be, the pledgee's right so to
act with respect to such Certificates and that the pledgee is not
the Seller, any other obligor upon the Certificates or any Affil-
iate of any of the foregoing Persons.
Certificate Minimum Adjusted Balance: $11,200,000.
Certificate Minimum Balance: With respect to any Payment Date
the Series 1997-1 Participation Interest Invested Amount, after
giving effect to the distribution made on the Series 1997-1 Partic-
ipation Interest on such Payment Date, multiplied by 1.0101%.
Certificate Paying Agent: The meaning specified in Section
3.03 of the Indenture.
Certificate Rate: With respect to any Interest Period, the
per annum rate equal to the sum of (i) LIBOR and (ii) 1.0% (or such
other percentage determined pursuant to an amendment to the Trust
Agreement pursuant to Section 11.01 thereof not to exceed 1.25%),
but in no event greater than 15.0% per annum.
Certificate Register: The register maintained by the Certif-
icate Registrar in which the Certificate Registrar shall provide
for the registration of Certificates and of transfers and exchanges
of Certificates.
Certificate Registrar: Initially, The Bank of New York, in
its capacity as Certificate Registrar, or any successor to the
Indenture Trustee in such capacity as appointed pursuant to Section
3.05 of the Trust Agreement.
Certificates: The Consumer Loan Asset Backed Certificates,
Series 1997-1, each evidencing undivided beneficial interests in
the Issuer and executed by the Owner Trustee in substantially the
form set forth in Exhibit A to the Trust Agreement.
Certificate Targeted Balance: An amount equal to (i) the
Series 1997-1 Participation Interest Invested Amount multiplied by
91.5%, less (ii) the Class A Adjusted Principal Balance and the
Class B Adjusted Principal Balance immediately prior to such Pay-
ment Date and after giving effect to payments of principal on the
Class A Notes and Class B Notes pursuant to Section 3.05(a)(ii) of
the Indenture on such Payment Date.
Certificate Yield: The sum of (a) the amount accrued during
the related Interest Period at the Certificate Rate on the sum of
(i) the Certificate Balance immediately prior to such Payment Date
and (ii) any previously accrued and unpaid amount at the Certif-
icate Rate for prior Payment Dates, and (b) any previously accrued
and unpaid amount at the Certificate Rate for prior Payment Dates.
Class: Any of class of the Class A Notes and Class B Notes
issued pursuant to Article II of the Indenture.
Class A Adjusted Principal Balance: The sum of the Class A-1
Adjusted Principal Balance, Class A-2 Adjusted Principal Balance
and Class A-3 Adjusted Principal Balance.
Class A Notes: Any of the Class A-1 Notes, Class A-2 Notes
and Class A-3 Notes issued pursuant to Article II of the Indenture.
Class A Targeted Principal Balance: The sum of the Class A-1
Targeted Principal Balance, Class A-2 Targeted Principal Balance,
and Class A-3 Targeted Principal Balance.
Class A-1 Adjusted Principal Balance: With respect to any
Payment Date, the Principal Balance of the Class A-1 Notes after
giving effect to any distributions thereon pursuant to Section
3.05(a)(ii), (v) and (vi) of the Indenture on all Payment Dates
including the current Payment Date less any Net Charge-Off allo-
cated to the Class A-1 Notes after giving effect to any such
allocation to be made on such Payment Date.
Class A-1 Notes: The Class A-1 Notes issued pursuant to
Article II of the Indenture.
Class A-1 Targeted Principal Balance: The Series 1997-1
Participation Interest Invested Amount multiplied by 52.0%.
Class A-2 Adjusted Principal Balance: With respect to any
Payment Date, the Principal Balance of the Class A-2 Notes after
giving effect to any distributions thereon pursuant to Section
3.05(a)(ii), (v) and (vi) of the Indenture on all Payment Dates
including the current Payment Date less any Net Charge-Off allo-
cated to the Class A-2 Notes after giving effect to any such
allocation to be made on such Payment Date.
Class A-2 Notes: The Class A-2 Notes issued pursuant to
Article II of the Indenture.
