EXHIBIT 4.1
EXECUTION COPY
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HOUSEHOLD AFFINITY CREDIT CARD MASTER NOTE TRUST I
Issuer
and
THE BANK OF NEW YORK,
Indenture Trustee, Paying Agent and Securities Intermediary
AMENDED AND RESTATED
MASTER INDENTURE
Dated as of March 13, 2003,
amending and restating in full the
Master Indenture, dated as of February 18, 2003
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS.......................................................................2
Section 1.01. Definitions.......................................................................2
Section 1.02. Other Definitional Provisions....................................................14
ARTICLE II THE NOTES........................................................................16
Section 2.01. Form Generally...................................................................16
Section 2.02. Denominations....................................................................16
Section 2.03. Execution, Authentication and Delivery...........................................16
Section 2.04. Authenticating Agent.............................................................17
Section 2.05. Registration of and Limitations on Transfer and Exchange of Notes................18
Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes.......................................19
Section 2.07. Persons Deemed Owners............................................................20
Section 2.08. Appointment of Paying Agent......................................................20
Section 2.09. Access to List of Noteholders' Names and Addresses...............................20
Section 2.10. Cancellation.....................................................................21
Section 2.11. Release of Collateral............................................................21
Section 2.12. New Issuances....................................................................21
Section 2.13. Book-Entry Notes.................................................................23
Section 2.14. Notices to Clearing Agency or Foreign Clearing Agency............................24
Section 2.15. Definitive Notes.................................................................24
Section 2.16. Global Note; Euro-Note Exchange Date.............................................24
Section 2.17. Meetings of Noteholders..........................................................25
Section 2.18. Uncertificated Classes...........................................................25
ARTICLE III REPRESENTATIONS AND COVENANTS OF ISSUER..........................................26
Section 3.01. Payment of Principal and Interest................................................26
Section 3.02. Maintenance of Office or Agency..................................................26
Section 3.03. Money for Note Payments to Be Held in Trust......................................26
Section 3.04. Existence........................................................................27
Section 3.05. Protection of Trust..............................................................28
Section 3.06. Opinions as to Collateral........................................................28
Section 3.07. Performance of Obligations; Servicing of Receivables.............................29
Section 3.08. Negative Covenants...............................................................30
Section 3.09. Statements as to Compliance......................................................31
Section 3.10. Issuer May Consolidate, Etc., Only on Certain Terms..............................31
Section 3.11. Successor Substituted............................................................32
Section 3.12. No Other Business................................................................33
i
TABLE OF CONTENTS (cont'd.)
Section 3.13. No Borrowing.....................................................................33
Section 3.14. Servicer's Obligations...........................................................33
Section 3.15. Guarantees, Loans, Advances and Other Liabilities................................33
Section 3.16. Capital Expenditures.............................................................33
Section 3.17. [Reserved].......................................................................33
Section 3.18. Restricted Payments..............................................................33
Section 3.19. Notice of Events of Default......................................................34
Section 3.20. Further Instruments and Acts.....................................................34
ARTICLE IV SATISFACTION AND DISCHARGE.......................................................35
Section 4.01. Satisfaction and Discharge of this Indenture.....................................35
Section 4.02. Application of Trust Money.......................................................36
ARTICLE V AMORTIZATION EVENTS, DEFAULTS AND REMEDIES.......................................37
Section 5.01. Amortization Events..............................................................37
Section 5.02. Events of Default................................................................37
Section 5.03. Acceleration of Maturity; Rescission and Annulment...............................38
Section 5.04. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee........39
Section 5.05. Remedies; Priorities.............................................................40
Section 5.06. Optional Preservation of the Collateral..........................................42
Section 5.07. Limitation on Suits..............................................................42
Section 5.08. Unconditional Rights of Noteholders to Receive Principal and Interest............43
Section 5.09. Restoration of Rights and Remedies...............................................43
Section 5.10. Rights and Remedies Cumulative...................................................43
Section 5.11. Delay or Omission Not Waiver.....................................................44
Section 5.12. Rights of Noteholders to Direct Indenture Trustee................................44
Section 5.13. Waiver of Past Defaults..........................................................44
Section 5.14. Undertaking for Costs............................................................44
Section 5.15. Waiver of Stay or Extension Laws.................................................45
Section 5.16. Sale of Receivables..............................................................45
Section 5.17. Action on Notes..................................................................45
ARTICLE VI THE INDENTURE TRUSTEE............................................................47
Section 6.01. Duties of the Indenture Trustee..................................................47
Section 6.02. Notice of Amortization Event or Event of Default.................................48
Section 6.03. Rights of Indenture Trustee......................................................49
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TABLE OF CONTENTS (cont'd.)
Section 6.04. Not Responsible for Recitals or Issuance of Notes................................50
Section 6.05. May Hold Notes...................................................................50
Section 6.06. Money Held in Trust..............................................................50
Section 6.07. Compensation, Reimbursement and Indemnification..................................50
Section 6.08. Replacement of Indenture Trustee.................................................51
Section 6.09. Successor Indenture Trustee by Merger............................................51
Section 6.10. Appointment of Co-Indenture Trustee or Separate Indenture Trustee................52
Section 6.11. Eligibility; Disqualification....................................................53
Section 6.12. Preferential Collection of Claims Against........................................53
Section 6.13. Tax Returns......................................................................53
Section 6.14. Representations and Covenants of the Indenture Trustee...........................53
Section 6.15. Custody of the Collateral........................................................54
ARTICLE VII NOTEHOLDERS' LIST AND REPORTS BY INDENTURE TRUSTEE AND ISSUER....................55
Section 7.01. Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders...........55
Section 7.02. Preservation of Information; Communications to Noteholders.......................55
Section 7.03. Reports by Issuer................................................................55
Section 7.04. Reports by Indenture Trustee.....................................................56
Section 7.05. Notices..........................................................................56
ARTICLE VIII ALLOCATION AND APPLICATION OF COLLECTIONS........................................57
Section 8.01. Collection of Money..............................................................57
Section 8.02. Rights of Noteholders............................................................57
Section 8.03. Establishment of Collection Account and Special Funding Account..................57
Section 8.04. Collections and Allocations......................................................60
Section 8.05. Shared Principal Collections and Shared Transferor Principal Collections.........61
Section 8.06. Additional Withdrawals from the Collection Account...............................62
Section 8.07. Allocation of Collateral to Pools................................................62
Section 8.08a. Reallocation Groups..............................................................62
Section 8.08b. Shared Enhancement Groups........................................................63
Section 8.08c. Excess Finance Charge Sharing Groups.............................................63
Section 8.09. Release of Collateral; Eligible Loan Documents...................................63
Section 8.10. Opinion of Counsel...............................................................64
ARTICLE IX DISTRIBUTIONS AND REPORTS TO NOTEHOLDERS.........................................65
iii
TABLE OF CONTENTS (cont'd.)
ARTICLE X SUPPLEMENTAL INDENTURES..........................................................66
Section 10.01. Supplemental Indentures Without Consent of Noteholders...........................66
Section 10.02. Supplemental Indentures With Consent of Noteholders..............................67
Section 10.03. Execution of Supplemental Indentures.............................................68
Section 10.04. Effect of Supplemental Indenture.................................................69
Section 10.05. Conformity With Trust Indenture Act..............................................69
Section 10.06. Reference in Notes to Supplemental Indentures....................................69
ARTICLE XI TERMINATION......................................................................70
Section 11.01. Termination of Trust.............................................................70
Section 11.02. Final Distribution...............................................................70
Section 11.03. Transferor's Termination Rights..................................................71
Section 11.04. Defeasance.......................................................................71
ARTICLE XII MISCELLANEOUS....................................................................73
Section 12.01. Compliance Certificates and Opinions etc.........................................73
Section 12.02. Form of Documents Delivered to Indenture Trustee.................................74
Section 12.03. Acts of Noteholders..............................................................75
Section 12.04. Notices..........................................................................75
Section 12.05. Notices to Noteholders; Waiver...................................................76
Section 12.06. Alternate Payment and Notice Provisions..........................................77
Section 12.07. Conflict with Trust Indenture Act................................................77
Section 12.08. Effect of Headings and Table of Contents.........................................77
Section 12.09. Successors and Assigns...........................................................77
Section 12.10. Separability.....................................................................77
Section 12.11. Benefits of Indenture............................................................77
Section 12.12. Limitation on Voting Preferred Stock.............................................77
Section 12.13. Governing Law....................................................................78
Section 12.14. Counterparts.....................................................................78
Section 12.15. Trust Obligation.................................................................78
Section 12.16. No Petition......................................................................78
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RECONCILIATION AND TIE BETWEEN TRUST INDENTURE
ACT OF 1939 AND INDENTURE PROVISIONS*
Trust Indenture
Act Section Indenture Section
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310(a)(1)...................................................... 6.11
(a)(2)...................................................... 6.11
(a)(3)...................................................... 6.10
(a)(4)...................................................... Not Applicable
(a)(5)...................................................... 6.11
(b)......................................................... 6.08, 6.11
(c)......................................................... Not Applicable
311(a)......................................................... 6.12
(b)......................................................... 6.12
(c)......................................................... Not Applicable
312(a)......................................................... 7.01, 7.02(a)
(b)......................................................... 7.02(b)
(c)......................................................... 7.02(c)
313(a)......................................................... 7.04
(b)......................................................... 7.04
(c)......................................................... 7.03, 7.04
(d)......................................................... 7.04
314(a)......................................................... 3.09, 7.03(a)
(b)......................................................... 3.06
(c)(1)...................................................... 2.11, 8.09(c), 12.01(a)
(c)(2)...................................................... 2.11, 8.09(c), 12.01(a)
(c)(3)...................................................... 2.11, 8.09(c), 12.01(a)
(d)(1)...................................................... 2.11, 8.09(c), 12.01(b)
(d)(2)...................................................... Not Applicable
(d)(3)...................................................... Not Applicable
(e)......................................................... 12.01(a)
315(a)......................................................... 6.01(b)
(b)......................................................... 6.02
(c)......................................................... 6.01(c)
(d)......................................................... 6.01(d)
(d)(1)...................................................... 6.01(d)
(d)(2)...................................................... 6.01(d)
(d)(3)...................................................... 6.01(d)
(e)......................................................... 5.14
316(a)(1)(A)................................................... 5.12
316(a)(1)(B)................................................... 5.13
316(a)(2)...................................................... Not Applicable
316(b)......................................................... 5.08
317(a)(1)...................................................... 5.04
317(a)(2)...................................................... 5.04(d)
317(b)......................................................... 5.04(a)
318(a)......................................................... 12.07
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This reconciliation and tie shall not, for any purpose, be deemed to be part of
the within indenture.
v
AMENDED AND RESTATED MASTER INDENTURE, dated as of March 13, 2003,
amending and restating in full the Master Indenture, dated as of February 18,
2003 (herein, as amended, modified or supplemented from time to time as
permitted hereby, called the "Indenture"), between Household Affinity Credit
Card Master Note Trust I, a Delaware statutory trust (herein, together with its
permitted successors and assigns, called the "Issuer" or the "Trust"), and The
Bank of New York, a New York banking corporation, as indenture trustee (herein,
together with its successors in the trusts hereunder, called the "Indenture
Trustee"), paying agent and securities intermediary. This Indenture may be
supplemented at any time and from time to time by an Indenture Supplement in
accordance with Article X hereof (an "Indenture Supplement," and any Indenture
Supplement together with this Indenture and amendments hereof collectively
referred to as the "Agreement"). If a conflict exists between the terms and
provisions of this Indenture and any Indenture Supplement, the terms and
provisions of the Indenture Supplement shall be controlling with respect to the
related Series.
PRELIMINARY STATEMENT
The Issuer has duly authorized the execution and delivery of this
Indenture to provide for an issue of its asset backed notes (the "Notes") as
provided in this Indenture. All covenants and agreements made by the Issuer
herein are for the benefit and security of the Noteholders. The Issuer is
entering into this Indenture, and the Indenture Trustee is accepting the trusts
created hereby, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged.
Simultaneously with the delivery of this Indenture, the Issuer is
entering into the Transfer and Servicing Agreement with Household Affinity
Funding Corporation III, a Delaware corporation, as Transferor (the
"Transferor"), and Household Finance Corporation, a Delaware corporation, as
Servicer (in such capacity, the "Servicer"), pursuant to which (a) the
Transferor will convey to the Issuer all of its right, title and interest in, to
and under the Receivables, which the Transferor will have received from a Seller
pursuant to a Receivables Purchase Agreement and (b) the Servicer will agree to
service the Receivables and make collections thereon on behalf of the
Noteholders.
Under the Receivables Purchase Agreements and the Transfer and
Servicing Agreement, Receivables arising in the Accounts from time to time will
automatically be conveyed thereunder to the Issuer without any further action by
the Sellers or Transferor being necessary.
GRANTING CLAUSES
The Issuer hereby Grants to the Indenture Trustee, for the benefit of
the Holders of the Notes, all of its right, title and interest, whether now
owned or hereafter acquired, in, to and under (a) the Receivables, (b)
Interchange and Recoveries related to and all money, instruments, investment
property and other property (together with all earnings, dividends,
distributions, income, issues, and profits relating to) distributed or
distributable in respect of the Receivables pursuant to the terms of the
Transfer and Servicing Agreement, this Indenture and any Indenture Supplement,
(c) all Eligible Investments and all money, investment property, instruments and
other property on deposit from time to time in, credited to or related to the
Collection Account, the Series Accounts and the Special Funding Account
(including any subaccounts of such account), and in all interest, dividends,
earnings, income and other distributions from time to time received, receivable
or otherwise distributed or distributable thereto or in respect thereof
(including any accrued discount realized on liquidation of any investment
purchased at a discount), (d) all rights, remedies, powers, privileges and
claims of the Issuer under or with respect to any Series Enhancement or the
Transfer and Servicing Agreement (whether arising pursuant to the terms of such
Series Enhancement or the Transfer and Servicing Agreement or otherwise
available to the Issuer at law or in equity), including, without limitation, the
rights of the Issuer to enforce such Series Enhancement or the Transfer and
Servicing Agreement, and to give or withhold any and all consents, requests,
notices,
directions, approvals, extensions or waivers under or with respect to such
Series Enhancement or the Transfer and Servicing Agreement to the same extent as
the Issuer could but for the assignment and security interest granted to the
Indenture Trustee for the benefit of the Noteholders, (e) all of the Issuer's
money, accounts, general intangibles, chattel paper, instruments, documents,
goods, investment property, deposit accounts, certificates of deposit, letters
of credit, and advices of credit, (f) the Preferred Stock, (g) all other
property of the Issuer, (h) all present and future claims, demands, causes and
chose in action in respect of any or all of the foregoing and all payments on or
under and all proceeds of every kind and nature whatsoever in respect of any or
all of the foregoing, including all proceeds, products, rents, receipts or
profits of the conversion, voluntary or involuntary, into cash or other
property, all cash and non-cash proceeds, and other property consisting of,
arising from or relating to all or any part of any of the foregoing, and (i) any
proceeds of the foregoing; in each case, excluding the Transferor Amount and all
amounts distributable to the Holder of the Transferor Certificate pursuant to
the terms of any Transaction Document (collectively, the "Collateral").
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.
Whenever used in this Agreement, the following words and phrases shall
have the following meanings, and the definitions of such terms are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.
"Accumulation Period" shall mean, with respect to any Series, or any
Class within a Series, a period following the Revolving Period during which
Collections of Principal Receivables are accumulated in an account for the
benefit of the Noteholders of such Series or Class within such Series, which
shall be the controlled accumulation period, the early accumulation period, the
optional accumulation period, the partial accumulation period or other
accumulation period, in each case as defined with respect to such Series in the
related Indenture Supplement.
"Act" shall have the meaning specified in subsection 12.03(a).
"Adjusted Pool Principal Balance" shall, with respect to any Series,
have the meaning specified in the applicable Indenture Supplement.
"Adverse Effect" shall have the meaning specified in the Transfer and
Servicing Agreement.
"Aggregate Investor Percentage" shall mean, with respect to Principal
Receivables, Finance Charge and Administrative Receivables and Defaulted
Receivables relating to a particular Pool, as the case may be, as of any date of
determination, the sum of such Investor Percentages (as such term is defined in
the related Indenture Supplements) of all Series of Notes relating to such Pool
issued and outstanding on such date of determination; provided, however, that
the Aggregate Investor Percentage shall not exceed 100%.
"Agreement" shall mean this Indenture, as the same may be amended,
supplemented or otherwise modified from time to time, including, with respect to
any Series or Class, the related Indenture Supplement.
2
"Amortization Event" shall mean, with respect to any Series, a Trust
Amortization Event or a Series Amortization Event.
"Amortization Period" shall mean, with respect to any Series, or any
Class within a Series, a period following the Revolving Period during which
Collections of Principal Receivables are distributed to Noteholders, which shall
be the controlled amortization period, the rapid amortization period, the
optional amortization period, the partial amortization period or other
amortization period, in each case as defined with respect to such Series in the
related Indenture Supplement.
"Applicants" shall have the meaning specified in Section 2.09.
"Authorized Officer" shall mean:
(a) with respect to the Issuer, any officer of the Owner Trustee
who is authorized to act for the Owner Trustee in matters relating to the
Issuer and who is identified on the list of Authorized Officers, containing
the specimen signature of each such Person, delivered by the Owner Trustee
to the Indenture Trustee on the Closing Date (as such list may be modified
or supplemented from time to time thereafter) and any Vice President or
more senior officer of the Servicer who is authorized to act for the
Servicer in matters relating to the Issuer and to be acted upon by the
Servicer pursuant to the Transaction Documents and who is identified on the
list of Authorized Officers (containing the specimen signatures of such
officers) delivered by the Servicer to the Indenture Trustee on the Closing
Date (as such list may be modified or supplemented from time to time
thereafter);
(b) with respect to the Transferor, any officer of the Transferor
who is authorized to act for the Transferor in matters relating to the
Transferor and who is identified on the list of Authorized Officers,
containing the specimen signature of each such Person, delivered by the
Transferor to the Indenture Trustee on the Closing Date (as such list may
be modified or supplemented from time to time thereafter);
(c) with respect to the Servicer, any officer of the Servicer who
is authorized to act for the Servicer in matters relating to the Servicer
and who is identified on the list of Authorized Officers, containing the
specimen signature of each such Person, delivered by the Servicer to the
Indenture Trustee on the Closing Date (as such list may be modified or
supplemented from time to time thereafter).
"Bank" shall mean Household Bank (SB), National Association, and its
successors and permitted assigns.
"Bearer Notes" shall have the meaning specified in Section 2.01.
"Beneficial Owner" shall mean, with respect to a Book-Entry Note, the
Person who is the owner of such Book-Entry Note, as reflected on the books of
the Clearing Agency or Foreign Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency or Foreign Clearing Agency
(directly as a Clearing Agency Participant or as an Indirect Participant, in
accordance with the rules of such Clearing Agency or Foreign Clearing Agency).
"Book-Entry Notes" shall mean beneficial interests in the Notes,
ownership and transfers of which shall be made through book entries by a
Clearing Agency or Foreign Clearing Agency as described in Section 2.13.
3
"Class" shall mean, with respect to any Series, any one of the classes
of Notes of that Series.
"Clearing Agency" shall mean an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended, and serving as clearing agency for a Series or Class of Book-Entry
Notes.
"Clearing Agency Participant" shall mean a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Clearstream" shall mean Clearstream Banking, societe anonyme, a
professional depository incorporated under the laws of Luxembourg, and its
successors.
"Closing Date" shall mean, with respect to any Series, the closing
date specified in the related Indenture Supplement.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Collateral" shall have the meaning specified in the Granting Clause
of this Indenture.
"Collection Account" shall have the meaning specified in Section 8.03.
"Commission" shall mean the Securities and Exchange Commission and its
successors in interest.
"Corporate Trust Office" means the office of the Indenture Trustee at
which at any particular time its corporate trust business shall be administered,
which office at date of the execution of this Agreement is located at 000
Xxxxxxx Xxxxxx, Xxxxx 8 West, New York, New York 10286, Attention: Asset-Backed
Securities Unit (facsimile no. (000) 000-0000) or at such other address as the
Indenture Trustee may designate from time to time by notice to the Noteholders
and the Transferor, or the principal corporate trust office of any successor
Indenture Trustee (the address of which the successor Indenture Trustee will
notify the Noteholders and the Transferor).
"Coupon" shall have the meaning specified in Section 2.01.
"Default" shall mean any occurrence that is, or with notice or the
lapse of time or both would become, an Event of Default.
"Defeasance" shall have the meaning specified in subsection 11.04(a).
"Defeased Series" shall have the meaning specified in subsection
11.04(a).
"Definitive Notes" shall mean Notes in definitive, fully registered
form.
"Deposit Date" shall mean each day on which the Servicer deposits
Collections in the Collection Account.
"Determination Date" shall mean, unless otherwise specified in the
Indenture Supplement for a particular Series, the earlier of the third Business
Day and the fifth calendar day (or if the fifth calendar day is not a Business
Day, then the preceding Business Day) preceding the fifteenth day of each
calendar month.
4
"Distribution Date" shall mean, with respect to any Series, the date
specified in the applicable Indenture Supplement.
"Dollars," "$" or "U.S. $" shall mean United States dollars.
"DTC" shall mean The Depository Trust Company.
"Due Period" shall mean, with respect to each Distribution Date,
unless otherwise provided in an Indenture Supplement, the period from and
including the first day of the preceding calendar month to and including the
last day of such calendar month.
"Eligible Institution" shall mean any depository institution (which
may be the Owner Trustee or the Indenture Trustee) organized under the laws of
the United States or any one of the states thereof, including the District of
Columbia (or any domestic branch of a foreign bank), which depository
institution at all times (a) is a member of the FDIC and (b) has (i) a long-term
unsecured debt rating in the highest rating category of Standard & Poor's,
Xxxxx'x and, if rated by Fitch, of Fitch, or such other rating acceptable to the
Rating Agency or (ii) a short-term rating in the highest rating category of
Standard & Poor's, Xxxxx'x, and if rated by Fitch, of Fitch, or such other
rating acceptable to the Rating Agency. Notwithstanding the previous sentence
any institution the appointment of which satisfies the Rating Agency Condition
shall be considered an Eligible Institution. If so qualified, the Servicer may
be considered an Eligible Institution for the purposes of this definition.
"Eligible Investments" shall mean instruments, investment property or
other property with respect to any of the following (but does not include any
security issued by or obligations of Household Receivables Acquisition
Company II):
(a) direct obligations of, or obligations fully guaranteed as to
timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit
(having original maturities of no more than 365 days) of depository
institutions or trust companies incorporated under the laws of the United
States of America or any state thereof, including the District of Columbia
(or domestic branches of foreign banks) and subject to supervision and
examination by federal or state banking or depository institution
authorities; provided that at the time of the Trust's investment or
contractual commitment to invest therein, the short-term debt rating of
such depository institution or trust company shall be in the highest rating
category of Standard & Poor's, Xxxxx'x and, if rated by Fitch, of Fitch, or
such other rating category acceptable to the Rating Agency;
(c) commercial paper (having original or remaining maturities of
no more than 30 days) having, at the time of the Trust's investment or
contractual commitment to invest therein, a rating in the highest rating
category of Standard & Poor's, Xxxxx'x and, if rated by Fitch, of Fitch, or
such other rating category acceptable to the Rating Agency;
(d) demand deposits, time deposits and certificates of deposit
which are fully insured by the FDIC having, at the time of the Trust's
investment therein, a rating in the highest rating category of Standard &
Poor's, Xxxxx'x and, if rated by Fitch, of Fitch, or such other rating
category acceptable to the Rating Agency;
(e) bankers' acceptances (having original maturities of no more
than 365 days) issued by any depository institution or trust company
referred to in clause (b) above;
5
(f) money market funds having, at the time of the Trust's
investment therein, a rating in the highest rating category of Standard &
Poor's, Xxxxx'x and, if rated by Fitch, of Fitch, or such other rating
category acceptable to the Rating Agency (including funds for which the
Indenture Trustee or any of its Affiliates is investment manager or
advisor);
(g) time deposits (having maturities not later than the succeeding
Distribution Date) other than as referred to in clause (d) above, with a
Person the commercial paper of which has a credit rating acceptable to
Standard & Poor's, Xxxxx'x and, if rated by Fitch, to Fitch; or
(h) any other investment of a type or rating that satisfies the
Rating Agency Condition.
