$100,000,000
Variable Funding Note
---------------------------------
INDENTURE
Dated as of March 2, 2006
-----------------------------------
SILVERLEAF FINANCE IV, LLC
Issuer
UBS REAL ESTATE SECURITIES INC.
Noteholder
and
WELLS FARGO BANK, NATIONAL ASSOCIATION,
Trustee
TABLE OF CONTENTS
PAGE NO.
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE...........................2
SECTION 1.1 Definitions.................................................2
SECTION 1.2 [Reserved]..................................................3
SECTION 1.3 Other Definitional Provisions...............................3
ARTICLE II THE NOTE............................................................3
SECTION 2.1 Form........................................................4
SECTION 2.2 Execution, Authentication and Delivery......................4
SECTION 2.3 Scheduled Maturity Date.....................................4
SECTION 2.4 Registration; Registration of Transfer and Exchange.........5
SECTION 2.5 Restrictions on Transfer and Exchange.......................6
SECTION 2.6 Mutilated, Destroyed, Lost or Stolen Note..................10
SECTION 2.7 Persons Deemed Owner.......................................10
SECTION 2.8 Payment of Principal and Interest; Defaulted Interest......11
SECTION 2.9 Cancellation...............................................11
SECTION 2.10 Release of Collateral......................................12
SECTION 2.11 Amount Limited; Advances...................................12
SECTION 2.12 Participations............................................123
ARTICLE III COVENANTS.........................................................13
SECTION 3.1 Payment of Principal and Interest..........................13
SECTION 3.2 Maintenance of Office or Agency............................13
SECTION 3.3 Money for Payments to be Held in Trust.....................13
SECTION 3.4 Existence..................................................15
SECTION 3.5 Protection of Trust Estate.................................15
SECTION 3.6 Opinions as to Trust Estate................................16
SECTION 3.7 Performance of Obligations; Servicing of Receivables.......16
SECTION 3.8 Negative Covenants.........................................17
SECTION 3.9 Annual Statement as to Compliance..........................19
SECTION 3.10 [Reserved].................................................19
SECTION 3.11 [Reserved].................................................19
SECTION 3.12 No Other Business..........................................19
SECTION 3.13 No Borrowing...............................................19
SECTION 3.14 Servicer's Obligations.....................................19
SECTION 3.15 Guarantees, Loans, Advances and Other Liabilities..........19
SECTION 3.16 Capital Expenditures.......................................20
SECTION 3.17 Compliance with Laws.......................................20
SECTION 3.18 Restricted Payments........................................20
SECTION 3.19 Notice of Events of Default and Funding
Termination Events.........................................20
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PAGE NO.
SECTION 3.20 Further Instruments and Acts...............................20
SECTION 3.21 Amendments of Sale and Servicing Agreement.................20
SECTION 3.22 Income Tax Characterization................................20
SECTION 3.23 Separate Existence of the Issuer...........................20
SECTION 3.24 Amendment of Issuer's Organizational Documents.............22
SECTION 3.25 Other Agreements...........................................22
SECTION 3.26 Rule 144A Information......................................22
SECTION 3.27 Change of Control. .......................................23
ARTICLE IV SATISFACTION AND DISCHARGE.........................................23
SECTION 4.1 Satisfaction and Discharge of Indenture....................23
SECTION 4.2 Application of Trust Money.................................23
SECTION 4.3 Repayment of Moneys Held by Note Paying Agent..............24
ARTICLE V REMEDIES............................................................24
SECTION 5.1 Events of Default..........................................24
SECTION 5.2 Rights Upon Event of Default...............................27
SECTION 5.3 Collection of Indebtedness and Suits
for Enforcement by Trustee.................................28
SECTION 5.4 Remedies...................................................30
SECTION 5.5 Optional Preservation of the Receivables...................30
SECTION 5.6 Priorities.................................................30
SECTION 5.7 Limitation of Suits........................................31
SECTION 5.8 Unconditional Rights of the Noteholder To
Receive Principal and Interest.............................31
SECTION 5.9 Restoration of Rights and Remedies.........................31
SECTION 5.10 Rights and Remedies Cumulative.............................32
SECTION 5.11 Delay or Omission Not a Waiver.............................32
SECTION 5.12 [Reserved].................................................32
SECTION 5.13 Waiver of Past Defaults....................................32
SECTION 5.14 Undertaking for Costs......................................32
SECTION 5.15 Waiver of Stay or Extension Laws...........................32
SECTION 5.16 Sale of Trust Estate.......................................33
ARTICLE VI THE TRUSTEE........................................................34
SECTION 6.1 Duties of Trustee..........................................34
SECTION 6.2 Rights of Trustee..........................................35
SECTION 6.3 Individual Rights of Trustee...............................36
SECTION 6.4 Trustee's Disclaimer.......................................36
SECTION 6.5 Notice of Defaults.........................................36
SECTION 6.6 Reports by Trustee to the Noteholder.......................37
SECTION 6.7 Compensation and Indemnity.................................37
SECTION 6.8 Replacement of Trustee.....................................37
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PAGE NO.
SECTION 6.9 Successor Trustee by Merger................................38
SECTION 6.10 Appointment of Co-Trustee or Separate Trustee..............38
SECTION 6.11 Eligibility: Disqualification..............................39
SECTION 6.12 [RESERVED].................................................40
SECTION 6.13 Appointment and Powers.....................................40
SECTION 6.14 Performance of Duties......................................40
SECTION 6.15 Limitation on Liability....................................40
SECTION 6.16 [Reserved].................................................41
SECTION 6.17 Successor Trustee..........................................41
SECTION 6.18 [Reserved].................................................42
SECTION 6.19 Representations and Warranties of the Trustee..............42
SECTION 6.20 Waiver of Setoffs..........................................42
SECTION 6.21 Control by the Noteholder..................................42
ARTICLE VII [RESERVED]........................................................43
ARTICLE VIII COLLECTION OF MONEY AND RELEASES OF TRUST ESTATE.................43
SECTION 8.1 Collection of Money........................................43
SECTION 8.2 Release of Trust Estate....................................43
ARTICLE IX SUPPLEMENTAL INDENTURES............................................44
SECTION 9.1 Supplemental Indentures....................................45
SECTION 9.2 [Reserved].................................................45
SECTION 9.3 Execution of Supplemental Indentures.......................45
SECTION 9.4 Effect of Supplemental Indenture...........................45
ARTICLE X REPAYMENT AND PREPAYMENT OF NOTE....................................45
SECTION 10.1 Repayment of the Note; Optional Prepayment of the Note.....45
SECTION 10.2 Notice of Prepayment.......................................46
SECTION 10.3 General Procedures.........................................46
ARTICLE XI MISCELLANEOUS......................................................46
SECTION 11.1 Compliance Certificates and Opinions, etc..................46
SECTION 11.2 Form of Documents Delivered to Trustee.....................47
SECTION 11.3 Acts of the Noteholder.....................................48
SECTION 11.4 Notices, etc., to Trustee, Issuer, Noteholder and
Rating Agency..............................................49
SECTION 11.5 Waiver.....................................................50
SECTION 11.6 Alternate Payment and Notice Provisions....................50
SECTION 11.7 Effect of Headings and Table of Contents...................50
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PAGE NO.
SECTION 11.8 Successors and Assigns; Third Party Beneficiary............50
SECTION 11.9 Severability...............................................50
SECTION 11.10 Legal Holidays.............................................50
SECTION 11.11 Governing Law..............................................51
SECTION 11.12 Counterparts...............................................51
SECTION 11.13 Recording of Indenture.....................................51
SECTION 11.14 Issuer Obligation..........................................51
SECTION 11.15 No Petition................................................51
SECTION 11.16 Inspection.................................................51
SECTION 11.17 Submission to Jurisdiction.................................52
SECTION 11.18 Waiver of Trial by Jury....................................51
SECTION 11.19 Entire Agreement...........................................52
Exhibits
Exhibit A-1 Form of Variable Funding Note
Exhibit A-2 Form of Transferor Certification
Exhibit B Form of Transferee Certification
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INDENTURE dated as of March 2, 2006, by and among SILVERLEAF FINANCE IV,
LLC a Delaware limited liability company (the "Issuer"), UBS REAL ESTATE
SECURITIES INC., a Delaware corporation, as noteholder (the "Noteholder") and
WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as
trustee (the "Trustee").
Each party agrees as follows for the benefit of the other parties and for
the benefit of each Holder of the Issuer's Variable Funding Note (the "Note"):
To secure the payment of principal of and interest on, and any other
amounts owing in respect of the Note, and to secure compliance with this
Indenture, the Issuer has agreed to pledge the Collateral (as defined below) as
collateral to the Trustee for the benefit of the Noteholder.
As security for the performance by the Issuer of the Secured Obligations,
the Issuer has agreed to assign the Collateral (as defined below) as collateral
to the Trustee for the benefit of the Noteholder.
GRANTING CLAUSE
The Issuer hereby Grants to the Trustee on each Funding Date, as Trustee
for the benefit of the Noteholder, all right, title and interest of the Issuer,
whether now existing or hereafter arising, in and to the following;
(a) the Receivables listed in the Schedule of Receivables from time to
time;
(b) Timeshare Loans relating to the Receivables and all monies received
under the Receivables and the Timeshare Loans after the related Cutoff Date and
all Net Liquidation Proceeds received with respect to the Receivables and the
Timeshare Loans after the related Cutoff Date;
(c) with respect to any Timeshare Loan, all of the Seller's and the
Issuer's interest in the Timeshare Property arising under or in connection with
the related Mortgage, Finance Agreement, Oak N' Spruce Certificate and the
related Timeshare Loan Documents;
(d) all other security interests or liens and property subject thereto
from time to time purporting to secure payment of such Timeshare Loan, together
with all mortgages, assignments and financing statements signed by an Obligor
describing any collateral securing such Timeshare Loan;
(e) all guarantees, insurance and other agreements or arrangements of
whatever character from time to time supporting or securing payment of such
Timeshare Loan and all proceeds thereof (including, but not limited to, any
insurance proceeds to the extent they are not used to rebuild or repair a Unit);
(f) Reserved;
(g) the Timeshare Loan File related to each Receivable and all other
security and books, records and computer tapes relating to the foregoing;
(h) all amounts and property from time to time held in or credited to the
Collection Account, the Note Distribution Account, the Principal Funding
Account, the Reserve Account and the Lockbox Account;
(i) all property (including the right to receive future Net Liquidation
Proceeds) that secures a Receivable that has been acquired by or on behalf of
the Issuer pursuant to a liquidation of such Receivable;
(j) the Sale and Servicing Agreement, including a direct right to cause
the Seller to purchase Receivables from the Issuer pursuant to the Sale and
Servicing Agreement under the circumstances specified therein;
(k) any Hedge Agreements;
(l) the Custodial Agreement;
(m) the Note Purchase Agreement (to the extent of the Issuer's rights
against the Servicer);
(n) the Escrow Agreement; and
(o) all present and future claims, demands, causes and choses in action in
respect of any or all of the foregoing and all payments on or under and all
proceeds of every kind and nature whatsoever in respect of any or all of the
foregoing, including all proceeds of the conversion, voluntary or involuntary,
into cash or other liquid property, all cash proceeds, accounts, accounts
receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts,
insurance proceeds, condemnation awards, rights to payment of any and every kind
and other forms of obligations and receivables, instruments and other property
which at any time constitute all or part of or are included in the proceeds of
any of the foregoing (collectively, the property described in this Granting
Clause, the "Collateral").
The foregoing Grant is made in trust to the Trustee, for the benefit of
the Noteholder, to secure the payment of principal of and interest on, and any
other amounts owing in respect of the Note, to secure the Secured Obligations
and to secure compliance with this Indenture. The Trustee hereby acknowledges
such Grant, accepts the trusts under this Indenture in accordance with the
provisions of this Indenture and agrees to perform its duties as required in
this Indenture.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1 Definitions. Except as otherwise specified herein, the
following terms have the respective meanings set forth below for all purposes of
this Indenture and the definitions of such terms are equally applicable to both
the singular and plural forms of such terms and to each gender.
-2-
Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to them in Annex A to the Sale and Servicing Agreement
dated as of March 2, 2006 among the Purchaser, the Seller, the Servicer, the
Backup Servicer, the Account Intermediary and the Trustee, as the same may be
amended or supplemented from time to time (the "Sale and Servicing Agreement").
Section 1.2 [Reserved].
Section 1.3 Other Definitional Provisions.
(i) All terms defined in this Indenture shall have the defined
meanings when used in any instrument governed hereby and in any
certificate or other document made or delivered pursuant hereto unless
otherwise defined therein.
(ii) Accounting terms used but not defined or partly defined in this
Indenture, in any instrument governed hereby or in any certificate or
other document made or delivered pursuant hereto, to the extent not
defined, shall have the respective meanings given to them under U.S.
generally accepted accounting principles as in effect on the date of this
Indenture or any such instrument, certificate or other document, as
applicable. To the extent that the definitions of accounting terms in this
Indenture or in any such instrument, certificate or other document are
inconsistent with the meanings of such terms under U.S. generally accepted
accounting principles, the definitions contained in this Indenture or in
any such instrument, certificate or other document shall control.
(iii) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Indenture shall refer to this Indenture as a
whole and not to any particular provision of this Indenture.
(iv) Section, Schedule and Exhibit references contained in this
Indenture are references to Sections, Schedules and Exhibits in or to this
Indenture unless otherwise specified; and the term "including" shall mean
"including without limitation."
(v) The definitions contained in this Indenture 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.
(vi) Any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection
herewith means such agreement, instrument or statute as the same may from
time to time be amended, modified or supplemented and includes (in the
case of agreements or instruments) references to all attachments and
instruments associated therewith; all references to a Person include its
permitted successors and assigns.
ARTICLE II
THE NOTE
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Section 2.1 Form. The Note, together with the Trustee's certificate of
authentication, shall be in substantially the form set forth in Exhibit A-1,
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture and may have such letters,
numbers or other marks of identification and such legends or endorsements placed
thereon as may, consistently herewith, be determined by the officers executing
the Note, as evidenced by their execution of the Note. Any portion of the text
of the Note may be set forth on the reverse thereof, with an appropriate
reference thereto on the face of the Note. Only one Note will be issued on the
Closing Date which Note shall be subject to Advances and prepayments from time
to time in accordance with Section 2.11 and Article X, respectively.
(a) The Note shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods (with or without steel engraved
borders), all as determined by the officers executing the Note, as evidenced by
their execution of the Note.
(b) The terms of the Note set forth in Exhibit A-1 are part of the terms
of this Indenture.
Section 2.2 Execution, Authentication and Delivery. The Note shall be
executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Note may be manual or facsimile.
