Exhibit 10.16
EPIC MASTER FUNDING CORPORATION,
as Company
EPIC RESORTS, LLC,
as Administrator
and
MARINE MIDLAND BANK,
as Trustee
______________
TRUST INDENTURE
Dated as of September 28, 1998
______________
Timeshare Loan-Backed Notes
TRUST INDENTURE
This TRUST INDENTURE dated as of September 28, 1998, is among EPIC
MASTER FUNDING CORPORATION, a Delaware corporation (the "Company"), EPIC
RESORTS, LLC, a Delaware limited liability company, as Administrator (the
"Administrator") and individually ("Epic"), and MARINE MIDLAND BANK, as trustee
(the "Trustee").
RECITALS OF THE COMPANY
WHEREAS, the Company is a bankruptcy-remote corporation formed for the
sole purpose of acquiring from Epic and its Affiliates certain timeshare loans
acquired by Epic and its Affiliates and certain other rights and properties
pertaining thereto;
WHEREAS, the Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of its debentures,
notes or other evidences of indebtedness (herein called the "Notes"), to be
issued in one or more Series as in this Indenture provided;
WHEREAS, pursuant to Article 13 hereof and in connection with the
Credit Agreement (as defined herein), the Company shall issue a series of Notes
designated as Epic Master Funding Corporation Variable Funding Notes, which
Notes shall be secured by the Assets listed in Schedule 1 hereto, as it may be
modified from time to time;
WHEREAS, the Company intends that the Trustee, on behalf of the Trust
Estate (as defined herein) for the benefit of the Noteholders and the Company,
will take assignment of the Loans and related rights and benefits, including
those under any collateral security agreement, insurance and guarantees from the
Company simultaneously with the acquisition of such Loans by the Company from
Epic and its Affiliates; and
NOW, THEREFORE, THIS TRUST INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes
by the holders thereof, it is mutually covenanted and agreed, for the benefit of
all Noteholders, the Trustee and the Company, as follows:
GRANTING CLAUSE
The Company hereby Grants to the Trustee for inclusion in the Trust
Estate on each Assignment Date, for the benefit and security of the Noteholders
and the Trustee, all of the Company's right, title and interest in and to the
following:
(i) all Assets specified in the related Collateral Assignment. The
Trustee acknowledges receipt of the related Trust Estate and declares that
it will hold or shall cause the related Custodian to hold such documents
and the other documents constituting a part of the related Loan Documents,
for the benefit of the Noteholders;
(ii) the Collection Account, the Cash Collateral Account, if any, and
all monies, checks, securities, investments and interests held in, credited
to or evidencing such accounts;
(iii) all of the Company's right, title and interest in and to
investments made with proceeds of the property described in clauses (i) and
(ii) above; and
(iv) all distributions, revenues, products, substitutions, benefits,
profits and proceeds, in whatever form, of any of the foregoing.
Such Grant is made in trust to secure (i) the payment of all amounts due on the
Notes of each Series, (ii) the payment of all other sums payable under this
Indenture with respect to the Notes and (iii) compliance with the provisions of
this Indenture with respect to the Notes.
The Trustee acknowledges such Grant, accepts the trusts hereunder in
accordance with the provisions hereof, and agrees to perform the duties herein
required to the best of its ability and to the end that the Trust Estate and the
interests of the Noteholders, the Trustee and the Company may be adequately and
effectively protected as hereinafter provided.
ARTICLE 1.
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1. GENERAL DEFINITIONS.
In addition to the terms defined elsewhere in this Indenture, the
following terms shall have the following meanings when used in this Indenture,
and the definitions of such terms are applicable to the singular as well as to
the plural forms of such terms and to the masculine as well as to the feminine
and neuter genders of such terms. With respect to each Series, additional
defined terms may be used. To the extent that any defined terms of a Series
conflict with terms defined in this Section 1.1, terms defined for such Series
shall prevail.
ACT: with respect to any Noteholder, as defined in Section 1.4.
ADMINISTRATOR: Epic and any permitted successor to such functions in
accordance, and in connection with, this Indenture in its capacity as
Administrator hereunder.
3
ADMINISTRATOR DUTIES: specified in Section 5.3.
ADMINISTRATOR ORDER: a written order or request delivered to the
Trustee and signed in the name of the Administrator by an Authorized Officer.
ADVERSE CLAIM: any claim of ownership or any lien, security interest,
title retention, trust or other charge or encumbrance, or other type of
preferential arrangement having the effect or purpose of creating a lien or
security interest, other than the interests created under this Indenture in
favor of the Trustee and the Noteholders.
AFFILIATE: any Person: (a) which directly or indirectly controls, or
is controlled by, or is under common control with such Person; (b) which
directly or indirectly beneficially owns or holds five percent (5%) or more of
the voting stock of such Person; or (c) five percent (5%) or more of the voting
stock of which is directly or indirectly beneficially owned or held by such
Person. The term "control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
ASSETS: each Loan, including any Substitute Loans (but excluding any
such loan which has been released from the lien of the Indenture pursuant to the
terms hereof) and assigned to the Trustee by the Company as part of the Trust
Estate, and includes, without limitation, (a) the related Assignment, (b) all
security interests or liens and property subject thereto from time to time
purporting to secure payment by the Obligor thereunder, including without
limitation, the Property, (c) all guarantees, indemnities and warranties,
proceeds of insurance policies (including the Insurance Policies), certificates
of title or other title documentation and other agreements or arrangements of
whatever character from time to time supporting or securing payment of such
Loan, (d) all collections and all related Loan Documents, Loan Files and records
with respect to the foregoing, and (e) all proceeds of any of the foregoing.
ASSIGNMENT: collectively, with respect to any Loan, the related Sale
Assignment and any Collateral Assignment.
ASSIGNMENT DATE: each date when Loans are transferred to the Trust
Estate.
AUTHORIZED OFFICER: with respect to any corporation, limited
liability company or partnership, the Chairman of the Board, the President, any
Vice President, the Secretary, the Treasurer, any Assistant Secretary, any
Assistant Treasurer, Managing Member and each other officer of such corporation
or limited liability company or the general partner of such partnership
specifically authorized in resolutions of the Board of Directors of such
corporation or limited liability company to sign agreements, instruments or
other documents in connection with this Indenture on behalf of such corporation,
limited liability company or partnership, as the case may be, and whose name and
specimen signature appear on a written list furnished to the
4
Trustee, as such list may be amended from time to time.
BOARD OF DIRECTORS: either the board of directors of the Company or
any duly authorized committee of that board.
BOARD RESOLUTION: a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
BUSINESS DAY: any day other than a Saturday, a Sunday or a day on
which banking institutions in New York, New York, or in the city and State where
the Trustee's, the Servicer's principal offices are located, are authorized or
obligated by law, executive order or governmental decree to be closed.
CASH COLLATERAL ACCOUNT: the Eligible Bank Account, if any, so
designated for a Series established and maintained by the Trustee pursuant to
Section 3.3.
CLASS: with respect to a Series of Notes, each class of Notes so
designated within such Series.
COLLATERAL ASSIGNMENT: a certificate of assignment by the Company to
the Trustee substantially in the form of Exhibit B giving notice of, and
evidencing, the pledge of Loans and the related Assets by the Company to the
Trustee on behalf of the Trust Estate.
COLLECTION ACCOUNT: the Eligible Bank Account so designated,
established and maintained by the Trustee pursuant to Section 3.2.
COMMISSION: the Securities and Exchange Commission.
COMPANY: Epic Master Funding Corporation, a Delaware corporation.
COMPANY ORDER or COMPANY REQUEST: a written order or request
delivered to the Trustee and signed in the name of the Company by an Authorized
Officer.
CORPORATE TRUST OFFICE: the office of the Trustee at which at any
particular time its corporate trust business shall be principally administered,
which office at the date of the execution of this Indenture is located at the
address set forth in Section 12.4.
CREDIT AND COLLECTION POLICIES: the credit extension procedures and
policies and collection practices relating to the Loans consistent with the
requirements of this Indenture and each Servicing Agreement, in effect from time
to time, as formulated by the Administrator and the Servicer.
CUSTODIAN: As may be specified in each Series.
5
CUT-OFF DATE: with respect to the Loans specified in any Transfer,
the previous month-end date specified in the related Assignment.
DEBT: for any Person, (a) indebtedness of such Person for borrowed
money or credit extended, (b) obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (c) obligations of such Person
to pay the deferred purchase price of property or services, (d) obligations of
such Person as lessee under leases which have been or should be, in accordance
with GAAP, recorded as capital leases, (e) obligations secured by any lien or
other charge upon property or assets owned by such Person, even though such
Person has not assumed or become liable for the payment of such obligations, (f)
obligations of such Person under direct or indirect guaranties in respect of,
and obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clauses (a) through (e) above,
and (g) liabilities in respect of unfunded vested benefits under plans covered
by ERISA. For the purposes hereof, the term "guarantee" shall include any
agreement, whether such agreement is on a contingency or otherwise, to purchase,
repurchase or otherwise acquire Debt of any other Person, or to purchase, sell
or lease, as lessee or lessor, property or services, in any such case primarily
for the purpose of enabling another Person to make payment of Debt, or to make
any payment (whether as an advance, capital contribution, purchase of an equity
interest or otherwise) to assure a minimum equity, asset base, working capital
or other balance sheet or financial condition, in connection with the Debt of
another Person, or to supply funds to or in any manner invest in another Person
in connection with Debt of such Person.