"Eligible Servicer" shall mean the Indenture Trustee or, if the
Indenture Trustee is not acting as Servicer, an entity which, at the time of its
appointment as Servicer, (a) is servicing a portfolio of revolving credit card
accounts, (b) is legally qualified and had the capacity to service the Accounts,
(c) in the sole determination of the Indenture Trustee, which determination
shall be conclusive and binding, has demonstrated the ability to service
professionally and competently a portfolio of similar accounts in accordance
with high standards of skill and care, (d) is qualified to use the software that
is then being used to service the Accounts or obtains the right to use or has
its own software which is adequate to perform its duties under this Indenture
and (e) has a net worth of at least $50,000,000 as of the end of its most recent
fiscal quarter.
"Enhancement Agreement" shall mean any agreement, instrument or
document governing the terms of any Series Enhancement or pursuant to which any
Series Enhancement is issued or outstanding.
"Euroclear Operator" shall mean Euroclear Bank, S.A./N.V., a bank
organized under the laws of Belgium, as operator of the Euroclear System or its
successor as operator of such system or any system that is a successor to such
system.
"Event of Default" shall have the meaning specified in Section 5.02.
"Excess Finance Charge and Administrative Collections" shall have the
meaning specified in Section 8.08c.
"Excess Finance Charge Sharing Group" shall mean all Excess Finance
Charge Sharing Series that have the same Excess Finance Charge Sharing Group
designation.
"Excess Finance Charge Sharing Series" shall mean a Series that,
pursuant to the Indenture Supplement therefor, is entitled to receive certain
excess Collections of Finance Charge and Administrative Receivables from other
Series in the same Excess Finance Charge Sharing Group, as more specifically set
forth in such Indenture Supplement.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Finance Charge Shortfalls" shall have the meaning specified in
Section 8.08C.
"Foreclosure Remedy" shall have the meaning specified in Sections
5.05(a)(iii) and (iv).
"Foreign Clearing Agency" shall mean Clearstream and the Euroclear
Operator.
6
"Global Note" shall have the meaning specified in Section 2.16.
"Grant" means to mortgage, pledge, bargain, warrant, alienate, remise,
release, convey, assign, transfer, create, and xxxxx x xxxx upon and a security
interest in and right of set-off against, deposit, set over and confirm pursuant
to this Indenture. A Grant of the Collateral or of any other agreement or
instrument shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of the Collateral and all other moneys payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
Proceedings in the name of the Granting party or otherwise and generally to do
and receive anything that the Granting party is or may be entitled to do or
receive thereunder or with respect thereto.
"Group" shall mean, with respect to any Series, a group or groups of
Series (including any Reallocation Group, Excess Finance Charge Sharing Group,
Principal Sharing Group, Shared Enhancement Group or any other Group established
by an Indenture Supplement) in which the Indenture Supplement for each such
Series specifies such Series is to be included for the purpose of sharing
certain collections of Finance Charge and Administrative Receivables and/or
Principal Receivables. A particular Series may be included in more than one
Group if the Indenture Supplement for such Series so provides.
"Household Finance Corporation" shall mean Household Finance
Corporation, a Delaware corporation, and its successors and permitted assigns.
"Household Receivables Acquisition Company II" shall mean Household
Receivables Acquisition Company II, a Delaware corporation, and its successors
and permitted assigns.
"Indenture" shall mean this Amended and Restated Master Indenture,
dated as of March 13, 2003, between the Issuer and the Indenture Trustee, as the
same may be amended, supplemented or otherwise modified from time to time.
"Indenture Supplement" shall mean, with respect to any Series, a
supplement to the Indenture, executed and delivered in connection with the
original issuance of the Notes of such Series pursuant to Section 10.01, and an
amendment to the Indenture executed pursuant to Sections 10.01 or 10.02, and, in
either case, including all amendments thereof and supplements thereto.
"Indenture Trustee" shall mean The Bank of New York, a New York
banking corporation, in its capacity as trustee under the Indenture, its
successors in interest and any successor indenture trustee under the Indenture.
"Independent" shall mean, when used with respect to any specified
Person, that the Person (a) is in fact independent of the Issuer, any other
obligor upon the Notes, the Transferor and any Affiliate of any of the foregoing
Persons, (b) does not have any direct financial interest or any material
indirect financial interest in the Issuer, any such other obligor, the
Transferor or any Affiliate of any of the foregoing Persons and (c) is not
connected with the Issuer, any such other obligor, the Transferor or any
Affiliate of any of the foregoing Persons as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
"Independent Certificate" shall mean a certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 12.01, made by
an Independent appraiser or other expert appointed by an Issuer
7
Order, and such opinion or certificate shall state that the signer has read the
definition of "Independent" in this Indenture and that the signer is Independent
within the meaning thereof.
"Indirect Participant" shall mean other Persons such as securities
brokers and dealers, banks and trust companies that clear or maintain a
custodial relationship with a participant of DTC, either directly or indirectly.
"Invested Amount" shall mean, with respect to any Series and for any
date, an amount equal to the invested amount, unless the term "adjusted invested
amount" is applicable to such Series, specified in the related Indenture
Supplement.
"Investment Company Act" shall mean the Investment Company Act of
1940, as amended.
"Issuer" shall mean the Trust.
"Issuer Order" and "Issuer Request" shall mean a written order or
request signed in the name of the Issuer by any one of its Authorized Officers
and delivered to the Indenture Trustee.
"New Issuance" shall have the meaning specified in Section 2.12.
"Note Interest Rate" shall mean, as of any particular date of
determination and with respect to any Series or Class, the interest rate as of
such date specified therefor in the related Indenture Supplement.
"Note Owner" shall mean, with respect to a Book-Entry Note, the Person
who is the owner of such Book-Entry Note, as reflected on the books of the
Clearing Agency, or on the books of a Person maintaining an account with such
Clearing Agency (directly as a Clearing Agency Participant or as an indirect
participant, in accordance with the rules of such Clearing Agency).
"Note Register" shall have the meaning specified in Section 2.05.
"Noteholder" or "Holder" shall mean the Person in whose name a Note is
registered on the Note Register and, if applicable, the holder of any Bearer
Note, Global Note, or Coupon, as the case may be, or such other Person deemed to
be a "Noteholder" or "Holder" in any related Indenture Supplement.
"Notes" shall mean all Series of Notes issued by the Trust pursuant to
the Indenture and the applicable Indenture Supplement.
"Officer's Certificate" shall mean, unless otherwise specified in this
Agreement, a certificate delivered to the Indenture Trustee signed by any
Authorized Officer of the Issuer, Transferor, or Servicer, as applicable, under
the circumstances described in, and otherwise complying with, the applicable
requirements of Section 12.01.
"Opinion of Counsel" shall mean a written opinion of counsel, who may
be counsel for, or an employee of, the Person providing the opinion and who
shall be reasonably acceptable to the Indenture Trustee; provided that a Tax
Opinion shall be an opinion of nationally recognized tax counsel.
"Outstanding" shall mean, as of the date of determination, all Notes
theretofore issued under this Indenture except:
8
(a) Notes theretofore cancelled by the Registrar or delivered to
the Registrar for cancellation;
(b) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Indenture Trustee
or any Paying Agent in trust for the Holders of such Notes (provided,
however, that if such Notes are to be redeemed, notice of such redemption
has been duly given pursuant to this Indenture or provision therefor,
satisfactory to the Indenture Trustee, has been made);
(c) Notes deemed to be satisfied and discharged pursuant to
Sections 4.01 or 11.04; and
(d) Notes in exchange for or in lieu of other Notes which have
been issued pursuant to this Indenture unless proof satisfactory to the
Indenture Trustee is presented that any such Notes are held by a bona fide
purchaser;
provided that in determining whether the Holders of the requisite Outstanding
Amount of the Notes have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Notes owned by the Issuer, any other
obligor upon the Notes, the Transferor, the Servicer or any Affiliate of any of
the foregoing Persons shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Indenture Trustee shall be protected in
relying upon any such request, demand, authorization, direction, notice, consent
or waiver, only Notes that a Responsible Officer of the Indenture Trustee
actually knows to be so owned shall be so disregarded. Notes so owned that have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Indenture Trustee the pledgee's right so
to act with respect to such Notes and that the pledgee is not the Issuer, any
other obligor upon the Notes, the Transferor, the Servicer or any Affiliate of
any of the foregoing Persons. In making any such determination, the Indenture
Trustee may rely on the representations of the pledgee and shall not be required
to undertake any independent investigation.
"Outstanding Amount" means the aggregate principal amount of all Notes
Outstanding at the date of determination.
"Owner Trustee" shall mean Wilmington Trust Company, in its capacity
as owner trustee under the Trust Agreement, its successors in interest and any
successor owner trustee under the Trust Agreement.
"Paired Series" shall mean (a) each Series which has been paired with
another Series (which Series may be prefunded or partially prefunded), such that
the reduction of the Invested Amount or Adjusted Invested Amount of such Series
results in the increase of the Invested Amount of such other Series, as
described in the related Indenture Supplements, and (b) such other Series.
"Paying Agent" shall mean any paying agent appointed pursuant to
Section 2.08 that meets the eligibility standards for the Indenture Trustee
specified in Section 6.11 and shall initially be the Indenture Trustee;
provided, that if the Indenture Supplement for a Series so provides, a different
or additional Paying Agent may be appointed with respect to such Series.
"Permitted Assignee" shall mean any Person who, if it were to purchase
Receivables (or interests therein) in connection with a sale thereof pursuant to
Section 5.05 would not cause the Trust to be taxable as a publicly traded
partnership for federal income tax purposes.
9
"Pool" shall mean the pool of Receivables having the same pool
designation as listed on a schedule, and as to which the Series that relate to
such Pool (as designated in the Indenture Supplement for such Series) primarily
look to for support in respect of payments, proceeds, Recoveries and
Collections; and specifically shall mean, (a) with respect to any Receivables
conveyed to the Trust pursuant to Section 2.01 of the Transfer and Servicing
Agreement listed from time to time on Schedule 1 thereto, Pool One, and (b) with
respect to any other Receivables conveyed to the Trust pursuant to Section 2.09
of the Transfer and Servicing Agreement, the Pool as specified by the Transferor
in the notice delivered pursuant to Section 2.09(c)(i) of the Transfer and
Servicing Agreement, with respect to such Receivables shall be reflected in an
appropriate related schedule which shall be created or amended to reflect the
current composition of such Pool.
"Portfolio Yield" shall mean with respect to any Pool and, with
respect to any Due Period, unless otherwise specified in an Indenture Supplement
related to such Pool, the annualized percentage equivalent of a fraction (a) the
numerator of which is equal to the Collections of Finance Charge and
Administrative Receivables during such Due Period calculated on a cash basis,
after subtracting therefrom the Defaulted Amount with respect to such Due Period
and (b) the denominator of which is the sum of (i) total amount of Principal
Receivables related to such Pool plus (ii) the Special Funding Amount related to
such Pool, each as of the last day of the immediately preceding Due Period.
"Principal Sharing Group" shall mean all Principal Sharing Series that
have the same Principal Sharing Group designation.
"Principal Sharing Series" shall mean a Series that, pursuant to the
Indenture Supplement therefor, is entitled to receive Shared Principal
Collections within a specified Principal Sharing Group from other Series in the
same Principal Sharing Group, as more specifically set forth in such Indenture
Supplement.
"Principal Shortfalls" shall have the meaning specified in
Section 8.05.
"Principal Terms" shall mean, with respect to any Series, (a) the name
or designation; (b) the initial principal amount (or method for calculating such
amount) and the Invested Amount, (c) the Note Interest Rate for each Class of
Notes of such Series (or method for the determination thereof); (d) the payment
date or dates and the date or dates from which interest shall accrue; (e) the
Distribution Date; (f) the method for allocating Collections to Noteholders; (g)
the designation of any Series Accounts and the terms governing the operation of
any such Series Accounts; (h) the Servicing Fee; (i) the issuer and terms of any
form of Series Enhancements with respect thereto; (j) the terms on which the
Notes of such Series may be exchanged for Notes of another Series, repurchased
by the Transferor or remarketed to other investors; (k) the Series Final
Maturity Date; (l) the number of Classes of Notes of such Series and, if more
than one Class, the rights and priorities of each such Class; (m) the extent to
which the Notes of such Series will be issuable in temporary or permanent global
form (and, in such case, the depositary for such global note or notes, the terms
and conditions, if any, upon which such global note may be exchanged, in whole
or in part, for Definitive Notes, and the manner in which any interest payable
on a temporary or global note will be paid); (n) whether the Notes of such
Series may be issued in bearer form and any limitations imposed thereon; (o) the
priority of such Series with respect to any other Series; (p) its Pool
designation; (q) and whether such Series will be part of a Reallocation Group
and, if so, its Reallocation Group designation; (r) whether such Series will be
a Principal Sharing Series and, if so, its Principal Sharing Group designation;
(s) whether such Series is entitled to share Shared Transferor Principal
Collections; (t) whether such Series will be an Excess Finance Charge Sharing
Series, and, if so, its Excess Finance Charge Sharing Group designation; (u)
whether such Series or subseries within such Series will be part of a Shared
Enhancement Group and, if so, its Shared Enhancement Group
10
designation; (v) whether such Series will or may be a Paired Series and the
Series with which it will be paired; and (w) any other terms of such Series.
"Proceeding" shall mean any suit in equity, action at law or other
judicial or administrative proceeding.
"Qualified Account" shall mean either (a) a segregated account with an
Eligible Institution, (b) a segregated trust account with the corporate trust
department of the Securities Intermediary, or (c) a segregated securities
account with the Securities Intermediary.
"Rating Agency" shall mean, with respect to any outstanding Series or
Class, each rating agency, as specified in the Indenture Supplement applicable
to such outstanding Series or Class, selected by the Transferor to rate the
Notes of such Series or Class.
"Rating Agency Condition" shall mean, with respect to any action, that
each Rating Agency shall have notified the Transferor, the Servicer, the Owner
Trustee and the Indenture Trustee in writing that such action will not result in
a reduction or withdrawal of the then existing rating of any outstanding Series
or Class with respect to which it is a Rating Agency or, with respect to any
outstanding Series or Class not rated by any Rating Agency, as specified in the
Indenture Supplement for such Series.
"Reallocation Group" shall mean a group of one or more Series as
specified in the related Indenture Supplement, if any, with respect to which
reallocation of certain Collections of Finance Charge and Administrative
Receivables and other similar amounts are to be made among such Series, where
applicable, for certain specified purposes as specified in the Agreement or any
related Indenture Supplement, including, to the extent so specified, pooling
amounts available to all Series in the particular Reallocation Group prior to
any application for individual Series requirements and sharing such amounts
among such Series on the basis of the relative requirements for each such
Series.
"Record Date" shall mean, with respect to any Distribution Date, the
last day of the calendar month immediately preceding such Distribution Date
unless otherwise specified for a Series in the related Indenture Supplement.
"Redemption Date" shall mean, with respect to any Series, the date or
dates specified in the related Indenture Supplement.
"Registered Notes" shall have the meaning specified in Section 2.01.
"Registrar" shall have the meaning specified in Section 2.05.
"Reinvestment Event" shall mean, if applicable with respect to any
Series, any Reinvestment Event specified in the related Indenture Supplement.
"Required Minimum Principal Balance" shall mean, unless otherwise
provided in an Indenture Supplement relating to a Series having a Paired Series,
with respect to any date and any Pool (a) the sum of the Series Adjusted
Invested Amounts for each Series outstanding on such date in such Pool plus the
Required Transferor Amount on such date, minus (b) the Special Funding Amount.
"Required Transferor Amount" shall mean, with respect to any date and
the related Pool, the product of the Required Transferor Percentage and the
aggregate Series Adjusted Invested Amounts (as defined in the related Indenture
Supplement) of all Series which relate to a Pool.
11
"Required Transferor Percentage" shall, with respect to any Series,
have the meaning set forth in the related Indenture Supplement.
"Responsible Officer" shall mean, when used with respect to the
Indenture Trustee, any officer within the Corporate Trust Office of the
Indenture Trustee including any vice president, assistant vice president,
assistant treasurer, trust officer or any other officer of the Indenture Trustee
customarily performing functions similar to those performed by the persons who
at the time shall be such officers or to whom any corporate trust matter is
referred at the Corporate Trust Office because of such officer's knowledge of
and familiarity with the particular subject.
"Revolving Period" shall have, with respect to each Series, the
meaning specified in the related Indenture Supplement.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securities Intermediary" shall mean The Bank of New York, in its
capacity as securities intermediary pursuant to Section 6.15, its successors in
interest and any successor securities intermediary.
"Seller" shall mean the Person or Persons identified as seller under a
Receivables Purchase Agreement.
"Series" shall mean any series or subseries of Notes issued pursuant
to this Agreement and the related Indenture Supplement.
"Series Account" shall mean any deposit, trust, securities escrow or
similar account maintained for the benefit of the Noteholders of any Series or
Class, as specified in any Indenture Supplement.
"Series Adjusted Invested Amount" shall have the meaning specified in
the related Indenture Supplement.
"Series Amortization Event" shall have, with respect to any Series,
the meaning specified pursuant to the related Indenture Supplement.
"Series Enhancement" shall mean the rights and benefits provided to
the Trust or the Noteholders of any Series or Class pursuant to any
subordination, collateral interest, insurance policy, cash collateral guaranty
or account, swap arrangements, interest rate cap agreement, letter of credit,
surety bond, spread account, reserve account, guaranteed rate agreement, tax
protection agreement or other similar arrangement. The subordination of any
Series or Class to another Series or Class shall be deemed to be a Series
Enhancement.
"Series Enhancer" shall mean the Person or Persons providing any
Series Enhancement, other than (except to the extent otherwise provided with
respect to any Series in the Indenture Supplement for such Series) the
Noteholders of any Series or Class which is subordinated to another Series or
Class.
"Series Final Maturity Date" shall mean, with respect to any Series,
the final maturity date for such Series specified in the related Indenture
Supplement.
12
"Series Issuance Date" shall mean, with respect to any Series, the
date on which the Notes of such Series are to be originally issued in accordance
with Section 2.12 and the related Indenture Supplement.
"Servicer" shall have the meaning specified in the Transfer and
Servicing Agreement.
"Shared Enhancement Group" shall mean a group of one or more Series as
specified in the related Indenture Supplement, if any, with respect to which
credit enhancement, including subordination of a particular Class or Classes or
Series, and collections are shared among such Series.
"Shared Principal Collections" shall have the meaning specified in
Section 8.05(a).
"Shared Transferor Principal Collections" shall have the meaning set
forth in Section 8.05(b).
"Special Funding Account" shall have the meaning set forth in Section
8.03.
"Special Funding Amount" shall mean the amount on deposit in a Special
Funding Account.
"Tax Opinion" shall mean, with respect to any action, an Opinion of
Counsel to the effect that, for federal income tax purposes, (a) such action
will not adversely affect the tax characterization as debt of the Notes of any
outstanding Series or Class that were characterized as debt at the time of their
issuance, (b) such action will not cause the Trust to be deemed to be an
association (or publicly traded partnership) taxable as a corporation and (c)
such action will not cause or constitute an event in which gain or loss would be
recognized by any Noteholder.
"Transaction Documents" shall mean, with respect to any Series of
Notes, the Trust Agreement, the Receivables Purchase Agreements, the Transfer
and Servicing Agreement, this Indenture, the related Indenture Supplement and
such other documents and certificates delivered in connection therewith.
"Transfer Agent" shall have the meaning specified in Section 2.05.
"Transfer and Servicing Agreement" shall mean the Amended and Restated
Transfer and Servicing Agreement, dated as of March 13, 2003, among the
Transferor, the Servicer and the Issuer, as the same may be amended,
supplemented or otherwise modified from time to time.
"Transfer Date" shall mean with respect to each Distribution Date, the
Business Day immediately preceding such Distribution Date.
"Transfer Restriction Event" shall mean any event in which any
Transferor is unable for any reason to transfer Receivables to the Trust in
accordance with the provisions of the Transfer and Servicing Agreement or any
order of any governmental authority.
"Transferor" shall have the meaning specified in the Transfer and
Servicing Agreement.
"Transferor Amount" shall mean with respect to any Pool, on any date
of determination an amount equal to the difference between (a) the sum of (i)
the total amount of Principal Receivables at the end of the day immediately
prior to such date of determination plus (ii) the related Special Funding Amount
at the end of the day immediately prior to such date of determination minus (b)
the aggregated
13
Series Adjusted Invested Amounts of all Series of Notes related to such Pool
issued and outstanding on such date of determination.
"Transferor Percentage" shall mean, on any date of determination, when
used with respect to Principal Receivables, Finance Charge and Administrative
Receivables and Defaulted Receivables in a Pool, a percentage equal to 100%
minus the Aggregate Investor Percentage for Series related to such Pool with
respect to such category of Receivables, minus, where applicable, the percentage
interest of certain credit enhancement providers, as specified in the related
Indenture Supplement.
"Trust" shall mean the Household Affinity Credit Card Master Note
Trust I, a Delaware statutory trust.
"Trust Agreement" shall mean the agreement relating to the Trust,
dated as of February 14, 2003, between Household Affinity Funding Corporation
III and Wilmington Trust Company, as the same may be amended, supplemented or
otherwise modified from time to time.
"Trust Amortization Event" shall have, with respect to each Series,
the meaning specified in Section 5.01.
"Trust Indenture Act" or "TIA" shall mean the Trust Indenture Act of
1939, as amended.
"Trust Termination Date" shall have the meaning specified in the Trust
Agreement.
"UCC" shall have the meaning specified in the Transfer and Servicing
Agreement.
Section 1.02. Other Definitional Provisions.
(a) With respect to any Series, all terms used herein and not
otherwise defined herein shall have meanings ascribed to them in the Trust
Agreement, the Transfer and Servicing Agreement or the related Indenture
Supplement, as applicable.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate or
other document to the extent not defined, shall have the respective meanings
given to them under generally accepted accounting principles or regulatory
accounting principles, as applicable and as in effect on the date of this
Agreement. To the extent that the definitions of accounting terms in this
Agreement or in any such certificate or other document are inconsistent with the
meanings of such terms under generally accepted accounting principles or
regulatory accounting principles in the United States, the definitions contained
in this Agreement or in any such certificate or other document shall control.
(d) Any reference to each Rating Agency shall only apply to any
specific rating agency if such rating agency is then rating any outstanding
Series.
(e) Unless otherwise specified, references to any amount as on
deposit or outstanding on any particular date shall mean such amount at the
close of business on such day.
14
(f) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; references to any
subsection, Section, Schedule or Exhibit are references to subsections,
Sections, Schedules and Exhibits in or to this Agreement unless otherwise
specified; and the term "including" means "including without limitation."
(g) Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture
Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission rule
have the meaning assigned to them by such definitions.
[END OF ARTICLE I]
15
ARTICLE II
THE NOTES
Section 2.01. Form Generally.
Any Series or Class of Notes, together with the Indenture Trustee's
certificate of authentication related thereto, may be issued in bearer form (the
"Bearer Notes") with attached interest coupons and a special coupon
(collectively, the "Coupons") or in fully registered form (the "Registered
Notes") and shall be in substantially the form of an exhibit to the related
Indenture Supplement with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture or such
Indenture Supplement, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon, as may,
consistently herewith, be determined by the officers executing such Notes, as
evidenced by their execution of such Notes. Any portion of the text of any Note
may be set forth on the reverse thereof, with an appropriate reference thereto
on the face of the Note. The terms of any Notes set forth in an exhibit to the
related Indenture Supplement are part of the terms of this Indenture, as
applicable.
The Definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods, all as determined by
the officers executing such Notes, as evidenced by its execution of such Notes.
Each Global Note will be dated the Closing Date and each Definitive
Note will be dated as of the date of its authentication.
Section 2.02. Denominations.