Class A-2 Targeted Principal Balance: With respect to any
Payment Date an amount equal to (i) the Series 1997-1 Participation
Interest Invested Amount multiplied by 62.0%, less (ii) the Class
A-1 Adjusted Principal Balance immediately prior to such Payment
Date and after giving effect to payments of principal on the Class
A-1 Notes pursuant to Section 3.05(a)(ii)(a) of the Indenture on
such Payment Date.
Class A-3 Adjusted Principal Balance: With respect to any
Payment Date, the Principal Balance of the Class A-3 Notes after
giving effect to any distributions thereon pursuant to Section
3.05(a)(ii), (v) and (vi) of the Indenture on all Payment Dates
including the current Payment Date less any Net Charge-Off allo-
cated to the Class A-3 Notes after giving effect to any such
allocation to be made on such Payment Date.
Class A-3 Notes: The Class A-3 Notes issued pursuant to
Article II of the Indenture.
Class A-3 Targeted Principal Balance: With respect to any
Payment Date an amount equal to (i) the Series 1997-1 Participation
Interest Invested Amount multiplied by 75.0%, less (ii) the sum of
the Class A-1 Adjusted Principal Balance and Class A-2 Adjusted
Principal Balance immediately prior to such Payment Date and after
giving effect to payments of principal on the Class A-1 Notes and
Class A-2 Notes pursuant to Section 3.05(a)(ii) of the Indenture on
such Payment Date.
Class B Adjusted Principal Balance: With respect to any Pay-
ment Date, the Principal Balance of the Class B Notes, after giving
effect to any distributions thereon pursuant to Section
3.05(a)(ii), (v) and (vi) of the Indenture on all Payments Dates
including the current Payment Date less all Net Charge-Off allo-
cated to the Class B Notes after giving effect to any such alloca-
tion to be made on such Payment Date.
Class B Notes: The Class B Notes issued pursuant to Article
II of the Indenture.
Class B Targeted Principal Balance: With respect to any Pay-
ment Date an amount equal to (i) the Series 1997-1 Participation
Interest Invested Amount multiplied by 84.5%, less (ii) the Class
A Adjusted Principal Balance immediately prior to such Payment Date
and after giving effect to payments of principal on the Class A
Notes pursuant to Section 3.05(a)(ii) of the Indenture on such
Payment Date.
Class Interest Distribution: With respect to any Payment Date
and Class of Notes, the sum of (a) the amount of interest accrued
during the Interest Period relating to such Payment Date at the
related Note Rate for such Class of Notes on the sum of (i) the
Principal Balance of such Class of Notes immediately prior to such
Payment Date and (ii) any previously accrued and unpaid interest on
such Class of Notes for prior Payment Dates, and (b) any previously
accrued and unpaid interest on such Class of Notes for prior Pay-
ment Dates.
Class Percentage: With respect to each Class of Notes and
Payment Date, the ratio, expressed as a percentage, of the aggre-
gate Principal Balance of such Class of Notes to the aggregate
Principal Balance of the Notes, in each case immediately prior to
such Payment Date.
Closing Date: March 12, 1997.
Code: The Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.
Corporate Trust Office: With respect to the Indenture
Trustee, Certificate Registrar, Certificate Paying Agent and Paying
Agent, the principal corporate trust office of the Indenture
Trustee and Note Registrar at which at any particular time its
corporate trust business shall be principally administered, which
office at the date of the execution of this instrument is located
at 000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Corporate Trust Administration Asset-Backed Unit. With
respect to the Owner Trustee, the principal corporate trust office
of the Owner Trustee at which at any particular time its corporate
trust business shall be administered, which office at the date of
the execution of the Trust Agreement is located at 0000 Xxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Corporate Trustee
Administration.
Default: Any occurrence which is or with notice or the lapse
of time or both would become an Event of Default.
Definitive Notes: The meaning specified in Section 4.06 of
the Indenture.
Deposit Trust: The trust created pursuant to the Pooling and
Servicing Agreement.
Deposit Trustee: Texas Commerce Bank National Association, as
successor trustee to The Chase Manhattan Bank, N.A., and any
successor thereto under the Pooling and Servicing Agreement.