DEFAULTED LOAN: as specified for each Series.
DEFAULT: any occurrence that is, or with notice or the lapse of time
or both would become, an Event of Default.
DEPOSIT DATE: the Business Day immediately preceding each related
Payment Date.
DEPOSITARY: with respect to Notes of any Series issuable in whole or
in part in the form of one or more Global Notes, a clearing agency registered
under the Exchange Act that is designated to act as Depositary for such Notes as
contemplated by Section 2.1.
DUE PERIOD: as specified for each Series.
ELIGIBLE BANK ACCOUNT: a segregated account, which may be an account
maintained with the Trustee, which is either (a) maintained with a depository
institution or trust company whose long-term unsecured debt obligations are
rated at least BBB+ by S&P and Baa-1 by Moody's and whose short-term unsecured
obligations are rated at least A-1 by S&P and P-1 by Moody's; or (b) a trust
account or similar account maintained with a federally or state chartered
depository institution subject to
6
regulations regarding fiduciary funds on deposit substantially similar to 12
C.F.R. 9.10(b).
ELIGIBLE INVESTMENTS: one or more of the following:
(a) obligations of, or guaranteed as to timely payment of principal
and interest by, the United States or any agency or instrumentality thereof when
such obligations are backed by the full faith and credit of the United States;
(b) repurchase agreements (including those with the Trustee as a
counterparty) on obligations specified in clause (a) maturing not more than one
month from the date of acquisition thereof, provided that the long-term
unsecured obligations of the party agreeing to repurchase such obligations are
at the time rated by each Rating Agency in one of the three highest rating
categories (without regard to numerical modifiers) available from each Rating
Agency; and provided, further, that the short-term debt obligations of the party
agreeing to repurchase shall be rated in the highest rating category (without
regard to numerical modifiers) by each such Rating Agency;
(c) federal funds, certificates of deposit, time deposits and
bankers' acceptances, each of which shall not have an original maturity of more
than 90 days, of any depository institution or trust company incorporated under
the laws of the United States or any state; provided that the long-term
unsecured debt obligations of such depository institution or trust company at
the date of acquisition thereof have been rated by each Rating Agency in one of
the three highest rating categories (without regard to numerical modifiers)
available from each Rating Agency; and provided, further, that the short-term
obligations of such depository institution or trust company shall be rated in
the highest rating category (without regard to numerical modifiers) by each
Rating Agency;
(d) commercial paper or commercial paper funds (having original
maturities of not more than 90 days) of any corporation incorporated under the
laws of the United States or any state thereof; provided that any such
commercial paper or commercial paper funds shall be rated in the highest
short-term rating category (without regard to numerical modifiers) by each
Rating Agency; and
(e) any no-load money market fund rated in the highest short-term
rating category or equivalent highest long-term rating category (without regard
to numerical modifiers) by each Rating Agency;
PROVIDED THAT, Eligible Investments purchased from funds in the Eligible Bank
Accounts shall include only such obligations or securities that either may be
redeemed daily or mature no later than the Business Day next preceding the next
Payment Date; and PROVIDED, FURTHER, that no instrument shall be an Eligible
Investment if such instrument evidences a right to receive only interest
payments with respect to the obligations underlying such instrument. Eligible
Investments may include those Eligible Investments with respect to which the
Trustee or an Affiliate thereof provides services.
ELIGIBLE LOAN: as specified for each Series.
7
EPIC: Epic Resorts, LLC, a Delaware limited liability company, and
its successors and permitted assigns.
ERISA: the Employee Retirement Income Security Act of 1974, as
amended.
EVENT OF DEFAULT: as defined in Section 6.1 and as supplemented with
respect to any Series.
EVENT OF SERVICING TERMINATION: as specified in the designated
Servicing Agreement.
EVENT OF ADMINISTRATOR TERMINATION: as specified in each Series.
EXCHANGE ACT: the Securities Exchange Act of 1934, as amended.
GAAP: generally accepted accounting principles set forth from time to
time in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar function of comparable stature and authority within the accounting
profession), or in such other statements by such other entity as may be in
general use by significant segments of the U.S. accounting profession, which are
applicable to the circumstances as of the date of determination.
GLOBAL NOTE: a Note that evidences all or part of the Notes of any
Series and bears such legend as may be specified as contemplated by Section 2.1
for such Notes.
GRANT: grant, bargain, convey, assign, transfer, mortgage, pledge,
create and grant a security interest in and right of set-off against, deposit,
set over and confirm. The Grant of the Trust Estate effected by this Indenture
shall include all rights, powers, and options (but none of the obligations) of
the Company with respect thereto, including, without limitation, the immediate
and continuing right to claim for, collect, receive, and give receipts for
Payments in respect of the Loans and all other moneys payable thereunder, to
give and receive notices and other communications, to make waivers or other
agreements, to exercise all rights and options, to bring judicial proceedings in
the name of the Company or otherwise, and generally to do and receive anything
that the Company is or may be entitled to do or receive thereunder or with
respect thereto.
GOVERNMENTAL AUTHORITY: (a) any federal, state, county, municipal or
foreign government, or political subdivision thereof, (b) any governmental or
quasi-governmental agency, authority, board, bureau, commission, department,
instrumentality or public body, (c) any court or administrative tribunal or (d)
with respect to any Person, any arbitration tribunal or other non-governmental
authority to the jurisdiction of which such Person has consented.
8
HOLDER: a Person in whose name a Note is registered in the Note
Register.
INDENTURE: this instrument as originally executed and as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, including, for
all purposes of this instrument and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be part of and govern
this instrument and any such supplemental indenture, respectively. The term
"Indenture" shall also include the terms of particular Series of Notes
established as contemplated by Section 2.1.
INSURANCE POLICIES: the insurance policies, if any issued by each of
the Insurers to Epic (the benefits of which have been assigned to the Trust
Estate as security for the Notes of a designated Series) and listed on Schedule
2 (as modified from time to time), in the case of the Variable Funding Notes,
and otherwise as specified with respect to a Series.
INSURANCE PROCEEDS: (i) proceeds of any Insurance Policy, including
property insurance policies, casualty insurance policies and title insurance
policies, and (ii) any condemnation proceeds, in each case which relate to the
Loans or the Property and are paid to the Company, the Servicer, any of their
respective affiliates or to any mortgagee of record.
INSURERS: each of the insurance companies named in the Insurance
Policies.
INTENDED TAX CHARACTERIZATION: as specified in Section 4.4(b).
INTEREST PAYMENT DATE: as specified with respect to a Series, if any.
INTEREST PAYMENTS: as defined in Section 2.1(d).
ISSUANCE DATE: as specified with respect to a Series.
LIEN: any mortgage, pledge, hypothecation, assignment for security,
security interest, encumbrance, xxxx, xxxx or charge.
LIQUIDATED LOAN: a Loan for which a Liquidation has occurred.
LIQUIDATION: with respect to any Defaulted Loan, the sale of the
related Property, following foreclosure, other enforcement action or the taking
of a deed-in-lieu of foreclosure, to a Person other than the Servicer, the
Company or Epic and the recording of a deed of conveyance with respect thereto.
LOAN: either a Mortgage Loan or a Membership Loan.
LOAN COUPON RATE: with respect to any Loan, the per annum rate of
interest set forth in the related Obligor Note, used to calculate the interest
payment due
9
on such Loan.
LOAN DOCUMENTS: In addition to any Loan Documents specified for each
Series, with respect to each Loan and each Obligor:
(i) if the Loan is a Mortgage Loan, an original Obligor Note,
executed by the Obligor for such Loan, endorsed in blank (either directly on the
Obligor Note or on an allonge affixed thereto), by an Authorized Officer of the
Company and showing a complete chain of endorsements from the original payee of
the Obligor Note to the Trustee:
"Pay to the order of _____________, without recourse",
(ii) an original Mortgage (or a copy thereof certified (which
may be a blanket certification) by an Authorized Officer of the Company) with
evidence that such Mortgage has been recorded in the appropriate recording
office;
(iii) an original assignment of the Mortgage (which may be a
part of a blanket assignment of more than one Loan), from the Company to the
Trustee, in recordable form but unrecorded, signed by an Authorized Officer of
Company;
(iv) if the Loan is a Mortgage Loan, an original lender's title
insurance policy or master policy (or a copy thereof) referencing such Mortgage
Loan;
(v) an original of each guarantee, assumption, modification or
substitution agreement, if any, which relates to the related Loan (or copy
thereof certified by an officer of the Company to be a true and correct copy);
and
(vi) if the Loan is a Membership Loan, an original Vacation
Club owner agreement (or a copy thereof certified by an Authorized Officer of
the Company) with evidence that the appropriate financing statements have been
filed in the appropriate filing offices.