Except as otherwise specified in the related Indenture Supplement and
the Notes, each class of Notes of each Series shall be issued in fully
registered form in minimum amounts of $1,000 and in integral multiples of $1,000
in excess thereof (except that one Note of each Class may be issued in a
different amount, so long as such amount exceeds the applicable minimum
denomination for such Class), and shall be issued upon initial issuance as one
or more Notes in an aggregate original principal amount equal to the applicable
Invested Amount for such Class or Series.
Section 2.03. Execution, Authentication and Delivery.
Each Note shall be executed by manual or facsimile signature on behalf
of the Issuer by an Authorized Officer.
Notes bearing the manual or facsimile signature of an individual who
was, at the time when such signature was affixed, authorized to sign on behalf
of the Issuer shall not be rendered invalid, notwithstanding the fact that such
individual ceased to be so authorized prior to the authentication and delivery
of such Notes or does not hold such office at the date of issuance of such
Notes.
At any time and from time to time after the execution and delivery of
this Indenture, the Issuer may deliver Notes executed by the Issuer to the
Indenture Trustee for authentication and delivery, and the Indenture Trustee
shall authenticate and deliver such Notes as provided in this Indenture or the
related Indenture Supplement and not otherwise.
No Note shall be entitled to any benefit under this Indenture or the
applicable Indenture Supplement or be valid or obligatory for any purpose,
unless there appears on such Note a certificate of
16
authentication substantially in the form provided for herein or in the related
Indenture Supplement executed by or on behalf of the Indenture Trustee by the
manual signature of a duly authorized signatory, and such certificate upon any
Note shall be conclusive evidence, and the only evidence, that such Note has
been duly authenticated and delivered hereunder.
Section 2.04. Authenticating Agent.
(a) The Indenture Trustee may appoint one or more authenticating
agents with respect to the Notes which shall be authorized to act on behalf of
the Indenture Trustee in authenticating the Notes in connection with the
issuance, delivery, registration of transfer, exchange or repayment of the
Notes. Whenever reference is made in this Indenture to the authentication of
Notes by the Indenture Trustee or the Indenture Trustee's certificate of
authentication, such reference shall be deemed to include authentication on
behalf of the Indenture Trustee by an authenticating agent and a certificate of
authentication executed on behalf of the Indenture Trustee by an authenticating
agent. Each authenticating agent must be acceptable to the Issuer and the
Servicer.
(b) Any institution succeeding to the corporate agency business of
an authenticating agent shall continue to be an authenticating agent without the
execution or filing of any power or any further act on the part of the Indenture
Trustee or such authenticating agent.
(c) An authenticating agent may at any time resign by giving
written notice of resignation to the Indenture Trustee, the Issuer and the
Servicer. The Indenture Trustee may at any time terminate the agency of an
authenticating agent by giving notice of termination to such authenticating
agent and to the Issuer and the Servicer. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time an authenticating
agent shall cease to be acceptable to the Indenture Trustee or the Issuer and
the Servicer, the Indenture Trustee may promptly appoint a successor
authenticating agent. Any successor authenticating agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
authenticating agent. No successor authenticating agent shall be appointed
unless acceptable to the Issuer and the Servicer.
(d) The Issuer agrees to pay to each authenticating agent from
time to time reasonable compensation for its services under this Section.
(e) The provisions of Sections 6.01 and 6.04 shall be applicable
to any authenticating agent.
(f) Pursuant to an appointment made under this Section, the Notes
may have endorsed thereon, in lieu of or in addition to the Indenture Trustee's
certificate of authentication, an alternative certificate of authentication in
substantially the following form:
17
"This is one of the Notes described in the within-mentioned Agreement.
---------------------------------------
---------------------------------------
as Authenticating Agent
for the Indenture Trustee
By:
------------------------------------
Authorized Signatory"
Dated: [_________]
Section 2.05. Registration of and Limitations on Transfer and
Exchange of Notes.
The Issuer shall cause to be kept a register (the "Note Register") in
which the Issuer shall provide for the registration of Notes and the
registration of transfers of Notes. The Indenture Trustee initially shall be the
transfer agent and registrar (in such capacity, the "Transfer Agent" and
"Registrar") for the purpose of registering Notes and transfers of Notes as
herein provided. Upon any resignation of any Transfer Agent and Registrar, the
Issuer shall promptly appoint a successor or, if it elects not to make such an
appointment, assume the duties of Transfer Agent and Registrar.
If a Person other than the Indenture Trustee is appointed by the
Issuer as Transfer Agent and Registrar, the Issuer will give the Indenture
Trustee prompt written notice of the appointment of a Transfer Agent and
Registrar and of the location, and any change in the location, of the Transfer
Agent and Note Register. The Indenture Trustee shall have the right to inspect
the Note Register at all reasonable times and to obtain copies thereof, and the
Indenture Trustee shall have the right to rely upon a certificate executed on
behalf of the Transfer Agent and Registrar by an officer thereof as to the names
and addresses of the Noteholders and the principal amounts and numbers of such
Notes.
Upon surrender for registration of transfer of any Note at the office
or agency of the Transfer Agent and Registrar, to be maintained as provided in
Section 3.02, if the requirements of Section 8-401(a) of the UCC are met, the
Issuer shall execute, and upon receipt of such surrendered Note the Indenture
Trustee shall authenticate and deliver to the Noteholder, in the name of the
designated transferee or transferees, one or more new Notes (of the same Series
and Class) in any authorized denominations of like aggregate principal amount.
At the option of a Noteholder, Notes may be exchanged for other Notes
(of the same Series and Class) in any authorized denominations and of like
aggregate principal amount, upon surrender of such Notes to be exchanged at the
office or agency of the Transfer Agent and Registrar. Whenever any Notes are so
surrendered for exchange, if the requirements of Section 8-401(a) of the UCC are
met, the Issuer shall execute, and upon receipt of such surrendered Note the
Indenture Trustee shall authenticate and deliver to the Noteholder, the Notes
which the Noteholder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of
Notes shall evidence the same obligations, evidence the same debt, and be
entitled to the same rights and privileges under this Indenture, as the Notes
surrendered upon such registration of transfer or exchange.
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Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument of
transfer in a form satisfactory to the Indenture Trustee duly executed by, the
Noteholder thereof or his attorney-in-fact duly authorized in writing, and by
such other documents as the Indenture Trustee may reasonably require.
The registration of transfer of any Note shall be subject to the
additional requirements, if any, set forth in the related Indenture Supplement.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Issuer and Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of such Notes.
All Notes surrendered for registration of transfer and exchange shall
be cancelled by the Issuer and delivered to the Indenture Trustee for subsequent
destruction without liability on the part of either. The Indenture Trustee shall
dispose of (in accordance with its customary procedures) the Global Note upon
its exchange in full for Definitive Notes and shall deliver a certificate of
destruction to the Issuer. Such certificate shall also state that a certificate
or certificates of each Foreign Clearing Agency to the effect referred to in
Section 2.16 was received with respect to each portion of the Global Note
exchanged for Definitive Notes.
The preceding provisions of this section notwithstanding, the Issuer
shall not be required to make, and the Registrar need not register, transfers or
exchanges of Notes for a period of 20 days preceding the due date for any
payment with respect to the Note.
If and so long as any Series of Notes are listed on a stock exchange
and such exchange shall so require, the Indenture Trustee shall appoint a
co-transfer agent and co-registrar in accordance with the rules of such
exchange. Any reference in this Agreement to the Transfer Agent and Registrar
shall include any co-transfer agent and co-registrar unless the context
otherwise requires. The Indenture Trustee will enter into any appropriate agency
agreement with any co-transfer agent and co-registrar not a party to this
Indenture, which will implement the provisions of this Indenture that relate to
such agent.
Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes.
If (a) any mutilated Note is surrendered to the Indenture Trustee, or
the Indenture Trustee receives evidence to its reasonable satisfaction of the
destruction, loss or theft of any Note, and (b) there is delivered to the
Indenture Trustee such security or indemnity as may be required by it to hold
the Issuer, the Noteholders and the Indenture Trustee harmless, then, in the
absence of notice to the Issuer, the Transfer Agent and Registrar or the
Indenture Trustee that such Note has been acquired by a bona fide purchaser, the
Issuer shall execute, and the Indenture Trustee shall authenticate and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Note, a replacement Note of like tenor (including the same date of issuance) and
principal amount, bearing a number not contemporaneously outstanding; provided,
however, that if any such mutilated, destroyed, lost or stolen Note shall have
become or within seven days shall be due and payable, or shall have been
selected or called for redemption, instead of issuing a replacement Note, the
Issuer may pay such Note without surrender thereof, except that any mutilated
Note shall be surrendered. If, after the delivery of such replacement Note or
payment of a destroyed, lost or stolen Note pursuant to the proviso to the
preceding sentence, a bona fide purchaser of the original Note in lieu of which
such replacement Note was issued presents for payment such original Note, the
Issuer and the Indenture Trustee shall be entitled to recover such replacement
Note (or such payment) from the Person to whom it was delivered or any Person
taking such replacement Note from such Person to whom such replacement Note was
delivered or any assignee of such Person, except a bona fide purchaser, and
shall be entitled to recover upon the security or indemnity
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provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer or the Indenture Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section, the
Issuer may require the payment by the Holder of such Note of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Indenture Trustee or the Transfer Agent and Registrar) connected therewith.
Every replacement Note issued pursuant to this Section in replacement
of any mutilated, destroyed, lost or stolen Note shall constitute complete and
indefeasible evidence of an obligation of the Trust, as if originally issued,
whether or not the mutilated, destroyed, lost or stolen Note shall be found at
any time, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
Section 2.07. Persons Deemed Owners.
Prior to due presentment for registration of transfer of any Note, the
Issuer, the Indenture Trustee and any agent of the Transferor, the Issuer or the
Indenture Trustee shall treat the Person in whose name any Note is registered as
the owner of such Note for the purpose of receiving distributions pursuant to
the terms of the applicable Indenture Supplement and for all other purposes
whatsoever, whether or not such Note is overdue, and neither the Transferor, the
Issuer, the Indenture Trustee nor any agent of the Transferor, the Issuer or the
Indenture Trustee shall be affected by any notice to the contrary.
Section 2.08. Appointment of Paying Agent.
(a) The Issuer reserves the right at any time to vary or terminate
the appointment of a Paying Agent for the Notes, and to appoint additional or
other Paying Agents, provided that it will at all times maintain the Indenture
Trustee as a Paying Agent.
If and so long as any Series of Notes are listed on a stock exchange
and such exchange shall so require, the Indenture Trustee will appoint a
co-paying agent in accordance with the rules of such exchange. The Indenture
Trustee will enter into any appropriate agency agreement with any co-paying
agent not a party to this Indenture, which will implement the provisions of this
Indenture that relate to such agent.
Notice of all changes in the identity or specified office of a Paying
Agent will be delivered promptly to the Noteholders by the Indenture Trustee.
(b) The Indenture Trustee shall cause the Paying Agent (other than
itself) to execute and deliver to the Indenture Trustee an instrument in which
such Paying Agent shall agree with the Indenture Trustee that such Paying Agent
will hold all sums, if any, held by it for payment to the Noteholders in trust
for the benefit of the Noteholders entitled thereto until such sums shall be
paid to such Noteholders and shall agree, and if the Indenture Trustee is the
Paying Agent it hereby agrees, that it shall comply with all requirements of the
Code regarding the withholding by the Indenture Trustee of payments in respect
of federal income taxes due from the Beneficial Owners.
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Section 2.09. Access to List of Noteholders' Names and Addresses.
(a) The Issuer will furnish or cause to be furnished to the
Indenture Trustee, the Servicer, any Noteholder or the Paying Agent, within five
Business Days after receipt by the Issuer of a written request therefor from the
Indenture Trustee, the Servicer, such Noteholder or the Paying Agent,
respectively, a list of the names and addresses of the Noteholders. Unless
otherwise provided in the related Indenture Supplement, holders of 10% of the
Outstanding Amount of the Notes of any Series (the "Applicants") may apply in
writing to the Indenture Trustee, and if such application states that the
Applicants desire to communicate with other Noteholders of any Series with
respect to their rights under this Agreement or under the Notes and is
accompanied by a copy of the communication which such Applicants propose to
transmit, then the Indenture Trustee, after having been indemnified to its
satisfaction by such Applicants for its costs and expenses, shall afford or
shall cause the Transfer Agent and Registrar to afford such Applicants access
during normal business hours to the most recent list of Noteholders held by the
Indenture Trustee and shall give the Servicer notice that such request has been
made, within five Business Days after the receipt of such application. Such list
shall be as of a date no more than 45 days prior to the date of receipt of such
Applicants' request.
(b) Every Noteholder, by receiving and holding a Note, agrees that
none of the Issuer, the Indenture Trustee, the Transfer Agent and Registrar and
the Servicer nor any of their respective agents and employees shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Noteholders hereunder, regardless of the sources from which
such information was derived.
Section 2.10. Cancellation.
All Notes surrendered for payment, registration of transfer, exchange
or redemption shall, if surrendered to any Person other than the Indenture
Trustee, be delivered to the Indenture Trustee and shall be promptly cancelled
by it. The Issuer may at any time deliver to the Indenture Trustee for
cancellation any Notes previously authenticated and delivered hereunder which
the Issuer may have acquired in any lawful manner whatsoever, and all Notes so
delivered shall be promptly cancelled by the Indenture Trustee. No Notes shall
be authenticated in lieu of or in exchange for any Notes cancelled as provided
in this Section, except as expressly permitted by this Indenture. All cancelled
Notes held by the Indenture Trustee shall be disposed of by the Indenture
Trustee (in accordance with its customary procedures) unless the Issuer shall
direct by a timely order that they be returned to it.
Section 2.11. Release of Collateral.
Subject to Section 12.01, the Indenture Trustee shall release property
from the lien of this Indenture only upon receipt of an Issuer Request
accompanied by an Officer's Certificate, an Opinion of Counsel and, to the
extent required in accordance with TIA Sections314(c) and 314(d), Independent
Certificates.
Section 2.12. New Issuances.
(a) The Transferor may from time to time direct the Owner Trustee
in writing, on behalf of the Issuer, to issue one or more new Series of Notes
(each such issuance a "New Issuance") pursuant to one or more Indenture
Supplements. The Notes of all outstanding Series shall be equally and ratably
entitled as provided herein to the benefits of this Indenture without
preference, priority or distinction, all in accordance with the terms and
provisions of this Indenture and the applicable Indenture Supplement except,
with respect to any Series or Class, as provided in the related Indenture
Supplement. Interest on the Notes of all outstanding Series shall be paid on the
dates specified in or pursuant to the
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Indenture Supplement relating to such outstanding Series. Principal of the Notes
of each outstanding Series shall be paid as specified in or pursuant to the
Indenture Supplement relating to such outstanding Series.
(b) On or before the Series Issuance Date relating to any new
Series of Notes, the parties hereto will execute and deliver an Indenture
Supplement which will specify the Principal Terms of such Series. The terms of
such Indenture Supplement may modify or amend the terms of this Indenture solely
as applied to such new Series. The obligation of the Indenture Trustee to
authenticate and deliver the Notes of any Series (other than any Series issued
pursuant to an Indenture Supplement dated as of the date hereof) and to execute
and deliver the related Indenture Supplement is subject to the satisfaction of
the following conditions:
(i) on or before the fifth day immediately preceding the Series
Issuance Date, the Transferor shall have given the Indenture Trustee, the
Owner Trustee, the Servicer and each Rating Agency notice (unless such
notice requirement is otherwise waived) of such issuance and the Series
Issuance Date;
(ii) the Transferor shall have delivered to the Indenture Trustee
and the Owner Trustee any related Indenture Supplement, in form
satisfactory to the Indenture Trustee and the Owner Trustee, executed by
each party hereto (other than the Indenture Trustee);
(iii) the Transferor shall have delivered to the Indenture Trustee
and the Owner Trustee any related Enhancement Agreement executed by each of
the parties thereto, other than the Indenture Trustee and the Owner
Trustee;
(iv) the Rating Agency Condition shall have been satisfied with
respect to such issuance;
(v) such issuance will not result in any Adverse Effect and the
Transferor shall have delivered to the Indenture Trustee and the Owner
Trustee an Officer's Certificate, dated the Series Issuance Date to the
effect that the Transferor reasonably believes that such issuance will not,
based on the facts known to such officer at the time of such certification,
have an Adverse Effect;
(vi) the Transferor shall have delivered to the Indenture Trustee
and the Owner Trustee (with a copy to each Rating Agency) a Tax Opinion,
dated the Series Issuance Date with respect to such issuance;
(vii) the aggregate amount of Principal Receivables in the related
Pool shall be greater than the Required Minimum Principal Balance as of the
Series Issuance Date and after giving effect to such issuance; and
(viii) the Transferor shall have delivered to the Indenture Trustee
an Opinion of Counsel stating that the Notes are valid and binding
obligations of the Issuer, and an Officer's Certificate that all the
conditions in this Section 2.12 are met.
Any Note held by the Transferor at any time after the date of its initial
issuance may be transferred or exchanged only upon the delivery to the Indenture
Trustee of a Tax Opinion dated as of the date of such transfer or exchange, as
the case may be, with respect to such transfer or exchange.
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(c) Any Indenture Supplement providing for the issuance of
subseries of Notes within the Series subject to such Indenture Supplement may
specify conditions, in addition to the conditions applicable to each such
subseries as a Series hereunder, for issuance of such subseries, which
conditions shall be consistent with the conditions for issuance of the related
Series.
(d) Upon satisfaction of the above conditions, pursuant to Section
2.03, the Owner Trustee, on behalf of the Issuer, shall execute and the
Indenture Trustee shall authenticate and deliver the Notes of such Series as
provided in this Indenture and the applicable Indenture Supplement.
Notwithstanding the provisions of this Section, prior to the execution of any
Indenture Supplement, the Indenture Trustee shall be entitled to receive and
rely upon an Opinion of Counsel stating that the execution of such Indenture
Supplement is authorized or permitted by this Indenture and any Indenture
Supplement related to any outstanding Series. The Indenture Trustee may, but
shall not be obligated to, enter into any such Indenture Supplement which
adversely affects the Indenture Trustee's own rights, duties or immunities under
this Indenture.
(e) The Issuer may direct the Indenture Trustee to deposit the net
proceeds from any New Issuance in the Special Funding Account with respect to
the related Pool. The Issuer may also specify that on any Transfer Date the
proceeds from the sale of any new Series which is a Principal Sharing Series may
be withdrawn from the Special Funding Account for the related Pool and treated
as Shared Principal Collections with respect to the same Principal Sharing
Group.
Section 2.13. Book-Entry Notes.
Unless otherwise provided in any related Indenture Supplement, the
Notes, upon original issuance, shall be issued in the form of typewritten Notes
representing the Book-Entry Notes to be delivered to the depository specified in
such Indenture Supplement which shall be the Clearing Agency or Foreign Clearing
Agency, by or on behalf of such Series.
The Notes of each Series shall, unless otherwise provided in the
related Indenture Supplement, initially be registered in the Note Register in
the name of the nominee of the Clearing Agency or Foreign Clearing Agency for
such Book-Entry Notes and shall be delivered to the Indenture Trustee or,
pursuant to such Clearing Agency's or Foreign Clearing Agency's instructions
held by the Indenture Trustee's agent as custodian for the Clearing Agency or
Foreign Clearing Agency.
Unless and until Definitive Notes are issued under the limited
circumstances described in Section 2.15, no Beneficial Owner shall be entitled
to receive a Definitive Note representing such Beneficial Owner's interest in
such Note. Unless and until Definitive Notes have been issued to the Beneficial
Owners pursuant to Section 2.15:
(a) the provisions of this Section shall be in full force and
effect with respect to each such Series;
(b) the Indenture Trustee shall be entitled to deal with the
Clearing Agency or Foreign Clearing Agency and the Clearing Agency
Participants for all purposes of this Indenture (including the payment of
principal of and interest on the Notes of each such Series) as the
authorized representatives of the Beneficial Owners;
(c) to the extent that the provisions of this Section conflict
with any other provisions of this Indenture, the provisions of this Section
shall control with respect to each such Series;
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(d) the rights of Beneficial Owners of each such Series shall be
exercised only through the Clearing Agency or Foreign Clearing Agency and
the applicable Clearing Agency Participants and shall be limited to those
established by law and agreements between such Beneficial Owners and the
Clearing Agency or Foreign Clearing Agency and/or the Clearing Agency
Participants. Pursuant to the depository agreement applicable to a Series,
unless and until Definitive Notes of such Series are issued pursuant to
Section 2.15, the initial Clearing Agency shall make book-entry transfers
among the Clearing Agency Participants and receive and transmit
distributions of principal and interest on the Notes to such Clearing
Agency Participants; and
(e) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of the Holders of Notes
evidencing a specified percentage of the Outstanding Amount of the Notes,
the Clearing Agency or Foreign Clearing Agency shall be deemed to represent
such percentage only to the extent that they have received instructions to
such effect from the Beneficial Owners and/or Clearing Agency Participants
owning or representing, respectively, such required percentage of the
beneficial interest in the Notes and has delivered such instructions to the
Indenture Trustee.
Section 2.14. Notices to Clearing Agency or Foreign Clearing Agency.
Whenever a notice or other communication to the Noteholders is
required under this Indenture, unless and until Definitive Notes shall have been
issued to Beneficial Owners pursuant to Section 2.15, the Indenture Trustee
shall give all such notices and communications specified herein to be given to
Noteholders to the Clearing Agency or Foreign Clearing Agency, as applicable,
and shall have no obligation to the Beneficial Owners.
Section 2.15. Definitive Notes.
If (i)(a) the Servicer advises the Indenture Trustee in writing that
the Clearing Agency or Foreign Clearing Agency is no longer willing or able to
properly discharge its responsibilities as Clearing Agency or Foreign Clearing
Agency with respect to the Book-Entry Notes of a given Class and (b) the
Servicer is unable to locate and reach an agreement on satisfactory terms with a
qualified successor, (ii) the Servicer, at its option, advises the Indenture
Trustee in writing that it elects to terminate the book-entry system through the
Clearing Agency or Foreign Clearing Agency with respect to such Class or (iii)
after the occurrence of a Servicer Default or an Event of Default, Beneficial
Owners aggregating more than 50% of the Outstanding Amount of the Notes of such
Class advise the Indenture Trustee and the applicable Clearing Agency or Foreign
Clearing Agency through the applicable Clearing Agency Participants in writing
that the continuation of a book-entry system is no longer in the best interests
of the Beneficial Owners of such Class, the Indenture Trustee shall notify all
Beneficial Owners of such Class of the occurrence of such event and of the
availability of Definitive Notes to Beneficial Owners of such Class requesting
the same. Upon surrender to the Indenture Trustee of the Notes of such Class,
accompanied by registration instructions from the applicable Clearing Agency,
the Issuer shall execute and the Indenture Trustee shall authenticate Definitive
Notes of such Class and shall recognize the registered holders of such
Definitive Notes as Noteholders under this Indenture. Neither the Issuer nor the
Indenture Trustee shall be liable for any delay in delivery of such
instructions, and the Issuer and the Indenture Trustee may conclusively rely on,
and shall be protected in relying on, such instructions. Upon the issuance of
Definitive Notes of such Series, all references herein to obligations imposed
upon or to be performed by the applicable Clearing Agency or Foreign Clearing
Agency shall be deemed to be imposed upon and performed by the Indenture
Trustee, to the extent applicable with respect to such Definitive Notes, and the
Indenture Trustee shall recognize the registered holders of the Definitive Notes
of such Series as Noteholders of such Series hereunder. Definitive Notes will be
transferable and exchangeable at the offices of the Transfer Agent and
Registrar.
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Section 2.16. Global Note; Euro-Note Exchange Date.
If specified in the related Indenture Supplement for any Series, Notes
may be initially issued in the form of a single temporary Global Note (the
"Global Note") in bearer form, without interest coupons, in the denomination of
the Initial Invested Amount and substantially in the form attached to the
related Indenture Supplement. Unless otherwise specified in the related
Indenture Supplement, the provisions of this Section shall apply to such Global
Note. The Global Note will be authenticated by the Indenture Trustee upon the
same conditions, in substantially the same manner and with the same effect as
the Definitive Notes. The Global Note may be exchanged in the manner described
in the related Indenture Supplement for Registered Notes or Bearer Notes in
definitive form. Except as otherwise specifically provided in the Indenture
Supplement, any Notes that are issued in bearer form pursuant to this Indenture
shall be issued in accordance with the requirements of Code section 163(f)(2).