Depository or Depository Agency: The Depository Trust Company
or a successor appointed by the Indenture Trustee with the approval
of the Seller. Any successor to the Depository shall be an
organization registered as a "clearing agency" pursuant to Section
17A of the Exchange Act and the regulations of the Securities and
Exchange Commission thereunder.
Depository Participant: A Person for whom, from time to time,
the Depository effects book-entry transfers and pledges of securi-
ties deposited with the Depository.
Designated Certificate: The meaning specified in Section 3.11
of the Trust Agreement.
Determination Date: With respect to any Payment Date, the 5th
Business Day prior to such Payment Date occurs or if such day is
not a Business Day, the next succeeding Business Day.
Distribution Date: The meaning specified in the Supplement.
Due Period: The meaning assigned to such term in the Pooling
and Servicing Agreement.
Eligible Deposit Account: The meaning assigned to such term
in the Pooling and Servicing Agreement.
Eligible Investments: The meaning assigned to such term in
the Pooling and Servicing Agreement.
ERISA: The meaning assigned to such term in the Pooling and
Servicing Agreement.
Event of Default: With respect to the Indenture, any one of
the following events (whatever the reason for such Event of Default
and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):
(i) a default in the payment on any related Payment Date
of any interest accrued on any Note during the related
Interest Period, and such default shall continue for a period
of five days;
(ii) a default in the payment of the principal of or any
installment of the principal of any Note when the same becomes
due and payable;
(iii) default in the observance or performance of any
covenant or agreement of the Issuer made in the Indenture, or
any representation or warranty of the Issuer made in the
Indenture or in any certificate or other writing delivered
pursuant thereto or in connection therewith proving to have
been incorrect in any material respect as of the time when the
same shall have been made and shall have had a material
adverse effect on any Noteholders, and such default shall
continue or not be cured, or the circumstance or condition in
respect of which such representation or warranty was incorrect
shall not have been eliminated or otherwise cured, for a
period of 30 days after there shall have been given, by
registered or certified mail, to the Issuer by the Indenture
Trustee or to the Issuer and the Indenture Trustee by the
Holders of at least 25% in principal amount of the Notes then
outstanding, a written notice specifying such default or
incorrect representation or warranty and requiring it to be
remedied and stating that such notice is a notice of default
hereunder;
(iv) the filing of a decree or order for relief by a
court having jurisdiction in the premises in respect of the
Issuer or any substantial part of the Indenture Trust Estate
in an involuntary case under any applicable federal or state
bankruptcy, insolvency or other similar law now or hereafter
in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the
Issuer or for any substantial part of the Indenture Trust
Estate, or ordering the winding-up or liquidation of the
Issuer's affairs, and such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days; or
(v) 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 or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Issuer or for any substantial part of
the Indenture Trust Estate, or the making by the Issuer of any
general assignment for the benefit of creditors, or the
failure by the Issuer generally to pay its debts as such debts
become due, or the taking of any action by the Issuer in
furtherance of any of the foregoing.
Excess Interest: With respect to any Payment Date the amount
if any by which Series 1997-1 Participation Interest Monthly
Interest exceeds the sum of (a) the amount to be distributed
pursuant to Section 3.05(a)(i) of the Indenture on such Payment
Date and (b) Series 1997-1 Participation Interest Charge-Offs for
the related Due Period.
Exchange Act: The Securities Exchange Act of 1934, as amend-
ed, and the rules and regulations promulgated thereunder.
Expenses: The meaning specified in Section 8.02 of the Trust
Agreement.
FASIT: Financial Asset Securitization Investment Trust as
passed by Congress in the Small Business Tax Bill, H.R. 3448, in
August 1996, and as enacted and amended from time to time.
FDIC: The Federal Deposit Insurance Corporation or any
successor thereto.
Final Scheduled Payment Date: To the extent not previously
paid, the principal balance of each Class of Notes will be due on
the Payment Date in March 2007.
Grant: Mortgage, pledge, bargain, sell, 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 the Indenture. A Grant
of the Indenture Collateral or of any other agreement or instrument
shall include all rights, powers and options (but none of the
obligations) of the granting party thereunder, including the
immediate and continuing right to claim for, collect, receive and
give receipt for principal and interest payments in respect of such
collateral or other agreement or instrument and all other moneys
payable thereunder, to give and receive notices and other communi-
cations, to make waivers or other agreements, to exercise all
rights and options, to bring proceedings in the name of the grant-
ing 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.