LOAN FILES: the documents and other papers and computerized records
customarily maintained by the Servicer in servicing loans comparable to the
Loans.
LOAN SALE AGREEMENT: the Loan Sale Agreement, dated as of September
28, 1998 between Epic and the Company, providing for the sale or contribution of
the Loans to the Company.
MATURITY: with respect to any installment of principal of or interest
on any Note, the date on which such installment is due and payable as therein or
herein provided, whether at the Stated Maturity, by declaration of acceleration,
or otherwise.
MEMBERSHIP LOAN: a Loan secured by a membership interest in a
Vacation Club which holds unencumbered fee title (or a long term lease) to the
related Resorts.
MORTGAGE: the original mortgage, security agreement, deed of trust,
UCC financing statement or other instrument creating a first mortgage lien or
other security
10
interest on the Property securing a Loan.
MORTGAGE LOAN: each loan listed on the Schedule of Loans, evidenced
by a Obligor Note and secured by a Mortgage, including any Substitute Loans, but
excluding any such loan which has been released from the lien of the Indenture
pursuant to the terms thereof. Unless the context otherwise requires, the term
"Mortgage Loan" shall include all collateral securing such Mortgage Loan.
NOTEHOLDER: at any time, any Person in whose name a Note is
registered in the Note Register.
NOTE RATE: the weighted average interest rate with respect to the
Notes of a Series.
NOTE REGISTER: as defined in Section 2.3.
NOTE REGISTRAR: as defined in Section 2.3.
NOTES: as set forth in the Recitals to this Indenture.
OBLIGOR: collectively, the obligor or obligors on a Obligor Note.
OBLIGOR NOTE: the original note or other instrument of indebtedness
evidencing the indebtedness of an Obligor under a Loan.
OFFICER'S CERTIFICATE: a certificate executed by a Responsible
Officer of the related party.
OPINION OF COUNSEL: means a written opinion of counsel, who may be
counsel employed by the Servicer or other counsel, in each case acceptable to
the addressees thereof.
ORIGINAL PRINCIPAL BALANCE: means, with respect to any Loan, the
principal balance of the related Obligor Note at its date of origination.
OUTSTANDING PRINCIPAL BALANCE: means, as of any date of
determination, with respect to any Loan, the Original Principal Balance thereof
as reduced by the amount of principal payments made by or on behalf of the
related Obligor prior to such date of determination.
OUTSTANDING: with respect to the Notes, as of any date of
determination, all Notes theretofore authenticated and delivered under this
Indenture except:
(a) Notes theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(b) Notes or portions thereof for whose payment money in the
necessary amount has been theretofore irrevocably deposited with the Trustee in
trust for the
11
holders of such Notes; and
(c) Notes in exchange for or in lieu of which other Notes have been
authenticated and delivered pursuant to this Indenture unless proof satisfactory
to the Trustee is presented that any such Notes are held by a Person in whose
hands the Note is a valid obligation; PROVIDED, HOWEVER, that in determining
whether the holders of the requisite percentage of the Outstanding Principal
Amount of the Notes have given any request, demand, authorization, direction,
notice, consent, or waiver hereunder, Notes owned by the Company or any
Affiliate of the Company shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent, or
waiver, only Notes that a Responsible Officer of the Trustee actually knows to
be so owned shall be so disregarded.
OUTSTANDING PRINCIPAL AMOUNT: the aggregate unpaid principal amount
of the Notes of any Series Outstanding at any time.
PAYING AGENT: the Trustee, unless otherwise specified for a Series.
PAYMENT DATE: as specified for each Series.
PAYMENTS: for any Loan for any Due Period, all amounts received with
respect to such Loan during such Due Period, including, without limitation,
payments (including prepayments) from the relevant Obligor (including principal,
interest, late fees and other charges), proceeds from any insurance policy,
including the Insurance Policies.
PERCENTAGE: means, with respect to a particular Note within a Class,
the percentage obtained by dividing the outstanding principal amount of the
related Note by the aggregate Outstanding Principal Amount of all Notes in such
Class, or with respect to Notes of a Class within a Series, the percentage
obtained by dividing the aggregate outstanding principal amount of the related
Notes of such Class, by the aggregate Outstanding Principal Amounts of such
Series.
PERSON: means an individual, general partnership, limited
partnership, limited liability partnership, corporation, business trust, joint
stock company, limited liability company, trust, unincorporated association,
joint venture, Governmental Authority, or other entity of whatever nature.
PREDECESSOR NOTES: with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.4 in lieu of a lost, destroyed or
stolen Note (or a mutilated Note surrendered to the Trustee) shall be deemed to
evidence the same debt as the lost, destroyed or stolen Note (or a mutilated
Note surrendered to the Trustee).
PRINCIPAL BALANCE: of a Loan means, on any date of determination, the
Original Principal Balance minus that portion of all payments made on or prior
to such
12
date allocable to principal.
PRINCIPAL PAYMENTS: as defined in Section 2.1(c).
PROPERTY: (a) with respect to a Mortgage Loan, the timeshare estate
at the Resort which secures such Mortgage Loan, or (b) with respect to a
Membership Loan, the related Obligor's membership interests in the related
Vacation Club.
RATING AGENCIES: Standard & Poor's Ratings Service and Xxxxx'x
Investor Services, Inc. or as designated with respect to a Series.
RECORD DATE: with respect to any Payment Date the last day of the
immediately preceding Due Period.
RECORDS: all documents, books, records and other information
(including, without limitation, computer programs, tapes, disks, punch cards,
data processing software and related property and rights) prepared and
maintained by the Servicer or by or on behalf of the Company with respect to
Loans and the related Obligors.
RELATED DOCUMENTS: with respect to any Series each Sale Assignment,
each Collateral Assignment, the Loan Sale Agreement, the Insurance Policies, the
Servicing Agreement, the Custody Agreement and all documents and instruments
required to be delivered hereunder or thereunder.
REQUEST FOR RELEASE: as defined in the related Custody Agreement.
REQUIRED INFORMATION: as of the related Cut-Off Date, with respect
to a Loan, the following information: (a) the loan number, (b) the name and
mailing address of Obligor, (c) the Resort, (d) the Loan Coupon Rate, (e) the
Original Principal Balance, (f) the maturity date, (g) the monthly payment
amount, (h) the Outstanding Principal Balance, (i) sale price, (j) the
paid-through date, (k) the first payment date, (l) the unit number, (m) the
date of sale, and (n) the interval number.
RESORTS the respective land, buildings and appurtenant rights of (i)
London Bridge Resort, LLC, Daytona Beach Regency, Ltd., and Epic Resorts-Hilton
Head, LLC, and (ii) such other resorts as approved in writing by the Noteholders
of a Series.
RESPONSIBLE OFFICER: (a) when used with respect to the Trustee, any
officer assigned to the Corporate Trust Office, including any Managing Director,
Vice President, Assistant Vice President, Secretary, Assistant Secretary,
Assistant Treasurer, any trust officer or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers, and also, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer's knowledge of
and familiarity with the particular subject; (b) when used with respect to the
Servicer, any officer responsible for the administration or management of the
Servicer's servicing department; and (c) with respect to any other Person, the
Chairman of the Board, the President, a Vice President, the Treasurer, the
13
Secretary, an Assistant Secretary, or the manager of such Person.
SALE ASSIGNMENT: each assignment executed by Epic or an Affiliate in
favor of the Company from time to time pursuant to the Loan Sale Agreement
conveying Loans to the Company.
SCHEDULE OF LOANS: a list containing the Required Information with
respect to each Loan delivered to the Trustee and the Custodian, the Series to
which such Loan is allocated and certified by a duly Authorized Officer of the
Company or the Administrator, which is attached hereto as Schedule 1 (as
supplemented from time to time).
SCHEDULED PAYMENTS: each periodic installment of interest and
principal payable by an Obligor.
SECURITIES ACT: the Securities Act of 1933, as amended.
SERIES: each Series of Notes designated as such pursuant to this
Indenture.
SERVICER: the servicer designated as such, under the Servicing
Agreement and any successor thereto in accordance with this Indenture and the
Servicing Agreement.
SERVICING AGREEMENT: as designated with respect to a Series.
STATED MATURITY: the date on which the entire remaining unpaid
Outstanding Principal Amount of a Class of Notes is due and payable.
SUBSIDIARIES: those entities in which any Person has an ownership
interest sufficient to cause the assets and liabilities of such entities to be
consolidated with those of such Person in the preparation of a consolidated
balance sheet of such Person in accordance with GAAP.