(a) A Note bearing the manual or facsimile signature of individuals who
were at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of the Note or did not hold
such offices at the date of the Note.
(b) The Trustee shall upon receipt of an Issuer Order for authentication
and delivery, authenticate and deliver the Note for original issue in an
aggregate principal amount up to, but not in excess of, the Maximum Invested
Amount.
(c) The Note shall be dated the date of its authentication.
(d) The Note shall not be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose, unless there appears attached to the
Note a certificate of authentication substantially in the form provided for
herein, executed by the Trustee by the manual signature of one of its authorized
signatories, and such certificate attached to the Note shall be conclusive
evidence, and the only evidence, that the Note has been duly authenticated and
delivered hereunder.
Section 2.3 Scheduled Maturity Date. (a) On the Scheduled Maturity Date,
the outstanding principal balance of the Note and all accrued and unpaid
interest thereon will be amortized and shall be payable in full by the Final
Scheduled Settlement Date.
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(b) No earlier than three (3) months prior to the Scheduled Maturity Date,
the Issuer shall inform the Noteholder if the Issuer intends to (i) terminate
this Indenture on, or at any time during the one (1) month period prior to the
Scheduled Maturity Date or (ii) request to renew this Indenture and extend the
Scheduled Maturity Date. Within thirty (30) days of receipt of the Issuer's
renewal request, the Noteholder shall respond to such request. The Noteholder
shall include in its response any conditions precedent to renewal of this
Indenture and extension of the Scheduled Maturity Date as the Noteholder shall
require in addition to those required in Section 3.6(b) below and in Sections
4.18 and 11.2(i)(2) of the Sale and Servicing Agreement.
Section 2.4 Registration; Registration of Transfer and Exchange. The
Issuer shall cause to be kept a register (the "Note Register") in which, subject
to such reasonable regulations as it may prescribe and subject to the provisions
of Section 2.5, the Issuer shall provide for the registration of the Note, and
the registration of transfers and exchanges of the Note. The Trustee shall be
"Note Registrar" for the purpose of registering the Note and transfers of the
Note as herein provided. Upon any resignation or removal of any Note Registrar,
the Issuer shall promptly appoint a successor or, if it elects not to make such
an appointment, assume the duties of Note Registrar.
(a) If a Person other than the Trustee is appointed by the Issuer as Note
Registrar, the Issuer will give the Trustee and the Noteholder prompt written
notice of the appointment of such Note Registrar and of the location, and any
change in the location, of the Note Register, and the Trustee shall have the
right to inspect the Note Register at all reasonable times and to obtain copies
thereof. The Trustee shall have the right to conclusively rely upon a
certificate executed on behalf of the Note Registrar by an Executive Officer
thereof as to the name and address of the Holder of the Note and the principal
amounts and number of the Note.
(b) Subject to Section 2.5 hereof, upon surrender for registration of
transfer of the Note at the office or agency of the Issuer to be maintained as
provided in Section 3.2, if the requirements of Section 8-401(a) of the UCC are
met, the Trustee shall have the Issuer execute and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, a new Note in the minimum denomination of $10,000,000 or any
multiple of $1,000 in excess thereof and a like aggregate principal amount.
(c) At the option of the Holder, the Note may be exchanged for another
Note in any authorized denominations, of the same class and a like aggregate
principal amount, upon surrender of the Note to be exchanged at such office or
agency. Whenever the Note is so surrendered for exchange, subject to Section 2.5
hereof, if the requirements of Section 8-401(a) of the UCC are met, the Issuer
shall execute, and upon receipt of an Issuer Order, the Trustee shall
authenticate, and the Noteholder shall obtain from the Trustee, the Note which
the Noteholder making the exchange is entitled to receive. Every Note presented
or surrendered for registration of transfer or exchange shall be accompanied by
a written instrument of transfer substantially set forth in the form of Note
attached hereto as Exhibit A-1, duly executed by the Holder thereof or his
attorney duly authorized in writing.
(d) The Note issued upon any registration of transfer or exchange of the
Note shall be the valid obligation of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Note surrendered upon
such registration of transfer or exchange.
-5-
(e) Every Note presented or surrendered for registration of transfer or
exchange shall be (i) duly endorsed by, or accompanied by a written instrument
of transfer in the form attached to Exhibits A-1, duly executed by the Holder
thereof or such Holder's attorney, duly authorized in writing, with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar which requirements include membership or
participation in Securities Transfer Agents Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Note Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Exchange Act and (ii) accompanied by such other documents as the Trustee may
require.
(f) No service charge shall be made to a Holder for any registration of
transfer or exchange of the Note, but the Note 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 the Note.
(g) The preceding provisions of this Section 2.4 notwithstanding, the
Issuer shall not be required to make and the Note Registrar shall not register
transfers or exchanges of the Note selected for redemption or of any Note for a
period of 15 days preceding the due date for any payment with respect to the
Note.
Section 2.5 Restrictions on Transfer and Exchange.
(a) No transfer of the Note shall be made unless the transferor thereof
has provided a certification substantially in the form of Exhibit A-2 that such
transfer is (i) to the Issuer or an Affiliate of the Issuer, or (ii) to any
person the transferor reasonably believes is a qualified institutional buyer (as
defined in Rule 144A under the Securities Act) in a transaction meeting the
requirements of Rule 144A under the Securities Act, or (iii) in compliance with
Section 2.5(c) hereof, (A) to an institutional investor that is an "accredited
investor" as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D
promulgated under the Securities Act in compliance with Section 2.5(d) hereof,
or (B) in a transaction complying with or exempt from the registration
requirements of the Securities Act and in accordance with any applicable
securities laws of any state of the United States or any other jurisdiction;
provided, that (except with respect to the transfer of the Note or Advance made
by the Noteholder), in the case of clauses (A) and (B) the Trustee may require
an Opinion of Counsel to the effect that such transfer may be effected without
registration under the Securities Act, which Opinion of Counsel, if so required,
shall be addressed to the Trustee and shall be secured at the expense of the
Holder. Each prospective purchaser by its acquisition of the Note, acknowledges
that the Note will contain a legend substantially to the effect set forth in
Section 2.5(d) (unless the Issuer determines otherwise in accordance with
applicable law).
Any transfer or exchange of a Note to a proposed transferee taking such
transfer in the form of a Note shall be conducted in accordance with the
provisions of Section 2.4, and shall be contingent upon receipt by the Note
Registrar of (A) such Note, if applicable, properly endorsed for assignment or
transfer or (B) written instructions from such Transferor directing the Note
Registrar to cause to be credited the amount of the corresponding Note to the
account designated by such Transferor in an amount equal to the amount of such
Note to be transferred (but not less than the minimum authorized denomination
applicable to the Note) and (C) such certificates or signatures as may be
required under the Note or this Section 2.5, in each case, in form and substance
satisfactory to the Note Registrar. The Note Registrar shall cause any such
transfers and related cancellations or increases and related reductions, as
applicable, to be properly recorded in its books in accordance with the
requirements of Section 2.4.
-6-
(b) Transfers to Qualified Institutional Buyers are subject to the
following:
(i) Each purchaser of the Note that is a qualified institutional
buyer will be deemed to have represented and agreed as follows (terms used
in this paragraph that are defined in Rule 144A under the Securities Act
are used herein as defined therein):
(A) The purchaser (1) is a qualified institutional buyer, (2)
is aware that the sale of the Note to it is being made in reliance
on the exemption from registration provided by Rule 144A under the
Securities Act and (3) is acquiring the Note for its own account or
for one or more accounts, each of which is a qualified institutional
buyer, and as to each of which the purchaser exercises sole
investment discretion, for the purchaser and for each such account.
The purchaser has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks
of its investment in the Note, and the purchaser and any accounts
for which it is acting are each able to bear the economic risk of
the purchaser's or its investment.
(B) The purchaser understands that the Note is being offered
only in a transaction not involving any public offering in the
United States within the meaning of the Securities Act, the Note has
not been and will not be registered under the Securities Act, and,
if in the future the purchaser decides to offer, resell, pledge or
otherwise transfer the Note, the Note may be offered, resold,
pledged or otherwise transferred only in accordance with the legend
on the Note set forth in Section 2.5(d). The purchaser acknowledges
that no representation is made by the Issuer as to the availability
of any exemption under the Securities Act or any state securities
laws for resale of the Note.
(C) The purchaser is not purchasing the Note with a view to
the resale, distribution or other disposition thereof in violation
of the Securities Act. The purchaser understands that an investment
in the Note involves certain risks, including the risk of loss of a
substantial part of its investment under certain circumstances. The
purchaser has had access to such financial and other information
concerning the Issuer and the Note as it deemed necessary or
appropriate in order to make an informed investment decision with
respect to its purchase of the Note, including an opportunity to ask
questions of and request information from the Noteholder and the
Issuer.
-7-
(D) In connection with the transfer of the Note: (i) none of
the Issuer or the Noteholder is acting as a fiduciary or financial
or investment adviser for the purchaser; (ii) the purchaser is not
relying (for purposes of making any investment decision or
otherwise) upon any advice, counsel or representations (whether
written or oral) of the Issuer or the Noteholder other than any
representations expressly set forth in a written agreement with such
party; (iii) none of the Issuer or the Noteholder has given to the
purchaser (directly or indirectly through any other person) any
assurance, guarantee, or representation whatsoever as to the
expected or projected success, profitability, return, performance,
result, effect, consequence, or benefit (including legal,
regulatory, tax, financial, accounting, or otherwise) of the
Indenture or documentation for the Note; (iv) the purchaser has
consulted with its own legal, regulatory, tax, business, investment,
financial, and accounting advisers to the extent it has deemed
necessary, and it has made its own investment decisions (including
decisions regarding the suitability of any transaction pursuant to
the Indenture) based upon its own judgment and upon any advice from
such advisers as it has deemed necessary and not upon any view
expressed by the Issuer; (v) the purchaser has determined that the
rates, prices or amounts and other terms of the purchase and sale of
the Note reflect those in the relevant market for similar
transactions; (vi) the purchaser is acquiring the Note with a full
understanding of all of the terms, conditions and risks thereof
(economic and otherwise), and it is capable of assuming and willing
to assume (financially and otherwise) those risks; and (vii) the
purchaser is a sophisticated investor.
(E) The purchaser understands that the Note will bear the
legend set forth in Section 2.5(d).
(F) The purchaser will not, at any time, offer to buy or offer
to sell the Note by any form of general solicitation or advertising,
including, but not limited to, any advertisement, article, notice or
other communication published in any newspaper, magazine or similar
medium or broadcast over television or radio or seminar or meeting
whose attendees have been invited by general solicitations or
advertisings.
(G) The purchaser represents that either (1) it is not a
Benefit Plan and is not acting on behalf of or investing plan assets
of a Benefit Plan or (2) the purchaser's purchase and holding of the
Note is entitled to exemptive relief from the prohibited transaction
rules of Section 406 of ERISA and Section 4975 of the Code pursuant
to a U.S. Department of Labor prohibited transaction class
exemption.
(H) The purchaser acknowledges that the Issuer, the Noteholder
and others will rely upon the truth and accuracy of the foregoing
acknowledgments, representations and agreements and agrees that, if
any of the acknowledgments, representations or warranties deemed to
have been made by it by or in connection with its purchase of the
Note are no longer accurate, it shall promptly notify the Issuer and
the Noteholder. If the purchaser is acquiring the Note as a
fiduciary or agent for one or more investor accounts, it shall be
deemed to have represented that it has sole investment discretion
with respect to each such account and that it has full power to make
the foregoing acknowledgments, representations and agreements on
behalf of each such account.
-8-
(I) In connection with a transfer of the Note, the Issuer
shall furnish upon request of a Noteholder to the Noteholder and any
prospective purchaser designated by the Noteholder the information
required to be delivered under paragraph (d)(4) of Rule 144A of the
Securities Act.
(J) Any information the purchaser desires concerning the
Issuer, the Note or any other matter relevant to its decision to
purchase the Note is or has been made available to it.
(c) If the Note is sold in the United States to U.S. Persons under Section
4(2) of the Securities Act to a limited number of institutional "accredited
investors" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act), it shall be issued in the form of a certificated Note in definitive, fully
registered form without interest coupons with the applicable legends set forth
in the form of the Note registered in the name of the beneficial owner or a
nominee thereof, duly executed by the Issuer and authenticated by the Trustee as
hereinafter provided. Any transfer to an institutional "accredited investor" is
expressly conditioned upon the requirement that such transferee shall deliver a
Transferee's Certificate in the form of Exhibit B.
(d) Unless the Issuer determines otherwise in accordance with applicable
law, the Note shall have the following legend:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR "BLUE
SKY" LAWS. THE HOLDER HEREOF, BY PURCHASING ANY NOTE, AGREES FOR THE
BENEFIT OF THE ISSUER THAT IT IS AN INSTITUTIONAL INVESTOR THAT IS AN
"ACCREDITED INVESTOR" AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF
REGULATION D PROMULGATED UNDER THE SECURITIES ACT AND THAT SUCH NOTE IS
BEING ACQUIRED FOR ITS OWN ACCOUNT FOR INVESTMENT AND NOT WITH A VIEW TO
DISTRIBUTION AND MAY BE RESOLD, PLEDGED OR TRANSFERRED ONLY TO (1) THE
ISSUER (UPON REDEMPTION THEREOF OR OTHERWISE) OR AN AFFILIATE OF THE
ISSUER, (2) TO A PERSON THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A OR (3) IN A
TRANSACTION OTHERWISE EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER JURISDICTION, IN EACH SUCH CASE, IN COMPLIANCE WITH
THE INDENTURE AND ALL APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER JURISDICTION; PROVIDED, THAT THE TRUSTEE OR THE
ISSUER MAY REQUIRE AN OPINION OF COUNSEL TO THE EFFECT THAT SUCH TRANSFER
MAY BE EFFECTED WITHOUT REGISTRATION UNDER THE SECURITIES ACT, WHICH
OPINION OF COUNSEL, IF SO REQUIRED, SHALL BE ADDRESSED TO THE ISSUER AND
THE TRUSTEE AND SHALL BE SECURED AT THE EXPENSE OF THE HOLDER.