HFC: Household Finance Corporation, a Delaware corporation
and a subsidiary of Household International, Inc.
Holdback Amount: An amount initially equal to the excess of
(i) the Series 1997-1 Participation Interest Initial Invested
Amount over (ii) the aggregate Initial Principal Balances of the
Class A Notes, the Class B Notes and the Certificates. Such amount
will be reduced through payments made pursuant to Section
3.05(a)(iv) and 3.05(a)(vi) of the Indenture and will be reduced or
increased through the allocation of Series 1997-1 Participation
Interest Charge-Offs and Reversals pursuant to Section 3.05(c) and
(d) of the Indenture.
Holder: Any of the Noteholders or Certificateholders.
Indemnified Party: The meaning specified in Section 8.02 of
the Trust Agreement.
Indenture: The Indenture dated as of March 1, 1997 between
the Issuer, as debtor, and the Indenture Trustee, as Indenture
Trustee, as may be amended from time to time.
Indenture Collateral: The meaning specified in the Granting
Clause of the Indenture.
Indenture Trustee: The Bank of New York, and its successors
and assigns or any successor indenture trustee appointed pursuant
to the terms of the Indenture.
Indenture Trust Estate: The meaning specified in the Granting
Clause of the Indenture.
Independent: When used with respect to any specified Person,
the Person (i) is in fact independent of the Issuer, any other
obligor on the Notes, the Seller, the Servicer and any Affiliate of
any of the foregoing Persons, (ii) does not have any direct xxxxx-
cial interest or any material indirect financial interest in the
Issuer, any such other obligor, the Seller, the Servicer or any
Affiliate of any of the foregoing Persons and (iii) is not
connected with the Issuer, any such other obligor, the Seller, the
Servicer 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: A certificate or opinion to be
delivered to the Indenture Trustee under the circumstances
described in, and otherwise complying with, the applicable require-
ments of Section 10.01 of the Indenture, made by an Independent
appraiser or other expert appointed by the Issuer and approved by
the Indenture Trustee in the exercise of reasonable care, and such
opinion or certificate shall state that the signer has read the
definition of "Independent" in this Indenture and that the signer
is Independent within the meaning thereof.
Initial Certificate Balance: $33,600,000.
Initial Principal Balance: With respect to the Class A-1
Notes, Class A-2 Notes, Class A-3 Notes and Class B Notes,
$729,600,000, $48,000,000, $62,400,000 and $45,600,000, respec-
tively.
Insolvency Event: With respect to a specified Person, (a) the
filing of a decree or order for relief by a court having juris-
diction in the premises in respect of such Person or any substan-
tial part of its property in an involuntary case under any applic-
able bankruptcy, insolvency or other similar law now or hereafter
in effect, or appointing a receiver, liquidator, assignee, custo-
dian, trustee, sequestrator or similar official for such Person or
for any substantial part of its property, or ordering the winding-
up or liquidation of such Person's affairs, and such decree or
order shall remain unstayed and in effect for a period of 60 con-
secutive days; or (b) the commencement by such Person of a volun-
tary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or the consent by such
Person to the entry of an order for relief in an involuntary case
under any such law, or the consent by such Person to the appoint-
ment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such
Person or for any substantial part of its property, or the making
by such Person of any general assignment for the benefit of
creditors, or the failure by such Person generally to pay its debts
as such debts become due or the admission by such Person in writing
(as to which the Indenture Trustee shall have notice) of its
inability to pay its debts generally, or the adoption by the Board
of Directors or managing member of such Person of a resolution
which authorizes action by such Person in furtherance of any of the
foregoing.
Interest Period: With respect to any Payment Date other than
the first Payment Date, the period beginning on the preceding Pay-
ment Date and ending on the day preceding such Payment Date, and in
the case of the first Payment Date, the period beginning on the
Closing Date and ending on the day preceding the first Payment
Date.
Issuer: The Household Consumer Loan Trust 1997-1, a Delaware
business trust, or its successor in interest.
Issuer Request: 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.