SUBSTITUTE LOAN: means an Eligible Loan submitted for a Loan under
Section 4.6: (i) having as of the time of substitution a principal balance,
after deduction of the principal portion of the monthly payment due in the month
of substitution equal to or greater than the Outstanding Principal Balance of
the Loan for which it is being substituted, provided that if more than one Loan
is being submitted, the aggregate principal balance of all submitted Loans shall
be equal or greater than the Outstanding Principal Balance of the Loans for
which they are being substituted, (ii) having a Loan Coupon Rate equal to or
greater than the Loan Coupon Rate of the Loan for which it is being substituted,
(iii) otherwise satisfying the representations and warranties contained therein,
and (iv) relating to one of the Resorts.
TAX OR TAXES: all taxes, charges, fees, levies or other assessments,
including, without limitation, income, gross receipts, profits, withholding,
excise, property, sales, use, occupation and franchise taxes (including, in each
such case, any
14
interest, penalties or additions attributable to or imposed on or with
respect to any such taxes, charges, fees or other assessments) imposed by the
United States, any state or political subdivision thereof, any foreign
government or any other jurisdiction or taxing authority.
TRANSFER: as specified in Section 4.2(a).
TRANSFER NOTICE: as specified in Section 4.2(b).
TRUST ACCOUNTS: the Collection Account, the Cash Collateral Account,
if any, and any other account so designated with respect to such Series.
TRUST ESTATE: all money, instruments and other property and rights
subject to the lien of this Indenture, including all proceeds thereof.
TRUSTEE: the Person named as the "Trustee" in the first paragraph of
this Indenture or in an indenture supplemental hereto with respect to a Series,
in each case until a successor Person shall have become the Trustee pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Person; PROVIDED, that the provisions of Section 7.7, as
applicable to any Person at any time serving as Trustee hereunder, shall survive
the termination of such Person's status as Trustee hereunder and the succession
of any other Person to such status.
TRUSTEE FEE: as specified for each Series.
UCC: the Uniform Commercial Code as in effect in the relevant state.
VACATION CLUB: a corporation which holds unencumbered fee title to
(or a long-term lease on) a Resort and issues membership certificates evidencing
ownership interests in the corporation, which permits the owner of such
membership certificates use and enjoyment of Resorts.
SECTION 1.2. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any written application or request (or oral application with
prompt written or telecopied confirmation) by the Company to the Trustee to take
any action under any provision of this Indenture, other than any request that
(a) the Trustee authenticate the Notes specified in such request, (b) the
Trustee invest moneys in any of the Trust Accounts pursuant to the written
directions specified in such request, or (c) the Trustee pay moneys due and
payable to the Company hereunder to the Company's assignee specified in such
request, the Trustee shall require the Company to furnish to the Trustee 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 that the request otherwise is in accordance with the terms of the Indenture,
and 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 requested action as to which other evidence of satisfaction of the
conditions precedent thereto is specifically required by any provision of this
Indenture, no additional certificate or opinion need be
15
furnished.
SECTION 1.3. 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.
Any certificate or opinion of an officer of the Company delivered to
the Trustee may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless such officer
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such officer's certificate
or opinion and any 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 Company as to such factual matters unless such
officer or counsel knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to such matters
are erroneous. Any Opinion of Counsel may be based on the written opinion of
other counsel, in which event such Opinion of Counsel shall be accompanied by a
copy of such other counsel's opinion and shall include a statement to the effect
that such counsel believes that such counsel and the Trustee may reasonably rely
upon the opinion of such other counsel.
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.
Wherever in this Indenture, in connection with any application or
certificate or report to the Trustee, it is provided that the Company shall
deliver any document as a condition of the granting of such application, or as
evidence of 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 Company 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 Section
7.1(b).
Whenever in this Indenture it is provided that the absence of the
occurrence and continuation of a Default or Event of Default, Event of
Administrator Termination or Event of Servicing Termination is a condition
precedent to the taking of
16
any action by the Trustee at the request or direction of the Company, then,
notwithstanding that the satisfaction of such condition is a condition
precedent to the Company's right to make such request or direction, the
Trustee shall be protected in acting in accordance with such request or
direction if it does not have knowledge of the occurrence and continuation of
such Default or Event of Default, Event of Administrator Termination or Event
of Servicing Termination. For all purposes of this Indenture, the Trustee
shall not be deemed to have knowledge of any Default or Event of Default,
Event of Administrator Termination or Event of Servicing Termination nor
shall the Trustee have any duty to monitor or investigate to determine
whether a default has occurred (other than an Event of Default of the kind
described in Section 6.1(a)), Event of Administrator Termination or Event of
Servicing Termination unless a Responsible Officer of the Trustee shall have
actual knowledge thereof or shall have been notified in writing thereof by
the Company, the Servicer, or any Noteholder.
SECTION 1.4. ACTS OF NOTEHOLDERS, ETC.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by 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
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Noteholders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 7.1) conclusive in
favor of the Trustee and the Company, if made in the manner provided in this
Section 1.4.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the holder of any Note shall bind every future holder of
the same Note and the holder of every Note issued upon the registration of
transfer thereof or in exchange therefore or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such Note.
(d) By accepting the Notes issued pursuant to this Indenture, each
17
Noteholder irrevocably appoints the Trustee hereunder as the special
attorney-in-fact for such Noteholder vested with full power on behalf of such
Noteholder to effect and enforce the rights of such Noteholder for the benefit
of such Noteholder; PROVIDED that nothing contained in this Section 1.4(d) shall
be deemed to confer upon the Trustee any duty or power to vote on behalf of the
Noteholders with respect to any matter on which the Noteholders have a right to
vote pursuant to the terms of this Indenture.
SECTION 1.5. NOTICE TO NOTEHOLDERS; WAIVER.
(a) Where this Indenture provides for notice to Noteholders of any
event, or the mailing of any report to Noteholders, such notice or report shall
be sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class postage prepaid or certified mail return receipt
requested, or sent by private courier or confirmed telecopy to each Noteholder
affected by such event or to whom such report is required to be mailed, at its
address as it appears in the Note Register, not later than the latest date, and
not earlier than the earliest date, prescribed for the giving of such notice or
the mailing of such report. In any case where a notice or report to Noteholders
is mailed, neither the failure to mail such notice or report, nor any defect in
any notice or report so mailed, to any particular Noteholder shall affect the
sufficiency of such notice or report with respect to other Noteholders. Where
this Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Noteholders shall be filed with the Trustee, but such filing shall not
be a condition precedent to the validity of any action taken in reliance upon
such waiver.
(b) In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to mail or send notice to
Noteholders, in accordance with Section 1.5(a), of any event or any report to
Noteholders when such notice or report is required to be delivered pursuant to
any provision of this Indenture, then such notification or delivery as shall be
made with the approval of the Trustee shall constitute a sufficient notification
for every purpose hereunder.
SECTION 1.6. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and in the Table of Contents
are for convenience only and shall not affect the construction hereof.
SECTION 1.7. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by each of the Company,
the Administrator or the Trustee shall bind its respective successors and
permitted assigns, whether so expressed or not.
SECTION 1.8. GOVERNING LAW.
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND
18
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. UNLESS MADE
APPLICABLE IN A SUPPLEMENT HERETO, THIS INDENTURE IS NOT SUBJECT TO THE TRUST
INDENTURE ACT OF 1939 AND SHALL NOT BE GOVERNED THEREBY AND CONSTRUED IN
ACCORDANCE THEREWITH.
SECTION 1.9. LEGAL HOLIDAYS.
In any case where any Payment Date or the Stated Maturity or any other
date on which principal of or interest on any Note is proposed to be paid shall
not be a Business Day, then (notwithstanding any other provision of this
Indenture or of the Notes) such 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 such Payment Date, Stated Maturity, or other date on which principal of
or interest on any Note is proposed to be paid, provided that no interest shall
accrue for the period from and after such Payment Date, Stated Maturity, or any
other date on which principal of or interest on any Note is proposed to be paid,
as the case may be, until such next succeeding Business Day.
SECTION 1.10. EXECUTION IN COUNTERPARTS.
This Indenture may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
SECTION 1.11. INSPECTION.
The Company agrees that, on reasonable prior notice, it will permit
the representatives of the Trustee or any Noteholder holding Notes evidencing at
least 25% of the Outstanding Principal Amount of the Notes of any Series, during
the Company's normal business hours, to examine all of the books of account,
records, reports and other papers of the Company, to make copies thereof and
extracts therefrom, and to discuss its affairs, finances and accounts with its
officers, employees and independent accountants (and by this provision the
Company hereby authorizes its accountants to discuss with such representatives
such affairs, finances and accounts), all at such reasonable times and as often
as may be reasonably requested for the purpose of reviewing or evaluating the
financial condition or affairs of the Company or the performance of and
compliance with the covenants and undertakings of the Company and the
Administrator in this Indenture, the Sale Agreement and the Servicing Agreement
or any of the other documents referred to herein or therein. Any expense
incident to the exercise by the Trustee at any time or any Noteholder during the
continuance of any Default or Event of Default, of any right under this Section
1.11 shall be borne by the Company. Nothing contained herein shall be construed
as a duty of the Trustee to perform such inspection.