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Section 2.6 Mutilated, Destroyed, Lost or Stolen Note. If (i) any
mutilated Note is surrendered to the Trustee, or the Trustee receives evidence
to its satisfaction of the destruction, loss or theft of any Note, and (ii)
there is delivered to the Trustee such security or indemnity as may be required
by it to hold the Issuer and the Trustee harmless, then, in the absence of
notice to the Issuer, the Note Registrar or the Trustee that such Note has been
acquired by a bona fide purchaser, and, provided that the requirements of
Section 8-405 and 8-406 of the UCC are met, the Issuer shall execute, and upon
receipt of an Issuer Order, the Trustee shall authenticate and deliver in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a
replacement Note; provided, however, that if any such destroyed, lost or stolen
Note, but not a mutilated Note, shall have become, or within seven days shall
be, due and payable or shall have been called for redemption, instead of issuing
a replacement Note, the Issuer may direct the Trustee, in writing, to pay such
destroyed, lost or stolen Note when so due or payable without surrender thereof.
If, after the delivery of such replacement Note or payment of a destroyed, lost
or stolen Note pursuant to the 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 Trustee shall be entitled to
recover such replacement Note (or such payment) from the Person to whom it was
delivered or any assignee of such Person, except a bona fide purchaser, and
shall be entitled to recover upon the security or indemnity provided therefor to
the extent of any loss, damage, cost or expense incurred by the Issuer or the
Trustee in connection therewith.
(a) 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 Trustee) connected therewith.
(b) Every replacement Note issued pursuant to this Section in replacement
of any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with the Note duly issued hereunder.
(c) 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 the mutilated, destroyed, lost or stolen Note.
Section 2.7 Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Trustee and any agent of
the Issuer or the Trustee may treat the Person in whose name any Note is
registered (as of the applicable Record Date) as the owner of such Note for the
purpose of receiving payments of principal of and interest, if any, on such
Note, for all other purposes whatsoever and whether or not such Note be overdue,
and none of the Issuer, the Trustee or any agent of the Issuer or the Trustee
shall be affected by notice to the contrary.
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Section 2.8 Payment of Principal and Interest; Defaulted Interest.
(a) The Note shall accrue interest as provided in the form of the Note set
forth in Exhibit A-1, and such interest shall be due and payable on each
Settlement Date, as specified therein. Any installment of interest or principal,
if any, payable on the Note which is punctually paid or duly provided for by the
Issuer on the applicable Settlement Date shall be paid to the Person in whose
name such Note is registered on the Record Date, either by (i) wire transfer in
immediately available funds to such Person's account as it appears on the Note
Register on such Record Date (A) if such Noteholder has provided to the Note
Registrar appropriate written instructions at least five Business Days prior to
such Settlement Date and such Holder's Note in the aggregate evidences a
denomination of not less than $1,000,000 or (B) if such Noteholder is the
Seller, or an Affiliate thereof, or (ii) by check mailed to such Noteholder at
the address of such Noteholder appearing on the Note Register.
(b) If the Facility Termination Date is determined in accordance with
subsection (I) of the definition thereof, the outstanding principal balance of
the Note and all accrued and unpaid interest thereon will be amortized and shall
be payable in full by the Final Scheduled Settlement Date. If the Facility
Termination Date is determined in accordance with subsection (II) or (III) of
the definition thereof, such Facility Termination Date will result in immediate
acceleration of the Note in accordance with Section 5.2. All principal payments
on the Note shall be made pro rata to the Noteholder entitled thereto. Upon
written notice from the Issuer, the Trustee shall notify the Person in whose
name a Note is registered at the close of business on the Record Date preceding
the Settlement Date on which the Issuer expects that the final installment of
principal of and interest on such Note will be paid. Such notice shall be mailed
or transmitted by facsimile prior to such final Settlement Date and such final
installment will be payable without any requirement of presentment, but the
Holder of the Note shall be deemed to agree by its acceptance of the same, to
surrender such Note at the Corporate Trust Office within thirty (30) days after
receipt of the final principal payment of such Note.
(c) If the Issuer defaults in a payment of interest on the Note, the
Issuer shall pay defaulted interest (plus interest on such defaulted interest to
the extent lawful) at the Note Interest Rate then in effect in any lawful
manner. The Issuer may pay such defaulted interest to the Noteholder on the
immediately following Settlement Date, and if such amount is not paid on such
following Settlement Date, then on a subsequent special record date, which date
shall be at least five Business Days prior to the Settlement Date. The Issuer
shall fix or cause to be fixed any such special record date and Settlement Date,
and, at least 15 days before any such special record date, the Issuer shall mail
to the Noteholder and the Trustee a notice that states the special record date,
the Settlement Date and the amount of defaulted interest to be paid.
Section 2.9 Cancellation. Subject to Section 2.8(b), the Note surrendered
for payment, registration of transfer, exchange or redemption shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by the Trustee. Subject to Section 2.8(b), the
Issuer may at any time deliver to the Trustee for cancellation any Note
previously authenticated and delivered hereunder which the Issuer may have
acquired in any manner whatsoever, and the Note so delivered shall be promptly
canceled by the Trustee. No Note shall be authenticated in lieu of or in
exchange for any Note canceled as provided in this Section, except as expressly
permitted by this Indenture. Subject to Section 2.8(b), the canceled Note may be
held or disposed of by the Trustee in accordance with its standard retention or
disposal policy as in effect at the time unless the Issuer shall direct by an
Issuer Order that they be destroyed or returned to it; provided that such Issuer
Order is timely and the Note has not been previously disposed of by the Trustee.
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Section 2.10 Release of Collateral. Subject to the terms of the other
Basic Documents and Sections 10.1 and 11.1, the Trustee shall, on or after the
Termination Date, release any remaining portion of the Trust Estate from the
lien created by this Indenture and deposit in the Collection Account any funds
then on deposit in any other Pledged Account. The Trustee shall release property
from the lien created by this Indenture pursuant to this Section 2.10 only upon
receipt of an Issuer Request accompanied by an Officer's Certificate meeting the
applicable requirements of Section 11.1.
Section 2.11 Amount Limited; Advances.
The maximum aggregate principal amount of the Note which may be
authenticated and delivered and Outstanding at any time under this Indenture is
limited to the Maximum Invested Amount.
On each Business Day prior to the Facility Termination Date that is a
Funding Date, and upon the satisfaction of all conditions precedent to (a) the
funding of an Advance and (b) the purchase of Receivables and Other Conveyed
Property, in each case as set forth in Section 2.1(b) of the Sale and Servicing
Agreement, and Section 6.02 and Section 6.03 of the Note Purchase Agreement, the
Issuer shall be entitled to borrow additional funds pursuant to an Advance on
such Funding Date in an aggregate principal amount equal to the Advance Amount
with respect to such Funding Date. Each request by the Issuer for an Advance
shall be deemed to be a certification by the Issuer as to the satisfaction of
the conditions specified in the immediately preceding sentence.
The aggregate outstanding principal amount of the Note may be increased
through the funding of the Advances. Each Advance and corresponding Advance
Amount shall be recorded on the grid attached to the Note or in an electronic
file substantially in the same form as such grid. The grid (or such electronic
file) shall show all Advance Amounts and prepayments. The Noteholder shall be
responsible for maintaining the grid with respect to the Note. Absent manifest
error, all such grid entries (whether manual or in electronic form) shall be
dispositive with respect to the determination of the outstanding principal
amount of the Note. The Note (i) can be funded by Advances on any Funding Date
in a minimum amount of $3,000,000 and any higher amount (subject to the Maximum
Invested Amount), and (ii) subject to subsequent Advances pursuant to this
Section 2.11, is subject to prepayment in whole or in part, at the option of the
Issuer as provided in Article X herein. A Funding Date shall not occur more than
once in any calendar week.
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Section 2.12 Participations. Notwithstanding the foregoing provisions, the
Noteholder shall have the unrestricted right at any time and from time to time,
and without the consent of or notice to the Issuer or the Servicer, to grant to
one or more institutions or other persons (each a "Participant") participating
interests in the Note (secured by the Collateral) and the Noteholder's
obligations to the Issuer hereunder. In the event of any such grant by the
Noteholder of a participating interest to a Participant, whether or not upon
notice to the Issuer or Servicer, the Noteholder shall remain responsible for
the performance of its obligations hereunder. The Noteholder may furnish any
information concerning the Issuer in its possession from time to time to any
prospective assignees and Participants.
ARTICLE III
COVENANTS
Section 3.1 Payment of Principal and Interest. The Issuer will duly and
punctually pay the principal of and interest on the Note in accordance with the
terms of the Note and this Indenture. Without limiting the foregoing, the Issuer
will cause to be distributed on each Settlement Date all amounts deposited in
the Note Distribution Account pursuant to the Sale and Servicing Agreement to
the Noteholder.
Section 3.2 Maintenance of Office or Agency. The Issuer will maintain in
Minneapolis, Minnesota, an office or agency where the Note may be surrendered
for registration of transfer or exchange, and where notices and demands to or
upon the Issuer in respect of the Note and this Indenture may be served. The
Issuer hereby initially appoints the Trustee to serve as its agent for the
foregoing purposes. The Issuer will give prompt written notice to the Trustee
and the Noteholder of the location, and of any change in the location, of any
such office or agency. If at any time the Issuer shall fail to maintain any such
office or agency or shall fail to furnish the Trustee with the address thereof,
such surrenders, notices and demands may be made or served at the Corporate
Trust Office, and the Issuer hereby appoints the Trustee as its agent to receive
all such surrenders, notices and demands.
Section 3.3 Money for Payments to be Held in Trust. On or before each
Settlement Date, the Issuer shall deposit or cause to be deposited in the Note
Distribution Account from the Collection Account an aggregate sum sufficient to
pay the amounts then becoming due under the Note, such sum to be held in trust
for the benefit of the Persons entitled thereto and (unless the Note Paying
Agent is the Trustee) shall promptly notify the Trustee of its action or failure
so to act. Except as provided in Section 3.3(c) hereof, all payments of amounts
due and payable with respect to the Note that are to be made from amounts
withdrawn from the Note Distribution Account shall be made on behalf of the
Issuer by the Trustee or by the Note Paying Agent, and no amounts so withdrawn
from the Note Distribution Account for payment of the Note shall be paid to the
Issuer.
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(a) The Issuer shall cause each Note Paying Agent other than the Trustee
to execute and deliver to the Trustee an instrument in which such Note Paying
Agent shall agree with the Trustee (and if the Trustee acts as Note Paying
Agent, it hereby so agrees), subject to the provisions of this Section, that
such Note Paying Agent shall:
(i) hold all sums held by it for the payment of amounts due with
respect to the Note 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 Trustee notice of any default by the Issuer (or any
other obligor upon the Note) of which it has actual knowledge in the
making of any payment required to be made with respect to the Note;
(iii) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by such Note Paying Agent;
(iv) immediately resign as a Note Paying Agent and forthwith pay to
the Trustee all sums held by it in trust for the payment of the Note if at
any time it ceases to meet the standards required to be met by a Note
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 the Note of any applicable
withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith.
(b) The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Note Paying Agent to pay to the Trustee all sums held in trust
by such Note Paying Agent, such sums to be held by the Trustee upon the same
trusts as those upon which the sums were held by such Note Paying Agent; and
upon such a payment by any Note Paying Agent to the Trustee, such Note Paying
Agent shall be released from all further liability with respect to such money.
(c) Subject to applicable laws with respect to the escheat of funds, any
money held by the Trustee or any Note Paying Agent in trust for the payment of
any amount due with respect to the Note and remaining unclaimed for two years
after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuer on Issuer Request and shall be deposited by the
Trustee in the Collection Account; and the Holder of the Note shall thereafter,
as an unsecured general creditor, look only to the Issuer for payment thereof
(but only to the extent of the amounts so paid to the Issuer), and all liability
of the Trustee or such Note Paying Agent with respect to such trust money shall
thereupon cease; provided, however, that the Trustee or such Note Paying Agent,
before being required to make any such repayment, shall at the expense of the
Issuer cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general circulation
in the City of New York, notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Issuer. The Trustee shall also adopt and employ, at the
expense of the Issuer, any other reasonable means of notification of such
repayment (including, but not limited to, mailing notice of such repayment to
the Holder whose Note have been called but have not been surrendered for
redemption or whose right to or interest in moneys due and payable but not
claimed is determinable from the records of the Trustee or of any Note Paying
Agent, at the last address of record for each such Holder).
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Section 3.4 Existence. The Issuer shall keep in full effect its existence,
rights and franchises as a limited liability company under the laws of the State
of Delaware (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 Note, the Collateral and each other
instrument or agreement included in the Trust Estate.
Section 3.5 Protection of Trust Estate. The Issuer intends the security
interest Granted pursuant to this Indenture in favor of the Trustee, for the
benefit of the Noteholder, to be prior to all other liens in respect of the
Trust Estate, and the Issuer shall take all actions necessary to obtain and
maintain, in favor of the Trustee, for the benefit of the Noteholder, a first
lien on and a first priority, perfected security interest in the Trust Estate.
The Issuer will from time to time prepare (or shall 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:
(i) Grant more effectively all or any portion of the Trust Estate;
(ii) maintain or preserve the lien and security interest (and the
priority thereof) in favor of the Trustee for the benefit of the
Noteholder created by this Indenture or carry out more effectively the
purposes hereof;
(iii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(iv) enforce any of the Collateral;
(v) preserve and defend title to the Trust Estate (including the
Timeshare Loans and the right to receive all payments due or to become due
thereunder, the interests in the Timeshare Properties, or other property
included in the Collateral) and the rights of the Trustee and the
Noteholder in such Trust Estate against the claims of all persons and
parties;
(vi) pay all taxes or assessments levied or assessed upon the Trust
Estate when due; and
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(vii) enforce or cause the Servicer to enforce the Timeshare Loans
in accordance with the Servicing Standard; provided, however, the Issuer
shall not cause the Servicer to obtain on behalf of the Trustee or the
Noteholder, any Timeshare Property or to take any actions with respect to
any property the result of which would adversely affect the interests of
the Trustee or the Noteholder (including, but not limited to, actions
which would cause the Trustee or the Noteholder to be considered a holder
of title, mortgagee-in-possession, or otherwise an "owner" or "operator"
of property not in compliance with applicable environmental statutes).
The Issuer hereby designates the Trustee its agent and attorney-in-fact to
authorize or execute, as applicable, any financing statement, continuation
statement or other instrument required by the Trustee pursuant to this Section;
provided, however, that the Trustee shall not be obligated to authorize, execute
or file such instruments except upon written instruction from the Servicer or
the Issuer to execute such instruments, except that such instruction need not be
in writing if delivered with respect to UCC-1 financing statements relating to
the Trust Estate to be executed or authorized by the Trustee on the Closing
Date.
Section 3.6 Opinions as to Trust Estate.
(a) On the Closing Date, the Issuer shall furnish to the Trustee an
Opinion of Counsel either stating that, in the opinion of such counsel, such
action has been taken 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 necessary to perfect and make
effective the first priority lien and security interest in favor of the Trustee,
for the benefit of the Noteholder, created by this Indenture in the Receivables
and such other items of Collateral that the Noteholder may reasonably request be
the subject of such opinion (the "Opinion Collateral") and reciting the details
of such action, or stating that, in the opinion of such counsel, no such action
is necessary to make such lien and security interest effective.