LIBOR: For any Interest Period other than the first Interest
Period, the rate for United States dollar deposits for one month
which appears on the Telerate Screen Page 3750 as of 11:00 A.M.,
London time, on the second LIBOR Business Day prior to the first
day of such Interest Period. With respect to the first Interest
Period, the rate for United States dollar deposits for one month
which appears on the Telerate Screen Page 3750 as of 11:00 A.M.,
London time, two LIBOR Business Days prior to the Closing Date. If
such rate does not appear on such page (or such other page as may
replace that page on that service, or if such service is no longer
offered, such other service for displaying LIBOR or comparable
rates as may be reasonably selected by the Indenture Trustee after
consultation with the Servicer), the rate will be the Reference
Bank Rate. If no such quotations can be obtained and no Reference
Bank Rate is available, LIBOR will be LIBOR applicable to the
preceding Payment Date.
LIBOR Business Day: Any day other than (i) a Saturday or a
Sunday or (ii) a day on which banking institutions in the State of
New York or Illinois, or in the city of London, England are
required or authorized by law to be closed.
Lien: Any mortgage, deed of trust, pledge, conveyance,
hypothecation, assignment, participation, deposit arrangement,
encumbrance, lien (statutory or other), preference, priority right
or interest or other security agreement or preferential arrangement
of any kind or nature whatsoever, including, without limitation,
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 Section 6.02 of the Pooling and Servicing
Agreement shall not be deemed to constitute a Lien.
Minimum Adjusted Principal Balance: With respect to the Class
A-2 Notes, Class A-3 Notes and Class B Notes, $16,000,000,
$20,800,000, and $15,200,000, respectively.
Monthly Security Report: The report attached as Exhibit C to
the Indenture.
Monthly Servicer's Certificate: The Monthly Servicer's
Certificate attached to the Supplement for Series 1997-1 as Exhibit
X.
Xxxxx'x: Xxxxx'x Investors Service, Inc. or its successor in
interest.
Net Charge-Off: With respect to any Payment Date, the aggre-
gate amount of Optimum Monthly Principal not distributed on such
Payment Date and all prior Payment Dates less the aggregate amount
of Reversals allocated on such Payment Date and prior Payment
Dates.
Note Depositary Agreement: The DTC Letter of Representations
dated as of the Closing Date by and among, The Depository Trust
Company, the Indenture Trustee and the Issuer.
Note Owner: The Beneficial Owner of a Note.
Note Rate: With respect to any Interest Period, a per annum
rate equal to the sum of (a) LIBOR and (b) 0.125% with respect to
the Class A-1 Notes, 0.250% with respect to the Class A-2 Notes,
0.350% with respect to the Class A-3 Notes, and 0.65% (or such
other percentage determined pursuant to an amendment to the
Indenture adopted pursuant to Section 9.02 thereof not to exceed
0.875%) with respect to the Class B Notes but in no event greater
than 12.5%, 14.0%, 14.0% and 14.0% per annum, respectively.
Note Register: The register maintained by the Note Registrar
in which the Note Registrar shall provide for the registration of
Notes and of transfers and exchanges of Notes.
Note Registrar: The Indenture Trustee, in its capacity as
Note Registrar.
Noteholder: The Person in whose name a Note is registered in
the Note Register, except that, any Note registered in the name of
the Seller, the Issuer or the Indenture Trustee or any Affiliate of
any of them shall be deemed not to be outstanding and the regis-
tered holder will not be considered a Noteholder or holder for
purposes of giving any request, demand, authorization, direction,
notice, consent or waiver under the Indenture or the Trust Agree-
ment provided 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 the Indenture Trustee or the Owner Trustee knows to be so
owned shall be so disregarded. Owners of Notes that have been
pledged in good faith may be regarded as Holders if the pledgee
establishes to the satisfaction of the Indenture Trustee or the
Owner Trustee the pledgee's right so to act with respect to such
Notes and that the pledgee is not the Issuer, any other obligor
upon the Notes or any Affiliate of any of the foregoing Persons.
Notes: Each of the Class A Notes and Class B Notes.