SECTION 1.12. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
The representations, warranties and certifications of the Company made
in this Indenture or in any certificate or other writing delivered by the
Company pursuant
19
hereto shall survive the authentication and delivery of the Notes hereunder.
SECTION 1.13. SECURITY FORMS.
The Notes of each Series shall be in such form as shall be established
by or pursuant to a Board Resolution or in one or more indentures supplemental
hereto, in each case with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture, and may
have such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or Depositary therefor or as may, consistently herewith, be
determined by the officers executing such Notes, as evidenced by their execution
thereof. If the form of Notes of any Series is established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Company Order
contemplated by Section 2.2 for the authentication and delivery of such Notes.
The definitive Notes shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as determined
by the officers executing such Notes, as evidenced by their execution of such
Notes.
ARTICLE 2.
THE NOTES
SECTION 2.1. GENERAL PROVISIONS.
(a) AMOUNT UNLIMITED; ISSUABLE IN SERIES; DENOMINATIONS. The
aggregate principal amount of Notes which may be authenticated and delivered
under this Indenture is unlimited.
The Notes may be issued in one or more Series and the maximum
aggregate principal amount of Notes in each Series shall be determined at the
time of issuance. Pursuant to an Exchange permitted under Section 13.6, there
shall be established in one or more indentures supplemental hereto, prior to the
issuance of Notes of any Series (other than the Variable Funding Notes
established pursuant to Article 13):
(i) the title of the Notes of the Series (which shall
distinguish the Notes of the Series from Notes of any other Series) and the
designation of each Class, if any, within such Series;
(ii) any limit upon the aggregate principal amount of the Notes
of the Series which may be authenticated and delivered under this Indenture
(except for Notes authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Notes of the Series pursuant
to Sections 2.4, 2.5 or 9.5 and except for any Notes which, pursuant to
Section 2.2, are deemed
20
never to have been authenticated and delivered hereunder);
(iii) the Person to whom any interest or principal on a Note of
the Series shall be payable, if other than the Person in whose name that
Note (or one or more Predecessor Notes) is registered at the close of
business on the Record Date for such interest;
(iv) the Payment Date or Dates on which the principal of any
Notes of the Series is payable and the amount of principal payable on such
date or dates;
(v) the rate or rates at which any Notes of the Series shall
bear interest, if any, the date or dates from which any such interest shall
accrue, the Interest Payment Dates on which any such interest shall be
payable;
(vi) the designation of the Trust Accounts specific to such
Series;
(vii) the designation of Assets allocable to such Series and the
Cut-off Date or Dates applicable thereto;
(viii) any form of credit enhancement, including surety bonds,
letters of credit, derivative contracts, guarantees or cash reserve
accounts applicable to such Series;
(ix) the priority of payments to Noteholders of such Series and
to the Trustee, the Servicer, any providers of credit enhancement,
liquidity or hedging contracts, the Company and any other party with an
interest in the proceeds of the allocated Assets;
(x) the applicable Servicing Agreement and the Servicer
thereunder, if other than Epic;
(xi) the Trustee;
(xii) representations and warranties of the Company with respect
to the allocated Assets, as customarily required for such Series;
(xiii) the place or places where the principal of and any premium
and interest on any Notes of the Series shall be payable;
(xiv) if other than denominations of $100,000 and any integral
multiple of $1,000 in excess thereof, the denominations in which any Notes
of the Series shall be issuable;
(xv) the forms of the Notes of such Series;
(xvi) if applicable, that any Notes of the Series shall be
issuable in whole or in part in the form of one or more Global Notes and,
in such case, the
21
respective Depositaries for such Global Notes, the form of any legend or
legends which shall be borne by any such Global Security and any
circumstances in which any such Global Security may be exchanged in whole
or in part for Notes registered, and any transfer of such Global Security
in whole or in part may be registered, in the name or names of Persons
other than the Depositary for such Global Security or a nominee thereof;
(xvii) any addition to or change in the Events of Default which
applies to any Notes of the Series and any change in the right of the
Trustee or the requisite Holders of such Notes to declare the principal
amount thereof due and payable pursuant to Section 6.2 or to liquidate all
or a portion of the Trust Estate (in each case, only to the extent
customarily required for such a Series);
(xviii) any addition to or change in the covenants which
applies to Notes of the Series (in each case, only to the extent
customarily required for such a Series); and
(xix) any other terms of the Series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted by
Section 9.2).
(b) DENOMINATIONS. The Notes of each Series shall be issuable only
in registered form without coupons and only in such denominations as shall be
specified as contemplated by Section 2.1(a).
(c) PRINCIPAL PAYMENTS; CLEAN-UP CALL. For each Payment Date,
payments of principal (the "Principal Payments") on the Notes will be made in
accordance with Sections 3.4 or 6.6, as applicable. Except as otherwise
provided in Section 6.2, no part of the principal of any Note shall be paid
prior to the Payment Date on which such principal is due in accordance with the
preceding provisions of this Section 2.1(b), except that, upon the
Administrator's direction, the Company may redeem the Notes of any Series in
their entirety, without premium, as of any Payment Date on which the sum of the
Outstanding Principal Amount of the Notes of such Series is less than or equal
to ten percent (10%) of the initial Outstanding Principal Amount of the Notes of
such Series (after giving effect to all Principal Payments on such Payment
Date). The Administrator will give notice of any such redemption to each
Noteholder and the Trustee at least 30 days before the Payment Date fixed for
such prepayment by certified mail return receipt requested, hand delivery or
overnight courier. Notice of such prepayment having been so given, the
remaining unpaid principal as of the Payment Date fixed for prepayment together
with all interest accrued and unpaid to such Payment Date, shall become due and
payable on such Payment Date.
(d) INTEREST PAYMENTS. For each Payment Date, the interest due and
payable (the "Interest Payments") with respect to any Series of Notes will be
the interest that has accrued on the Notes during the previous Due Period, plus
unpaid interest from prior Due Periods, at the designated interest rates.
Interest Payments will be made in accordance with Sections 3.4 and 6.6, as
applicable. Interest will be
22
calculated as designated with respect to a Series.
SECTION 2.2. EXECUTION, AUTHENTICATION, DELIVERY, AND DATING.
(a) The Notes shall be manually executed on behalf of the Company by
its Chairman, President or Vice Chairman.
(b) Any Note bearing the signature of an individual who was at the
time of execution thereof a proper officer of the Company shall bind the
Company, notwithstanding that such individual ceases to hold such office prior
to the authentication and delivery of such Note or did not hold such office at
the date of such Note.
(c) No Note shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Note a
certificate of authentication substantially in the form provided for herein,
executed by the Trustee by manual signature, and such certificate upon any Note
shall be conclusive evidence, and the only evidence, that such Note has been
duly authenticated and delivered hereunder. Each Note shall be dated the date
of its authentication.
(d) The Notes may from time to time be executed by the Company and
delivered to the Trustee for authentication together with a Company Order to the
Trustee directing the authentication and delivery of such Notes and thereupon
the same shall be authenticated and delivered by the Trustee in accordance with
such Company Order.
SECTION 2.3. TRANSFER AND EXCHANGE.
(a) The Company shall cause to be kept at the Corporate Trust Office
a register (the "Note Register") in which, subject to such reasonable
regulations as the Trustee may prescribe, the Company shall provide for the
registration of Notes and of transfers of Notes. The Trustee is hereby
appointed "Note Registrar" for the purpose of registering Notes and transfers of
Notes as herein provided.
No transfer of any Note may be made unless that transfer is made
pursuant to an effective registration statement under the Securities Act and an
effective registration or a qualification under applicable state securities
laws, or is made in a transaction that does not require such registration or
qualification because the transfer satisfies one of the following: (i) such
transfer is in compliance with Rule 144A under the Securities Act, to a person
who the transferor reasonably believes is a Qualified Institutional Buyer (as
defined in Rule 144A) that is purchasing for its own account or for the account
of a Qualified Institutional Buyer and to whom notice is given that such
transfer is being made in reliance upon Rule 144A under the Securities Act as
certified by such transferee in a letter in the form of Exhibit D hereto; (ii)
after the appropriate holding period, such transfer is pursuant to an exemption
from registration under the Securities Act provided by Rule 144 under the
Securities Act; (iii) such transfer is to a transferee who is an accredited
investor in a transaction exempt from the registration requirements of the
Securities Act, in each case in accordance with any applicable
23
securities laws of any State of the United States or (iv) such transfer is
otherwise exempt from the registration requirements of the Securities Act.