(b) As a condition precedent to the renewal of this Indenture by the
Noteholder pursuant to Section 2.3 hereof, the Issuer shall furnish to the
Trustee and the Noteholder an Opinion of Counsel either stating that, in the
opinion of such counsel, such action has been taken 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
are necessary to maintain the lien and security interest created by this
Indenture in the Receivables and the Opinion Collateral and reciting the details
of such action or stating that in the opinion of such counsel no such action is
necessary to maintain such lien and security interest. Such Opinion of Counsel
shall also describe any action necessary (as of the date of such opinion) to be
taken in the following year to maintain the lien and security interest of this
Indenture in the Receivables.
Section 3.7 Performance of Obligations; Servicing of Receivables. 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 Trust Estate 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 ordered by any
bankruptcy or other court or as expressly provided in this Indenture, the other
Basic Documents or such other instrument or agreement.
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(a) 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 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.
(b) The Issuer will punctually perform and observe all of its obligations
and agreements contained in this Indenture, the other Basic Documents and in the
instruments and agreements included in the Trust Estate, including but not
limited to preparing (or causing to be prepared) and 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 Sale and Servicing Agreement in
accordance with and within the time periods provided for herein and therein.
Except as otherwise expressly provided therein, the Issuer shall not waive,
amend, modify, supplement or terminate any Basic Document or any provision
thereof without the prior written consent of the Noteholder.
(c) If a Responsible Officer of the Issuer shall have written notice or
actual knowledge of the occurrence of a Servicer Termination Event or Funding
Termination Event under the Sale and Servicing Agreement, the Issuer shall
promptly notify the Trustee, the Noteholder and the Rating Agency thereof in
accordance with Section 11.4, and shall specify in such notice the action, if
any, the Issuer is taking in respect of such default. If a Servicer Termination
Event or Funding Termination Event shall arise from the failure of the Servicer
to perform any of its duties or obligations under the Sale and Servicing
Agreement with respect to the Receivables or the Other Conveyed Property, the
Issuer shall take all reasonable steps available to it to remedy such failure.
(d) The Issuer agrees that it will not waive timely performance or
observance by the Servicer or the Seller of their respective duties under the
Basic Documents without the prior written consent of the Noteholder.
Section 3.8 Negative Covenants. So long as the Note is Outstanding, the
Issuer shall not:
(i) except as expressly permitted by this Indenture or the other
Basic Documents, sell, transfer, exchange or otherwise dispose of any of
the properties or assets of the Issuer, including those included in the
Trust Estate, unless directed to do so by the Noteholder or the Noteholder
has approved such disposition;
(ii) claim any credit on, or make any deduction from the principal
or interest payable in respect of, the Note (other than amounts properly
withheld from such payments under the Code) or assert any claim against
any present or former Noteholder by reason of the payment of the taxes
levied or assessed upon any part of the Trust Estate;
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(iii) (A) permit the validity or effectiveness of this Indenture or
any Grant to be impaired, or permit the lien in favor of the Trustee
created by 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 Note under this Indenture
except as may be expressly permitted hereby, (B) permit any lien, charge,
excise, claim, security interest, mortgage or other encumbrance (other
than the lien of this Indenture) to be created on or extend to or
otherwise arise upon or burden the Trust Estate or any part thereof or any
interest therein or the proceeds thereof (other than tax liens, mechanics'
liens and other liens that arise by operation of law, in each case on any
of the Resort interests and arising solely as a result of an action or
omission of the related Obligor), (C) permit the lien of this Indenture
not to constitute a valid first priority (other than with respect to any
such tax, mechanics' or other lien) perfected security interest in the
Trust Estate or (D) amend, modify or fail to comply with the provisions of
the Basic Documents without the prior written consent of the Noteholder;
(iv) dissolve or liquidate in whole or in part or merge or
consolidate with any other Person;
(v) take any other action or fail to take any actions, which action or
failure may cause the Issuer to be taxable as an association pursuant
to Section 7701 of the Code and the corresponding regulations, (b) a
publicly traded partnership taxable as a corporation pursuant to
Section 7704 of the Code and the corresponding regulations or (c) a
taxable mortgage pool pursuant to Section 7701(i) of the Code and the
corresponding regulations;
(vi) change the location of its principal place of business or its
jurisdiction of organization without the prior consent of the Noteholder;
(vii) become an "investment company" or under the "control" of an
"investment company" as such terms are defined in the Investment Company
Act of 1940, as amended (or any successor or amendatory statute), and the
rules and regulations thereunder (taking into account not only the general
definition of the term "investment company" but also any available
exceptions to such general definition); provided, however, that the Issuer
shall be in compliance with this Section 3.8 if it shall have obtained an
order exempting it from regulation as an "investment company" so long as
it is in compliance with the conditions imposed in such order; or
(viii) except to the extent required or expressly permitted by the
Basic Documents, take any action or fail to take any action if, as a
result of such action or failure to act (A) the Issuer will be, or is
reasonably likely to be, substantively consolidated with the Servicer or
the Seller, or (B) the transfer of the Receivables and the Other Conveyed
Property from the Seller to the Issuer would be, or would be reasonably
likely to be, re-characterized as a financing.
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Section 3.9 Annual Statement as to Compliance. So long as the Note is
Outstanding, the Issuer will deliver to the Trustee and the Noteholder on or
before February 28 of each year, beginning February 28, 2007, an Officer's
Certificate, dated as of December 31 of the preceding year, stating as to the
Authorized Officer signing such Officer's Certificate that:
(i) using their best efforts, a review of the activities of the
Issuer during the preceding year (or portion of such year from the Closing
Date through December 31, 2006) and of performance under this Indenture
has been made under such Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based on
such best-efforts review, the Issuer has complied with all conditions and
covenants under this Indenture throughout such year and no event has
occurred and is continuing which is, or after notice or lapse of time or
both would become, an Event of Default, 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 [RESERVED].
Section 3.11 [RESERVED].
Section 3.12 No Other Business. The Issuer shall not engage in any
business other than financing, purchasing, owning, selling and managing the
Related Receivables in the manner contemplated by this Indenture and the other
Basic Documents and activities incidental thereto. After the Facility
Termination Date, the Issuer shall not purchase any additional Receivables.
Section 3.13 No Borrowing. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
Indebtedness except for (i) the Note, and (ii) any other Indebtedness permitted
by or arising under the Basic Documents. The proceeds of the Note shall be used
to fund the Issuer's purchase of the Related Receivables and the other assets
specified in the Sale and Servicing Agreement, to fund the Reserve Account up to
the Required Reserve Account Amount and to pay the Issuer's organizational,
transactional and start-up expenses.
Section 3.14 Servicer's Obligations. The Issuer shall cause the Servicer
to comply with Sections 4.9, 4.10, 4.11 and 5.9 of the Sale and Servicing
Agreement.
Section 3.15 Guarantees, Loans, Advances and Other Liabilities. Except as
contemplated by the Sale and Servicing Agreement, this Indenture or the other
Basic Documents, 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.
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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 Compliance with Laws. The Issuer shall comply with the
requirements of all applicable laws, the non-compliance with which would,
individually or in the aggregate, materially and adversely affect the ability of
the Issuer to perform its obligations under the Note, this Indenture or any
other Basic Document.
Section 3.18 Restricted Payments. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to any owner of a beneficial interest in the Issuer or otherwise with
respect to any ownership or equity interest or security in or of the Issuer,
(ii) redeem, purchase, retire or otherwise acquire for value any such ownership
or equity interest or security or (iii) set aside or otherwise segregate any
amounts for any such purpose; provided, however, that the Issuer may make, or
cause to be made, distributions to the Trustee and to any owner of a beneficial
interest in the Issuer as permitted by, and to the extent funds are available
for such purpose from distributions under the Sale and Servicing Agreement. The
Issuer will not, directly or indirectly, make payments to or distributions from
the Collection Account and the other Pledged Accounts except in accordance with
this Indenture and the Other Basic Documents.
Section 3.19 Notice of Events of Default and Funding Termination Events.
Upon a Responsible Officer of the Issuer having notice or actual knowledge
thereof, the Issuer agrees to give the Trustee, the Noteholder and the Rating
Agency prompt written notice of each Event of Default hereunder and each Funding
Termination Event, Servicer Termination Event or other Default on the part of
the Servicer or the Seller of its obligations under the Sale and Servicing
Agreement.
Section 3.20 Further Instruments and Acts. Upon request of the Trustee or
the Noteholder, the Issuer will execute and deliver such further instruments and
do such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
Section 3.21 Amendments of Sale and Servicing Agreement. The Issuer shall
not agree to any amendment to Section 11.1 of the Sale and Servicing Agreement
to eliminate the requirements thereunder that the Trustee or the Noteholder
consent to amendments thereto as provided therein.
Section 3.22 Income Tax Characterization. For purposes of federal income
tax, state and local income tax, franchise tax and any other income taxes, the
Issuer and the Noteholder will treat the Note as indebtedness and hereby
instruct the Trustee to treat the Note as indebtedness for all such tax
reporting purposes.
Section 3.23 Separate Existence of the Issuer. During the term of the
Indenture, the Issuer shall observe the applicable legal requirements for the
recognition of the Issuer as a legal entity separate and apart from its
Affiliates, including as follows:
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(i) the Issuer shall maintain business records and books of account
separate from those of its Affiliates;
(ii) except as otherwise provided in the Basic Documents, the Issuer
shall not commingle its assets and funds with those of its Affiliates;
(iii) the Issuer shall at all times hold itself out to the public
under the Issuer's own name as a legal entity separate and distinct from
its Affiliates;
(iv) all transactions and dealings between the Issuer and its
Affiliates will be conducted on an arm's-length basis;
(v) the Issuer shall maintain its own deposit and other account or
accounts, separate from those of any Affiliate; the funds of the Issuer
will not be diverted to any other Person or for other than the use of the
Issuer;
(vi) the Issuer shall ensure that, to the extent that it shares the
same officers or other employees as any of its members or Affiliates, the
salaries of and the expenses related to providing benefits to such
officers and other employees shall be fairly allocated among such
entities, and each such entity shall bear its fair share of the salary and
benefit costs associated with all such common officers and employees;
(vii) the Issuer shall ensure that, to the extent that it jointly
contracts with any of its members or Affiliates to do business with
vendors or service providers or to share overhead expenses, the costs
incurred in so doing shall be allocated fairly among such entities, and
each such entity shall bear its fair share of such costs; to the extent
that the Issuer contracts or does business with vendors or service
providers where the goods and services provided are partially for the
benefit of any other Person, the costs incurred in so doing shall be
fairly allocated to or among such entities for whose benefit the goods and
services are provided, and each such entity shall bear its fair share of
such costs;
(viii) the Issuer shall maintain an office and a telephone number
separate from those of each of its members and Affiliates other than
Affiliates that are bankruptcy remote entities; to the extent that the
Issuer and any of its members or Affiliates have offices in contiguous
space, there shall be fair and appropriate allocation of overhead costs
(including rent) among them, and each such entity shall bear its fair
share of such expenses;
(ix) the Issuer shall ensure that decisions with respect to its
business and daily operations shall be independently made by the Issuer
and shall not be dictated by any Affiliate of the Issuer;
(x) the Issuer shall act solely in its own name and through its own
authorized officers and agents; the Issuer shall at all times use its own
stationery;
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(xi) other than organizational expenses and as contemplated by the
Basic Documents, the Issuer shall pay all expenses, indebtedness and other
obligations incurred by it using its own funds;
(xii) the Issuer shall not enter into any guaranty, or otherwise
become liable, with respect to any obligation of any Affiliate nor make
any loans to any Person;
(xiii) the Issuer shall ensure that any financial reports required
by it shall comply with generally accepted accounting principles and shall
be issued separately from, but may be consolidated with, any reports
prepared for any of its Affiliates so long as such consolidated reports
contain footnotes describing the effect of the transactions on the Issuer
and such Affiliate and also state that the assets of the Issuer are not
available to pay creditors of the Affiliate;
(xiv) the Issuer shall ensure that at all times it is adequately
capitalized to engage in the transactions contemplated in the Limited
Liability Company Agreement and in the Basic Documents; and
(xv) the Issuer shall ensure compliance with the requirements set
forth in the legal opinion delivered by Mayer Brown Rowe & Maw LLP dated
March 2, 2006 with respect to non-consolidation of the Issuer and its
Affiliates.
Section 3.24 Amendment of Issuer's Organizational Documents. The Issuer
shall not amend its organizational documents except in accordance with the
provisions thereof and with the prior written consent of the Noteholder.
Section 3.25 Other Agreements. The Issuer shall not enter into any
agreement that does not contain non-petition or limited recourse language with
respect to the Issuer.
Section 3.26 Rule 144A Information. At any time when the Issuer is not
subject to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, upon the request of the Noteholder, the Issuer shall promptly furnish
to such Noteholder or to a prospective purchaser of the Note designated by the
Noteholder, as the case may be, the information required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act ("Rule 144A Information")
in order to permit compliance by such Noteholder with Rule 144A in connection
with the resale of the Note by the Noteholder; provided, however, that the
Issuer shall not be required to furnish Rule 144A Information in connection with
any request made on or after the date which is three years from the later of (i)
the date the Note (or any predecessor Note) was acquired from the Issuer or (ii)
the date the Note (or any predecessor Note) was last acquired from an
"affiliate" of the Issuer within the meaning of Rule 144 under the Securities
Act; and provided further that the Issuer shall not be required to furnish such
information at any time to a prospective purchaser located outside of the United
States who is not a "United States Person" within the meaning of Regulation S
under the Securities Act if such Note may then be sold to such prospective
purchaser in accordance with Rule 904 under the Securities Act (or any successor
provision thereto).
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Section 3.27 Change of Control. Silverleaf will and shall at all times be
the legal and beneficial owner of all of the issued and outstanding membership
interests of the Issuer.