Officer's Certificate: With respect to the Servicer, a
certificate signed by the President, Treasurer or Assistant
Treasurer, a Vice President or an Assistant Vice President, of the
Servicer and delivered to the Indenture Trustee. With respect to
the Issuer, a certificate signed by any Authorized Officer of the
Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 10.01 of the
Indenture, and delivered to the Indenture Trustee. Unless
otherwise specified, any reference in the Indenture to an Officer's
Certificate shall be to an Officer's Certificate of any Authorized
Officer of the Issuer.
Opinion of Counsel: A written opinion of counsel who may be
in-house counsel for the Servicer, Seller or Household Inter-
national, Inc. if acceptable to the Indenture Trustee, and the
Rating Agencies or counsel for the Seller, as the case may be.
Optimum Monthly Principal: As to any Payment Date, the sum of
Available Investor Principal Collections, any Series 1997-1 Partic-
ipation Interest Charge-Offs during the preceding Due Period and
the lesser of Excess Interest and the Net Charge-Off as of the end
of the preceding Payment Date.
Outstanding: With respect to the Notes, as of the date of
determination, all Notes theretofore executed, authenticated and
delivered under this Indenture except:
(i) Notes theretofore cancelled by the Note Registrar or
delivered to the Indenture Trustee for cancellation; and
(ii) Notes in exchange for or in lieu of which other
Notes have been executed, authenticated and delivered pursuant
to the Indenture unless proof satisfactory to the Indenture
Trustee is presented that any such Notes are held by a holder
in due course.
Overcollateralization Amount: As to any Payment Date, the
amount by which the Series 1997-1 Participation Interest Invested
Amount exceeds the Aggregate Security Balances in each case after
giving effect to distributions on such Payment Date.
Overcollateralization Minimum Amount: $13,600,000.
Owner Trust Estate: The corpus of the Issuer created by the
Trust Agreement.
Owner Trustee: Chase Manhattan Bank Delaware and its
successors and assigns or any successor owner trustee appointed
pursuant to the terms of the Trust Agreement.
Paying Agent: Any paying agent or co-paying agent appointed
pursuant to Section 3.03 of the Indenture and Section 3.10 of the
Trust Agreement, which initially shall be the Indenture Trustee.
Payment Account: The account established by the Indenture
Trustee pursuant to Section 8.02 of the Indenture. The Payment
Account shall be an Eligible Deposit Account.
Payment Date: The 15th day of each month, or if such day is
not a Business Day, then the next Business Day.
Percentage Interest: With respect to any Payment Date and any
Note, the percentage obtained by dividing the Security Balance of
such Note prior to distributions on such Payment Date by the aggre-
gate of the Security Balances of all Notes of the same Class. With
respect to any Certificate, the percentage obtained by dividing the
denomination specified on such Certificate by the Initial Principal
Balance of the Certificates.
Person: The meaning assigned to such term in the Pooling and
Servicing Agreement.
Pooling and Servicing Agreement: The Pooling and Servicing
Agreement dated as of September 1, 1995, as supplemented by the
Supplement for Series 1997-1 dated as of March 1, 1997, by and
among the Seller, the Servicer and the Deposit Trustee, as each of
the foregoing may be amended from time to time.
Principal Balance: With respect to any Payment Date and each
Note, the Initial Principal Balance thereof, reduced by all distri-
butions of principal thereon prior to such Payment Date.
Proceeding: Any suit in equity, action at law or other
judicial or administrative proceeding.
Rating Agency: The meaning assigned to such term in the Pool-
ing and Servicing Agreement.
Receivables: The meaning assigned to such term in the Pooling
and Servicing Agreement.
Receivables Purchase Agreement: The meaning assigned to such
term in the Pooling and Servicing Agreement.
Record Date: With respect to the Notes and any Payment Date,
the Business Day next preceding such Payment Date and with respect
to the Certificates and any Payment Date, the last Business Day of
the month preceding the month of such Payment Date.