The Trustee will require, in order to assure compliance with such laws, that
the Noteholder's prospective transferee referred to in the preceding clauses
(iii) or (iv) deliver an investment letter certifying to the Company and the
Trustee as to the facts surrounding such transfer in the form of Exhibit E
hereto. Except in the case of a transfer of Notes to a transferee referred
to in the preceding clause (i) or, in general, a transfer that is to be made
after two years from the Issuance Date, the Trustee shall require an opinion
of counsel satisfactory to it to the effect that such transfer may be made
pursuant to an exemption from the Securities Act without such registration
(which opinion of counsel shall not be an expense of the Trustee, the
Administrator or the Company). None of the Company, the Administrator or the
Trustee is obligated to register or qualify the Notes under the Securities
Act or any other securities law or to take any action not otherwise required
under this Indenture to permit the transfer of any Note without registration.
Neither the Trustee nor the Note Registrar shall effect the
registration of transfer of any Note, if after giving effect to such transfer,
the Notes of such Series would be held by more than ninety-eight Noteholders.
(b) Subject to Section 2.3(a), upon surrender for registration of
transfer of any Note at the office of the Company designated pursuant to Section
8.2 for such purpose, the Company shall execute and the Trustee upon request
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes of any authorized denominations and of a like
aggregate original principal amount.
(c) Every Note presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed, by the holder thereof
or his attorney duly authorized in writing.
(d) No service charge shall be made for any registration of transfer
or exchange of Notes, but the Company or the Trustee may require payment by the
transferor 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 Notes, other than exchanges pursuant to Section 9.5 not involving any
transfer.
(e) The Administrator agrees to cause the Company, and the Company
agrees, to provide such information as required under Rule 144A under the
Securities Act so as to allow resales of Notes to Qualified Institutional Buyers
in accordance herewith.
SECTION 2.4. MUTILATED, DESTROYED, LOST AND STOLEN NOTES.
(a) If any mutilated Note is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefore a
24
replacement Note of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
(b) If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Note and
(ii) such security or indemnity as may be required by them to save each of them
and any agent of either of them harmless then, in the absence of actual notice
to the Company or the Trustee that such Note has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen Note, a
replacement Note of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
(c) In case the final installment of principal on any such mutilated,
destroyed, lost or stolen Note has become or will at the next Payment Date
become due and payable, the Company in its discretion may, instead of issuing a
replacement Note, pay such Note.
(d) Upon the issuance of any replacement Note under this Section 2.4,
the Company or the Trustee may require the payment by the Noteholder of a sum
sufficient to cover any Tax or other governmental charge that may be imposed as
a result of the issuance of such replacement Note.
(e) Every replacement Note issued pursuant to this Section 2.4 in
lieu of any destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Note shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Notes duly issued hereunder.
(f) The provisions of this Section 2.4 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.5. PAYMENT OF INTEREST AND PRINCIPAL; RIGHTS PRESERVED.
(a) Any installment of interest or principal, payable on any Note
that is punctually paid or duly provided for by or on behalf of the Company on
the applicable Payment Date shall be paid to the Person in whose name such Note
was registered at the close of business on the Record Date for such Payment Date
by check mailed to the address specified in the Note Register, or upon the
request of a Holder of more than $1,000,000 original principal amount of Notes,
by wire transfer of federal funds to the account and number specified in the
Note Register, in each case on such Record Date for such Person (which shall be,
as to each original purchaser of the Notes, the account and number specified by
such purchaser to the Trustee in writing, or, if no such account or number is so
specified, then by check mailed to such Person's address as it appears in the
Note Register on such Record Date).
(b) All reductions in the principal amount of a Note effected by
25
payments of installments of principal made on any Payment Date shall be binding
upon all Holders of such Note and of any Note issued upon the registration of
transfer thereof or in exchange therefore or in lieu thereof, whether or not
such payment is noted on such Note. All payments on the Notes shall be paid
without any requirement of presentment but each Holder of any Note shall be
deemed to agree, by its acceptance of the same, to surrender such Note at the
Corporate Trust Office against payment of the final installment of principal of
such Note.
SECTION 2.6. PERSONS DEEMED OWNERS.
Prior to due presentment of a Note for registration of transfer, the
Company, the Trustee, and any agent of the Company or the Trustee may treat the
registered Noteholder as the owner of such Note for the purpose of receiving
payment of principal of and interest on such Note and for all other purposes
whatsoever, whether or not such Note be overdue, and neither the Company, the
Trustee, nor any agent of the Company or the Trustee shall be affected by notice
to the contrary.
SECTION 2.7. CANCELLATION.
All Notes surrendered for registration of transfer or exchange or
following final payment shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and shall be promptly canceled by it. The
Company may at any time deliver to the Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Notes so delivered shall be promptly
canceled by the Trustee. No Notes shall be authenticated in lieu of or in
exchange for any Notes canceled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Notes held by the Trustee may be
disposed of in the normal course of its business or as directed by a Company
Order.
SECTION 2.8. NOTEHOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Noteholders. In the event the Trustee no longer serves as the Note Registrar,
the Company (or any other obligor upon the Notes) shall furnish to the Trustee
at least 5 Business Days before each Interest Payment Date (and in all events in
intervals of not more than 6 months) and at such other times as the Trustee may
request in writing a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Noteholders.
SECTION 2.9. TREASURY NOTES.
In determining whether the Noteholders of the required Outstanding
Principal Amount of the Notes have concurred in any direction, waiver or
consent, Notes held or redeemed by the Company or any other obligor upon the
Notes or held by an Affiliate of the Company or such other obligor shall be
considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be
26
protected in relying on any such direction, waiver or consent, only Notes
which a Responsible Officer of the Trustee knows are so owned shall be so
disregarded.
ARTICLE 3.
ACCOUNTS; COLLECTION AND
APPLICATION OF MONEYS; REPORTS
SECTION 3.1. TRUST ACCOUNTS; INVESTMENTS BY TRUSTEE.
(a) On or before the Issuance Date for any Series, the Trustee shall
establish in the name of the Trustee for the benefit of the Noteholders of such
Series and the Company to the extent of their interests therein as provided in
this Indenture and in the Servicing Agreement, the Trust Accounts designated for
such Series, which accounts shall be Eligible Bank Accounts maintained at the
Corporate Trust Office.
Subject to the further provisions of this Section 3.1(a), the
Trustee shall, upon receipt or upon transfer from another account, as the case
may be, deposit into such accounts all amounts received by it which are required
to be deposited therein in accordance with the provisions of this Indenture.
All such amounts and all investments made with such amounts, including all
income and other gain from such investments, shall be held by the Trustee in
such accounts as part of the Trust Estate as herein provided, subject to
withdrawal by the Trustee in accordance with, and for the purposes specified in
the provisions of, this Indenture.
(b) The Trustee shall hold in trust but shall not be required to
deposit in any account specified pursuant to Section 3.1(a) any payment received
by it until such time as the Trustee shall have identified to its reasonable
satisfaction the nature of such payment and, on the basis thereof, the proper
account or accounts into which such payment is to be deposited. In determining
into which of the accounts, if any, referred to above any amount received by the
Trustee is to be deposited, the Trustee may conclusively rely (in the absence of
bad faith on the part of the Trustee) on the advice of the Administrator.
Unless the Trustee is advised differently in writing by the Administrator, the
Trustee shall assume that any amount remitted to it is to be deposited into the
designated Collection Account pursuant to Section 3.3. The Trustee may
establish from time to time such deadline or deadlines as it shall determine are
reasonable or necessary in the administration of the Trust Estate after which
all amounts received or collected by the Trustee on any day shall not be deemed
to have been received or collected until the next succeeding Business Day.
(c) None of the Administrator, the Trustee nor the institution then
acting as Trustee shall have any right of set-off with respect to any Trust
Account, or any investment therein.
(d) So long as no Event of Default shall have occurred and be
continuing, all or a portion of the amounts in any Trust Account shall be
invested and reinvested by the Trustee pursuant to an Administrator Order in one
or more Eligible
27
Investments. Subject to the restrictions on the maturity of investments set
forth in Section 3.1(f), each such Administrator Order may authorize the
Trustee to make the specific Eligible Investments set forth therein, to make
Eligible Investments from time to time consistent with the general
instructions set forth therein, or to make specific Eligible Investments
pursuant to instructions received in writing or by telegraph or facsimile
transmission from the employees or agents of the Administrator, as the case
may be, identified therein, in each case in such amounts as such
Administrator Order shall specify.
(e) In the event that either (i) the Administrator shall have failed
to give investment directions to the Trustee by 9:30 A.M., New York City time on
any Business Day on which there may be uninvested cash or (ii) an Event of
Default shall be continuing, the Trustee shall promptly invest and reinvest the
funds then in the designated Trust Account to the fullest extent practicable in
one or more Eligible Investments, in accordance with Section 3.2(d). All
investments made by the Trustee shall mature no later than the maturity date
therefore permitted by Section 3.1(f).
(f) No investment of any amount held in any Trust Account shall
mature later than the Deposit Date preceding the Payment Date which is scheduled
to occur immediately following the date of investment. All income or other
gains (net of losses) from the investment of moneys deposited in any Trust
Account shall be deposited by the Trustee in such account immediately upon
receipt.