Section 2.17. Meetings of Noteholders.
To the extent provided by the Indenture Supplement for any Series
issued in whole or in part in Bearer Notes, the Servicer or the Indenture
Trustee may at any time call a meeting of the Noteholders of such Series, to be
held at such time and at such place as the Servicer or the Indenture Trustee, as
the case may be, shall determine, for the purpose of approving a modification of
or amendment to, or obtaining a waiver of, any covenant or condition set forth
in this Agreement with respect to such Series or in the Notes of such Series,
subject to Article X.
Section 2.18. Uncertificated Classes.
Notwithstanding anything to the contrary contained in this Article II
or in Article XI, unless otherwise specified in any Indenture Supplement, any
provisions contained in this Article II and in Article XI relating to the
registration, form, execution, authentication, delivery, presentation,
cancellation and surrender of Notes shall not be applicable to any
uncertificated Notes, provided, however, that, except as otherwise specifically
provided in the Indenture Supplement, any such uncertificated Notes shall be
issued in "registered form" within the meaning of Code section 163(f)(1).
[END OF ARTICLE II]
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ARTICLE III
REPRESENTATIONS AND COVENANTS OF ISSUER
Section 3.01. Payment of Principal and Interest.
(a) The Issuer will duly and punctually pay principal and interest
in accordance with the terms of the Notes as specified in the relevant Indenture
Supplement.
(b) The Noteholders of a Series as of the Record Date in respect
of a Distribution Date shall be entitled to the interest accrued and payable and
principal payable on such Distribution Date as specified in the related
Indenture Supplement. All payment obligations under a Note are discharged to the
extent such payments are made to the Noteholder of record.
Section 3.02. Maintenance of Office or Agency.
The Issuer will maintain an office or agency where Notes may be
presented or surrendered for payment, where Notes may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Issuer in respect of the Notes and this Indenture may be served. The Issuer
hereby initially appoints The Bank of New York, currently located at 000 Xxxxxxx
Xxxxxx, Xxxxx 0 Xxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Asset-Backed
Securities Unit (facsimile no. (000) 000-0000), to serve as its agent for the
foregoing purposes. The Issuer will give prompt written notice to the Indenture
Trustee and the Noteholders of the location, and of any change in the location,
of any such office or agency. If at any time the Issuer shall fail to maintain
any such office or agency or shall fail to furnish the Indenture Trustee with
the address thereof, such presentations, surrenders, notices and demands may be
made or served at the Corporate Trust Office, and the Issuer hereby appoints the
Indenture Trustee at its Corporate Trust Office as its agent to receive all such
presentations, surrenders, notices and demands.
Section 3.03. Money for Note Payments to Be Held in Trust.
As specified in Section 8.03(a) and (b) herein and in the related
Indenture Supplement, all payments of amounts due and payable with respect to
the Notes which are to be made from amounts withdrawn from the Collection
Account and the Special Funding Account shall be made on behalf of the Issuer by
the Indenture Trustee or by the Paying Agent, and no amounts so withdrawn from
the Collection Account or the Special Funding Account shall be paid over to or
at the direction of the Issuer except as provided in this Section and in the
related Indenture Supplement.
On or before each Distribution Date, in accordance with Section 8.04
the Issuer shall deposit or cause to be deposited in the Series Account,
specified in the related Indenture Supplement, of each outstanding Series an
aggregate sum sufficient to pay the amounts then becoming due under the Notes of
such outstanding Series, such sum to be held in trust for the benefit of the
Persons entitled thereto, and (unless the Paying Agent is the Indenture Trustee)
shall promptly notify the Indenture Trustee in writing of its action or failure
so to act.
Whenever the Issuer shall have a Paying Agent in addition to the
Indenture Trustee, it will, on or before the Business Day next preceding each
Distribution Date, direct the Indenture Trustee to deposit with such Paying
Agent on or before such Distribution Date an aggregate sum sufficient to pay the
amounts then becoming due, such sum to be (i) held in trust for the benefit of
Persons entitled thereto and (ii) invested, pursuant to an Issuer Order, by the
Paying Agent in an Eligible Investment in accordance with the terms of the
related Indenture Supplement. For all investments made by a Paying
26
Agent under this Section, such Paying Agent shall be entitled to all of the
rights and obligations of the Indenture Trustee under the related Indenture
Supplement, such rights and obligations being incorporated in this paragraph by
this reference.
The Issuer will cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee an instrument in which
such Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of
this Section, that such Paying Agent, in acting as Paying Agent, is an express
agent of the Issuer and, further, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and pay such sums to such Persons as herein provided;
(ii) give the Indenture Trustee notice of any default by the Issuer
(or any other obligor upon the Notes) of which it has actual knowledge in
the making of any payment required to be made with respect to the Notes;
(iii) at any time during the continuance of any such default, upon
the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) promptly resign as a Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it by in trust for the payment of Notes
if at any time it ceases to meet the standards required to be met by a
Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the satisfaction and
discharge of this Indenture or for any other purpose, by Issuer Order direct any
Paying Agent to pay to the Indenture Trustee all sums held in trust by such
Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts
as those upon which such sums were held by such Paying Agent; and upon such
payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
Section 3.04. Existence.
The Issuer will keep in full effect its existence, rights and
franchises as a statutory trust under the laws of the State of Delaware (unless
it becomes, or any successor Issuer hereunder is or becomes, organized under the
laws of any other state or of the United States of America, in which case the
Issuer will keep in full effect its existence, rights and franchises under the
laws of such other jurisdiction) and will obtain and preserve its qualification
to do business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Indenture, the
Notes, the Collateral and each other related instrument or agreement.
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Section 3.05. Protection of Trust.
The Issuer will from time to time prepare, or cause to be prepared,
execute and deliver all such supplements and amendments hereto and all such
financing statements, continuation statements, instruments of further assurance
and other instruments, and will take such other action necessary or advisable
to:
(a) Grant more effectively all or any portion of the Collateral as
security for the Notes;
(b) maintain or preserve the lien (and the priority thereof) of
this Indenture or to carry out more effectively the purposes hereof;
(c) perfect, publish notice of, or protect the validity of any
Grant made or to be made by this Indenture;
(d) enforce any of the Collateral; or
(e) preserve and defend title to the Collateral securing the Notes
and the rights therein of the Indenture Trustee and the Noteholders secured
thereby against the claims of all Persons and parties.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required pursuant to this Section.
The Issuer shall pay or cause to be paid any taxes levied on all or
any part of Receivables securing the Notes.
Section 3.06. Opinions as to Collateral.
(a) On the Series Issuance Date relating to any new Series of
Notes, the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel
either stating that, in the opinion of such counsel, such action has been taken
to perfect the lien and security interest of this Indenture, including without
limitation with respect to the recording and filing of this Indenture, any
indentures supplemental hereto, and any other requisite documents, and with
respect to the execution and filing of any financing statements and continuation
statements, as are so necessary and reciting the details of such action, or
stating that, in the opinion of such counsel, no such action is necessary to
maintain the perfection of such lien and security interest.
(b) On or before April 30 in each calendar year, beginning in
2004, the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel
either stating that, in the opinion of such counsel, such action has been taken
to perfect the lien and security interest of this Indenture, including without
limitation with respect to the recording, filing, re-recording and refiling of
this Indenture, any indentures supplemental hereto and any other requisite
documents and with respect to the execution and filing of any financing
statements and continuation statements as is so necessary and reciting the
details of such action or stating that in the opinion of such counsel no such
action is necessary to maintain the perfection of such lien and security
interest. Such Opinion of Counsel shall also describe the recording, filing,
re-recording and refiling of this Indenture, any indentures supplemental hereto
and any other requisite documents and the execution and filing of any financing
statements and continuation statements that will,
28
in the opinion of such counsel, be required to maintain the perfection of the
lien and security interest of this Indenture until April 30 in the following
calendar year.
Section 3.07. Performance of Obligations; Servicing of Receivables.
(a) The Issuer will not take any action and will use its best
efforts not to permit any action to be taken by others that would release any
Person from any of such Person's material covenants or obligations under any
instrument or agreement included in the Collateral or that would result in the
amendment, hypothecation, subordination, termination or discharge of, or impair
the validity or effectiveness of, any such instrument or agreement, except as
expressly provided in this Indenture, the Transfer and Servicing Agreement, the
Receivables Purchase Agreement, the Trust Agreement or such other instrument or
agreement.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee in an Officer's Certificate of
the Issuer shall be deemed to be action taken by the Issuer. Initially, the
Issuer has contracted with the Servicer to assist the Issuer in performing its
duties under this Indenture.
(c) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the other Transaction
Documents and in the instruments and agreements relating to the Collateral,
including but not limited to filing or causing to be filed all UCC financing
statements and continuation statements required to be filed by the terms of this
Indenture and the Transfer and Servicing Agreement in accordance with and within
the time periods provided for herein and therein. Except as otherwise expressly
provided herein or therein, the Issuer shall not waive, amend, modify,
supplement or terminate any Transaction Document or any provision thereof
without the consent of the Holders of more than 50% of the Outstanding Amount of
the Notes of each adversely affected Series.
(d) If the Issuer shall have knowledge of the occurrence of a
Servicer Default under the Transfer and Servicing Agreement, the Issuer shall
cause the Indenture Trustee to promptly notify the Rating Agencies thereof, and
shall cause the Indenture Trustee to specify in such notice the action, if any,
being taken with respect to such default. If a Servicer Default shall arise from
the failure of the Servicer to perform any of its duties or obligations under
the Transfer and Servicing Agreement with respect to the Receivables, the Issuer
shall take all reasonable steps available to it to remedy such failure.
(e) On and after the receipt by the Servicer of a Termination
Notice pursuant to Section 7.01 of the Transfer and Servicing Agreement (a
"Termination Notice"), the Servicer shall continue to perform all servicing
functions under the Transfer and Servicing Agreement until the date specified in
the Termination Notice or otherwise specified by the Indenture Trustee or until
a date mutually agreed upon by the Servicer and the Indenture Trustee. As
promptly as possible after the giving of a Termination Notice to the Servicer,
the Indenture Trustee shall appoint a successor servicer (the "Successor
Servicer"), and such Successor Servicer shall accept its appointment by a
written assumption in a form acceptable to the Indenture Trustee. In the event
that a Successor Servicer has not been appointed and accepted its appointment at
the time when the Servicer ceases to act as Servicer, the Indenture Trustee
without further action shall automatically be appointed the Successor Servicer,
at which point the Indenture Trustee may terminate any sub-servicing agreement
between the Servicer and a third party. The Indenture Trustee may delegate any
of its servicing obligations to an Affiliate or agent in accordance with
subsection 3.01(b) and Section 5.07 of the Transfer and Servicing Agreement.
Notwithstanding the foregoing, the Indenture Trustee shall, if it is legally
unable so to act, petition at the expense of the Servicer a court of competent
jurisdiction to appoint any established institution qualifying as an Eligible
Servicer as the Successor Servicer hereunder. The Indenture Trustee shall give
prompt
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notice to each Rating Agency and each Series Enhancer upon the appointment of a
Successor Servicer. Upon its appointment, the Successor Servicer shall be the
successor in all respects to the Servicer with respect to servicing functions
under the Transfer and Servicing Agreement and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Servicer
by the terms and provisions thereof, and all references in this Indenture to the
Servicer shall be deemed to refer to the Successor Servicer. In connection with
any Termination Notice, the Indenture Trustee will review any bids which it
obtains from Eligible Servicers and shall be permitted to appoint any Eligible
Servicer submitting such a bid as a Successor Servicer for servicing
compensation, subject to the limitations set forth in Section 7.02 of the
Transfer and Servicing Agreement.
(f) Without derogating from the absolute nature of the assignment
granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Issuer agrees (i) that it will not, without the
prior written consent of the Indenture Trustee and more than 50% in Outstanding
Amount of the Notes, amend, modify, waive, supplement, terminate or surrender,
or agree to any amendment, modification, supplement, termination, waiver or
surrender of, the terms of any Collateral (except to the extent otherwise
provided in the Transfer and Servicing Agreement) or the Transaction Documents
(except to the extent otherwise provided in the Transaction Documents), or waive
timely performance or observance by the Servicer or the Transferor under the
Transfer and Servicing Agreement; and (ii) that any such amendment shall not (A)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on the Receivables or distributions that are
required to be made for the benefit of the Noteholders or (B) reduce the
aforesaid percentage of the Notes that is required to consent to any such
amendment, without the consent of the Holders of all the Outstanding Notes. If
any such amendment, modification, supplement or waiver shall be so consented to
by the Indenture Trustee and such Noteholders, the Issuer agrees, promptly
following a request by the Indenture Trustee to do so, to execute and deliver,
in its own name and at its own expense, such agreements, instruments, opinions,
consents and other documents as the Indenture Trustee may deem necessary or
appropriate in the circumstances.
Section 3.08. Negative Covenants.
So long as any Notes are Outstanding, the Issuer will not:
(a) sell, transfer, exchange, pledge or otherwise dispose of any
part of the Collateral except as expressly permitted by the Indenture and
any Indenture Supplement, the Trust Agreement or the Transfer and Servicing
Agreement;
(b) claim any credit on, or make any deduction from, the principal
and interest payable in respect of the Notes (other than amounts properly
withheld from such payments under the Code or applicable state law) or
assert any claim against any present or former Noteholder by reason of the
payment of any taxes levied or assessed upon any part of the Collateral;
(c) incur, assume or guarantee any direct or contingent
indebtedness other than incurred pursuant to the Transaction Documents;
(d) (i) permit the validity or effectiveness of this Indenture to
be impaired, or permit the lien of this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit any Person
to be released from any covenants or obligations with respect to the Notes
under this Indenture except as may be expressly permitted hereby, (ii)
permit any Lien, charge, excise, claim, security interest, mortgage or
other encumbrance (other than the lien of this Indenture) to be created on
or extend to or otherwise arise upon or burden the Collateral or any
30
part thereof or any interest therein or the proceeds thereof or (iii)
permit the lien of this Indenture not to constitute a valid first priority
security interest in the Collateral; or
(e) voluntarily dissolve or liquidate in whole or in part.
Section 3.09. Statements as to Compliance.
The Issuer will deliver to the Indenture Trustee, within 120 days
after the end of each fiscal year of the Issuer (commencing within 120 days
after the end of the fiscal year 2003), an Officer's Certificate stating, as to
the Authorized Officer signing such Officer's Certificate, that
(a) a review of the activities of the Issuer during the 12-month
period ending at the end of such fiscal year (or in the case of the fiscal
year ending December 31, 2003, the period from the initial Closing Date to
December 31, 2003) and of performance under this Indenture has been made
under such Authorized Officer's supervisions, and
(b) to the best of such Authorized Officer's knowledge, based on
such review, the Issuer has complied with all conditions and covenants
under this Indenture throughout such year, or, if there has been a default
in the compliance of any such condition or covenant, specifying each such
default known to such Authorized Officer and the nature and status thereof.
Section 3.10. Issuer May Consolidate, Etc., Only on Certain Terms.
(a) The Issuer shall not consolidate or merge with or into any
other Person, unless:
(1) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger shall be a Person (i) organized and
existing under the laws of the United States of America or any state or the
District of Columbia and (ii) shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Indenture Trustee, in a
form satisfactory to the Indenture Trustee, the due and punctual payment of
the principal of and interest on all Notes and the performance of every
covenant of this Indenture on the part of the Issuer to be performed or
observed;
(2) the Person is not subject to regulation as an
"investment company" under the Investment Company Act of 1940, as amended;
(3) immediately after giving effect to such transaction,
no Event of Default or Amortization Event shall have occurred and be
continuing;
(4) the Issuer shall have delivered to the Indenture
Trustee an Officer's Certificate and an Opinion of Counsel each stating
that (i) such consolidation or merger and such supplemental indenture
comply with this Section, (ii) all conditions precedent in this Section
relating to such transaction have been complied with (including any filing
required by the Exchange Act), and (iii) such supplemental indenture is
duly authorized, executed and delivered and is valid, binding and
enforceable against such person;
(5) the Rating Agency Condition shall have been satisfied
with respect to such transaction;
(6) the Issuer shall have received a Tax Opinion and an
Opinion of Counsel dated the date of such consolidation or merger (and
shall have delivered copies thereof to the
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Indenture Trustee) to the effect that such transaction will not have any
material adverse tax consequence to any Noteholder; and
(7) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been taken.
(b) The Issuer shall not convey or transfer any of its properties
or assets, including those included in the Collateral, substantially as an
entirety to any Person, unless:
(1) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of which is
hereby restricted shall (A) be a United States citizen or a Person
organized and existing under the laws of the United States of America or
any state, or the District of Columbia, (B) expressly assume, by an
indenture supplemental hereto, executed and delivered to the Indenture
Trustee, in form satisfactory to the Indenture Trustee, the due and
punctual payment of the principal of and interest on all Notes and the
performance or observance of every agreement and covenant of this Indenture
on the part of the Issuer to be performed or observed, all as provided
herein, (C) expressly agree by means of such supplemental indenture that
all right, title and interest so conveyed or transferred shall be subject
and subordinate to the rights of Holders of the Notes, (D) unless otherwise
provided in such supplemental indenture, expressly agree to indemnify,
defend and hold harmless the Issuer against and from any loss, liability or
expense arising under or related to this Indenture and the Notes and (E)
expressly agree by means of such supplemental indenture that such Person
(or if a group of Persons, then one specified Person) shall make all
filings with the Commission (and any other appropriate Person) required by
the Exchange Act in connection with the Notes;
(2) immediately after giving effect to such transaction,
no Event of Default or Amortization Event shall have occurred and be
continuing;
(3) the Rating Agency Condition shall have been satisfied
with respect to such transaction;
(4) the Issuer shall have received a Tax Opinion and an
Opinion of Counsel (and shall have delivered copies thereof to the
Indenture Trustee) to the effect that such transaction will not have any
material adverse tax consequence to any Noteholder;
(5) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been taken; and
(6) the Issuer shall have delivered to the Indenture
Trustee an Officer's Certificate and an Opinion of Counsel each stating
that such conveyance or transfer and such supplemental indenture comply
with this Section and that all conditions precedent herein provided for
relating to such transaction have been complied with (including any filing
required by the Exchange Act).
Section 3.11. Successor Substituted.
Upon any consolidation or merger, or any conveyance or transfer of the
properties and assets of the Issuer substantially as an entirety in accordance
with Section 3.10 hereof, the Person formed by or surviving such consolidation
or merger (if other than the Issuer) or the Person to which such conveyance or
transfer is made shall succeed to, and be substituted for, and may exercise
every right and power of, the Issuer under this Indenture with the same effect
as if such Person had been named as the
32
Issuer herein. In the event of any such conveyance or transfer, the Person named
as the Issuer in the first paragraph of this Indenture or any successor which
shall theretofore have become such in the manner prescribed in this Section
shall be released from its obligations under this Indenture as issued
immediately upon the effectiveness of such conveyance or transfer, provided that
the Issuer shall not be released from any obligations or liabilities to the
Indenture Trustee or the Noteholders arising prior to such effectiveness.
Section 3.12. No Other Business.
The Issuer shall not engage in any business other than financing,
purchasing, owning and selling and managing the payment obligations in the
manner contemplated by this Indenture and the other Transaction Documents and
all activities incidental thereto.
Section 3.13. No Borrowing.
The Issuer shall not issue, incur, assume, guarantee or otherwise
become liable, directly or indirectly, for any indebtedness except as expressly
provided for pursuant to the terms of the Transaction Documents and the Notes.
Section 3.14. Servicer's Obligations.
The Issuer shall cause the Servicer to comply with all of its
obligations under the Transaction Documents.
Section 3.15. Guarantees, Loans, Advances and Other Liabilities.
Except as contemplated by this Indenture or the Transfer and Servicing
Agreement, the Issuer shall not make any loan or advance or credit to, or
guarantee (directly or indirectly or by an instrument having the effect of
assuring another's payment or performance on any obligation or capability of so
doing or otherwise), endorse or otherwise become contingently liable, directly
or indirectly, in connection with the obligations, stocks or dividends of, or
own, purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person.
Section 3.16. Capital Expenditures.
The Issuer shall not make any expenditure (by long-term or operating
lease or otherwise) for capital assets (either realty or personalty).
Section 3.17. [Reserved].
Section 3.18. Restricted Payments.
The Issuer shall not, directly or indirectly, (a) pay any dividend or
make any distribution (by reduction of capital or otherwise), whether in cash,
property, securities or a combination thereof, to the Owner Trustee or any owner
of a beneficial interest in the Issuer or otherwise with respect to any
ownership or equity interest or security in or of the Issuer or to the Servicer,
(b) redeem, purchase, retire or otherwise acquire for value any such ownership
or equity interest or security or (c) set aside or otherwise segregate any
amounts for any such purpose; provided, however, that the Issuer may make, or
cause to be made, (i) distributions as contemplated by, and to the extent funds
are available for such purpose under, the Transfer and Servicing Agreement or
the Trust Agreement and (ii) payments to the
33
Indenture Trustee pursuant to Section 6.07 hereof. The Issuer will not, directly
or indirectly, make payments to or distributions from the Collection Account
except in accordance with the Transaction Documents.
Section 3.19. Notice of Events of Default.
The Issuer agrees to give the Indenture Trustee and the Rating
Agencies prompt written notice of each Event of Default hereunder and,
immediately after obtaining knowledge of any of the following occurrences,
written notice of each default on the part of the Servicer or the Transferor of
its obligations under the Transfer and Servicing Agreement and each default on
the part of a Seller of its obligations under the Receivables Purchase
Agreement.
Section 3.20. Further Instruments and Acts.
Upon request of the Indenture Trustee, the Issuer will execute and
deliver such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purpose of this Indenture.
[END OF ARTICLE III]
34
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of this Indenture.
This Indenture shall cease to be of further effect with respect to the
Notes of any Series except as to (a) rights of registration of transfer and
exchange, (b) substitution of mutilated, destroyed, lost or stolen Notes, (c)
the rights of Noteholders to receive payments of principal thereof and interest
thereon, (d) Sections 3.03, 3.07, 3.08, 3.11, 3.12 and 12.16, (e) the rights and
immunities of the Indenture Trustee hereunder, including the rights of the
Indenture Trustee under Section 6.07, and the obligations of the Indenture
Trustee under Section 4.02, and (f) the rights of Noteholders as beneficiaries
hereof with respect to the property so deposited with the Indenture Trustee and
payable to all or any of them, and the Indenture Trustee, on demand of and at
the expense of the Issuer, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture with respect to such Notes when:
(i) either
(A) all Notes of such Series theretofore authenticated and
delivered (other than (1) Notes which have been destroyed, lost or
stolen and which have been replaced, or paid as provided in Section
2.06, and (2) Notes for whose full payment money has theretofore been
deposited in trust or segregated and held in trust by the Indenture
Trustee thereafter repaid to the Issuer or discharged from such trust,
as provided in Section 3.03) have been delivered to the Indenture
Trustee for cancellation; or
(B) all Notes of such Series not theretofore delivered to
the Indenture Trustee for cancellation:
(1) have become due and payable;
(2) will become due and payable at the Series
Final Maturity Date for such Class or Series of Notes; or
(3) are to be called for redemption within one
year under arrangements satisfactory to the Indenture Trustee
for the giving of notice of redemption by the Indenture
Trustee in the name, and at the expense, of the Issuer;
and the Issuer, in the case of (1), (2) or (3) above, has irrevocably
deposited or caused to be irrevocably deposited with the Indenture
Trustee cash or direct obligations of or obligations guaranteed by the
United States of America (which will mature prior to the date such
amounts are payable), in trust for such purpose, in an amount
sufficient to pay and discharge the entire indebtedness on such Notes
not theretofore delivered to the Indenture Trustee for cancellation
when due at the Series Final Maturity Date for such Class or Series of
Notes or the Redemption Date (if Notes shall have been called for
redemption pursuant to the related Indenture Supplement), as the case
may be;
(ii) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer; and
35
(iii) the Issuer has delivered to the Indenture Trustee an Officer's
Certificate, an Opinion of Counsel and (if required by the TIA or the
Indenture Trustee) an Independent Certificate from a firm of certified
public accountants, each meeting the applicable requirements of Section
12.01(a) and each stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of this Indenture have been
complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Issuer to the Indenture Trustee under Section 6.07 and of the
Indenture Trustee to the Noteholders under Section 4.02 shall survive.