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.1 Satisfaction and Discharge of Indenture. This Indenture shall
cease to be of further effect with respect to the Note except as to (i) rights
of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Note, (iii) rights of the Noteholder to receive
payments of principal thereof and interest thereon, (iv) Sections 3.3, 3.4, 3.5,
3.6, 3.8, 3.18, 3.19, 3.20, 3.21, 3.23, 3.24, 11.17 and 11.18, (v) the rights,
obligations and immunities of the Trustee hereunder (including the rights of the
Trustee under Section 6.7 and the obligations of the Trustee under Section 4.2)
and (vi) the rights of the Noteholder as beneficiary hereof with respect to the
property so deposited with the Trustee payable to all or any of them, and the
Trustee, on demand of and at the expense of the Issuer, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture with
respect to the Note, when:
(a) the Note theretofore authenticated and delivered (other than (i) a
Note that has been destroyed, lost or stolen and that has been replaced or paid
as provided in Section 2.6 and (ii) a Note for whose payment money has
theretofore been deposited in trust or segregated and held in trust by the
Issuer and thereafter repaid to the Issuer or discharged from such trust, as
provided in Section 3.3) has been delivered to the Trustee for cancellation;
(b) the Issuer has paid or caused to be paid all Secured Obligations; and
(c) the Issuer has delivered to the Trustee and the Noteholder an
Officer's Certificate meeting the applicable requirements of Section 11.1(a) and
stating that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with.
For the avoidance of doubt, prior to the Facility Termination Date and subject
to the conditions set forth in Section 2.11, in the event that the aggregate
outstanding principal amount of the Note is reduced to zero, the Issuer may
continue to request Advances under this Indenture, provided that no Event of
Default or Funding Termination Event shall have occurred and be continuing.
Section 4.2 Application of Trust Money. All moneys deposited with the
Trustee pursuant to Section 4.1 or Section 4.3 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Note and this Indenture,
to the payment, either directly or through the Note Paying Agent, as the Trustee
may determine, to the Noteholder for the payment or redemption of which such
moneys have been deposited with the Trustee, of all sums due and to become due
thereon for principal and interest; but such moneys need not be segregated from
other funds except to the extent required herein, in the Sale and Servicing
Agreement or in the other Basic Documents or required by law. Any funds
remaining with the Trustee or on deposit in the Pledged Accounts shall be
remitted to the Issuer upon satisfaction by the Issuer of its obligations
hereunder and under the Other Basic Documents, including without limitation,
those under Section 4.1(c).
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Section 4.3 Repayment of Moneys Held by Note Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to the Note,
all moneys then held by the Note Paying Agent other than the Trustee under the
provisions of this Indenture with respect to the Note shall, upon demand of the
Issuer, be remitted to the Trustee to be held and applied according to Section
4.2 and thereupon the Note Paying Agent shall be released from all further
liability with respect to such moneys.
ARTICLE V
REMEDIES
Section 5.1 Events of Default.
(a) "Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(i) default in the payment of any interest on the Note or any other
amount (except principal) due with respect to the Note when the same
becomes due and payable (solely for purposes of this clause, a payment on
the Note funded from amounts on deposit in the Reserve Account shall be
deemed to be a payment made by the Issuer), which default continues for a
period of two (2) days after notice (whether written or oral) of such
default is provided to the Issuer;
(ii) default in the payment of the principal of or any installment
of the principal of the Note when the same becomes due and payable (solely
for purposes of this clause, a payment on the Note funded from amounts on
deposit in the Reserve Account shall be deemed to be a payment made by the
Issuer);
(iii) default in the observance or performance of any covenant or
agreement of the Issuer, the Seller or the Servicer made in any Basic
Document (other than a covenant or agreement, a default in the observance
or performance of which is elsewhere in this Section specifically dealt
with and other than the failure by the Seller or the Servicer to
repurchase any Receivable or substitute a Qualified Substitute Timeshare
Receivable in accordance with the terms of the Sale and Servicing
Agreement), or any representation or warranty of the Issuer, the Seller or
the Servicer made in any Basic Document or in any certificate or other
writing delivered pursuant to any Basic Document or in connection
therewith (including any Servicer's Certificate or any Borrowing Base
Certificate) proving to have been incorrect in any material respect as of
the time when the same shall have been made or deemed to have been made
(any such occurrence, a "Breach"), and such Breach shall continue or not
be cured within 30 days (or, if the breaching party shall have provided
evidence satisfactory to the Trustee and the Noteholder that such Breach
cannot be cured in the 30-day period and that it is diligently pursuing a
cure, 60 days) of the earlier of (i) written notice by the Noteholder or
(ii) knowledge of such Breach by the breaching party; provided that no
Breach shall be deemed to occur hereunder in respect of any representation
or warranty relating to eligibility of any Receivable on the Closing Date
or any related Funding Date to the extent the Seller has repurchased such
Receivable in accordance with the provisions of the Sale and Servicing
Agreement;
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(iv) the failure by the Seller or the Servicer to repurchase any
Receivable or substitute a Qualified Substitute Timeshare Receivable in
accordance with the terms of the Sale and Servicing Agreement;
(v) an Insolvency Event with respect to the Issuer, the Seller or
the Servicer shall have occurred;
(vi) a Borrowing Base Deficiency shall exist and not be cured within
two (2) Business Days;
(vii) the Internal Revenue Service shall file notice of a Lien
pursuant to Section 6323 of the Code with regard to any assets of the
Issuer or any material portion of the assets of the Seller and such Lien
shall not have been released within 30 days, or the Pension Benefit
Guaranty Corporation shall file notice of a Lien pursuant to Section 4068
of ERISA with regard to any of the assets of the Issuer or the Seller and
such Lien shall not have been released within 30 days;
(viii) (a) any Basic Document or any Lien granted thereunder by the
Issuer or the Seller shall (except in accordance with its terms), in whole
or in part, terminate, cease to be effective or cease to be the legally
valid, binding and enforceable obligation of the Issuer or the Seller; or
(b) the Issuer or the Seller or any other party shall, directly or
indirectly, contest in any manner such effectiveness, validity, binding
nature or enforceability of any Basic Document; or (c) any Lien securing
the payment of the Note shall, in whole or in part, not be or cease to be
a perfected first priority security interest against the Issuer; or (d)
failure by Silverleaf as the Servicer to maintain a perfected, first
priority ownership interest (and backup security interest) in the
Receivables and the Other Conveyed Property in favor of the Issuer or a
perfected, first priority security interest in the Receivables and the
Other Conveyed Property in favor of the Trustee for the benefit of the
Noteholder;
(ix) a Servicer Termination Event shall have occurred;
(x) the Issuer or the Seller shall fail to pay any principal of or
premium or interest on any indebtedness having a principal amount of
$25,000 or $500,000, respectively, or greater when the same becomes due
and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) and such failure shall continue after
the applicable grace period, if any, specified in the agreement or
instrument relating to such indebtedness; or any other default under any
agreement or instrument relating to any such indebtedness of the Issuer or
the Seller, as applicable, or any other event, shall occur and shall
continue after the applicable grace period, if any, specified in such
agreement or instrument if the effect of such default or event is to
accelerate, or to permit the acceleration of, the maturity of such
indebtedness; or any such indebtedness shall be declared to be due and
payable or required to be prepaid (other than by a regularly scheduled
required prepayment), redeemed, purchased or defeased, or an offer to
prepay, redeem, purchase or defease such indebtedness shall be required to
be made, in each case, prior to the stated maturity thereof;
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(xi) a notice of termination with respect to the Lockbox Agreement
shall have been delivered, or a termination of the Lockbox Agreement shall
have otherwise occurred, and a replacement Lockbox Bank acceptable to the
Noteholder shall not have executed a Lockbox Agreement in form and
substance satisfactory to the Noteholder within 30 days of such notice;
(xii) a Change of Control or a Material Adverse Change (in the
reasonable opinion of the Noteholder) shall have occurred with respect to
the Issuer or the Seller;
(xiii) the Issuer shall become an investment company required to be
registered under the Investment Company Act;
(xiv) any final judgment or ruling shall have been rendered against,
or any settlement entered into by, the Seller or any subsidiary thereof,
excluding the Issuer, which judgment, ruling or settlement exceeds, in the
aggregate, $1,000,000 or any final judgment or ruling shall have been
rendered against the Issuer; provided, in either case, that such final
judgment, ruling or settlement shall have remained unpaid, and enforcement
thereof shall have remained unstayed and unbonded, for a period in excess
of 30 days from the date of entry of such judgment or ruling or the date
of effectiveness of such settlement;
(xv) the Three Month Rolling Average of Delinquency Ratios exceeds
10%;
(xvi) the Three Month Rolling Average of Serviced Receivables
Delinquency Ratios exceeds 10%;
(xvii) the Three Month Rolling Average of Default Ratios exceeds
1.50%;
(xviii) the Three Month Rolling Average of the Serviced Receivables
Default Ratios exceeds 1.50%;
(xix) the Three Month Rolling Average of Net Spread is less than
5.0%;
(xx) the Facility Termination Date shall have occurred (other than
as a result of the events described in subsections (I) and (III) of the
definition thereof);
(xxi) [Reserved];
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(xxii) the rating assigned to the Note by Moody's shall be lower
than "Baa2";
(xxiii) [Reserved];
(xxiv) the occurrence of a payment default under any financing
transaction undertaken by the Seller, the initial Servicer, or an
Affiliate of either the Seller or the initial Servicer, involving the
direct or indirect sale or other conveyance of receivables similar to the
Receivables or other assets related thereto to a Person that shall
privately or publicly sell securities, notes or certificates backed by
such receivables or assets; or
(xxv) (A) any Hedge Agreement shall cease to be in full force and
effect, (B) the occurrence of any default by the Issuer in the observance
or performance of any of the terms or provisions of any Hedge Agreement,
or (C) the Issuer shall fail to comply with any hedging requirement under
any of the Basic Documents and, in any such case, such event shall remain
unremedied for two (2) Business Days after written notice thereof is
provided to the Issuer; provided, however, that such notice shall only be
necessary so long as the Noteholder or an Affiliate thereof is the Hedge
Counterparty, otherwise, the Event of Default shall occur if such event
shall remain unremedied for two (2) Business Days.
(b) The Issuer shall deliver to the Trustee and the Noteholder, within two
days after the occurrence thereof, written notice in the form of an Officer's
Certificate of any Event of Default which has occurred or any event which either
with the giving of notice or the lapse of time, or both, would become an Event
of Default, its status and what action the Issuer is taking or proposes to take
with respect thereto.
(c) After the earlier of the receipt of notice by the Trustee and the date
of actual knowledge by a Responsible Officer of the Trustee of the occurrence of
any Default or Event of Default hereunder, the Trustee shall give prompt written
notice to the Noteholder of each such Default or Event of Default hereunder so
known to the Trustee.
Section 5.2 Rights Upon Event of Default. If an Event of Default or a
Funding Termination Event specified in clauses (i) through (iii) of the
definition thereof shall have occurred and be continuing, the Noteholder may
declare the Note to be immediately due and payable at par, and with respect to
an Event of Default pursuant to Section 5.1(a)(v) hereof, the Note shall
automatically be declared to be immediately due and payable at par, in each case
together with accrued interest thereon. In addition, if an Event of Default
shall have occurred and be continuing, the Noteholder may exercise any of the
remedies specified in Section 5.4.
At any time after such declaration of acceleration of maturity has been
made and before a judgment or decree for payment of the money due has been
obtained by the Trustee as hereinafter in this Article V provided, the
Noteholder may, by written notice to the Issuer and the Trustee, rescind and
annul such declaration and its consequences if the Issuer has paid or deposited
with the Trustee a sum sufficient to pay:
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(i) all payments of principal of and interest on the Note and all
other amounts that would then be due hereunder or upon the Note if the
Event of Default giving rise to such acceleration had not occurred; and
(ii) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee and its agents and counsel; and
(iii) all Events of Default, other than the nonpayment of the
principal of the Note that has become due solely by such acceleration,
have been cured or waived as provided in Section 5.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
Section 5.3 Collection of Indebtedness and Suits for Enforcement by
Trustee.
(a) The Issuer covenants that if (i) a default occurs in the payment of
any interest on, or principal of, the Note when the same becomes due and
payable, the Issuer will, upon demand of the Trustee, pay to it, for the benefit
of the Noteholder, the whole amount then due and payable on the Note for
principal and interest, with interest upon the overdue principal, and, to the
extent payment at such rate of interest shall be legally enforceable, upon
overdue installments of interest, at the Note Interest Rate and in addition
thereto such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee and its agents and counsel.
(b) If an Event of Default occurs and is continuing, the Trustee may in
its discretion subject to the prior written consent of the Noteholder and shall,
at the direction of the Noteholder, proceed to protect and enforce its rights
and the rights of the Noteholder by such appropriate Proceedings as the Trustee
or the Noteholder shall deem most effective to protect and enforce any such
rights, whether for the specific enforcement of any covenant or agreement in
this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy or legal or equitable right vested in the
Trustee by this Indenture or by law.
(c) [RESERVED].
(d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Note or any Person having or claiming an ownership interest in
the Trust Estate, proceedings under Title 11 of the United States Code or any
other applicable Federal or state bankruptcy, insolvency or other similar law,
or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial proceedings relative to the Issuer
or other obligor upon the Note, or to the creditors or property of the Issuer or
such other obligor, the Trustee, irrespective of whether the principal of the
Note shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand
pursuant to the provisions of this Section, shall be entitled and empowered, by
intervention in such proceedings or otherwise:
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(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Note and to file
such other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for reasonable
compensation to the Trustee and each predecessor Trustee, and their
respective agents, attorneys and counsel, and for reimbursement of all
expenses and liabilities incurred, and all advances made, by the Trustee
and each predecessor Trustee, except as a result of negligence, bad faith
or willful misconduct) and of the Noteholder allowed in such proceedings;
(ii) unless prohibited by applicable law and regulations, to vote on
behalf of the Noteholder 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 Noteholder and of the Trustee on their
behalf; and
(iv) to file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee
or the Noteholder allowed in any judicial proceedings relative to the
Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such proceeding is hereby authorized by the Noteholder to make payments to
the Trustee, and, in the event that the Trustee shall consent to the making of
payments directly to the Noteholder, to pay to the Trustee such amounts as shall
be sufficient to cover reasonable compensation to the Trustee, each predecessor
Trustee and their respective agents, attorneys and counsel, and all other
expenses and liabilities incurred, and all advances made, by the Trustee and
each predecessor Trustee except as a result of negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of the
Noteholder any plan of reorganization, arrangement, adjustment or composition
affecting the Note or the rights of the Noteholder or to authorize the Trustee
to vote in respect of the claim of the 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 the Note, may be enforced by the Trustee without the possession of the
Note or the production thereof in any trial or other proceedings relative
thereto, and any such action or proceedings instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment, subject to the payment of the expenses, disbursements and compensation
of the Trustee, each predecessor Trustee and their respective agents and
attorneys, shall be for the benefit of the Noteholder.
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(g) In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture or any other
Basic Document), the Trustee shall be held to represent the Noteholder, and it
shall not be necessary to make the Noteholder a party to any such proceedings.