(g) Any investment of any funds in any Trust Account and any sale of
any investment held in such accounts, shall be made under the following terms
and conditions:
(i) each such investment shall be made in the name of the
Trustee or in the name of a nominee of the Trustee, in each case in such
manner as shall be necessary to maintain the identity of such investments
as assets of the Trust Estate;
(ii) any certificate or other instrument evidencing such
investment shall be delivered directly to the Trustee or its agent and the
Trustee shall have sole possession of such instrument, and all income on
such investment; and
(iii) the proceeds of any sale of an investment shall be
remitted by the purchaser thereof directly to the Trustee for deposit in
the account in which such investment was held.
(h) If any amounts are needed for disbursement from any Trust Account
and sufficient uninvested funds are not collected and available therein to make
such disbursement, in the absence of an Administrator Order for the liquidation
of investments held therein in an amount sufficient to provide the required
funds, the Trustee shall select and cause to be sold or otherwise converted to
cash a sufficient amount of the investments in such accounts.
(i) The Trustee shall not in any way be held liable by reason of any
28
insufficiency in any Trust Account resulting from losses on investments made in
accordance with the provisions of this Section 3.1 including, but not limited
to, losses resulting from the sale or depreciation in the market value of such
investments (but the institution serving as Trustee shall at all times remain
liable for its own debt obligations, if any, constituting part of such
investments). The Trustee shall not be liable for any investment made by it in
accordance with this Section 3.1 on the grounds that it could have made a more
favorable investment or a more favorable selection for sale of an investment.
The Trustee may trade with itself or an Affiliate in the purchase or sale of
Eligible Investments.
SECTION 3.2. ESTABLISHMENT AND ADMINISTRATION OF THE COLLECTION
ACCOUNTS. (a) The Trustee shall cause to be established and maintained a
Collection Account for each Series of Notes issued hereunder. Each Collection
Account shall be an Eligible Bank Account initially established at the office of
the Trustee, bearing a designation clearly indicating that the funds deposited
therein are held solely for the benefit of the Series. The Trustee shall
possess all right, title and interest in all funds on deposit from time to time
in each Collection Account and in all proceeds thereof. Each Collection Account
shall be under the sole dominion and control of the Trustee for the benefit of
the Noteholders as their interests appear in the designated Trust Estate. If,
at any time, the Collection Account ceases to be an Eligible Bank Account, the
Administrator and the Trustee shall within 5 Business Days establish a new
Collection Account which shall be an Eligible Bank Account, transfer any cash
and/or any investments to such new Collection Account and from the date such new
Collection Account is established, it shall be the "Collection Account".
(b) The Trustee agrees, pursuant to the related Servicing Agreement,
to cause the related Servicer to segregate and sweep funds related to the Loans
held by such Servicer and to remit such funds to the Trustee for deposit into
the appropriate Collection Account.
(c) Each of the Administrator and the Company shall immediately remit
directly to the related Servicer any Payments it may receive, with a written
notice to the Servicer of such remittance.
(d) The Administrator shall direct the Trustee in writing to invest,
and the Trustee shall so invest, the amounts in each Collection Account in
specified Eligible Investments that mature not later than the next succeeding
Deposit Date; PROVIDED, that any Eligible Investment as to which the Trustee is
the obligor in its individual capacity may mature not later than such Payment
Date. If the Trustee receives no such direction, such amounts shall be invested
in mutual funds maintained by the Trustee (or an Affiliate of the Trustee),
provided such mutual funds constitute Eligible Investments; and PROVIDED,
FURTHER, that such mutual funds maintain at all times a net asset value of $1
per share. The Trustee may trade with itself or an Affiliate in the purchase or
sale of Eligible Investments and may keep any 12b-1 fees paid to it. The
Trustee shall not be liable for any losses suffered on amounts invested
hereunder so long as such
29
investments are Eligible Investments satisfying the timing requirements
specified in the first sentence of this Section 3.2(d).
(e) The Administrator shall instruct the Trustee in writing to make
withdrawals and payments from each Collection Account for the purposes of
carrying out the Administrator's and the Trustee's duties hereunder.
SECTION 3.3. ESTABLISHMENT AND ADMINISTRATION OF CASH COLLATERAL
ACCOUNTS. If so designated with respect to a Series, on or prior to each
Issuance Date, the Trustee shall cause to be established and maintained at all
times a Cash Collateral Account on behalf of and in the name of the Trustee for
the benefit of the Trust Estate allocated to such Series. Each Cash Collateral
Account shall be an Eligible Bank Account initially established at the offices
of the Trustee. If, at any time, the Cash Collateral Account ceases to be an
Eligible Bank Account, the Administrator on behalf of the Trustee shall within 5
Business Days establish a new Cash Collateral Account which shall be an Eligible
Bank Account, transfer any cash and/or any investments to such new Cash
Collateral Account and from the date such new Cash Collateral Account is
established, it shall be the "Cash Collateral Account" in the name of the
Trustee for the benefit of the Trust Estate. If applicable for such Series, on
the Issuance Date, the Company shall cause to be deposited an amount equal to
the amount specified for such Series into the Cash Collateral Account, which
amounts shall be allocated in the manner provided herein or in a Supplemental
Indenture.
(a) The Administrator shall deliver or cause to be delivered to the
Trustee no later than the Business Day following the date specified for each
Series a written notice (a "Cash Collateral Account Withdrawal Notice")
requesting the withdrawal and application of funds in each Cash Collateral
Account in accordance with the terms of the designated Series, and the Trustee
shall so withdraw and allocate such funds.
(b) Funds on deposit in the Cash Collateral Account shall be invested
in accordance with Section 3.1.
SECTION 3.4. DISTRIBUTIONS.
(a) Distributions from that portion of Assets allocated to such
Series will be made by the Trustee in accordance with the terms of such Series,
or with respect to the Variable Funding Notes, as set forth in Article 13
hereof.
(b) On the first Business Day following the Payment Date on which all
Noteholders of a given Series have been paid in full, all amounts held in the
applicable Trust Accounts, if any, shall be disbursed to the Company and all
interests of the Trust Estate in all Loans allocated to such Series which have
an outstanding balance shall be reconveyed without representation or warranty
and without recourse by the Trustee to the Company.
SECTION 3.5. REPORTS TO NOTEHOLDERS. On each Payment Date,
concurrently with the distribution or allocation to the Noteholders, the Trustee
shall furnish to the
30
Noteholders a report (which the Administrator covenants to timely prepare and
deliver to the Trustee at least one Business Day prior to such Payment Date)
prepared by the Administrator substantially in the form designated for such
Series. Such report shall include a certification (i) that the information
contained in such report is accurate, (ii) that no Event of Administrator
Termination, or event that with notice or lapse of time or both would become
an Event of Administrator Termination, has occurred, or if an Event of
Administrator Termination or such event has occurred and is continuing,
specifying the Event of Administrator Termination or such event and its
status and (iii) that the representations and warranties of the Administrator
contained in the Servicing Agreement are true and correct as though made on
and as of the date of such certificate.
Notwithstanding any provision of this Indenture to the contrary, the
Trustee shall have no duty or obligation with respect to the information
provided to it, including, without limitation, to verify, monitor or otherwise
supervise or administer the performance of the Servicer or the Administrator.
SECTION 3.6. RETURNED PAYMENTS. If the principal amount of any Note
or any other amount payable under any Note (including interest) shall have been
reduced by any distribution or allocation of any portion of collections or other
Payments on Loans, and thereafter such distribution or allocation is rescinded
or must otherwise be returned by or on behalf of the recipient thereof to the
Company, the Trust Estate or any other creditor of the Company for any reason,
such principal or other amount distributed or allocated in respect of such Note
shall be increased by the amount of such distribution or allocation to the
extent so returned, all as though such distribution or allocation had not been
made.
ARTICLE 4.
THE TRUST ESTATE
SECTION 4.1. ACCEPTANCE BY TRUSTEE. (a) Pursuant to each Collateral
Assignment, the Trustee will acknowledge the conveyance of the Assets and other
assets constituting the Trust Estate conveyed by the Company pursuant to such
Collateral Assignment and the Trustee will hold such Loans and all other assets
comprising the Trust Estate, to the extent allocated to a Series, in trust for
the benefit of the Noteholders of such Series subject to the terms and
provisions hereof. If so specified for a Series and pursuant to a Custody
Agreement designated for such Series, a Custodian may hold the related Loan
Documents on behalf of the Trustee.
(b) The Trustee shall perform its duties under this Section 4.1 and
hereunder on behalf of the Trust Estate and for the benefit of the Noteholders
in accordance with the terms of this Indenture and applicable law and, in each
case, taking into account its other obligations hereunder, but without regard
to:
31
(i) any relationship that the Trustee or any Affiliate of the
Trustee may have with the related Obligor;
(ii) the ownership of any Note by the Trustee or any Affiliate
of the Trustee;
(iii) the Trustee's right to receive compensation for its
services hereunder or with respect to any particular transaction; or
(iv) the ownership, or holding in trust for others, by the
Trustee of any other loans or property.