Section 4.02. Application of Trust Money.
All monies deposited with the Indenture Trustee pursuant to Section
4.01 hereof shall be held in trust and applied by it, in accordance with the
provisions of the Notes, this Indenture and the applicable Indenture Supplement,
to make payments, either directly or through any Paying Agent, as the Indenture
Trustee may determine, to the Noteholders and for the payment in respect of
which such monies have been deposited with the Indenture Trustee, of all sums
due and to become due thereon for principal and interest; but such monies need
not be segregated from other funds except to the extent required herein or in
the Transfer and Servicing Agreement or required by law.
[END OF ARTICLE IV]
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ARTICLE V
AMORTIZATION EVENTS, DEFAULTS AND REMEDIES
Section 5.01. Amortization Events.
If any one of the following events (each, a "Trust Amortization
Event") shall occur:
(a) the occurrence of an Insolvency Event as defined in
Section 6.01 of the Transfer and Servicing Agreement relating to the
Transferor or, unless the Rating Agency Condition is satisfied with respect
to the deletion of the Bank or other Account Owner from this subsection,
the occurrence of an Insolvency Event relating to the Bank or other Account
Owner;
(b) a Transfer Restriction Event shall occur; or
(c) the Trust shall become subject to regulation by the
Securities and Exchange Commission as an "investment company" within the
meaning of the Investment Company Act;
then an Amortization Event with respect to all Series of Notes shall
occur without any notice or other action on the part of the Indenture Trustee or
the Noteholders immediately upon the occurrence of such event.
Upon the occurrence of an Amortization Event, an Amortization Period
or, if so specified on the related Indenture Supplement, an Accumulation Period
shall commence and payment on the Notes of each Series will be made in
accordance with the terms of the related Indenture Supplement.
Section 5.02. Events of Default.
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(a) default in the payment of the principal of any Note,
if and to the extent not previously paid, when the same becomes due and
payable on its Series Final Maturity Date; or
(b) default in the payment of any interest on any Note
when the same becomes due and payable, and such default shall continue for
a period of 35 days; or
(c) the filing of a decree or order for relief by a court
having jurisdiction in the premises in respect of the Issuer in an
involuntary case under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver, conservator, liquidator, assignee, custodian, trustee,
sequestrator or similar official for the Issuer or ordering the winding-up
or liquidation of the Issuer's affairs, and such decree or order shall
remain unstayed and in effect for a period of 60 or more consecutive days;
or
(d) the commencement by the Issuer of a voluntary case
under any applicable federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or the consent by the Issuer to the
entry of an order for relief in an involuntary case under any
37
such law, or the consent by the Issuer to the appointment of or the taking
possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator, conservator or similar official of the Issuer, or the making
by the Issuer of any general assignment for the benefit of creditors, or
the failure by the Issuer generally to pay, or the admission in writing by
the Issuer of its inability to pay, its debts as such debts become due, or
the taking of action by the Issuer in furtherance of any of the foregoing;
or
(e) default in the observance or performance of any
covenant or agreement of the Issuer made in this Indenture (other than a
covenant, or agreement, a default in the observance or performance of which
is elsewhere in this Section specifically dealt with), and such default
shall continue or not be cured for a period of 60 days and, as a result of
such failure, the interests of such Noteholders are materially adversely
affected and continue to be materially adversely affected during the 60-day
period, after there shall have been given, by registered or certified mail,
to the Issuer by the Indenture Trustee or to the Issuer and the Indenture
Trustee by the Holders of at least 25% of the Outstanding Amount of the
Notes of any affected Series, a written notice specifying such default and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or
(f) any other Events of Default described in the related
Indenture Supplement.
The Issuer shall deliver to the Indenture Trustee, within five days
after the occurrence thereof, written notice in the form of an Officer's
Certificate of any event which with the giving of notice and the lapse of time
would become an Event of Default, its status and what action the Issuer is
taking or proposes to take with respect thereto.
Section 5.03. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default described in (i) subsections 5.02 (a), (b), (e)
or (f) should occur and be continuing, then the Indenture Trustee or the Holders
of Notes representing more than 50% of the Outstanding Amount of each affected
Series of the Notes may declare, by a notice in writing to the Issuer (and to
the Indenture Trustee if declared by the Noteholders), and (ii) subsections
5.02(c) or (d) should occur and be continuing the Indenture Trustee shall be
deemed to have automatically declared, all the Notes of such Series to be
immediately due and payable, and upon any such declaration the Revolving Period
(or, if applicable, any other period of principal payment or accumulation other
than an Early Amortization Period (as such term is defined in the related
Indenture Supplements)) with respect to such Series shall terminate, an Early
Amortization Period (as such term is defined in the related Indenture
Supplements) will commence and the unpaid principal amount of such Notes,
together with accrued and unpaid interest thereon through the date of
acceleration, shall become immediately due and payable. The Indenture Trustee
shall provide written notice to the Issuer of the declarations of an Event of
Default under clause (ii) hereof promptly thereafter, but any failure to provide
such notice shall not affect such declaration or its validity.
At any time after such declaration of acceleration of maturity has
been made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee as hereinafter in this Article V provided, the
Holders of Notes representing more than 50% of the Outstanding Amount of the
Notes of such Series, by written notice to the Issuer and the Indenture Trustee,
may rescind and annul such declaration and its consequences with respect to such
Series.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
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Section 5.04. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee.
(a) The Issuer covenants that if (i) default is made in the
payment of any interest on any Note when the same becomes due and payable, and
such default continues for a period of 35 days following the date on which such
interest became due and payable, or (ii) default is made in the payment of
principal of any Note, if and to the extent not previously paid, when the same
becomes due and payable on its Series Final Maturity Date, the Issuer will, upon
demand of the Indenture Trustee, pay to it, for the benefit of the Holders of
the Notes of the affected Series, the whole amount then due and payable on such
Notes for principal and interest, with interest upon the overdue principal, and,
to the extent payment at such rate of interest shall be legally enforceable,
interest upon overdue installments of interest, at the applicable Note Interest
Rate borne by the Notes of such Series, and in addition thereto will pay such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee and its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts
upon such demand, the Indenture Trustee, in its own name and as trustee of an
express trust, may institute a Proceeding for the collection of the sums so due
and unpaid, and may prosecute such Proceeding to judgment or final decree, and
may enforce the same against the Issuer or other obligor upon such Notes and
collect in the manner provided by law out of the property of the Issuer or other
obligor upon such Notes, wherever situated, the moneys adjudged or decreed to be
payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee may, as more particularly provided in Section 5.05, in its discretion,
proceed to protect and enforce its rights and the rights of the Noteholders of
the affected Series, by such appropriate Proceedings as the Indenture Trustee
shall deem most effective to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy or legal or equitable right vested in the Indenture Trustee by this
Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or any
other obligor upon the Notes of the affected Series, or any Person having or
claiming an ownership interest in the Collateral, Proceedings under Title 11 of
the United States Code or any other applicable federal or state bankruptcy,
insolvency or other similar law, or in case a receiver, conservator, assignee or
trustee in bankruptcy or reorganization, liquidator, sequestrator, custodian or
similar official shall have been appointed for or taken possession of the Issuer
or its property or such other obligor or Person, or in case of any other
comparable judicial Proceedings relative to the Issuer or other obligor upon the
Notes of such Series, or to the creditors or property of the Issuer or such
other obligor, the Indenture Trustee, irrespective of whether the principal of
any Notes shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Indenture Trustee shall have made
any demand pursuant to the provisions of this Section 5.04, shall be entitled
and empowered, by intervention in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole
amount of principal and interest owing and unpaid in respect of the Notes
of such Series and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Indenture Trustee
(including any claim for reasonable compensation to the Indenture Trustee
and each predecessor Indenture Trustee, and their respective agents,
attorneys and counsel, and for reimbursement of all expenses and
liabilities incurred, and all advances made, by the Indenture Trustee and
each
39
predecessor Indenture Trustee, except as a result of negligence or bad
faith) and of the Noteholders of such Series allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations,
to vote on behalf of the Holders of Notes of such Series in any election of
a trustee, a standby trustee or Person performing similar functions in any
such Proceedings;
(iii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute all amounts
received with respect to the claims of the Noteholders of such Series and
of the Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of
the Indenture Trustee or the Holders of Notes of such Series allowed in any
judicial Proceedings relative to the Issuer, its creditors and its
property;
and any trustee, receiver, conservator, liquidator, custodian, assignee,
sequestrator or other similar official in any such Proceeding is hereby
authorized by each of such Noteholders to make payments to the Indenture
Trustee, and, in the event that the Indenture Trustee shall consent to the
making of payments directly to such Noteholders, to pay to the Indenture Trustee
such amounts as shall be sufficient to cover reasonable compensation to the
Indenture Trustee, each predecessor Indenture Trustee and their respective
agents, attorneys and counsel, and all other expenses and liabilities incurred,
and all advances made, by the Indenture Trustee and each predecessor Indenture
Trustee except as a result of negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this
Indenture, or under any of the Notes, may be enforced by the Indenture Trustee
without the possession of any of the Notes or the production thereof in any
trial or other Proceedings relative thereto, and any such action or Proceedings
instituted by the Indenture Trustee shall be brought in its own name as trustee
of an express trust, and any recovery of judgment, subject to the payment of the
expenses, disbursements and compensation of the Indenture Trustee, each
predecessor Indenture Trustee and their respective agents and attorneys, shall
be for the benefit of the Holders of the Notes of the affected Series as
provided herein.
(g) In any Proceedings brought by the Indenture Trustee (and also
any Proceedings involving the interpretation of any provision of this Indenture
to which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Holders of the Notes of the affected Series, and it
shall not be necessary to make any such Noteholder a party to any such
Proceedings.
Section 5.05. Remedies; Priorities.
(a) If an Event of Default shall have occurred and be continuing,
the Indenture Trustee may do one or more of the following:
(i) institute Proceedings in its own name and as trustee
of an express trust for the collection of all amounts then payable on the
Notes of the affected Series or under this
40
Indenture with respect thereto, whether by declaration or otherwise,
enforce any judgment obtained, and collect from the Issuer and any other
obligor upon such Notes moneys adjudged due;
(ii) take any other appropriate action to protect and
enforce the rights and remedies of the Indenture Trustee and the Holders of
the Notes of the affected Series;
(iii) at its own election or at the direction of the Holders
of more than 50% of the Outstanding Amount of the Notes of any affected
Series, institute foreclosure Proceedings from time to time with respect to
the portion of the Collateral which secures such Notes by causing the Trust
to sell to a Permitted Assignee Principal Receivables from the related Pool
in an amount equal to the Invested Amount with respect to the accelerated
Series of Notes and the related Finance Charge and Administrative
Receivables in accordance with Section 5.16 hereof, but only if the
Indenture Trustee determines that the proceeds of such sale will be
sufficient to pay principal of and interest on such Notes in full;
(iv) at the direction of not less than 66/2/3/% of the
Outstanding Amount of each Class of the Notes of such Series, institute
foreclosure Proceedings from time to time with respect to the portion of
the Collateral which secures such Notes, regardless of the sufficiency of
the proceeds thereof, by causing the Trust to sell to a Permitted Assignee
Principal Receivables from the related Pool in an amount equal to the
Invested Amount with respect to the accelerated Series of Notes and the
related Finance Charge and Administrative Receivables in accordance with
Section 5.16 hereof (each of the actions described in clauses (iii) and
(iv) a "Foreclosure Remedy");
In determining such sufficiency or insufficiency with respect to clause
(iii) and (iv), the Indenture Trustee may, but need not, obtain and rely upon an
opinion of an Independent investment banking or accounting firm of national
reputation as to the feasibility of such proposed action and as to the
sufficiency of the Collateral for such purpose.
(b) If the Indenture Trustee collects any money or property
pursuant to this Article V following the acceleration of the maturities of the
Notes of the affected Series pursuant to Section 5.03 (so long as such
declaration shall not have been rescinded or annulled), it shall pay out the
money or property in the following order:
FIRST: to the Indenture Trustee for amounts due pursuant to
Section 6.07;
SECOND: to the Servicer for amounts due and unpaid to such
Servicer with respect to the Servicing Fee;
THIRD: to Holders of the Notes of such Series for amounts due
and unpaid on such Notes for interest, ratably, without preference or priority
of any kind (except to the extent different priorities are established for a
Series in the applicable Indenture Supplement), according to the amounts due and
payable on such Notes for interest;
FOURTH: to Holders of the Notes of such Series for amounts due
and unpaid on such Notes for principal, ratably, without preference or priority
of any kind (except to the extent different priorities are established for a
Series in the applicable Indenture Supplement), according to the amounts due and
payable on such Notes for principal; and
41
FIFTH: to the Owner Trustee for distribution pursuant to
subsection 2.11 of the Trust Agreement.
(c) The Indenture Trustee may, upon notification to the Issuer,
fix a record date and payment date for any payment to Noteholders of the
affected Series pursuant to this Section. At least fifteen (15) days before such
record date, the Indenture Trustee shall mail or send by facsimile to each such
Noteholder a notice that states the record date, the payment date and the amount
to be paid.
(d) In addition to the application of money or property referred
to in subsection 5.05(b) for an accelerated Series, amounts then held in the
Collection Account, Special Funding Account or any Series Accounts for such
Series and any amounts available under the Series Enhancement for such Series
shall be used to make payments to the Holders of the Notes of such Series and
the Series Enhancer for such Series in accordance with the terms of this
Indenture, the related Indenture Supplement and the Series Enhancement for such
Series. Following the sale of the Collateral (or portion thereof) for a Series
and the application of the proceeds of such sale to such Series and the
application of the amounts then held in the Collection Account, the Special
Funding Account and any Series Accounts for such Series as are allocated to such
Series and any amounts available under the Series Enhancement for such Series,
such Series shall no longer be entitled to any allocation of Collections or
other property constituting the Collateral under this Indenture, and the Notes
of such Series shall no longer be Outstanding.
Section 5.06. Optional Preservation of the Collateral. If the Notes
of any Series have been declared to be due and payable under Section 5.03
following an Event of Default and such declaration and its consequences have not
been rescinded and annulled, and the Indenture Trustee has not received
direction from the Noteholders pursuant to Section 5.12, the Indenture Trustee
may, but need not, elect to maintain possession of the Collateral. It is the
desire of the parties hereto and the Noteholders that there be at all times
sufficient funds for the payment of principal of and interest on the Notes, and
the Indenture Trustee shall take such desire into account when determining
whether or not to maintain possession of the Collateral. In determining whether
to maintain possession of the Collateral, the Indenture Trustee may, but need
not, obtain and rely upon an opinion of an Independent investment banking or
accounting firm of national reputation as to the feasibility of such proposed
action and as to the sufficiency of the Collateral for such purpose.
Section 5.07. Limitation on Suits.
No Noteholder shall have any right to institute any Proceedings,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless:
(a) subject to the provisions of Section 5.05(a)(iv) and
5.12 hereof, the Holders of not less than 25% of the Outstanding Amount of
each affected Series of Notes have made written request to the Indenture
Trustee to institute such proceeding in its own name as indenture trustee;
(b) such Noteholder or Noteholders has previously given
written notice to the Indenture Trustee of a continuing Event of Default;
(c) such Noteholder or Noteholders has offered to the
Indenture Trustee reasonable indemnity against the costs, expenses and
liabilities to be incurred in compliance with such request;
42
(d) the Indenture Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has failed to institute any
such Proceeding; and
(e) no direction inconsistent with such written request
has been given to the Indenture Trustee during such 60-day period by more
than 50% of the Outstanding Amount of the Notes of such Series;
it being understood and intended that no one or more Noteholders of the affected
Series shall have any right in any manner whatever by virtue of, or by availing
of, any provision of this Indenture to affect, disturb or prejudice the rights
of any other Noteholders of such Series or to obtain or to seek to obtain
priority or preference over any other Noteholders of such Series or to enforce
any right under this Indenture, except in the manner herein provided and for the
equal and ratable benefit of all the Noteholders of such Series.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Noteholders of
such affected Series, each representing less than 50% of the Outstanding Amount
of such Notes, the Indenture Trustee in its sole discretion may determine what
action, if any, shall be taken, notwithstanding any other provisions of this
Indenture.
Section 5.08. Unconditional Rights of Noteholders to Receive
Principal and Interest.
Notwithstanding any other provision in this Indenture, each Noteholder
shall have the right which is absolute and unconditional to receive payment of
the principal of and interest in respect of such Note as such principal and
interest becomes due and payable and to institute suit for the enforcement of
any such payment, and such right shall not be impaired without the consent of
such Noteholder.
Section 5.09. Restoration of Rights and Remedies.
If the Indenture Trustee or any Noteholder has instituted any
Proceeding to enforce any right or remedy under this Indenture and such
Proceeding has been discontinued or abandoned, or has been determined adversely
to the Indenture Trustee or to such Noteholder, then and in every such case the
Issuer, the Indenture Trustee and the Noteholder shall, subject to any
determination in such Proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Indenture Trustee and the Noteholders shall continue as though no such
Proceeding had been instituted.
Section 5.10. Rights and Remedies Cumulative.
No right, remedy, power or privilege herein conferred upon or reserved
to the Indenture Trustee or to the Noteholders is intended to be exclusive of
any other right, remedy, power or privilege, and every right, remedy, power or
privilege shall, to the extent permitted by law, be cumulative and in addition
to every other right, remedy, power or privilege given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or exercise
of any right or remedy shall not preclude any other further assertion or the
exercise of any other appropriate right or remedy.
43
Section 5.11. Delay or Omission Not Waiver.
No failure to exercise and no delay in exercising, on the part of the
Indenture Trustee or of any Noteholder or other Person, any right or remedy
occurring hereunder upon any Event of Default shall impair any such right or
remedy or constitute a waiver thereof of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article V or by law
to the Indenture Trustee or to the Noteholders may be exercised from time to
time, and as often as may be deemed expedient, by the Indenture Trustee or by
the Noteholders, as the case may be.
Section 5.12. Rights of Noteholders to Direct Indenture Trustee.
Subject to the provisions of Section 5.05(a)(iv), more than 50% of the
Outstanding Amount of any Outstanding Series of Notes shall have the right to
direct the time, method and place of conducting any Proceeding for any remedy
available to the Indenture Trustee with respect to the Notes or exercising any
trust or power conferred on the Indenture Trustee with respect to the Notes;
provided, however, that subject to Section 6.01:
(a) the Indenture Trustee shall have the right to decline
any such direction if the Indenture Trustee, after being advised by
counsel, determines that the action so directed is in conflict with any
rule of law or with this Indenture, and
(b) the Indenture Trustee shall have the right to decline
any such direction if the Indenture Trustee in good faith shall, by a
Responsible Officer of the Indenture Trustee, determine that the
Proceedings so directed would be illegal or involve the Indenture Trustee
in personal liability or be unjustly prejudicial to the Noteholders not
parties to such direction.
Section 5.13. Waiver of Past Defaults.
Prior to the declaration of the acceleration of the maturity of the
Notes of the affected Series as provided in Section 5.03, more than 50% of the
Outstanding Amount of such Notes may, on behalf of all such Noteholders waive in
writing any past default with respect to such Notes and its consequences, except
a default:
(a) in the payment of the principal or interest in respect of
any Note of such Series, or
(b) in respect of a covenant or provision hereof that under
Section 10.02 hereof cannot be modified or amended without the consent of
the Noteholder of each Outstanding Note affected.
Upon any such written waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon. After a
declaration of acceleration, only waivers pursuant to Section 5.03 are
permitted.
Section 5.14. Undertaking for Costs.
All parties to this Indenture agree, and each Noteholder by its
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Indenture Trustee for any action
taken, suffered or omitted by it as Indenture Trustee, the filing by any party
litigant in such suit of an
44
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Indenture Trustee, to any suit instituted by any Noteholder, or group of
Noteholders, (in compliance with Section 5.08 hereof), holding in the aggregate
more than 10% of the Outstanding Amount of the Notes of the affected Series, or
to any suit instituted by any Noteholder for the enforcement of the payment of
the principal or interest in respect of any Note on or after the Distribution
Date on which any of such amounts was due (or, in the case of redemption, on or
after the applicable Redemption Date).
Section 5.15. Waiver of Stay or Extension Laws.
The Issuer covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may adversely affect the covenants
or the performance of this Indenture; and the Issuer (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Indenture Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
Section 5.16. Sale of Receivables.
(a) The method, manner, time, place and terms of any sale of
Receivables (or interest therein) pursuant to Section 5.05(a) shall be
commercially reasonable. The Indenture Trustee may from time to time postpone
any sale by public announcement made at the time and place of such sale. The
Indenture Trustee hereby expressly waives its right to any amount fixed by law
as compensation for any sale.
(b) The Indenture Trustee is hereby irrevocably appointed the
agent and attorney-in-fact of the Issuer in connection with any sale of
Receivables pursuant to Section 5.05(a)(iii) and (iv). No purchaser or
transferee at any such sale shall be bound to ascertain the Indenture Trustee's
authority, inquire into the satisfaction of any conditions precedent or see to
the application of any monies.
(c) In its exercise of the Foreclosure Remedy pursuant to Section
5.05(a), the Indenture Trustee shall solicit bids from Permitted Assignees for
the sale of Principal Receivables in an amount equal to the Invested Amount with
respect to the affected Series of Notes at the time of sale and the related
Finance Charge and Administrative Receivables (or interests therein). The
Transferor or any of its affiliates (other than Household Receivables
Acquisition Company II ) who are Permitted Assignees shall be entitled to
participate in, and to receive from the Indenture Trustee a copy of each other
bid submitted in connection with, such bidding process; provided that to the
extent that the Transferor or any of its Affiliates retains an interest in the
Transferor Amount, neither the Transferor nor any such Affiliates shall be
entitled to participate in the bidding of such sale. The Indenture Trustee shall
sell such Receivables (or interests therein) to the bidder with the highest cash
purchase offer. The proceeds of any such sale shall be applied in accordance
with Section 5.05(b).
Section 5.17. Action on Notes.
The Indenture Trustee's right to seek and recover judgment on the
Notes or under this Indenture shall not be affected by the seeking or obtaining
of or application for any other relief under or with respect to this Indenture.
Neither the lien of this Indenture nor any rights or remedies of the Indenture
Trustee or the Noteholders shall be impaired by the recovery of any judgment by
the Indenture
45
Trustee against the Issuer or by the levy of any execution under such judgment
upon any portion of the Collateral or upon any of the assets of the Issuer. Any
money or property collected by the Indenture Trustee shall be applied as
specified in the applicable Indenture Supplement.
[END OF ARTICLE V]
46
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.01. Duties of the Indenture Trustee.
(a) If an Event of Default has occurred and is continuing and a
Responsible Officer shall have actual knowledge or written notice of such Event
of Default, the Indenture Trustee shall, prior to the receipt of directions, if
any, from more than 50% of the Outstanding Amount of the Notes or as otherwise
provided herein in the case of certain directions, exercise the rights and
powers vested in it by this Indenture and use the same degree of care and skill
in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the Indenture
Trustee; and
(ii) in the absence of bad faith or negligence on its part, the
Indenture Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Indenture Trustee and conforming to the requirements of this
Indenture; provided, however, the Indenture Trustee, upon receipt of any
resolutions, certificates, statements, opinions, reports, documents, orders or
other instruments furnished to the Indenture Trustee which are specifically
required to be furnished pursuant to any provision of this Indenture or any
Indenture Supplement, shall examine them to determine whether they substantially
conform to the requirements of this Indenture or any Indenture Supplement. The
Indenture Trustee shall give prompt written notice to the Noteholders and each
Rating Agency of any such instrument that does not substantially conform to the
applicable requirements of this Indenture or any Indenture Supplement discovered
by the Indenture Trustee.