Section 5.4 Remedies. If an Event of Default shall have occurred and be
continuing, the Noteholder may do one or more of the following (subject to
Section 5.5):
(i) institute or direct the Trustee to institute Proceedings in its
own name and as trustee of an express trust for the collection of all
amounts then payable on the Note or under this Indenture with respect
thereto, whether by declaration or otherwise, enforce any judgment
obtained, and collect from the Issuer and any other obligor upon the Note
moneys adjudged due;
(ii) institute or direct the Trustee to institute Proceedings from
time to time for the complete or partial foreclosure of this Indenture
with respect to the Trust Estate;
(iii) exercise or direct the Trustee to exercise any remedies of a
secured party under the UCC and take any other appropriate action to
protect and enforce the rights and remedies of the Trustee and the
Noteholder; and
(iv) sell or direct the Trustee to sell the Trust Estate or any
portion thereof or rights or interest therein, at one or more public or
private sales (including, without limitation, the sale of the Collateral
in connection with a securitization thereof) called and conducted in any
manner permitted by law.
Section 5.5 Optional Preservation of the Receivables. If the Note has been
declared to be due and payable under Section 5.2 following an Event of Default
and such declaration and its consequences have not been rescinded and annulled,
the Trustee may, but need not, elect to maintain possession of the Trust Estate.
It is the desire of the parties hereto and the Noteholder that there be at all
times sufficient funds for the payment of principal of and interest on the Note,
and the Trustee shall take such desire into account when determining whether or
not to maintain possession of the Trust Estate. In determining whether to
maintain possession of the Trust Estate, the Trustee may, but need not, obtain
and rely upon an opinion of an Independent investment banking or accounting firm
of national reputation as to the feasibility of such proposed action and as to
the sufficiency of the Trust Estate for such purpose.
Section 5.6 Priorities.
(a) Following the acceleration of the Note pursuant to Section 5.2, the
Available Funds, together with any other amounts on deposit in the Pledged
Accounts, including any money or property collected pursuant to Section 5.4 of
this Indenture shall be applied by the Trustee on the related Settlement Date in
the order of priority specified in Section 5.7 of the Sale and Servicing
Agreement.
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(b) The Trustee may fix a record date and Settlement Date for any payment
to the Noteholder pursuant to this Section. At least 15 days before such record
date the Issuer shall mail to the Noteholder and the Trustee a notice that
states such record date, the Settlement Date and the amount to be paid.
Section 5.7 Limitation of Suits. Unless the Note shall be held by the
initial Holder or an affiliate thereof, no Holder of the Note shall have any
right to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(i) the Holder has previously given written notice to the Trustee of
a continuing Event of Default;
(ii) the Holder of the Note has made a written request to the
Trustee to institute such proceeding in respect of such Event of Default
in its own name as Trustee hereunder;
(iii) the Holder has offered to the Trustee indemnity reasonably
satisfactory to it against the costs, expenses and liabilities to be
incurred in complying with such request; and
(iv) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute such proceedings;
it being understood and intended that no Holder of the Note 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 Holder of the
Note or to obtain or to seek to obtain priority or preference over any other
Holder or to enforce any right under this Indenture, except in the manner herein
provided and it being understood that if the Note is held by the initial Holder
or an affiliate thereof, the Holder may directly institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy.
Section 5.8 Unconditional Rights of the Noteholder To Receive Principal
and Interest. Notwithstanding any other provisions of this Indenture, the
Noteholder shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest, if any, on the Note on or after the
respective due dates thereof expressed in the Note or in this Indenture and to
institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of the Noteholder.
Section 5.9 Restoration of Rights and Remedies. If the Noteholder has
instituted any proceeding to enforce any right or remedy under this Indenture
and such proceeding has been discontinued or abandoned for any reason or has
been determined adversely to the Trustee or to the Noteholder, then and in every
such case the Issuer, the 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
Trustee and the Noteholder shall continue as though no such proceeding had been
instituted.
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Section 5.10 Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Noteholder is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent permitted
by law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
Section 5.11 Delay or Omission Not a Waiver. No delay or omission of the
Noteholder to exercise any right or remedy accruing upon any Default or Event of
Default shall impair any such right or remedy or constitute a waiver of any such
Default or Event of Default or an acquiescence therein. Every right and remedy
given by this Article V or by law to the Trustee or to the Noteholder may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Noteholder, as the case may be.
Section 5.12 [Reserved].
Section 5.13 Waiver of Past Defaults. Prior to the declaration of the
acceleration of the maturity of the Note as provided in Section 5.2, the
Noteholder may waive any past Default or Event of Default and its consequences.
In the case of any such waiver, the Issuer, the Trustee and the Noteholder shall
be restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other Default or Event of Default
or impair any right consequent thereto.
Upon any such waiver, such Default or Event of Default shall cease to
exist and be deemed to have been cured and not to have occurred, and any Event
of Default arising therefrom shall be deemed to have been cured and not to have
occurred, for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other Default or Event of Default or impair any right
consequent thereto.
Section 5.14 Undertaking for Costs. All parties to this Indenture agree,
and the 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 Trustee for
any action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to (a) any suit instituted by
the Trustee, (b) any suit instituted by the Noteholder holding in the aggregate
more than 10% of the Invested Amount of the Note or (c) any suit instituted by
the Noteholder for the enforcement of the payment of principal of or interest on
the Note on or after the respective due dates expressed in the Note and in this
Indenture.
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, that may affect the covenants or the performance of this Indenture; and
the Issuer (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power and any right of the Issuer to take
such action shall be suspended.
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Section 5.16 Sale of Trust Estate.
(a) To the extent permitted by applicable law, the Trustee shall not in
any private sale sell to a third party the Trust Estate, or any portion thereof
unless,
(i) the Noteholder consents to or directs the Trustee in writing to
make such sale; or
(ii) the proceeds of such sale would be not less than the sum of all
amounts due on the entire unpaid principal amount of the Note and interest
due or to become due thereon in accordance with Section 5.6 hereof on the
Settlement Date next succeeding the date of such sale.
(b) For any public sale of the Trust Estate, the Trustee shall have
provided the Noteholder with notice of such sale at least two weeks in advance
of such sale which notice shall specify the date, time and location of such
sale.
(c) In connection with a sale of all or any portion of the Trust Estate:
(i) the Noteholder may bid for and purchase the property offered for
sale, and may hold, retain, possess and dispose of such property, without
further accountability, and the Noteholder may, in paying the purchase
money therefor, deliver in lieu of cash any Outstanding Note or claims for
interest thereon for credit in the amount that shall, upon distribution of
the net proceeds of such sale, be payable thereon, and the Note, in case
the amounts so payable thereon shall be less than the amount due thereon,
shall be returned to the Noteholder after being appropriately stamped to
show such partial payment;
(ii) the Trustee shall execute and deliver an appropriate instrument
of conveyance transferring its interest in any portion of the Trust Estate
in connection with a sale thereof; and
(iii) the Trustee is hereby irrevocably appointed the agent and
attorney-in-fact of the Issuer to transfer and convey its interest in any
portion of the Trust Estate in connection with a sale thereof, and to take
all action necessary to effect such sale.
(d) The method, manner, time, place and terms of any sale of all or any
portion of the Trust Estate shall be commercially reasonable.
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ARTICLE VI
THE TRUSTEE
Section 6.1 Duties of Trustee. If an Event of Default has occurred and is
continuing, the Trustee shall exercise the rights and powers vested in it by
this Indenture and the other Basic Documents 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.
(a) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and each of the
other Basic Documents to which it is a party and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture;
however, the Trustee shall examine the certificates and opinions to
determine whether or not they conform on their face to the requirements of
this Indenture.
(b) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:
(i) this paragraph does not limit the effect of paragraph (a) of
this Section;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it from the Noteholder.
(c) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Issuer.
(d) Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law or the terms of this Indenture or the
Sale and Servicing Agreement.
(e) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur financial liability in the performance of
any of its duties hereunder or in the exercise of any of its rights or powers,
if it shall have reasonable grounds to believe that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it.
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(f) Every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Trustee shall be subject to the
provisions of this Section.
(g) The Trustee shall permit any representative of the Noteholder, upon
reasonable prior notice and during the Trustee's normal business hours, to
examine all books of account, records, reports and other papers of the Trustee
relating to the Note, to make copies and extracts therefrom and to discuss the
Trustee's affairs and actions, as such affairs and actions relate to the
Trustee's duties with respect to the Note, with the Trustee's officers and
employees responsible for carrying out the Trustee's duties with respect to the
Note.
(h) The Trustee shall, and hereby agrees that it will, perform all of the
obligations and duties required of it under the Sale and Servicing Agreement.
(i) Except for actions expressly authorized by this Indenture, the Trustee
shall take no action reasonably likely to impair the security interests created
or existing under any Receivable or related Other Conveyed Property or to impair
the value of any Receivable or related Other Conveyed Property.
(j) All information obtained by the Trustee regarding the Obligors and the
Receivables and the related Other Conveyed Property, whether upon the exercise
of its rights under this Indenture or otherwise, shall be maintained by the
Trustee in confidence and shall not be disclosed to any other Person, other than
the Trustee's attorneys, accountants and agents unless such disclosure is
required by this Indenture or any applicable law or regulation.
Section 6.2 Rights of Trustee. Subject to Section 6.1 and this Section
6.2, the Trustee shall be protected and shall incur no liability to the Issuer
or the Noteholder in relying upon the accuracy, acting in reliance upon the
contents, and assuming the genuineness of any notice, demand, certificate,
signature, instrument or other document reasonably believed by the Trustee to be
genuine and to have been duly executed by the appropriate signatory, and, except
to the extent the Trustee has actual knowledge to the contrary or as required
pursuant to Section 6.1 the Trustee shall not be required to make any
independent investigation with respect thereto.
(a) Before the Trustee acts or refrains from acting, it may require an
Officer's Certificate. Subject to Section 6.1(b), the Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on the
Officer's Certificate.
(b) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian or nominee, and the Trustee shall not be responsible
for any misconduct or negligence on the part of, or for the supervision of the
Servicer, the Backup Servicer or any other such agent, attorney, custodian or
nominee appointed with due care by it hereunder.
(c) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute
willful misconduct, negligence or bad faith.
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(d) The Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the Note
shall be full and complete authorization and protection from liability in
respect to any action taken, omitted or suffered by it hereunder in good faith
and in accordance with the advice or opinion of such counsel.
(e) The Trustee shall be under no obligation to institute, conduct or
defend any litigation under this Indenture or in relation to this Indenture, at
the request, order or direction of the Noteholder, pursuant to the provisions of
this Indenture, unless the Noteholder shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that may be incurred therein or thereby; provided, however, that the Trustee
shall, upon the occurrence of an Event of Default (that has not been cured),
exercise the rights and powers vested in it by this Indenture in accordance with
Section 6.1.
(f) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other paper
or document, unless requested in writing to do so by the Noteholder; provided,
however, that if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to the
Trustee by the security afforded to it by the terms of this Indenture or the
Sale and Servicing Agreement, the Trustee may require reasonable indemnity
against such cost, expense or liability as a condition to so proceeding; the
reasonable expense of every such examination shall be paid by the Person making
such request, or, if paid by the Trustee, shall be reimbursed by the Person
making such request upon demand.
Section 6.3 Individual Rights of Trustee. The Trustee in its individual or
any other capacity may become the owner or pledgee of the Note and may otherwise
deal with the Issuer or its Affiliates with the same rights it would have if it
were not the Trustee. Any Note Paying Agent, Note Registrar, co-registrar or
co-paying agent may do the same with like rights.
Section 6.4 Trustee's Disclaimer. The Trustee shall not be responsible for
and makes no representation as to the validity or adequacy of this Indenture,
the Trust Estate, the Collateral or the Note, it shall not be accountable for
the Issuer's use of the proceeds from the Note, and it shall not be responsible
for any statement of the Issuer in the Indenture or in any document issued in
connection with the sale of the Note or in the Note other than the Trustee's
certificate of authentication.
Section 6.5 Notice of Defaults. If a Default or an Event of Default occurs
and is continuing and if it is either known by, or written notice of the
existence thereof has been delivered to, a Responsible Officer of the Trustee,
the Trustee shall mail to the Noteholder notice of the Default or Event of
Default within three (3) Business Days after such knowledge or notice occurs.
Except in the case of a Default or Event of Default in payment of principal of
or interest on the Note (including payments pursuant to the mandatory redemption
provisions of the Note, if any), the Trustee may withhold the notice if and so
long as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of the Noteholder.
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Section 6.6 Reports by Trustee to the Noteholder. The Trustee shall on
behalf of the Issuer deliver to the Noteholder such information as may be
reasonably required to enable such Holder to prepare its Federal and state
income tax returns.
Section 6.7 Compensation and Indemnity. Pursuant to Section 5.7 of the
Sale and Servicing Agreement, the Issuer shall pay to the Trustee from time to
time compensation for its services. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Issuer
shall reimburse the Trustee, pursuant to Section 5.7 of the Sale and Servicing
Agreement, 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 Trustee's agents, counsel, accountants and
experts. The Issuer shall or shall cause the Servicer to indemnify the Trustee
against any and all loss, liability or expense incurred by the Trustee without
willful misfeasance, negligence or bad faith on its part arising out of or in
connection with the acceptance or the administration of this trust and the
performance of its duties hereunder, including the costs and expenses of
defending itself against any claim or liability in connection therewith. The
Trustee shall notify the Issuer and the Servicer promptly of any claim for which
it may seek indemnity. Failure by the Trustee to so notify the Issuer and the
Servicer shall not relieve the Issuer of its obligations hereunder or the
Servicer of its obligations under Article XII of the Sale and Servicing
Agreement. The Trustee may have separate counsel and the Issuer shall or shall
cause the Servicer to pay the reasonable 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 Trustee through the
Trustee's own willful misconduct, negligence or bad faith.
(a) The Issuer's payment obligations to the Trustee pursuant to this
Section shall survive the discharge of this Indenture. When the Trustee incurs
expenses after the occurrence of a Default specified in Section 5.1(a)(v) 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. Notwithstanding anything
else set forth in this Indenture or the other Basic Documents, the recourse of
the Trustee hereunder and under the other Basic Documents shall be to the Trust
Estate only and specifically shall not be recourse to the other assets of the
Issuer or the assets of the Noteholder.
Section 6.8 Replacement of Trustee. The Issuer may, with the consent of
the Noteholder, and at the request of the Noteholder, shall remove the Trustee
if:
(i) the Trustee fails to comply with Section 6.11 or the Trustee
fails to perform any other material covenant or agreement of the Trustee
set forth in the Basic Documents to which the Trustee is a party and such
failure continues for 45 days after written notice of such failure from
the Noteholder;
(ii) an Insolvency Event with respect to the Trustee occurs; or
(iii) the Trustee otherwise becomes incapable of acting.