Reference Bank Rate: With respect to any Interest Period, as
follows: the arithmetic mean (rounded upwards, if necessary, to
the nearest one sixteenth of a percent) of the offered rates for
United States dollar deposits for one month which are offered by
the Reference Banks as of 11:00 A.M., London time, on the second
LIBOR Business Day prior to the first day of such Interest Period
to prime banks in the London interbank market for a period of one
month in amounts approximately equal to the Aggregate Security
Balance; provided that at least two such Reference Banks provide
such rate. If fewer than two offered rates appear, the Reference
Bank Rate will be the arithmetic mean of the rates quoted by one or
more major banks in New York City, selected by the Indenture
Trustee after consultation with the Servicer, as of 11:00 A.M., New
York City time, on such date for loans in U.S. Dollars to leading
European Banks for a period of one month in amounts approximately
equal to the Aggregate Security Balance. If no such quotations can
be obtained, the Reference Bank Rate shall be the Reference Bank
Rate applicable to the preceding Interest Period.
Reference Banks: Three money center banks as selected by the
Indenture Trustee after consultation with the Servicer.
Registered Holder: The Person in whose name a Note is regis-
tered in the Note Register on the applicable Record Date.
Responsible Officer: With respect to the Indenture Trustee,
any officer of the Indenture Trustee with direct responsibility for
the administration of the Indenture 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.
Reversals: With respect to any Payment Date the sum of (i)
the Net Charge-Off previously allocated, to the extent of Excess
Interest for such Payment Date and (ii) the amounts treated as
Available Investor Principal Collections pursuant to Section
4.11(a)(iv) of the Supplement for the related Distribution Date;
provided however, in no event will such Reversals exceed the Net
Charge-Off.
Sale: The meaning assigned to such term in Section 5.15 of
the Indenture.
Securities Act: The Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
Security: Any of the Certificates or Notes.
Security Balance: The Principal Balance of the Notes, or the
Certificate Balance, as the case may be.
Security Collections: With respect to any Payment Date the
sum of Series 1997-1 Participation Interest Monthly Interest and
Series 1997-1 Participation Interest Monthly Principal for such
Payment Date.
Securityholder or Holder: Any Noteholder or a Certificate-
holder.
Seller: Household Consumer Loan Corporation, a Nevada corpo-
ration and a wholly-owned, special purpose subsidiary of Household
Finance Corporation, or its successor in interest.
Seller's Trust Amount: The meaning assigned to such term in
the Pooling and Servicing Agreement.
Series Participation Interest: The meaning assigned to such
term in the Pooling and Servicing Agreement.
Series 1997-1 Participation Interest: The Series 1997-1
Participation Interest issued pursuant to the Pooling and Servicing
Agreement.
Series 1997-1 Participation Interest Charge-Offs: The meaning
assigned to such term in the Pooling and Servicing Agreement.
Series 1997-1 Participation Interest Invested Amount: The
meaning assigned to such term in the Pooling and Servicing Agree-
ment.
Series 1997-1 Participation Interest Monthly Interest: The
meaning assigned to such term in the Pooling and Servicing Agree-
ment.
Series 1997-1 Participation Interest Monthly Principal: The
meaning assigned to such term in the Pooling and Servicing Agree-
ment.
Servicer: HFC and its successors and assigns.
Servicer Default: An event specified in Section 10.01 of the
Pooling and Servicing Agreement.
Single Certificate: A Certificate in the denomination of
$1,000,000.
Single Note: A Note in the denomination of $100,000.
Standard & Poor's: Standard & Poor's Ratings Services, a
Division of The XxXxxx-Xxxx Companies, Inc., or its successor in
interest.
Successor Designated Certificateholder: The meaning assigned
to such term in Section 9.02 of the Trust Agreement.
Telerate Screen Page 3750: The display designated as page
3750 on the Telerate Service (or such other page as may replace
page 3750 on that service for the purpose of displaying London
interbank offered rates of major banks).
Treasury Regulations: Regulations, including proposed or
temporary Regulations, promulgated under the Code. References
herein to specific provisions of proposed or temporary regulations
shall include analogous provisions of final Treasury Regulations or
other successor Treasury Regulations.
Trust Agreement: The Trust Agreement dated as of March 1,
1997 between the Owner Trustee and the Seller, as amended from time
to time.
Trust Indenture Act or TIA: The Trust Indenture Act of 1939,
as amended from time to time, as in effect on any relevant date.
UCC: The Uniform Commercial Code, as amended from time to
time, as in effect in any specified jurisdiction.