(c) In case an Amortization Event has occurred and is continuing
and a Responsible Officer shall have actual knowledge or written notice of such
Amortization Event, the Indenture Trustee shall, prior to the receipt of
directions, if any, from more than 50% of the Outstanding Amount of the Notes,
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(d) No provision of this Indenture shall be construed to relieve
the Indenture Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) this subsection shall not be construed to limit the
effect of subsection (a) of this Section;
(ii) the Indenture Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer, unless it
shall be proved that the Indenture Trustee was negligent in ascertaining
the pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect
to any action taken, suffered or omitted to be taken by it in good faith in
accordance with the Indenture and/or the
47
direction of more than 50% of the Outstanding Amount of the Notes of each
outstanding Series of Notes relating to the time, method and place of
conducting any proceeding for any remedy available to the Indenture
Trustee, or for exercising any trust or power conferred upon the Indenture
Trustee, under this Indenture. The Indenture Trustee shall not be liable
for any action taken, suffered or omitted to be taken by it in good faith
in accordance with the direction of the Servicer, the Transferor or the
Trust in compliance with the terms of this Agreement.
(e) No provision of this Indenture shall require the Indenture
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the exercise
of any of its rights or powers if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(f) Every provision of this Indenture that in any way relates to
the Indenture Trustee is subject to subsections (a), (b), (c) and (d) of this
Section.
(g) Except as expressly provided in this Indenture, the Indenture
Trustee shall have no power to vary the Collateral, including, without
limitation, by (i) accepting any substitute payment obligation for a Receivable
initially transferred to the Trust under the Transfer and Servicing Agreement,
(ii) adding any other investment, obligation or security to the Trust or (iii)
withdrawing from the Trust any Receivable (except as otherwise provided in the
Transfer and Servicing Agreement).
(h) The Indenture Trustee shall have no responsibility or
liability for investment losses on Eligible Investments.
(i) The Indenture Trustee shall notify each Rating Agency (i) of
any change in any rating of the Notes by any other Rating Agency of which a
Trust Officer of the Indenture Trustee has actual knowledge, and (ii)
immediately of the occurrence of any actual or potential Event of Default or
Amortization Event of which a Trust Officer of the Indenture Trustee has actual
knowledge or has actual notice from the Servicer.
(j) For all purposes under this Indenture, the Indenture Trustee
shall not be deemed to have notice or knowledge of any Event of Default,
Amortization Event or Servicer Default unless a Responsible Officer assigned to
and working in the Corporate Trust Office of the Indenture Trustee has actual
knowledge thereof or has received written notice thereof. For purposes of
determining the Indenture Trustee's responsibility and liability hereunder, any
reference to an Event of Default, Amortization Event or Servicer Default shall
be construed to refer only to such event of which the Indenture Trustee is
deemed to have notice as described in this Section.
Section 6.02. Notice of Amortization Event or Event of Default.
Upon the occurrence of any Amortization Event or Event of Default of
which a Responsible Officer has actual knowledge or has received notice thereof,
the Indenture Trustee shall transmit by mail to all Noteholders as their names
and addresses appear on the Note Register and the Rating Agencies, notice of
such Amortization Event or Event of Default hereunder known to the Indenture
Trustee within 30 days after it occurs or within ten Business Days after it
receives such notice or obtains actual notice, if later.
48
Section 6.03. Rights of Indenture Trustee.
Except as otherwise provided in Section 6.01 hereof:
(a) the Indenture Trustee may conclusively rely and shall fully
be protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, note or other paper or document reasonably believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
(b) whenever in the administration of this Indenture the Indenture
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Indenture Trustee
(unless other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officer's Certificate of the Issuer. The
Issuer shall provide a copy of such Officer's Certificate to the Noteholders at
or prior to the time the Indenture Trustee receives such Officer's Certificate;
(c) as a condition to the taking, suffering or omitting of any
action by it hereunder, the Indenture Trustee may consult with counsel and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in-good faith and in reliance thereon;
(d) the Indenture Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture or to honor the
request or direction of any of the Noteholders pursuant to this Indenture,
unless such Noteholders shall have offered to the Indenture Trustee reasonable
security or indemnity reasonably satisfactory to the Indenture Trustee against
the costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(e) the Indenture Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, note or other paper or document, but the Indenture Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Indenture Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Issuer and the Servicer, personally or by
agent or attorney;
(f) the Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, attorneys, custodians or nominees and the Indenture Trustee shall not be
responsible for (i) any misconduct or negligence on the part of any agent,
attorney, custodians or nominees appointed with due care by it hereunder or (ii)
the supervision of such agents, attorneys, custodians or nominees after such
appointment with due care;
(g) the Indenture Trustee shall not be liable for any actions
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights conferred upon the Indenture
Trustee by this Indenture;
(h) the rights, privileges, protections, immunities and benefits
given to the Indenture Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Indenture Trustee
in each of its capacities hereunder; and
(i) the Indenture Trustee may request that the Issuer, the
Servicer or the Transferor deliver an Officer's Certificate setting forth the
names of individuals and/or titles of officers authorized at
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such time to take specified actions pursuant to this Indenture, which Officer's
Certificate may be signed by any person authorized to sign an Officer's
Certificate, including any person specified as so authorized in any such
certificate previously delivered and not superseded.
Section 6.04. Not Responsible for Recitals or Issuance of Notes.
The recitals contained herein and in the Notes, except the certificate
of authentication of the Indenture Trustee, shall be taken as the statements of
the Issuer, and the Indenture Trustee assumes no responsibility for their
correctness. The Indenture Trustee makes no representation as to the validity or
sufficiency of the Agreement, the Notes, or any related document. The Indenture
Trustee shall not be accountable for the use or application by the Issuer of the
proceeds from the Notes.
Section 6.05. May Hold Notes.
The Indenture Trustee, any Paying Agent, Transfer Agent and Registrar
or any other agent of the Issuer, in its individual or any other capacity, may
become the owner or pledgee of Notes and may otherwise deal with the Issuer with
the same rights it would have if it were not Indenture Trustee, Paying Agent,
Transfer Agent and Registrar or such other agent.
Section 6.06. Money Held in Trust.
Money held by the Indenture Trustee in trust hereunder need not be
segregated from other funds held by the Indenture Trustee in trust hereunder
except to the extent required herein or required by law. The Indenture Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed upon in writing by the Indenture Trustee and the
Issuer.
Section 6.07. Compensation, Reimbursement and Indemnification.
Pursuant to the Transfer and Servicing Agreement, the Issuer shall
direct the Servicer to pay and the Servicer shall pay to the Indenture Trustee
from time to time such compensation for its services as shall be agreed upon in
writing. The Indenture Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. Pursuant to the Transfer and
Servicing Agreement, the Servicer shall reimburse the Indenture Trustee for all
reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, in addition to the compensation for its services. Such expenses
shall include the reasonable compensation and expenses, disbursements and
advances of the Indenture Trustee's agents, counsel, accountants and experts.
Pursuant to the Transfer and Servicing Agreement, the Issuer shall direct the
Servicer to indemnify and the Servicer shall indemnify the Indenture Trustee
against any and all loss, liability or expense (including the fees of either
in-house counsel or outside counsel (which the Indenture Trustee shall
determine), but not both) incurred by it in connection with the administration
of this trust and the performance of its duties hereunder. The Indenture Trustee
shall notify the Issuer and the Servicer promptly of any claim for which it may
seek indemnity. Failure by the Indenture Trustee to so notify the Issuer and the
Servicer shall not relieve the Issuer or the Servicer of its obligations
hereunder unless such loss, liability or expense could have been avoided with
such prompt notification and then only to the extent of such loss, expense or
liability which could have been so avoided. Pursuant to the Transfer and
Servicing Agreement, the Servicer shall defend any claim against the Indenture
Trustee, the Indenture Trustee may have separate counsel and, if it does, the
Servicer shall pay the fees and expenses of such counsel. Neither the Issuer nor
the Servicer need reimburse any expense or indemnify against any loss, liability
or expense incurred by the Indenture Trustee through the Indenture Trustee's own
willful misconduct, negligence or bad faith.
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The Servicer's payment obligations to the Indenture Trustee pursuant
to this Section shall survive the discharge of this Indenture. When the
Indenture Trustee incurs expenses after the occurrence of a Default specified in
Section 5.02(c) or (d) with respect to the Issuer, the expenses are intended to
constitute expenses of administration under Title 11 of the United States Code
or any other applicable federal or state bankruptcy, insolvency or similar law.
Section 6.08. Replacement of Indenture Trustee.
No resignation or removal of the Indenture Trustee and no appointment
of a successor Indenture Trustee shall become effective until the acceptance of
appointment by the successor Indenture Trustee pursuant to this Section. The
Indenture Trustee may resign at any time by giving 30 days' written notice to
the Issuer. More than 50% of the Outstanding Amount of the Notes may remove the
Indenture Trustee by so notifying the Indenture Trustee and may appoint a
successor Indenture Trustee. The Owner Trustee at the direction of the
Transferor shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with
Section 6.11;
(ii) the Indenture Trustee is adjudged a bankrupt or
insolvent;
(iii) a receiver of the Indenture Trustee or of its property
shall be appointed, or any public officer takes charge of the Indenture
Trustee or its property or its affairs for the purpose of rehabilitation,
conservation or liquidation; or
(iv) the Indenture Trustee otherwise becomes legally unable
to act.
If the Indenture Trustee resigns or is removed or if a vacancy exists in the
office of Indenture Trustee for any reason (the Indenture Trustee in such event
being referred to herein as the retiring Indenture Trustee), the Owner Trustee
at the direction of the Transferor shall promptly appoint a successor Indenture
Trustee.
A successor Indenture Trustee shall deliver a written acceptance of
its appointment to the retiring Indenture Trustee, the Issuer and to the
Servicer. Thereupon the resignation or removal of the retiring Indenture Trustee
shall become effective, and the successor Indenture Trustee shall have all the
rights, powers and duties of the Indenture Trustee under this Indenture. The
successor Indenture Trustee shall mail a notice of its succession to
Noteholders. The retiring Indenture Trustee shall promptly transfer all property
held by it as Indenture Trustee to the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Holders of more than 50% of the Outstanding
Amount of the Notes may petition any court of competent jurisdiction, at the
expense of the Issuer, for the appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any
Noteholder may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section, the Issuer's obligations under Section 6.07 shall continue for the
benefit of the retiring Indenture Trustee.
Section 6.09. Successor Indenture Trustee by Merger.
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If the Indenture Trustee consolidates with, merges or converts into,
or transfers all or substantially all its corporate trust business or assets to,
another corporation or banking association, the resulting, surviving or
transferee corporation or banking association without any further act shall be
the successor Indenture Trustee; provided, that such corporation or banking
association shall be otherwise qualified and eligible under Section 6.11. The
Indenture Trustee shall provide the Rating Agencies written notice of any such
transaction promptly after such transaction.
In case at the time such successor or successors by merger,
conversion consolidation or transfer to the Indenture Trustee shall succeed to
the trusts created by this Indenture any of the Notes shall have been
authenticated but not delivered, any such successor to the Indenture Trustee
may adopt the certificate of authentication of any predecessor Indenture Trustee
and deliver such Notes so authenticated; and in case at that time any of the
Notes shall not have been authenticated, any successor to the Indenture Trustee
may authenticate such Notes in the name of the successor to the Indenture
Trustee; and in all such cases such certificates shall have the full force
which it is anywhere in the Notes or in this Indenture provided that the
certificate of the Indenture Trustee shall have.
Section 6.10. Appointment of Co-Indenture Trustee or Separate
Indenture Trustee.
(a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Collateral may at the time be located, the Indenture
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Collateral, and to vest
in such Person or Persons, in such capacity and for the benefit of the
Noteholders, such title to the Collateral, or any part hereof, and, subject to
the other provisions of this Section, such powers, duties, obligations, rights
and trusts as the Indenture Trustee may consider necessary or desirable. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 6.11, and no notice to
Noteholders of the appointment of any co-trustee or separate trustee shall be
required under Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred
or imposed upon the Indenture Trustee shall be conferred or imposed upon
and exercised or performed by the Indenture Trustee and such separate
trustee or co-trustee jointly (it being understood that such separate
trustee or co-trustee is not authorized to act separately without the
Indenture Trustee joining in such act), except to the extent that under
any law of any jurisdiction in which any particular act or acts are to be
performed the Indenture Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Collateral or any
portion thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the direction
of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept
the resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture
Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given
52
to each of them. Every instrument appointing any separate trustee or co-trustee
shall refer to this Indenture and the conditions of this Article VI. Each
separate trustee and co-trustee, upon its acceptance of the trusts conferred,
shall be vested with the estates or property specified in its instrument of
appointment, either jointly with the Indenture Trustee or separately, as may be
provided therein, subject to all the provisions of this Indenture, specifically
including every provision of this Indenture relating to the conduct of,
affecting the liability of, or affording protection to, the Indenture Trustee.
Every such instrument shall be filed with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute
the Indenture Trustee, its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Indenture on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 6.11. Eligibility; Disqualification.
The Indenture Trustee shall at all times satisfy the requirements of
TIA Section310(a). The Indenture Trustee shall have a combined capital and
surplus of at least $50,000,000 as set forth in its most recent published annual
report of condition and its long-term unsecured debt shall be rated at least
BBB- by Fitch, Baa3 by Moody's and BBB- by Standard & Poor's. The Indenture
Trustee shall comply with TIA Section310(b), including the optional provision
permitted by the second sentence of TIA Section310(b)(9); provided, however,
that there shall be excluded from the operation of TIA Section310(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
Section310(b)(1) are met.
Section 6.12. Preferential Collection of Claims Against. The
Indenture Trustee shall comply with TIA Section311(a), excluding any creditor
relationship listed in TIA Section311(b). An Indenture Trustee who has resigned
or been removed shall be subject to TIA Section311(a) to the extent indicated.
Section 6.13. Tax Returns.
In the event the Trust shall be required to file tax returns, the
Servicer shall prepare or shall cause to be prepared such tax returns and shall
provide such tax returns to the Owner Trustee for signature on behalf of the
Trust at least five days before such tax returns are due to be filed. The
Servicer, in accordance with the terms of each Indenture Supplement, shall also
prepare or shall cause to be prepared all tax information required by law to be
distributed to Noteholders and shall deliver such information to the Indenture
Trustee at least five days prior to the date it is required by law to be
distributed to Noteholders. The Indenture Trustee, upon request, will furnish
the Servicer with all such information known to the Indenture Trustee as may be
reasonably required in connection with the preparation of all tax returns of the
Trust, and shall, upon request, execute such returns. In no event shall the
Indenture Trustee be liable for any liabilities, costs or expenses of the Trust
or any Noteholder arising under any tax law, including without limitation,
federal, state or local income or excise taxes or any other tax imposed on or
measured by income (or any interest or penalty with respect thereto arising from
a failure to comply therewith).
Section 6.14. Representations and Covenants of the Indenture
Trustee.
The Indenture Trustee represents, warrants and covenants that:
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(a) The Indenture Trustee is a banking corporation duly
organized and validly existing under the laws of the State of New York;
(b) The Indenture Trustee has full power and authority to
deliver and perform this Indenture and has taken all necessary action to
authorize the execution, delivery and performance by it of this Indenture
and other Transaction Documents to which it is a party; and
(c) Each of this Indenture and other Transaction Documents
to which it is a party has been duly executed and delivered by the
Indenture Trustee and constitutes its legal, valid and binding obligation
in accordance with its terms.
Section 6.15. Custody of the Collateral.
The Indenture Trustee shall hold such of the Collateral as consists of
instruments, deposit accounts, negotiable documents, money, goods, letters of
credit, and advices of credit in the State of New York. The Indenture Trustee
shall hold such of the Collateral as constitutes investment property through the
Securities Intermediary, and The Bank of New York, as the initial Securities
Intermediary, hereby agrees (and any successor Securities Intermediary before
being appointed as Securities Intermediary shall agree) with the Indenture
Trustee that (a) such investment property shall at all times be credited to a
securities account of the Indenture Trustee, (b) such Securities Intermediary
shall treat the Indenture Trustee as entitled to exercise the rights that
comprise each financial asset credited to such securities account, (c) all
property credited to such securities account shall be treated as financial
assets, (d) such Securities Intermediary shall comply with entitlement orders
originated by the Indenture Trustee without the further consent of any other
person or entity, (e) such Securities Intermediary will not agree with any
person or entity other than the Indenture Trustee to comply with entitlement
orders originated by such other person or entity, (f) such securities accounts
and the property credited thereto shall not be subject to any lien, security
interest, or right of set-off in favor of such Securities Intermediary or anyone
claiming through it (other than the Indenture Trustee), and (g) such agreement
(including this agreement by The Bank of New York, as the initial Securities
Intermediary) shall be governed by the laws of the State of New York. Terms used
in this Section that are defined in the New York UCC and not otherwise defined
herein shall have the meaning set forth in the New York UCC. Except as permitted
by this Section 6.15, the Indenture Trustee shall not hold any part of the
Collateral through an agent or nominee. The Indenture Trustee shall not be
responsible for preparing or filing any financing statement or amendment to a
financing statement or recording any documents or instruments in any public
office at any time or times or otherwise perfecting or maintaining the
perfection of any security interest in the Collateral.
[END OF ARTICLE VI]
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ARTICLE VII
NOTEHOLDERS' LIST AND REPORTS BY INDENTURE TRUSTEE AND ISSUER
Section 7.01. Issuer to Furnish Indenture Trustee Names and
Addresses of Noteholders.
The Issuer will furnish or cause to be furnished to the Indenture
Trustee (a) upon each transfer of a Note, a list, in such form as the Indenture
Trustee may reasonably require, of the names, addresses and taxpayer
identification numbers of the Noteholders as they appear on the Note Register as
of the most recent Record Date, and (b) at such other times, as the Indenture
Trustee may request in writing, within 10 days after receipt by the Issuer of
any such request, a list of similar form and content as of a date not more than
10 days prior to the time such list is furnished; provided, however, that for so
long as the Indenture Trustee is the Transfer Agent and Registrar, no such list
should be required to be furnished.
Section 7.02. Preservation of Information; Communications to
Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of the Noteholders contained
in the most recent list furnished to the Indenture Trustee as provided in
Section 7.01 and the names, addresses and taxpayer identification numbers of the
Noteholders received by the Indenture Trustee in its capacity as Transfer Agent
and Registrar. The Indenture Trustee may destroy any list furnished to it as
provided in Section 7.01 upon receipt of a new list so furnished.
(b) Noteholders may communicate, pursuant to TIA Section312(b),
with other Noteholders with respect to their rights under this Indenture or
under the Notes.
(c) The Issuer, the Indenture Trustee and the Transfer Agent and
Registrar shall have the protection of TIA Section312(c).
Section 7.03. Reports by Issuer.
(a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after
the Issuer is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Issuer may be
required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act;
(ii) file with the Indenture Trustee and the Commission in
accordance with rules and regulations prescribed from time to time by the
Commission such additional information, documents and reports with respect
to compliance by the Issuer with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
(iii) supply to the Indenture Trustee (and the Indenture
Trustee shall transmit by mail to all Noteholders described in TIA
Section313(c)) such summaries of any information, documents and reports
required to be filed by the Issuer pursuant to clauses (i) and (ii) of this
55
Section as may be required by rules and regulations prescribed from time to
time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of
the Issuer shall end on December 31 of each year.
Delivery of such reports, information and documents to the Indenture
Trustee is for informational purposes only and the Indenture Trustee's receipt
of such shall not constitute constructive notice of any information contained
therein or determinable from information contained therein including the
Issuer's compliance with any of its covenants hereunder (as to which the
Indenture Trustee is entitled to rely exclusively on Officer's Certificates).
Section 7.04. Reports by Indenture Trustee.
If required by TIA Section313(a), within 60 days after each March 31
beginning with March 31, 2003, the Indenture Trustee shall mail to each
Noteholder as required by TIA Section313(c) a brief report dated as of such date
that complies with TIA Section313(a). The Indenture Trustee also shall comply
with TIA Section313(b).
A copy of each report at the time of its mailing to Noteholders shall
be filed by the Indenture Trustee with the Commission and each stock exchange,
if any, on which the Notes are listed. The Issuer shall notify the Indenture
Trustee if and when the Notes are listed on any stock exchange.
Section 7.05. Notices.
All notices required to be given to the Noteholders shall be given by
publication at least once, if any Notes are listed on a stock exchange and the
rules of such stock exchange shall so require, in a publication meeting the
requirements of such stock exchange.
[END OF ARTICLE VII]
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ARTICLE VIII
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 8.01. Collection of Money.
Except as otherwise expressly provided herein and in the related
Indenture Supplement, the Indenture Trustee may demand payment or delivery of,
and shall receive and collect, directly and without intervention or assistance
of any fiscal agent or other intermediary, all money and other property payable
to or receivable by the Indenture Trustee pursuant to this Indenture. The
Indenture Trustee shall hold all such money and property received by it in trust
for the Noteholders and shall apply it as provided in this Indenture. Except as
otherwise expressly provided in this Indenture, if any default occurs in the
making of any payment or performance under the Transfer and Servicing Agreement
or any other Transaction Document, the Indenture Trustee may, and upon the
request of the Holders of more than 50% of the Outstanding Amount of the Notes
shall, take such action as may be appropriate to enforce such payment or
performance, including the institution and prosecution of appropriate
proceedings. Any such action shall be without prejudice to any right to claim a
Amortization Event or a Default or Event of Default under this Indenture and to
proceed thereafter as provided in Article V hereof.
Section 8.02. Rights of Noteholders.
The Collateral shall secure the obligations of the Trust to pay to the
Holders of the Notes of each Series principal and interest and other amounts
payable pursuant to this Indenture and the related Indenture Supplement. Except
as specifically set forth in the Indenture Supplement with respect thereto, the
Notes of any Series or Class shall not have the right to payment from any Series
Account or Series Enhancement allocated for the benefit of any other Series or
Class.
Section 8.03. Establishment of Collection Account and Special
Funding Account.
The Servicer, for the benefit of the Noteholders, shall establish and
maintain for each Pool with the Indenture Trustee or its nominee in the name of
the Indenture Trustee, on behalf of the Trust, a Qualified Account (including
any subaccount thereof) bearing a designation clearly indicating that the funds
and other property credited thereto are held for the benefit of the Noteholders
relating to such Pool (the "Collection Account"). Where the Indenture or any
Indenture Supplement employs the term "Collection Account" such reference shall
implicitly refer to the "Collection Account" of the related Pool, unless
explicitly otherwise provided. The Indenture Trustee shall possess all right,
title and interest in all monies, instruments, investment property, documents,
certificates of deposit and other property credited from time to time to the
Collection Account and in all proceeds, earnings, income, revenue, dividends and
distributions thereof for the benefit of the Noteholders.
Each Collection Account shall be under the sole dominion and control
of the Indenture Trustee for the benefit of the Noteholders relating to such
Pool. Except as expressly provided in this Indenture and the Transfer and
Servicing Agreement, the Servicer agrees that it shall have no right of setoff
or banker's lien against, and no right to otherwise deduct from, any funds held
in the Collection Account for any amount owed to it by the Indenture Trustee,
the Trust, any Noteholder or any Series Enhancer. If, at any time, the
Collection Account ceases to be a Qualified Account, the Indenture Trustee (or
the Servicer on its behalf) shall within 10 Business Days (or such longer
period, not to exceed 30 calendar days, as to which each Rating Agency may
consent) establish a new Collection Account meeting the conditions specified
above, transfer any monies, documents, instruments, investment property,
certificates of deposit and other property to such new Collection Account and
from the date such new Collection Account is established, it shall be the
"Collection Account." Pursuant to the authority granted
57
to the Servicer in subsection 3.01(b) of the Transfer and Servicing Agreement,
the Servicer shall have the power to instruct the Indenture Trustee to make
withdrawals and payments from the Collection Account for the purposes of
carrying out the Servicer's or the Indenture Trustee's duties hereunder and
under the Transfer and Servicing Agreement, as applicable. The Servicer shall
reduce deposits into the Collection Account payable by the Transferor on any
Deposit Date to the extent the Transferor is entitled to receive funds from the
Collection Account on such Deposit Date, but only to the extent such reduction
would not reduce the Transferor Amount to an amount less than the Required
Transferor Amount.