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If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason (the Trustee in such event being referred to herein as
the retiring Trustee), the Issuer shall promptly appoint a successor Trustee
acceptable to the Noteholder. If the Issuer fails to appoint such a successor
Trustee, the Noteholder may appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee, the Noteholder and the Issuer, whereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the retiring
Trustee under this Indenture, subject to satisfaction of the Rating Agency
Condition. The retiring Trustee shall promptly transfer all property held by it
as Trustee to the successor Trustee.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuer or the
Noteholder may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
Any resignation or removal of the Trustee and appointment of a successor
Trustee pursuant to any of the provisions of this Section shall not become
effective until acceptance of appointment by the successor Trustee pursuant to
Section 6.8.
Notwithstanding the replacement of the Trustee pursuant to this Section,
the Issuer's and the Servicer's obligations under Section 6.7 shall continue for
the benefit of the retiring Trustee.
Section 6.9 Successor Trustee by Merger. (a) If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee. The Trustee shall provide the Rating
Agency prior written notice of any such transaction.
(b) In case at the time such successor or successors to the Trustee by
merger, conversion or consolidation shall succeed to the trusts created by this
Indenture the Note shall have been authenticated but not delivered, any such
successor to the Trustee may adopt the certificate of authentication of any
predecessor trustee, and deliver the Note so authenticated; and in case at that
time the Note shall not have been authenticated, any successor to the Trustee
may authenticate the Note either in the name of any predecessor hereunder or in
the name of the successor to the Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Note or in
this Indenture provided that the certificate of the Trustee shall have.
Section 6.10 Appointment of Co-Trustee or Separate Trustee.
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 Trust Estate may at the time be located, the Trustee with the consent of
the Noteholder shall have the power and may execute and deliver all instruments
to appoint one or more Persons to act as a co-trustee or co-trustees, or
separate trustee or separate trustees, of all or any part of the Trust Estate,
and to vest in such Person or Persons, in such capacity and for the benefit of
the Noteholder, such title to the Trust Estate, or any part thereof, and,
subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Trustee may consider necessary or
desirable. No co-trustee or separate trustee hereunder shall be required to meet
the terms of eligibility as a successor trustee under Section 6.11 and no notice
to the Noteholder of the appointment of any co-trustee or separate trustee shall
be required under Section 6.8 hereof.
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(a) 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 Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly
(it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of
title to the Trust or any portion thereof in any such jurisdiction) shall
be exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder, including acts or
omissions of predecessor or successor trustees; and
(iii) the Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
(b) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Indenture and the conditions
of this Article 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 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 Trustee. Every
such instrument shall be filed with the Trustee.
(c) Any separate trustee or co-trustee may at any time constitute the
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Indenture on its behalf and in its name. If any separate trustee or co-trustee
shall die, dissolve, become insolvent, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall
invest in and be exercised by the Trustee, to the extent permitted by law,
without the appointment of a new or successor trustee.
Section 6.11 Eligibility: Disqualification. The 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 subject to supervision or
examination by federal or state authorities; and having a rating, both with
respect to long-term and short-term unsecured obligations, of not less than
investment grade by the Rating Agency. The Trustee shall provide copies of such
reports to the Noteholder upon request.
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Section 6.12 [RESERVED].
Section 6.13 Appointment and Powers. Subject to the terms and conditions
hereof, the Noteholder hereby appoints Wells Fargo Bank, National Association as
the Trustee with respect to the Collateral, and Wells Fargo Bank, National
Association hereby accepts such appointment and agrees to act as Trustee with
respect to the Collateral for the Noteholder, to maintain custody and possession
of such Collateral (except as otherwise provided hereunder) and to perform the
other duties of the Trustee in accordance with the provisions of this Indenture
and the other Basic Documents. The Noteholder hereby authorizes the Trustee to
take such action on its behalf, and to exercise such rights, remedies, powers
and privileges hereunder, as the Noteholder may direct and as are specifically
authorized to be exercised by the Trustee by the terms hereof, together with
such actions, rights, remedies, powers and privileges as are reasonably
incidental thereto. The Trustee shall act upon and in compliance with the
written instructions of the Noteholder delivered pursuant to this Indenture
promptly following receipt of such written instructions; provided that the
Trustee shall not act in accordance with any instructions (i) which are not
authorized by, or in violation of the provisions of, this Indenture, (ii) which
are in violation of any applicable law, rule or regulation or (iii) for which
the Trustee has not received reasonable indemnity. Receipt of such instructions
shall not be a condition to the exercise by the Trustee of its express duties
hereunder, except where this Indenture provides that the Trustee is permitted to
act only following and in accordance with such instructions.
Section 6.14 Performance of Duties. The Trustee shall have no duties or
responsibilities except those expressly set forth in this Indenture and the
other Basic Documents to which the Trustee is a party or as directed by the
Noteholder in accordance with this Indenture. The Trustee shall not be required
to take any discretionary actions hereunder. The Trustee shall, and hereby
agrees that it will, perform all of the duties and obligations required of it
under the Sale and Servicing Agreement.
Section 6.15 Limitation on Liability. Neither the Trustee nor any of its
directors, officers or employees shall be liable for any action taken or omitted
to be taken by it or them in good faith hereunder, or in connection herewith,
except that the Trustee shall be liable for its negligence, bad faith or willful
misconduct. Notwithstanding any term or provision of this Indenture, the Trustee
shall incur no liability to the Issuer or the Noteholder for any action taken or
omitted by the Trustee in connection with the Collateral, except for the
negligence, bad faith or willful misconduct on the part of the Trustee, and,
further, shall incur no liability to the Noteholder except for negligence, bad
faith or willful misconduct in carrying out its duties to the Noteholder. The
Trustee shall at all times be free independently to establish to its reasonable
satisfaction, but shall have no duty to independently verify, the existence or
nonexistence of facts that are a condition to the exercise or enforcement of any
right or remedy hereunder or under any of the Basic Documents. The Trustee may
consult with counsel, and shall not be liable for any action taken or omitted to
be taken by it hereunder in good faith and in accordance with the written advice
of such counsel. The Trustee shall not be under any obligation to exercise any
of the remedial rights or powers vested in it by this Indenture or to follow any
direction from the Noteholder unless it shall have received reasonable security
or indemnity satisfactory to the Trustee against the costs, expenses and
liabilities which might be incurred by it.
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Section 6.16 [Reserved].
Section 6.17 Successor Trustee.
(a) Merger. Any Person into which the Trustee may be converted or merged,
or with which it may be consolidated, or to which it may sell or transfer its
trust business and assets as a whole or substantially as a whole, or any Person
resulting from any such conversion, merger, consolidation, sale or transfer to
which the Trustee is a party, shall (provided it is otherwise qualified to serve
as the Trustee hereunder) be and become a successor Trustee hereunder and be
vested with all of the title to and interest in the Collateral and all of the
trusts, powers, descriptions, immunities, privileges and other matters as was
its predecessor without the execution or filing of any instrument or any further
act, deed or conveyance on the part of any of the parties hereto, anything
herein to the contrary notwithstanding, except to the extent, if any, that any
such action is necessary to perfect, or continue the perfection of, the security
interest of the Noteholder in the Collateral; provided that any such successor
shall also be the successor Trustee under Section 6.9.
(b) Removal. The Trustee may be removed by the Noteholder at any time,
with or without cause, by an instrument or concurrent instruments in writing
delivered to the Trustee and the Issuer. A temporary successor may be removed at
any time to allow a successor Trustee to be appointed pursuant to subsection (c)
below. Any removal pursuant to the provisions of this subsection (b) shall take
effect only upon the date which is the latest of (i) the effective date of the
appointment of a successor Trustee and the acceptance in writing by such
successor Trustee of such appointment and of its obligation to perform its
duties hereunder in accordance with the provisions hereof, and (ii) receipt by
the Noteholder of an Opinion of Counsel to the effect described in Section 3.4.
(c) Acceptance by Successor. The Noteholder shall have the sole right to
appoint each successor Trustee. Every temporary or permanent successor Trustee
appointed hereunder shall execute, acknowledge and deliver to its predecessor
and to the Trustee, the Noteholder and the Issuer an instrument in writing
accepting such appointment hereunder and the relevant predecessor shall execute,
acknowledge and deliver such other documents and instruments as will effectuate
the delivery of all Collateral to the successor Trustee, whereupon such
successor, without any further act, deed or conveyance, shall become fully
vested with all the estates, properties, rights, powers, duties and obligations
of its predecessor. Such predecessor shall, nevertheless, on the written request
of the Noteholder or the Issuer, execute and deliver an instrument transferring
to such successor all the estates, properties, rights and powers of such
predecessor hereunder. In the event that any instrument in writing from the
Issuer or the Noteholder is reasonably required by a successor Trustee to more
fully and certainly vest in such successor the estates, properties, rights,
powers, duties and obligations vested or intended to be vested hereunder in the
Trustee, any and all such written instruments shall at the request of the
temporary or permanent successor Trustee, be forthwith executed, acknowledged
and delivered by the Trustee or the Issuer, as the case may be. The designation
of any successor Trustee and the instrument or instruments removing any Trustee
and appointing a successor hereunder, together with all other instruments
provided for herein, shall be maintained with the records relating to the
Collateral and, to the extent required by applicable law, filed or recorded by
the successor Trustee in each place where such filing or recording is necessary
to effect the transfer of the Collateral to the successor Trustee or to protect
or continue the perfection of the security interests granted hereunder.
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Section 6.18 [Reserved].
Section 6.19 Representations and Warranties of the Trustee. The Trustee
represents and warrants to the Issuer and to the Noteholder as follows:
(a) The Trustee is a national banking association, duly organized, validly
existing and in good standing under the laws of the United States and is duly
authorized and licensed under applicable law to conduct its business as
presently conducted.
(b) The Trustee has all requisite right, power and authority to execute
and deliver this Indenture and to perform all of its duties as Trustee
hereunder.
(c) The execution and delivery by the Trustee of this Indenture and the
other Basic Documents to which it is a party, and the performance by the Trustee
of its duties hereunder and thereunder, have been duly authorized by all
necessary corporate proceedings and no further approvals or filings, including
any governmental approvals, are required for the valid execution and delivery by
the Trustee, or the performance by the Trustee, of this Indenture and such other
Basic Documents.
(d) The Trustee has duly executed and delivered this Indenture and each other
Basic Document to which it is a party, and each of this Indenture and each such
other Basic Document constitutes the legal, valid and binding obligation of the
Trustee, enforceable against the Trustee in accordance with its terms, except as
(i) such enforceability may be limited by bankruptcy, insolvency, reorganization
and similar laws relating to or affecting the enforcement of creditors' rights
generally and (ii) the availability of equitable remedies may be limited by
equitable principles of general applicability.
Section 6.20 Waiver of Setoffs. The Trustee hereby expressly waives any
and all rights of setoff that the Trustee may otherwise at any time have under
applicable law with respect to any Pledged Account and agrees that amounts in
the Pledged Accounts shall at all times be held and applied solely in accordance
with the provisions hereof.
Section 6.21 Control by the Noteholder. The Trustee shall comply with
notices and instructions given by the Issuer only if accompanied by the written
consent of the Noteholder, except that if any Event of Default shall have
occurred and be continuing, the Trustee shall act upon and comply with notices
and instructions given by the Noteholder alone in the place and stead of the
Issuer.
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ARTICLE VII
[RESERVED]
ARTICLE VIII
COLLECTION OF MONEY AND RELEASES OF TRUST ESTATE
Section 8.1 Collection of Money. Except as otherwise expressly provided
herein, the Trustee may demand payment or delivery of, and shall receive and
collect, directly and without intervention or assistance of any fiscal agent or
other intermediary, all money and other property payable to or receivable by the
Trustee pursuant to this Indenture and the Sale and Servicing Agreement. The
Trustee shall apply all such money received by it as provided in this Indenture
and the Sale and Servicing Agreement. Except as otherwise expressly provided in
this Indenture or in the Sale and Servicing Agreement, if any default occurs in
the making of any payment or performance under any agreement or instrument that
is part of the Trust Estate, the Trustee may take such action as may be
appropriate to enforce such payment or performance, including the institution
and prosecution of appropriate proceedings. Any such action shall be without
prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.
Section 8.2 Release of Trust Estate. Subject to the payment of its fees
and expenses pursuant to Section 6.7, the Trustee may, and when required by the
provisions of this Indenture shall, execute instruments to release property from
the lien of this Indenture, in a manner and under circumstances that are not
inconsistent with the provisions of this Indenture. No party relying upon an
instrument executed by the Trustee as provided in this Article VIII shall be
bound to ascertain the Trustee's authority, inquire into the satisfaction of any
conditions precedent or see to the application of any moneys.
(a) The Trustee shall, at such time as there is no Note outstanding and
all sums due the Trustee pursuant to Section 6.7 have been paid, release any
remaining portion of the Trust Estate that secured the Note from the lien of
this Indenture and release to the Issuer or any other Person entitled thereto
any funds then on deposit in the Pledged Accounts. The Trustee shall release
property from the lien of this Indenture pursuant to this Section 8.2(a) only
upon receipt of an Issuer Request accompanied by an Officer's Certificate, a
copy of each of which shall also be delivered to the Noteholder.
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(b) Opinion of Counsel. The Trustee shall receive at least seven days'
notice when requested by the Issuer to take any action pursuant to Section
8.2(a), accompanied by copies of any instruments involved, and the Trustee shall
also require as a condition to such action, an Opinion of Counsel in form and
substance satisfactory to the Trustee, stating the legal effect of any such
action, outlining the steps required to complete the same, and concluding that
all conditions precedent to the taking of such action have been complied with
and such action will not materially and adversely affect the security for the
Note or the rights of the Noteholder in contravention of the provisions of this
Indenture; provided, however, that such Opinion of Counsel shall not be required
to express an opinion as to the fair value of the Trust Estate. Counsel
rendering any such opinion may rely, without independent investigation, on the
accuracy and validity of any certificate or other instrument delivered to the
Trustee in connection with any such action.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.1 Supplemental Indentures.