Funds on deposit in the Collection Account (other than investment
earnings and amounts deposited pursuant to Sections 2.06, 6.01, or 7.01 of the
Transfer and Servicing Agreement or Section 11.02 of this Agreement) shall at
the written direction of the Servicer be invested by the Indenture Trustee in
Eligible Investments selected by the Servicer. All such Eligible Investments
shall be held by the Indenture Trustee for the benefit of the Noteholders
pursuant to Section 6.15. Investments of funds representing Collections
collected during any Due Period shall be invested in Eligible Investments that
will mature so that such funds will be available no later than the close of
business on each monthly Transfer Date following such Due Period in amounts
sufficient to the extent of such funds to make the required distributions on the
following Distribution Date. No such Eligible Investment shall be disposed of
prior to its maturity; provided, however, that the Indenture Trustee may sell,
liquidate or dispose of any such Eligible Investment before its maturity, at the
written direction of the Servicer, if such sale, liquidation or disposal would
not result in a loss of all or part of the principal portion of such Eligible
Investment or if, prior to the maturity of such Eligible Investment, a default
occurs in the payment of principal, interest or any other amount with respect to
such Eligible Investment. Funds deposited in the Collection Account on the day
immediately preceding a Distribution Date will be invested at the direction of
the Servicer in Eligible Investments and the earnings on such overnight
investments shall be distributed to the Servicer for such Distribution Date in
the manner determined by notice from the Servicer from time to time. On each
Distribution Date, all interest and other investment earnings (net of losses and
investment expenses) on funds on deposit in the Collection Account shall be paid
to the Transferor, except as otherwise specified in any Indenture Supplement.
The Indenture Trustee shall bear no responsibility or liability for any losses
resulting from investment or reinvestment of any funds in accordance with this
Section nor for the selection of Eligible Investments in accordance with the
provisions of this Indenture and any Indenture Supplement.
The Servicer, for the benefit of the Noteholders with respect to a
particular Pool, shall establish and maintain with the Indenture Trustee or its
nominee in the name of the Indenture Trustee, on behalf of the Trust, a
Qualified Account (including any subaccounts thereof) bearing a designation
clearly indicating that the funds and other property credited thereto are held
for the benefit of the Noteholders relating to such Pool (the "Special Funding
Account"). The Indenture Trustee shall possess all right, title and interest in
all monies, instruments, investment property, documents, certificates of deposit
and other property credited from time to time to the Special Funding Account and
in all proceeds, dividends distributions, earnings, income and revenue thereof
for the benefit of the Noteholders. The Special Funding Account with respect to
a Pool shall be under the sole dominion and control of the Indenture Trustee for
the benefit of the Noteholders relating to such Pool. Except as expressly
provided in this Indenture and the Transfer and Servicing Agreement, the
Servicer shall have no right of setoff or banker's lien against, and no right to
otherwise deduct from, any funds and other property held in the Special Funding
Account for any amount owed to it by the Indenture Trustee, the Trust, any
Noteholder or any Series Enhancer. If, at any time, the Special Funding Account
ceases to be a Qualified Account, the Indenture Trustee (or the Servicer on its
behalf) shall within 10 Business Days (or such longer period, not to exceed 30
calendar days, as to which each Rating Agency may consent) establish a new
Special Funding Account meeting the conditions specified above, transfer any
monies, documents, instruments, investment property, certificates of deposit and
other property to such new Special Funding Account and from the date such new
Special Funding Account is established, it shall be the "Special Funding
58
Account." Where this Indenture or any Indenture Supplement employs the term
"Special Funding Account" such reference shall implicitly refer to the "Special
Funding Account" of the related Pool, unless explicitly otherwise provided. Upon
deposit of funds into the Special Funding Account, the Servicer shall provide
written notice of the allocation of any funds deposited to the Special Funding
Account to a particular Pool.
Funds on deposit in the Special Funding Account shall at the written
direction of the Servicer be invested by the Indenture Trustee in Eligible
Investments selected by the Servicer. All such Eligible Investments shall be
held by the Indenture Trustee for the benefit of the Noteholders pursuant to
Section 6.15. Funds on deposit in the Special Funding Account on any
Distribution Date will be invested in Eligible Investments that will mature so
that such funds will be available no later than the close of business on the
Transfer Date following such Due Period. No such Eligible Investment shall be
disposed of prior to its maturity; provided, however, that the Indenture Trustee
may sell, liquidate or dispose of an Eligible Investment before its maturity, at
the written direction of the Servicer, if such sale, liquidation or disposal
would not result in a loss of all or part of the principal portion of such
Eligible Investment or if, prior to the maturity of such Eligible Investment, a
default occurs in the payment of principal, interest or any other amount with
respect to such Eligible Investment. Unless directed by the Servicer, funds
deposited in the Special Funding Account on a Transfer Date with respect to the
immediately succeeding Distribution Date are not required to be invested
overnight. On each Distribution Date, all interest and other investment earnings
(net of losses and investment expenses) on funds on deposit in the Special
Funding Account shall be treated as Collections of Finance Charge and
Administrative Receivables of the related Pool with respect to the last day of
the related Due Period except as otherwise specified in the related Indenture
Supplement. On each Business Day on which funds are on deposit in the Special
Funding Account and on which no Series with respect to the related Pool is in an
Accumulation Period or Amortization Period, the Servicer shall determine the
amount (if any) by which the Transferor Amount with respect to such Pool exceeds
the Required Transferor Amount with respect to such Pool on such date and shall
instruct the Indenture Trustee to withdraw any such excess from the Special
Funding Account and pay such amount to the holders of the Transferor
Certificates. If (i) an Accumulation Period or Amortization Period has commenced
and is continuing with respect to one or more outstanding Series with respect to
the related Pool, any funds on deposit in the Special Funding Account shall be
treated as Shared Principal Collections with respect to such Pool and shall be
allocated and distributed in accordance with Section 8.05 and the terms of each
Indenture Supplement and (ii) the Servicer determines, based upon the yield of
Special Funding Account investments during the previous Due Period, that by
decreasing the amount on deposit in the Special Funding Account, any Series
relating to such Pool then outstanding which is issued pursuant to an Indenture
Supplement which permits partial amortization as provided in this Section 8.03
may be prevented from experiencing an Amortization Event based upon
insufficiency of yield, the Servicer shall on the next succeeding Distribution
Date instruct the Indenture Trustee in writing to apply funds on deposit in the
Special Funding Account as "Partial Amortization SFA Amounts" to such Series
(and if more than one such Series, to each on a pro rata basis according to each
such Invested Amount) in an amount such that the Special Funding Account is
reduced to an amount which, based on the then current investment yield, would
not cause a yield insufficiency Amortization Event for any such Series then
outstanding. In addition, the Servicer shall instruct the Indenture Trustee in
writing to apply funds on deposit in the Special Funding Account to each such
Series on such pro rata basis as Partial Amortization SFA Amounts on any
Distribution Date to the extent the Seller so determines in written instructions
provided to the Servicer on or prior to the Determination Date preceding such
Distribution Date.
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Section 8.04. Collections and Allocations.
(a) The Servicer will instruct the Indenture Trustee to apply all
funds on deposit in the Collection Account as described in this Article VIII and
in each Indenture Supplement. Except as otherwise provided below, the Servicer
shall deposit Collections received with respect to a particular Pool into the
Collection Account for such Pool as promptly as possible after the Date of
Processing of such Collections, but in no event later than the second Business
Day following the Date of Processing. Subject to the express terms of any
Indenture Supplement, but notwithstanding anything else in this Indenture or the
Transfer and Servicing Agreement to the contrary, for so long as any of the
following conditions are satisfied: (i) Household Finance Corporation remains
the Servicer and maintains a commercial paper rating of not less than F1 by
Fitch, P-1 by Moody's and A-1 by Standard & Poor's, (ii) Household Finance
Corporation remains the Servicer, no Amortization Event, Reinvestment Event or
Event of Default shall have occurred, the ultimate parent of Household Finance
Corporation maintains a commercial paper rating of not less than F1 by Fitch,
P-1 by Moody's and A-1 by Standard & Poor's, and, in the event that there is any
material change in the financing relationship between Household Finance
Corporation and its parent corporation, (A) Household Finance Corporation shall
have notified each Rating Agency and (B) the Rating Agency Condition shall be
satisfied with respect to such material change, or (iii) any other arrangements
are made and written confirmation is received from the specified Rating Agency
for which the above requirements are not satisfied such that the Rating Agency
Condition is satisfied with respect to that Rating Agency, and for five Business
Days following any reduction of any such rating or change in ownership, the
Servicer need not make the daily deposits of Collections into the Collection
Account as provided in the preceding sentence, but may make a single deposit in
the Collection Account in immediately available funds not later than 11:00 a.m.,
New York City time, on the Distribution Date following the Due Period with
respect to which such deposit relates. Subject to the first proviso in Section
8.05, but notwithstanding anything else in this Indenture or the Transfer and
Servicing Agreement to the contrary, with respect to any Due Period, whether the
Servicer is required to make deposits of Collections pursuant to the first or
the second preceding sentence, (i) the Servicer will only be required to deposit
Collections into the Collection Account up to the aggregate amount of
Collections required to be deposited into any Series Account or, without
duplication, distributed on or prior to the related Distribution Date to
Noteholders or to any Series Enhancer pursuant to the terms of any Indenture
Supplement or Enhancement Agreement and (ii) if at any time prior to such
Distribution Date the amount of Collections deposited in the Collection Account
exceeds the amount required to be deposited pursuant to clause (i) above, the
Servicer will be permitted to direct the Indenture Trustee to withdraw the
excess from the Collection Account and pay such amount pursuant to the terms of
the Transaction Documents. Subject to the immediately preceding sentence, the
Servicer may retain its Servicing Fee with respect to a Series and shall not be
required to deposit it in the Collection Account.
(b) Collections of Finance Charge and Administrative Receivables,
Principal Receivables and Defaulted Receivables will be allocated to each Series
of Notes and to the Owner Trustee for distribution to the holders of the
Transferor Certificates (pursuant to the Trust Agreement) in accordance with
this Article VIII and each Indenture Supplement, and amounts so allocated to any
Series will not, except as specified in the related Indenture Supplement, be
available to the Noteholders of any other Series. Allocations of the foregoing
amounts between the Holders of the Notes and the Holders of the Transferor
Certificates, among the Series and among the Classes in any Series, shall be set
forth in the related Indenture Supplement or Indenture Supplements.
On each Determination Date, after the amounts of all allocations have
been determined (i) with respect to all outstanding Series and (ii) as provided
for in any applicable Indenture Supplement, the Servicer may, with the consent
of each Transferor, allocate any excess Collections which would otherwise be
payable to the Transferor at such Transferor's direction to one or more of the
outstanding Series subject to the following conditions:
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(i) on or before the fifth Business Day immediately preceding such
allocation, the Servicer shall have given the Indenture Trustee and each
Rating Agency notice of such allocation;
(ii) the Rating Agency Condition shall have been satisfied with
respect to such allocation; and
(iii) the Servicer shall have delivered to the Indenture Trustee an
Officer's Certificate, dated the date of such allocation, to the effect
that the Servicer reasonably believes that such allocation will not have an
Adverse Effect.
Section 8.05. Shared Principal Collections and Shared Transferor
Principal Collections.
(a) On each Distribution Date, (a) the Servicer shall allocate
Shared Principal Collections (as described below) to each Principal Sharing
Series within a particular Principal Sharing Group, pro rata, in proportion to
the Principal Shortfalls, if any, with respect to each such Series and (b) the
Servicer shall withdraw from the Collection Account and pay to the Owner Trustee
for distribution to the holders of the Transferor Certificates in accordance
with the Trust Agreement an amount equal to the excess, if any, of (x) the
aggregate amount for all outstanding Series in such Principal Sharing Group of
Collections of Principal Receivables which the related Indenture Supplements
specify are to be treated as "Shared Principal Collections" (including the net
proceeds from any New Issuance as provided in Section 2.12(e)) for such
Distribution Date over (y) the aggregate amount for all outstanding Series in
such Principal Sharing Group which the related Indenture Supplements specify are
"Principal Shortfalls" for such Series and for such Distribution Date; provided,
however, that if the Transferor Amount for the related Pool as of such
Distribution Date (determined after giving effect to the Principal Receivables
transferred to and in the Trust on such date) is less than the Required
Transferor Amount, the Servicer will not distribute to the Owner Trustee for
distribution to the holders of the Transferor Certificates in accordance with
the Trust Agreement any such amounts that otherwise would be distributed to the
Owner Trustee for distribution to the holders of the Transferor Certificates in
accordance with the Trust Agreement, but shall deposit such funds in the Special
Funding Account with respect to such Pool. The Transferor may, at its option,
instruct the Indenture Trustee to deposit Shared Principal Collections which are
otherwise payable to the Owner Trustee for distribution to the holders of the
Transferor Certificates in accordance with the Trust Agreement pursuant to the
provisions set forth above into such Special Funding Account.
(b) The Servicer will determine the amount of Collections of
Principal Receivables for any Due Period allocated to the Holders of the
Transferor Certificates with respect to any Pool but not due to the Holder of
any Supplemental Certificate and other amounts payable to the Transferor with
respect to Collections of Principal Receivables with respect to such Pool,
regardless of whether such Collections were initially allocated to the
Transferor or any Series ("Shared Transferor Principal Collections"). The
Servicer will allocate the Shared Transferor Principal Collections to cover any
Principal Shortfalls for Series with respect to such Pool that have not been
covered out of the Shared Principal Collections allocated to each such Series
that has been designated in the applicable Indenture Supplement as being
entitled to receive Shared Transferor Principal Collections, and the remaining
Shared Transferor Principal Collections will be paid to the Holders of the
Transferor Certificates. If Principal Shortfalls remaining after the application
of Shared Principal Collections exceed related Shared Transferor Principal
Collections for any Due Period, such Shared Transferor Principal Collections
will be allocated pro rata among each such Series which in accordance with the
Indenture Supplement for such Series; provided, however, the sharing of Shared
Transferor Principal Collections among Series will commence only upon the
delivery by the Transferor to the Indenture Trustee of an Officer's Certificate
to the affect that, in the reasonable judgment of the Transferor, the sharing of
Shared Transferor Principal
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Collections would not have adverse regulatory implications with respect to the
Transferor or any Affiliate thereof and such sharing will continue only until
such time, if any, at which the Transferor shall deliver to the Indenture
Trustee an Officer's Certificate to the effect that, in the reasonable belief of
the Transferor, the continued sharing of Shared Transferor Principal Collections
among Series would have adverse regulatory implications with respect to the
Transferor or any Affiliate thereof. Following the delivery by the Transferor of
such an Officer's Certificate to the Indenture Trustee, there will not be any
further sharing of Shared Transferor Principal Collections among Series.
Section 8.06. Additional Withdrawals from the Collection Account.
On or before the Determination Date with respect to any Due Period,
the Servicer shall determine the amounts payable to the Bank or any other
Account Owner with respect to such Due Period under the applicable Receivables
Purchase Agreement in respect of amounts credited to the Collection Account that
were not transferred to the Trust hereunder, and the Servicer shall withdraw
such amounts from the Collection Account and pay such amount to the Bank or any
other Account Owner, as applicable.
Section 8.07. Allocation of Collateral to Pools.
To the extent so provided in the Indenture Supplement for any Series
or in an Indenture Supplement otherwise executed pursuant to Section 10.01,
Receivables conveyed to the Trust pursuant to Section 2.01 of the Transfer and
Servicing Agreement and Receivables or Participation Interests conveyed to the
Trust pursuant to Section 2.09 of the Transfer and Servicing Agreement or any
Participation Interest Supplement, and all Collections received with respect
thereto may be allocated or applied in whole or in part to one or more Pools as
may be provided in such Indenture Supplement, provided, however, that any such
allocation or application shall be effective only upon satisfaction of the
following conditions:
(i) on or before the fifth Business Day immediately
preceding such allocation, the Servicer shall have given the Indenture
Trustee and each Rating Agency written notice of such allocation;
(ii) the Rating Agency Condition shall have been satisfied
with respect to such allocation; and
(iii) the Servicer shall have delivered to the Indenture
Trustee an Officer's Certificate, dated the date of such allocation, to the
effect that the Servicer reasonably believes that such allocation will not
have an Adverse Effect.
Any such Indenture Supplement may provide that (i) such allocation to
one or more particular Pools may terminate upon the occurrence of certain events
specified therein and (ii) that upon the occurrence of any such event, such
assets and any Collections with respect thereto, shall be reallocated to other
Pools or to all Series, all as shall be provided in such Indenture Supplement.
Section 8.08a. Reallocation Groups. Collections of Finance Charge and
Administrative Receivables and other amounts specified in the Indenture
Supplement for each Series in a Reallocation Group shall be reallocated to cover
interest and expenses related to each Series in such Group as specified in such
Indenture Supplement. The reallocation provisions of the Indenture Supplement
for each Series in the same Reallocation Group are required to be identical in
all material respects.
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Section 8.08b. Shared Enhancement Groups. More than one Series in a
particular Shared Enhancement Group may share collections of Finance Charge and
Administrative Receivables and certain other amounts and share in the same
credit enhancement as shall be specified in the Indenture Supplement for each
Series in such Group, or, if the sharing is between subseries in the same
Series, as shall be specified in the Indenture Supplement for the Series
containing each such subseries. Such sharing may take the form, among others, of
Classes of Notes of one or more Series in a particular Shared Enhancement Group
issued from time to time which are subordinate to other Classes issued at the
same or at different times in the same or in different Series in such Group.
Section 8.08c. Excess Finance Charge Sharing Groups.
On each Distribution Date, (a) the Servicer shall allocate Excess
Finance Charge and Administrative Collections to each Excess Finance Charge
Sharing Series in a particular Excess Finance Charge Sharing Group pro rata, in
proportion to the Finance Charge Shortfalls, if any, with respect to each such
Series and (b) the Servicer shall withdraw from the collection account and pay
to the Transferor an amount equal to the excess, if any, of (i) the aggregate
amount for all such outstanding Series of Collections of Finance Charge and
Administrative Receivables which the related Indenture Supplements specify are
to be treated as "Excess Finance Charge and Administrative Collections" for such
Distribution Date over (ii) the aggregate amount for all outstanding Series in
such group which the related Indenture Supplements specify are "Finance Charge
Shortfalls" for such Series and such Distribution Date; provided, however, that
the sharing of Excess Finance Charge and Administrative Collections among Series
will continue only until such time, if any, at which the Transferor shall
deliver to the Indenture Trustee an Officer's Certificate to the effect that, in
the reasonable belief of the Transferor, the continued sharing of Excess Finance
Charge and Administrative Collections among Series would have adverse regulatory
implications with respect to the Transferor or any Affiliate. Following the
delivery by the Transferor of such an Officer's Certificate to the Indenture
Trustee there will not be any further sharing of Excess Finance Charge and
Administrative Collections among Series.
Section 8.09. Release of Collateral; Eligible Loan Documents.
(a) Subject to the payment of its fees and expenses, the
Indenture Trustee may, and when required by the provisions of this Indenture
shall, execute instruments to release property from the lien of this Indenture,
or convey the Indenture Trustee's interest in the same, in a manner and under
circumstances which are not inconsistent with the provisions of this Indenture.
No party relying upon an instrument executed by the Indenture Trustee as
provided in this Article VIII shall be bound to ascertain the Indenture
Trustee's authority, inquire into the satisfaction of any conditions precedent
or see to the application of any monies.
(b) In order to facilitate the servicing of the Receivables by
the Servicer, the Indenture Trustee upon Issuer Order shall authorize the
Servicer to execute in the name and on behalf of the Indenture Trustee
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and other comparable instruments with respect to the Receivables (and
the Indenture Trustee shall execute any such documents on request of the
Servicer), subject to the obligations of the Servicer under the Transfer and
Servicing Agreement.
(c) The Indenture Trustee shall, at such time as there are no
Notes outstanding, release and transfer, without recourse, all of the Collateral
that secured the Notes (other than any cash held for the payment of the Notes
pursuant to Section 4.02). The Indenture Trustee shall release property from the
lien of this Indenture pursuant to this Section only upon receipt of an Issuer
Order accompanied by an Officer's Certificate, an Opinion of Counsel and (if
required by the TIA) Independent Certificates in accordance with TIA
Sections314(c) and 314(d)(1) meeting the applicable requirements of
Section 12.01.
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(d) Notwithstanding anything to the contrary in this Indenture,
the Transfer and Servicing Agreement and the Trust Agreement, immediately prior
to the release of any portion of the Collateral or any funds on deposit in the
Series Accounts pursuant to this Indenture, the Indenture Trustee shall remit to
the Transferor for its own account any funds that, upon such release, would
otherwise be remitted to the Issuer.
[END OF ARTICLE VIII]
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ARTICLE IX
DISTRIBUTIONS AND REPORTS TO NOTEHOLDERS
Distributions shall be made to, and reports shall be provided to,
Noteholders as set forth in the applicable Indenture Supplement. The identity of
the Noteholders with respect to distributions and reports shall be determined
according to the immediately preceding Record Date.
[END OF ARTICLE IX]
65
ARTICLE X
SUPPLEMENTAL INDENTURES
Section 10.01. Supplemental Indentures Without Consent of
Noteholders.
(a) Without the consent of the Holders of any Notes but with
prior notice to the Rating Agencies and upon satisfaction of the Rating Agency
Condition with respect to the Notes of all Series, the Issuer and the Indenture
Trustee, when authorized by an Issuer Order, at any time and from time to time,
may enter into one or more indentures supplemental hereto (which shall conform
to the provisions of the TIA as in force at the date of the execution thereof),
in form satisfactory to the Indenture Trustee, for any of the following
purposes:
(i) to correct or amplify the description of any property
at any time subject to the lien of this Indenture, or better to assure,
convey and confirm unto the Indenture Trustee any property subject or
required to be subjected to the lien of this Indenture, or to subject to
the lien of this Indenture additional property;
(ii) to evidence the succession, in compliance with
Section 3.11 hereof, of another person to the Issuer, and the assumption by
any such successor of the covenants of the Issuer herein and in the Notes
contained;
(iii) to add to the covenants of the Issuer, for the benefit
of the Holders of the Notes, or to surrender any right or power herein
conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee;
(v) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to the Notes and
to add to or change any of the provisions of this Indenture as shall be
necessary to facilitate the administration of the trusts hereunder by more
than one trustee, pursuant to the requirements of Article VI;
(vi) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary, as evidenced by an Opinion
of Counsel, to effect the qualification of this Indenture under the TIA or
under any similar federal statute hereafter enacted and to add to this
Indenture such other provisions as may be expressly required by the TIA;
(vii) to provide for the issuance of one or more new Series
of Notes, in accordance with the provisions of Section 2.12 hereof; or
(viii) to provide for the termination of any interest rate
swap agreement or other form of credit enhancement in accordance with the
provisions of the related Indenture Supplement;
provided, however, the Issuer and the Indenture Trustee, when authorized by an
Issuer Order, at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the TIA
as in force at the date of the execution thereof), in form satisfactory to the
Indenture Trustee, without the consent of the Holders of any Notes or prior
notice to the Rating Agencies (provided that a final supplemental indenture
signed by the parties thereto shall be delivered to each Rating Agency within 10
days of its execution) in order to (A) cure any ambiguity, to correct or
66
supplement any provision herein or in any supplemental indenture that may be
inconsistent with any other provision herein or in any supplemental indenture,
(B) to make any other provisions with respect to matters or questions arising
under this Indenture or in any supplemental indenture and (C) qualify for sale
treatment under the appropriate generally accepted accounting principles;
provided, that such action shall not have an Adverse Effect and, in the case of
clause (C), the Transferor shall have delivered a Tax Opinion to the Indenture
Trustee with respect to such supplemental indenture.
The Indenture Trustee is hereby authorized to join in the execution of any such
supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an
Issuer Order, may, also without the consent of any Noteholders and any Series
Enhancers of any Series then Outstanding but with prior notice to the Rating
Agencies and upon satisfaction of the Rating Agency Condition with respect to
the Notes of all Series, enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture or of modifying in any
manner the rights of the Holders of the Notes under this Indenture; provided,
however, that (i) the Transferor shall have delivered to the Indenture Trustee
an Officer's Certificate, dated the date of any such action, stating that the
Transferor reasonably believes that such action will not have an Adverse Effect
and (ii) a Tax Opinion shall have been delivered to the Indenture Trustee.
Additionally, notwithstanding the preceding sentence, the Issuer and the
Indenture Trustee, when authorized by an Issuer Order, may, also without the
consent of any Noteholders and any Series Enhancers of any Series then
Outstanding, enter into an indenture or indentures supplemental hereto to add,
modify or eliminate such provisions as may be necessary or advisable in order to
enable all or a portion of the Trust (i) to qualify as, and to permit an
election to be made to cause the Trust to be treated as, a "financial asset
securitization investment trust" as described in the provisions of Section 860L
of the Code, and (ii) to avoid the imposition of state or local income or
franchise taxes imposed on the Trust's property or its income; provided,
however, that (i) the Transferor delivers to the Indenture Trustee and the Owner
Trustee an Officer's Certificate to the effect that the proposed amendments meet
the requirements set forth in this subsection, (ii) the Transferor, the
Servicer, the Indenture Trustee and the Owner Trustee shall have received
written confirmation of the satisfaction of the Rating Agency Condition and
(iii) such amendment does not affect the rights, duties or obligations of the
Indenture Trustee or the Owner Trustee hereunder. The amendments which the
Transferor may make without the consent of Noteholders and Series Enhancers
pursuant to the preceding sentence may include, without limitation, the addition
of a sale of Receivables.
(c) Notwithstanding anything to the contrary in this Section
10.01, no supplemental indenture or modification or amendment to this Indenture
which has the effect of (i) materially increasing the obligations or duties of
the Servicer hereunder, (ii) materially decreasing the compensation or rights of
the Servicer hereunder, or (iii) materially and adversely effecting the Servicer
shall become effective without prior consent of the Servicer.
Section 10.02. Supplemental Indentures With Consent of Noteholders.
The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, also may, with prior notice to the Rating Agencies and with the consent
of the Holders of not less than 66 2/3% of the Outstanding Amount of the Notes
of each adversely affected Series of Notes, by Act of such Holders delivered to
the Issuer and the Indenture Trustee, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, changing in any
manner or eliminating any of the provisions of this Indenture or of modifying in
any manner the rights of such Noteholders under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent of the
Holder of each outstanding Note affected thereby:
67
(a) change the due date of any installment of principal of
or interest on any Note, or reduce the principal amount thereof, the
interest rate specified thereon or the redemption price with respect
thereto or change any place of payment where, or the coin or currency in
which, any Note or any interest thereon is payable;
(b) impair the right to institute suit for the enforcement
of the provisions of this Indenture requiring the application of funds
available therefor, as provided in Article V, to the payment of any such
amount due on the Notes on or after the respective due dates thereof (or,
in the case of redemption, on or after the Redemption Date);
(c) reduce the percentage which constitutes a majority of
the Outstanding Amount of the Notes of any Series outstanding the consent
of the Holders of which is required for any such supplemental indenture, or
the consent of the Holders of which is required for any waiver of
compliance with certain provisions of this Indenture or certain defaults
hereunder and their consequences as provided for in this Indenture;
(d) reduce the percentage of the Outstanding Amount of any
Notes, the consent of the Holders of which is required to direct the
Indenture Trustee to sell or liquidate the Collateral if the proceeds of
such sale would be insufficient to pay the principal amount and accrued but
unpaid interest on the outstanding Notes of such Series;
(e) decrease the percentage of the Outstanding Amount of
the Notes required to amend the sections of this Indenture which specify
the applicable percentage of the aggregate principal amount of the Notes of
such Series necessary to amend the Indenture or any Transaction Documents
which require such consent;
(f) modify or alter the provisions of this Indenture
regarding the voting of Notes held by the Trust, any other obligor on the
Notes, a Seller or any affiliate thereof; or
(g) permit the creation of any Lien ranking prior to or on
a parity with the lien of this Indenture with respect to any part of the
Collateral for any Notes or, except as otherwise permitted or contemplated
herein, terminate the lien of this Indenture on any such Collateral at any
time subject hereto or deprive the Holder of any Note of the security
provided by the lien of this Indenture.
The Indenture Trustee may in its discretion determine whether or not any Notes
would be affected by any supplemental indenture and any such determination shall
be conclusive upon the Holders of all Notes, whether theretofore or thereafter
authenticated and delivered hereunder. The Indenture Trustee shall not be liable
for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee
of any Supplement Indenture pursuant to this Section, the Indenture Trustee
shall mail to the Holders of the Notes to which such supplemental indenture
relates a copy of such supplemental indenture. Any failure of the Indenture
Trustee to mail such supplemental indenture, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture.
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Notwithstanding anything to the contrary in this Section 10.02, no
supplemental indenture or modification or amendment to this Indenture which has
the effect of (i) materially increasing the obligations or duties of the
Servicer hereunder, (ii) materially decreasing the compensation or rights of the
Servicer hereunder, or (iii) materially and adversely effecting the Servicer
shall become effective without prior consent of the Servicer.
Section 10.03. Execution of Supplemental Indentures.
In executing, or permitting the additional trusts created by, any
supplemental indenture permitted by this Article X or the modification thereby
of the trusts created by this Indenture, the Indenture Trustee shall be entitled
to receive, and subject to Sections 6.01 and 6.02, shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture and all
conditions precedent to such execution have been satisfied. The Indenture
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture that affects the Indenture Trustee's own rights, duties, liabilities
or immunities under this Indenture or otherwise.
Section 10.04. Effect of Supplemental Indenture.
Upon the execution of any supplemental indenture under this Article X,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes, and every Holder
of Notes theretofore or thereafter authenticated and delivered hereunder shall
be bound thereby.
Section 10.05. Conformity With Trust Indenture Act.
Every amendment of this Indenture and every supplemental indenture
executed pursuant to this Article X shall conform to the requirements of the TIA
as then in effect so long as this Indenture shall then be qualified under the
TIA.
Section 10.06. Reference in Notes to Supplemental Indentures.
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article X may, and if required by the
Indenture Trustee shall, bear a notation in form approved by the Indenture
Trustee as to any matter provided for in such supplemental indenture. If the
Issuer shall so determine, new Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for the outstanding Notes.
[END OF ARTICLE X]
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ARTICLE XI
TERMINATION
Section 11.01. Termination of Trust.
The Trust and the respective obligations and responsibilities of the
Indenture Trustee created hereby (other than the obligation of the Indenture
Trustee to make payments to Noteholders as hereinafter set forth) shall
terminate, except with respect to the duties described in subsection 11.02(b),
on the Trust Termination Date.
Section 11.02. Final Distribution.
(a) The Servicer shall give the Indenture Trustee at least 30
days' prior notice of the Distribution Date on which the Noteholders of any
Series or Class may surrender their Notes for payment of the final distribution
on and cancellation of such Notes (or, in the event of a final distribution
resulting from the application of Section 2.06, 6.01 or 7.01 of the Transfer and
Servicing Agreement, notice of such Distribution Date promptly after the
Servicer has determined that a final distribution will occur, if such
determination is made less than 30 days prior to such Distribution Date). Such
notice shall be accompanied by an Officer's Certificate setting forth the
information specified in Section 3.05 of the Transfer and Servicing Agreement
covering the period during the then-current calendar year through the date of
such notice. Not later than the fifth day of the month in which the final
distribution in respect of such Series or Class is payable to Noteholders, the
Indenture Trustee shall provide notice to Noteholders of such Series or Class
specifying (i) the date upon which final payment of such Series or Class will be
made upon presentation and surrender of Notes of such Series or Class at the
office or offices therein designated, (ii) the amount of any such final payment
and (iii) that the Record Date otherwise applicable to such payment date is not
applicable, payments being made only upon presentation and surrender of such
Notes at the office or offices therein specified (which, in the case of Bearer
Notes, shall be outside the United States). The Indenture Trustee shall give
such notice to the Transfer Agent and Registrar and the Paying Agent at the time
such notice is given to Noteholders.
(b) Notwithstanding a final distribution to the Noteholders of
any Series or Class (or the termination of the Trust), except as otherwise
provided in this paragraph, all funds then on deposit in the Collection Account
and any Series Account allocated to such Noteholders shall continue to be held
in trust for the benefit of such Noteholders, and the Paying Agent or the
Indenture Trustee shall pay such funds to such Noteholders upon surrender of
their Notes, if certificated (and any excess shall be paid in accordance with
the terms of any Enhancement Agreement). In the event that all such Noteholders
shall not surrender their Notes for cancellation within six months after the
date specified in the notice from the Indenture Trustee described in paragraph
(a), the Indenture Trustee shall give a second notice to the remaining such
Noteholders to surrender their Notes for cancellation and receive the final
distribution with respect thereto (which surrender and payment, in the case of
Bearer Notes, shall be outside the United States). If within one year after the
second notice all such Notes shall not have been surrendered for cancellation,
the Indenture Trustee may take appropriate steps, or may appoint an agent to
take appropriate steps, to contact the remaining such Noteholders concerning
surrender of their Notes, and the cost thereof shall be paid out of the funds in
the Collection Account or any Series Account held for the benefit of such
Noteholders. The Indenture Trustee and the Paying Agent shall pay to the
Transferor any monies held by them for the payment of principal or interest that
remains unclaimed for two years. After payment to the Transferor, Noteholders
entitled to the money must look to the Transferor for payment as general
creditors unless an applicable abandoned property law designates another Person.
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Section 11.03. Transferor's Termination Rights.
Upon the termination of the Trust pursuant to Section 11.01 and the
surrender of such Transferor Certificates, the Indenture Trustee shall assign
and convey to the Holders of the Transferor Certificates or any of their
designees, without recourse, representation or warranty, all right, title and
interest of the Trust in the Receivables, whether then existing or thereafter
created, all Interchanges and Recoveries related thereto, all monies due or to
become due and all amounts received or receivable with respect thereto
(including all moneys then held in the Collection Account or any Series Account)
and all proceeds thereof, except for amounts held by the Indenture Trustee
pursuant to subsection 11.02(b). The Indenture Trustee shall execute and deliver
such instruments of transfer and assignment, in each case without recourse, as
shall be prepared and reasonably requested by the Transferor to vest in the
Holders of the Transferor Certificates or any of their designees all right,
title and interest which the Indenture Trustee had in the Collateral and such
other property.
Section 11.04. Defeasance.
Notwithstanding anything to the contrary in this Indenture or any
Indenture Supplement:
(a) The Issuer may at its option be discharged from its
obligations hereunder with respect to any Series or all outstanding Series
(each, a "Defeased Series") on the date the applicable conditions set forth in
subsection 11.04(c) are satisfied (a "Defeasance"); provided, however, that the
following rights, obligations, powers, duties and immunities shall survive with
respect to each Defeased Series until otherwise terminated or discharged
hereunder: (i) the rights of the Holders of Notes of the Defeased Series to
receive, solely from the trust funds provided for in subsection 11.04(c),
payments in respect of interest on and principal of such Notes when such
payments are due; (ii) the Issuer's obligations with respect to such Notes under
Sections 2.05 and 2.06; (iii) the rights, powers, trusts, duties, and immunities
of the Indenture Trustee, the Paying Agent and the Registrar hereunder; and (iv)
this Section and Section 12.16.
(b) Subject to subsection 11.04(c), the Issuer at its option may
cause Collections allocated to each Defeased Series and available to purchase
additional Receivables to be applied to purchase Eligible Investments rather
than additional Receivables.
(c) The following shall be the conditions precedent to any
Defeasance under subsection 11.04(a):
(i) the Issuer irrevocably shall have deposited or caused
to be deposited with the Indenture Trustee (such deposit to be made from
other than the Transferor's or any Affiliate of the Issuer's funds), under
the terms of an irrevocable trust agreement in form and substance
satisfactory to the Indenture Trustee, as trust funds in trust for making
the payments described below, (A) Dollars in an amount equal to, or (B)
Eligible Investments which through the scheduled payment of principal and
interest in respect thereof will provide, not later than the due date of
payment thereon, money in an amount equal to, or (C) a combination thereof,
in each case sufficient to pay and discharge (without relying on income or
gain from reinvestment of such amount), and which shall be applied by the
Indenture Trustee to pay and discharge, all remaining scheduled interest
and principal payments on all outstanding Notes of each Defeased Series on
the dates scheduled for such payments in this Indenture and the applicable
Indenture Supplements and all amounts owing to the Series Enhancers with
respect to each Defeased Series;
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(ii) a statement from a firm of nationally recognized
independent public accountants (who may also render other services to the
Issuer) to the effect that such deposit is sufficient to pay the amounts
specified in clause (i) above;
(iii) prior to its first exercise of its right pursuant to
this Section with respect to a Defeased Series to substitute money or
Eligible Investments for Receivables, the Issuer shall have delivered to
the Indenture Trustee an Opinion of Counsel to the effect contemplated by
clause (b) of the definition in Section 1.01, of the term "Tax Opinion"
(the preparation and delivery of which shall not be at the expense of the
Indenture Trustee) with respect to such deposit and termination of
obligations, and an Opinion of Counsel to the effect that such deposit and
termination of obligations will not result in the Trust being required to
register as an "investment company" within the meaning of the Investment
Company Act;
(iv) the Issuer shall have delivered to the Indenture
Trustee an Officer's Certificate of the Transferor stating that the
Transferor reasonably believes that such deposit and termination of
obligations will not, based on the facts known to such officer at the time
of such certification, then cause a Amortization Event with respect to any
Series or any event that, with the giving of notice or the lapse of time,
would result in the occurrence of a Amortization Event with respect to any
Series; and
(v) the Rating Agency Condition shall have been satisfied
and the Issuer shall have delivered copies of such written notice to the
Servicer and the Indenture Trustee.
[END OF ARTICLE XI]
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ARTICLE XII
MISCELLANEOUS
Section 12.01. Compliance Certificates and Opinions etc.
(a) Upon any application or request by the Issuer to the
Indenture Trustee to take any action under any provision of this Indenture, the
Issuer shall furnish to the Indenture Trustee (i) an Officer's Certificate
stating that all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with, (ii) an Opinion of
Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with and (iii) (if required by the TIA) an
Independent Certificate from a firm of certified public accountants meeting the
applicable requirements of this Section, except that, in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition and
the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such
signatory, such signatory has made such examination or investigation as is
necessary to enable such signatory to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Collateral or other
property or securities with the Indenture Trustee that is to be made the
basis for the release of any property or securities subject to the lien of
this Indenture, the Issuer shall, in addition to any obligation imposed in
subsection 12.01(a) or elsewhere in this Indenture, furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the fair value
(within 90 days of such deposit) to the Issuer of the Collateral or other
property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause (i)
above, the Issuer shall also deliver to the Indenture Trustee (if required
by the TIA) an Independent Certificate as to the same matters, if the fair
value to the Issuer of the securities to be so deposited and of all other
such securities made the basis of any such withdrawal or release since the
commencement of the then-current fiscal year of the Issuer, as set forth in
the certificates delivered pursuant to clause (i) above and this clause
(ii), is 10% or more of the Outstanding Amount of the Notes, but such a
certificate need not be furnished with respect to any securities so
deposited if the fair value thereof to the Issuer as set forth in the
related
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Officer's Certificate is less than $25,000 or less than one percent of the
Outstanding Amount of the Notes.
(iii) Whenever any property or securities are to be released
from the lien of this Indenture, the Issuer shall also furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the fair value
(within 90 days of such release) of the property or securities proposed to
be released and stating that in the opinion of such person the proposed
release will not impair the security under this Indenture in contravention
of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause (iii)
above, the Issuer shall also furnish to the Indenture Trustee (if required
by the TIA) an Independent Certificate as to the same matters if the fair
value of the property or securities and of all other property or securities
released from the lien of this Indenture since the commencement of the then
current calendar year, as set forth in the certificates required by clause
(iii) above and this clause (iv), equals 10% or more of the Outstanding
Amount of the Notes, but such certificate need not be furnished in the case
of any release of property or securities if the fair value thereof as set
forth in the related Officer's Certificate is less than $25,000 or less
than one percent of the then Outstanding Amount of the Notes.
(v) Notwithstanding Section 2.11 or any other provision of
this Section, the Issuer may (A) collect, liquidate, sell or otherwise
dispose of Receivables as and to the extent permitted or required by the
Transaction Documents and (B) make cash payments out of the Series Accounts
as and to the extent permitted or required by the Transaction Documents.
Section 12.02. Form of Documents Delivered to Indenture Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of a Responsible Officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which such officer's
certificate or opinion is based are erroneous. Any such certificate of a
Responsible Officer or Opinion of Counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Servicer, the Seller or the Issuer, stating that the
information with respect to such factual matters is in the possession of the
Servicer, a Seller or the Issuer, unless such Responsible Officer or Counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
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Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.
Section 12.03. Acts of Noteholders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by agent
duly appointed in writing and satisfying any requisite percentages as to minimum
number or dollar value of outstanding principal amount represented by such
Noteholders; and, except as herein otherwise expressly provided, such action
shall become effective when such instrument or instruments are delivered to the
Indenture Trustee, and, where it is hereby expressly required, to the Issuer.
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Noteholders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and conclusive in favor of the Indenture Trustee and
the Issuer, if made in the manner provided in this Section 12.03.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Notes shall bind the Holder
(and any transferee thereof) of every Note issued upon the registration thereof
in exchange therefor or in lieu thereof, in respect of anything done, omitted or
suffered to be done by the Indenture Trustee or the Issuer in reliance thereon,
whether or not notation of such action is made upon such Note.
Section 12.04. Notices.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Noteholders or other documents provided or permitted by the Agreement
to be made upon, given or furnished to, or filed with:
(a) the Indenture Trustee by any Noteholder or the Issuer shall
be sufficient for every purpose hereunder if made, given, furnished or filed in
writing to a Responsible Officer, by facsimile transmission or by other means
acceptable to the Indenture Trustee to or with the Indenture Trustee at its
Corporate Trust Office;
(b) the Issuer by the Indenture Trustee, the Servicer or any
Noteholder shall be sufficient for every purpose hereunder if in writing and (i)
mailed, first-class postage prepaid, to the Issuer addressed to it at Household
Affinity Credit Card Master Note Trust I, c/o Wilmington Trust Company, Xxxxxx
Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000 or at
any other
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address previously furnished in writing to the Indenture Trustee by the Issuer
or (ii) delivered electronically to the address previously furnished in writing
to the Indenture Trustee. A copy of each notice to the Issuer shall be sent in
writing and mailed, first-class postage prepaid, to the Servicer at the address
listed below;
(c) the Servicer by any other party hereto or any Noteholder
shall be sufficient for every purpose hereunder if in writing and mailed,
first-class postage prepaid, to Household Finance Corporation, 0000 Xxxxxxx
Xxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000;
(d) Fitch by the Indenture Trustee, the Issuer or any Noteholder
shall be sufficient for every purpose hereunder if in writing and mailed,
first-class postage prepaid, to Fitch addressed to it at Fitch, Inc., Xxx Xxxxx
Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: ABS Surveillance;
(e) Moody's by the Indenture Trustee, the Issuer or any
Noteholder shall be sufficient for every purpose hereunder if in writing and
mailed, first-class postage prepaid, to Moody's addressed to it at Xxxxx'x
Investors Service Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
ABS Monitoring Group; or
(f) Standard & Poor's by the Indenture Trustee, the Issuer or any
Noteholder shall be sufficient for every purpose hereunder if in writing and
mailed, first-class postage prepaid, to Standard & Poor's addressed to it at
Standard & Poor's Ratings Group, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Credit Card ABS - 40th Floor.
Section 12.05. Notices to Noteholders; Waiver.
Where the Indenture provides for notice to Noteholders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and (a) mailed by registered or certified mail or first
class postage prepaid or national overnight courier service or (b) delivered
electronically in a manner acceptable to the Servicer, the Owner Trustee on
behalf of the Issuer and the Indenture Trustee, to each Noteholder affected by
such event, at its address as it appears on the Note Register, not later than
the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice which is mailed in the manner
herein provided shall conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In the event that, by reason of the suspension of regular mail service
as a result of a strike, work stoppage or similar activity, it shall be
impractical to mail notice of any event to Noteholders when such notice is
required to be given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be satisfactory to the Indenture Trustee
shall be deemed to be a sufficient giving of such notice.
Where this Indenture provides for notice to any Rating Agency, failure
to give such notice shall not affect any other rights or obligations created
hereunder and shall not under any circumstance constitute a Default or Event of
Default.
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Section 12.06. Alternate Payment and Notice Provisions.
Notwithstanding any provision of this Indenture or any of the Notes to
the contrary, the Issuer, with the consent of the Indenture Trustee, may enter
into any agreement with any Holder of a Note providing for a method of payment,
or notice by the Indenture Trustee or any Paying Agent to such Holder, that is
different from the methods provided for in this Indenture for such payments or
notices. The Issuer will furnish to the Indenture Trustee a copy of each such
agreement and the Indenture Trustee will cause payments to be made and notices
to be given in accordance with such agreements.
Section 12.07. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with another
provision hereof that is required to be included in this Indenture by any of the
provisions of the TIA, such required provision shall control.
The provisions of TIA Sections310 through 317 that impose duties on
any person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
Section 12.08. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 12.09. Successors and Assigns.
All covenants and agreements in this Indenture by the Issuer shall
bind its successors and assigns, whether so expressed or not.
Section 12.10. Separability.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality, and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 12.11. Benefits of Indenture.
Nothing in this Indenture or in the Notes, express or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, and the Noteholders, any benefit.
Section 12.12. Limitation on Voting Preferred Stock.
The Indenture Trustee shall hold the Preferred Stock of the Transferor
in trust, for the benefit of the Noteholders and shall vote such stock only
pursuant to the written instructions of Noteholders holding 100% of the
Outstanding Amount of Notes of all Series. The Preferred Stock shall be
non-transferable except pursuant to the written instructions of Noteholders
holding 100% of the Outstanding Amount of all Series of Notes and if the Rating
Agency Condition has been satisfied with respect to such transfer.
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Section 12.13. Governing Law.
This Indenture and each Note shall be construed in accordance with and
governed by the laws of the State of New York applicable to agreements made and
to be performed therein, without regard to the conflict of law principles
thereof.
Section 12.14. Counterparts.
This Indenture may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
Section 12.15. Trust Obligation.
No recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under this Indenture or any certificate or other writing delivered in
connection herewith or therewith, against (i) the Indenture Trustee or the Owner
Trustee in its individual capacity, (ii) any owner of a beneficial interest in
the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director,
employee or agent of the Indenture Trustee or the Owner Trustee in its
individual capacity, any holder of a beneficial interest in the Issuer, the
Owner Trustee or the Indenture Trustee or of any successor or assign of the
Indenture Trustee or the Owner Trustee in its individual capacity, except as any
such Person may have expressly agreed (it being understood that the Indenture
Trustee and the Owner Trustee have no such obligations in their individual
capacity) and except that any such partner, owner or beneficiary shall be fully
liable, to the extent provided by applicable law, for any unpaid consideration
for stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity. For all purposes of this Indenture, in the performance of
any duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of
Articles V, VI and VII of the Trust Agreement.
Section 12.16. No Petition.
The Indenture Trustee, by entering into this Indenture, and each
Noteholder, by accepting a Note, hereby covenant and agree that they will not at
any time institute against the Issuer or the Transferor, or join in any
institution against the Issuer or the Transferor, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar law.
[END OF ARTICLE XII]
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IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers thereunto duly
authorized and attested, all as of the day and year first above written.
HOUSEHOLD AFFINITY CREDIT CARD
MASTER NOTE TRUST I
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Owner
Trustee of the Trust
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Financial Services Officer
THE BANK OF NEW YORK, not in its individual
capacity, but solely as Indenture Trustee,
Paying Agent and Securities Intermediary
By: /s/ Xxxxx Xxx
------------------------------------
Name: Xxxxx Xxx
Title: Assistant Treasurer
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