(a) With the prior written consent of the Noteholder and with prior
written notice to the Rating Agency by the Issuer, as evidenced to the Trustee,
the Issuer and the Trustee, when authorized by an Issuer Order, at any time and
from time to time, may enter into one or more supplemental indentures hereto, in
form satisfactory to the 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 Trustee any property subject or required to be
subjected to the lien of this Indenture, or to subject to the lien of this
Indenture additional property;
(ii) to evidence the succession, in compliance with the applicable
provisions hereof, of another person to the Issuer, and the assumption by
any such successor of the covenants of the Issuer herein and in the Note
contained;
(iii) to add to the covenants of the Issuer, for the benefit of the
Noteholder, 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 Trustee;
(v) to cure any ambiguity, to correct or supplement any provision
herein or in any supplemental indenture which may be inconsistent with any
other provision herein or in any supplemental indenture or to make any
other provisions with respect to matters or questions arising under this
Indenture or in any supplemental indenture; provided that such action
shall not adversely affect the interests of the Noteholder; or
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Note 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.
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The 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 Trustee, when authorized by an Issuer Order may,
also with the prior written consent of the Noteholder and with prior written
notice to the Rating Agency by the Issuer, as evidenced to the Trustee, enter
into an indenture or indentures supplemental hereto for the purpose of adding
any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or of modifying in any manner the rights of the
Holder of the Note under this Indenture; provided, however, that such action
shall not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of the Noteholder.
(c) Unless otherwise specified by the Noteholder, the Noteholder's
approval shall be required with respect to the particular form of any proposed
supplemental indenture, in addition to the substance thereof.
(d) Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to this Section, the Trustee shall mail to the
Noteholder a fully executed copy of such supplemental indenture. Any failure of
the Trustee to mail such supplemental indenture shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
Section 9.2 [Reserved].
Section 9.3 Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts created
by this Indenture, the Trustee shall be entitled to receive, and subject to
Sections 6.1 and 6.2, 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. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture that affects the Trustee's own
rights, duties, liabilities or immunities under this Indenture or otherwise.
Section 9.4 Effect of Supplemental Indenture. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and be deemed to be modified and amended in accordance therewith, and the
respective rights, limitations of rights, obligations, duties, liabilities and
immunities under this Indenture of the Trustee, the Issuer and the Noteholder
shall thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
ARTICLE X
REPAYMENT AND PREPAYMENT OF NOTE
Section 10.1 Repayment of the Note; Optional Prepayment of the Note. If
the Facility Termination Date is determined in accordance with subsection (I) of
the definition thereof, the outstanding principal balance of the Note and all
accrued and unpaid interest thereon will be amortized and shall be payable in
full by the Final Scheduled Settlement Date. If the Facility Termination Date is
determined in accordance with subsection (II) or (III) of the definition
thereof, such Facility Termination Date will result in immediate acceleration of
the Note pursuant to Section 5.2 hereof.
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The Issuer may, at its option, prepay the Invested Amount of the Note, in
whole or in part, at any time and without premium or penalty on any Business Day
(such day the "Prepayment Date") in accordance with Section 10.2; provided that
no such prepayment may occur unless and until all amounts due and payable in
respect of clauses (i) through (iii), (v) through (vii), (x), (xii) and (xiii)
of Section 5.7(a) of the Sale and Servicing Agreement have been paid in full.
Simultaneous with any such prepayment, the Issuer shall pay all accrued and
unpaid interest on the Invested Amount to be prepaid and all LIBOR breakage
costs and similar costs associated with such prepayment.
Section 10.2 Notice of Prepayment. Notice of the prepayment of the Note
shall be given, upon the direction of the Issuer, by the Trustee by facsimile
transmission, courier or first class mail, postage prepaid, mailed, faxed or
couriered not less than ten (10) days prior to the related Prepayment Date, to
the Noteholder. All notices of prepayment shall state (i) the Prepayment Date,
(ii) the Invested Amount to be prepaid, and (iii) the accrued and unpaid
interest on the Invested Amount to be prepaid. Failure to give notice of
prepayment, or any defect therein, to the Noteholder shall not impair or affect
the validity of such prepayment.
Section 10.3 General Procedures. The Invested Amount of the Note shall not
be considered reduced by any allocation, setting aside or distribution of any
portion of the Available Funds unless such Available Funds shall have been
actually paid to the Noteholder. The Invested Amount of the Note shall not be
considered repaid by any distribution of any portion of the Available Funds if
at any time such distribution is rescinded or must otherwise be returned for any
reason, in which event, if such amount has been returned by the Noteholder, such
principal and/or interest shall be reinstated in an amount equal to the amount
returned by the Noteholder. No provision of this Indenture shall require the
payment or permit the collection of interest in excess of the maximum permitted
by applicable law.
ARTICLE XI
MISCELLANEOUS
Section 11.1 Compliance Certificates and Opinions, etc. Except as set
forth herein, upon any application or request by the Issuer to the Trustee to
take any action under any provision of this Indenture (other than any request
hereunder by the Issuer for an Advance), the Issuer shall furnish to the
Trustee, with a copy of each to the Noteholder, (i) an Officer's Certificate
stating that all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with, and (ii) an Opinion of
Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, 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.
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Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or opinion
has read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
signatory such condition or covenant has been complied with.
(b) Other than with respect to Dollars, prior to the deposit of any
Collateral or other property or securities with the Trustee that is to be made
the basis for the release of any property or securities subject to the lien of
this Indenture, the Issuer shall, in addition to any obligation imposed in
Section 11.1(a) or elsewhere in this Indenture, furnish to the Trustee, with a
copy thereof to the Noteholder, an Officer's Certificate certifying or stating
the opinion of each person signing such certificate as to the fair value (on the
date of such deposit) to the Issuer of the Collateral or other property or
securities to be so deposited.
(c) Other than with respect to the release of any Purchased Receivables or
Liquidated Receivables or the release of any Receivables upon a mandatory or
partial prepayment of the Note pursuant to Section 10.1, whenever any property
or securities are to be released from the lien of this Indenture, the Issuer
shall also furnish to the Trustee, with a copy thereof to the Noteholder, 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.
(d) Notwithstanding Section 2.10 or any 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 Basic Documents and (B) make cash
payments out of the Pledged Accounts as and to the extent permitted or required
by the Basic Documents.
Section 11.2 Form of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
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(a) Any certificate or opinion of an Authorized Officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his or her certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or 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, the Seller
or the Issuer, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
(b) 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.
(c) Whenever in this Indenture, in connection with any application or
certificate or report to the Trustee, it is provided that the Issuer shall
deliver any document as a condition of the granting of such application, or as
evidence of the Issuer's compliance with any term hereof, it is intended that
the truth and accuracy, at the time of the granting of such application or at
the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Trustee's right to rely upon the truth and accuracy of
any statement or opinion contained in any such document as provided in Article
VI.
Section 11.3 Acts of the Noteholder. Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Noteholder may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by the Noteholder in person or
by agents duly appointed in writing; and except as herein otherwise expressly
provided such action shall become effective when such instrument or instruments
are delivered to the Trustee, and, where it is hereby expressly required, to the
Issuer. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Noteholder signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 6.1) conclusive in
favor of the Trustee and the Issuer, if made in the manner provided in this
Section.
(a) The fact and date of the execution by any person of any such
instrument or writing may be proved in any customary manner of the Trustee.
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(b) The ownership of the Note shall be proved by the Note Register.
(c) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of the Note shall bind the Holder of the Note
issued upon the registration thereof or in exchange therefor or in lieu thereof,
in respect of anything done, omitted or suffered to be done by the Trustee or
the Issuer in reliance thereon, whether or not notation of such action is made
upon the Note.
Section 11.4 Notices, etc., to Trustee, Issuer, Noteholder and Rating
Agency. Any request, demand, authorization, direction, notice, consent, waiver
or Act of the Noteholder or other documents provided or permitted by this
Indenture to be made upon, given or furnished to or filed with:
(i) the Trustee by the Noteholder or by the Issuer shall be
sufficient for every purpose hereunder if personally delivered, delivered
by overnight courier or mailed certified mail, return receipt requested
and shall be deemed to have been duly given upon receipt to the Trustee at
its Corporate Trust Office;
(ii) the Issuer by the Trustee or by the Noteholder shall be
sufficient for every purpose hereunder if personally delivered, delivered
by overnight courier or mailed certified mail, return receipt requested
and shall be deemed to have been duly given upon receipt by the Issuer at
Silverleaf Finance IV, LLC 1221 River Bend Drive, Suite 120, Dallas, Texas
75247 Attention: Robert E. Mead, Chief Executive Officer, Telecopy No.
(214) 905-0514 or at such other address previously furnished in writing to
the Trustee by the Issuer. The Issuer shall promptly transmit any notice
received by it from the Noteholder to the Trustee; or
(iii) the Noteholder shall be sufficient for any purpose hereunder
if in writing and mailed by registered mail or personally delivered or
telexed or telecopied to the recipient as follows:
To the Noteholder:
UBS Real Estate Securities Inc.
1285 Avenue of the Americas, 11th Floor
New York, New York 10019
Attention: Prakash B. Wadhwani
Telephone: (212) 713-3983
Telecopy: (212) 713-7999
(b) Notices required to be given to the Rating Agency by the Issuer or the
Trustee shall be in writing, personally delivered, delivered by overnight
courier or mailed certified mail, return receipt requested to Moody's, at the
following address: Moody's Investors Service, Inc., 99 Church Street, New York
New York 10007; or at such other address as shall be designated by written
notice to the other parties.
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Section 11.5 Waiver. 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 Noteholder shall be filed with
the Trustee but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such a waiver.
(a) In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholder when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice.
(b) Where this Indenture provides for notice to the Rating Agency, failure
to give such notice shall not affect any other rights or obligations created
hereunder, and shall not under any circumstance constitute a Default or Event of
Default.
Section 11.6 Alternate Payment and Notice Provisions. Notwithstanding any
provision of this Indenture or the Note to the contrary, the Issuer may enter
into any agreement with the Holder of the Note providing for a method of
payment, or notice by the Trustee or the Note Paying Agent to such Holder, that
is different from the methods provided for in this Indenture for such payments
or notices, provided that such methods are reasonable and consented to by the
Trustee (which consent shall not be unreasonably withheld). The Issuer will
furnish to the Trustee a copy of each such agreement and the Trustee will cause
payments to be made and notices to be given in accordance with such agreements.
Section 11.7 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 11.8 Successors and Assigns; Third Party Beneficiary. All
covenants and agreements in this Indenture and the Note by the Issuer shall bind
its successors and assigns, whether so expressed or not. All agreements of the
Trustee in this Indenture shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successors. The successors and assigns
of the Noteholder shall be third party beneficiaries to the provisions of this
Indenture and shall be entitled to rely upon and to directly enforce the
provisions of this Indenture.
Section 11.9 Severability. In case any provision in this Indenture or in
the Note 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 11.10 Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Note or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
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Section 11.11 Governing Law. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS
LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 11.12 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 11.13 Recording of Indenture. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
to the effect that such recording is necessary either for the protection of the
Noteholder or any other person secured hereunder or for the enforcement of any
right or remedy granted to the Trustee under this Indenture.
Section 11.14 Issuer Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer or the Trustee on the
Note or under this Indenture or any certificate or other writing delivered in
connection herewith or therewith, against (i) the Trustee in its individual
capacity (other than in connection with its obligations under the Basic
Documents to which it is a party), (ii) any partner, owner, beneficiary, agent,
officer, director, employee or agent of the Seller, the Servicer or the Trustee
in its individual capacity, or (iii) any holder of a beneficial interest in the
Trustee or of any successor or assign of the Trustee in its individual capacity,
except as any such Person may have expressly agreed (it being understood that
the Trustee has no such obligations in its 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; provided, however, that nothing contained herein shall be taken to
prevent recourse to, and enforcement against, the assets of the Issuer for any
and all liabilities, obligations and undertakings contained in the Indenture or
in this Note.
Section 11.15 No Petition. The Trustee, by entering into this Indenture,
hereby covenants and agrees that it will not at any time institute against the
Issuer, or join in any institution against the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Note, this Indenture or any
of the Other Basic Documents, without the prior written consent of the
Noteholder.
Section 11.16 Inspection. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Noteholder or the Trustee,
during the Issuer's normal business hours, to examine all the books of account,
records, reports, and other papers of the Issuer, to make copies and extracts
therefrom, to cause such books to be audited by independent certified public
accountants, and to discuss the Issuer's affairs, finances and accounts with the
Issuer's officers, employees, and independent certified public accountants, all
at such reasonable times and as often as may be reasonably requested. The
Trustee and the Noteholder shall and shall cause its representatives to hold in
confidence all such information except to the extent disclosure may be required
by law (and all reasonable applications for confidential treatment are
unavailing) and except to the extent that the Trustee may reasonably determine
that such disclosure is consistent with its obligations hereunder.
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SECTION 11.17 Submission to Jurisdiction. ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW
YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES HERETO CONSENTS,
FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF
THOSE COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, OR ANY LEGAL PROCESS WITH RESPECT TO ITSELF OR ANY OF ITS
PROPERTY, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO. EACH OF THE PARTIES HERETO WAIVES PERSONAL SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY NEW YORK LAW.
SECTION 11.18 Waiver of Trial by Jury. THE PARTIES HERETO EACH WAIVE THEIR
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY
PARTY AGAINST THE OTHER PARTY, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT
CLAIMS OR OTHERWISE. THE PARTIES HERETO EACH AGREE THAT ANY SUCH CLAIM OR CAUSE
OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE
FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY
JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR
OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION HEREOF. THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS AGREEMENT.
SECTION 11.19 Entire Agreement. This Agreement, together with the other
Basic Documents, including the exhibits and schedules thereto, contains a final
and complete integration of all prior expressions by the parties hereto with
respect to the subject matter hereof and shall constitute the entire agreement
among the parties hereto with respect to the subject matter hereof, superseding
all previous oral statements and other writings with respect thereto.
-52-
IN WITNESS WHEREOF, the Issuer, the Trustee and the Noteholder have caused
this Indenture to be duly executed by their respective officers, hereunto duly
authorized, all as of the day and year first above written.
SILVERLEAF FINANCE IV, LLC,
a Delaware limited liability company,
as Issuer
By: /S/ HARRY J. WHITE, JR.
----------------------------------
Name: Harry J. White, Jr.
Title: Vice President, Treasurer &
Chief Financial Officer
WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Trustee
By: /S/ CORY BRANDEN
----------------------------------
Name: Cory Branden
--------------------------------
Title: Vice President
-------------------------------
UBS REAL ESTATE SECURITIES INC.,
as Noteholder
By: /S/ REGINALD DE VILLIERS
----------------------------------
Name: Reginald de Villiers
--------------------------------
Title: Director
-------------------------------
By: /S/ PRAKASH WADHWANI
----------------------
Name: Prakash Wadhwani
---------------------------------
Title: Director
-------------------------------
Exhibits to Agreement not filed herewith:
Exhibit A-1 Form of Variable Funding Note
Exhibit A-2 Form of Transferor Certification
Exhibit B Form of Transferee Certification