SECTION 4.2. SUBSEQUENT TRANSFERS. (a) On each Assignment Date the
Company shall request that the Trust Estate acquire and the Trust Estate shall
so acquire Loans (each, a "Transfer") from the Company on the terms and subject
to the conditions of this Indenture; provided, however, that the conditions
specified in Section 4.3 shall have been satisfied; and PROVIDED, further, that
the Administrator may cause the Company to contribute (i), if applicable, Loans
that satisfy Section 11.2(a) to the Trust Estate as allocated to a Series on any
Payment Date and (ii) funds for deposit in a Cash Collateral Account, if any, at
any time.
(b) On any Business Day which is an Assignment Date after the
Issuance Date for a Series, the Company shall give the Administrator, the
Trustee and the Servicer written notice of each Transfer (in each case, a
"Transfer Notice") specifying the Outstanding Principal Balance of each Loan
transferred thereby to the Trust Estate on such Assignment Date. The
Administrator shall independently confirm and hereby represents and warrants as
to, and the Trustee may, without any duty to make any independent investigation
with respect thereto, rely on, the facts set forth in such Transfer Notice.
(c) On each Assignment Date following its delivery of a Transfer
Notice, the Company will complete, execute and deliver a Collateral Assignment
to the Administrator and the Trustee. The Administrator and the Trustee, as
custodian for and on behalf of the Trust Estate, shall thereupon execute such
Collateral Assignment and deliver executed copies thereof to each other and to
the Company and the Noteholders.
(d) Following delivery of a duly executed Collateral Assignment,
subject to the satisfaction of the conditions set forth in Sections 4.2(a) and
4.3, all Loans specified in such Collateral Assignment (including all Payments
allocable to principal and interest received after the related Cut-off Date)
will be assigned to the Trustee on behalf of the Trust Estate and such Loans
shall become Assets and part of the Trust Estate, as allocated to a particular
Series.
SECTION 4.3. CONDITIONS PRECEDENT TO ALL TRANSFERS.
Each Transfer shall be subject to the conditions precedent that:
32
(a) On the related Assignment Date (including the initial Transfer on
the date hereof), the Company (with respect to itself and the Loans) and the
Administrator shall have certified and are deemed to have represented and
warranted hereunder and shall so represent and warrant in the related Collateral
Assignment that:
(i) the representations and warranties (A) of the Company and
Epic set forth in Sections 11.1 and 11.2 hereof and (B) of the
Administrator set forth in the applicable Servicing Agreement, are true and
correct on and as of such date, before and after giving effect to such
Transfer, as though made on and as of such date;
(ii) no event has occurred, or would result from such Transfer
or from the application of the proceeds therefrom, which constitutes an
Event of Default or would constitute an Event of Default but for the
requirement that notice be given or time elapse or both;
(iii) each of the Company and Epic is in material compliance
with each of its covenants set forth herein and in all Related Documents;
and
(iv) no event has occurred which constitutes an Event of
Servicing Termination or would constitute an Event of Servicing Termination
but for the requirement that notice be given or time elapse or both.
(b) The Company shall have delivered to the Trustee (and the
Noteholders of the applicable Series) an executed copy of the related Collateral
Assignment and an Officer's Certificate stating and representing and warranting
(and hereby represents and warrants) that all conditions precedent to the
effectiveness thereof as specified herein shall have been satisfied;
(c) The Custodian shall have confirmed receipt of the Loan Documents
with respect to the Loans subject to such Transfer;
(d) No Responsible Officer of the Trustee has actual knowledge that
any conditions to such Transfer have not been fulfilled and no Noteholder shall
have notified the Trustee of the same, and the Trustee shall have received such
other documents, opinions, certificates and instruments as any Noteholder or the
Trustee may request; and
(e) A Custody Agreement and a Servicing Agreement shall be in full
force and effect for the related Loans.
SECTION 4.4. GRANT OF SECURITY INTEREST; TAX TREATMENT. (a) For
purposes of legal form and the Intended Tax Characterization, it is the
intention of the parties hereto that this Indenture and each related Collateral
Assignment shall constitute a security agreement under applicable law, and that
the Company has granted to the Trustee on behalf of the Trust Estate for the
benefit of the Noteholders, the Company and other creditors of the Trust Estate,
a first priority perfected security interest in all of the Company's right,
title and interest in, to and under the Assets and the other assets
33
constituting the Trust Estate. The Trustee shall treat this Indenture and
the Trust Estate as a security device for tax purposes and shall not file tax
returns or obtain an employer identification number on behalf of the Trust
Estate; provided, however, that if any Class of Notes is recharacterized as
equity interests in the Trust Estate for tax purposes, the parties hereto
agree to treat such class as partnership interests in a partnership under the
New York Uniform Partnership Act in which the Company was a general partner
and each such recharacterized Noteholder was a limited partner. In the event
of such treatment, the Administrator shall file all necessary tax returns or
reports. The provisions of this Indenture shall be construed in furtherance
of the foregoing intended tax treatment. The conveyance by the Company of
the Assets to the Trustee on behalf of the Trust Estate on each Assignment
Date shall not constitute and are not intended to result in an assumption by
the Trustee or any Noteholder (other than the Company or any Affiliate of any
obligations at the Trust Estate or of the Company) of any obligation of the
Company or the Administrator to the obligors, the insurers under any
insurance policies, or any other Person in connection with the Assets.
(b) It is the intention of the parties hereto that, with respect to
all Taxes, the Notes will be treated as indebtedness of the Company to the
Noteholders secured by the Assets (the "Intended Tax Characterization"). The
Company, the Administrator and the Trustee, by entering into this Indenture, and
each Noteholder by the purchase of a Note, agree to report such transactions for
purposes of all Taxes in a manner consistent with the Intended Tax
Characterization.
(c) The Company and the Administrator shall take no action
inconsistent with the Trustee's interest in the Assets and shall indicate or
shall cause to be indicated in its books and records held on its behalf that
each Loan and the other assets constituting the Trust Estate has been assigned
to the Trustee on behalf of the Trust Estate and the Noteholders.
SECTION 4.5. FURTHER ACTION EVIDENCING ASSIGNMENTS. (a) The Company
and the Administrator each agrees that, from time to time, at its respective
expense, it will promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or appropriate, or
that the Administrator, the Servicer or the Trustee or Noteholders of a Series
with a Percentage greater than 50% may reasonably request, in order to perfect,
protect or more fully evidence the security interest in the Assets allocated to
such Series or to enable the Trustee to exercise or enforce any of its rights
hereunder, and under any Collateral Assignment. Without limiting the generality
of the foregoing, the Company will, without the necessity of a request and upon
the request of the Administrator or the Trustee, execute and file (or cause to
be executed and filed) such financing or continuation statements, or amendments
thereto or assignments thereof, and such other instruments or notices, as may be
necessary or appropriate including, without limitation, recording and filing
UCC-1 financing statements, amendments or continuation statements with the
office of the Secretary of State of the States of Arizona, California, Florida,
Nevada, and South Carolina, and, if necessary, any counties in such States (and
other locations): (i) each
34
Assignment Date, and (ii) prior to the effective date of any change of the
name, identity or structure or relocation of its chief executive office or
any change that would or could affect the perfection pursuant to any
financing statement or continuation statement or assignment previously filed
or make any UCC-1 or continuation statement previously filed pursuant to this
Indenture seriously misleading within the meaning of applicable provisions of
the UCC (and the Company shall give the Trustee at least 30 Business Days
prior notice of any circumstance in (ii) before the same occurs). The Company
shall deliver promptly to the Trustee file-stamped copies of any such filing.
(b) (i) The Company hereby grants to each of the Administrator, the
Servicer and the Trustee a power of attorney to execute all documents on behalf
of the Company as may be necessary or desirable to effectuate the foregoing and
(ii) Epic hereby grants to the Trustee a power of attorney to execute all
documents on behalf of Epic as may be necessary or desirable to effectuate the
foregoing; provided, however, that such grant shall not create a duty on the
Trustee to file, prepare, record or monitor or any responsibility for the
contents or adequacy of any such documents.
SECTION 4.6. SUBSTITUTION OF LOANS AND RELEASE OF LIENS. (a) From
time to time, the Company, subject to the requirements of the related Series,
may Grant Substitute Loans to the Trustee for inclusion in the portion of the
Trust Estate related to such Series and may contemporaneously request the
release of a Loan (i) for which the Company intends to effect a Liquidation,
(ii) for which there is a breach of any of the representations and warranties
set forth in Sections 11.1, 11.2 and as supplemented by a Series, (iii) for
which original Loan Documents required by the related Custody Agreement have not
been delivered to the Custodian which would adversely affect the Trustee's, the
Administrator's or the Servicer's ability to enforce the obligations of the
Obligor, (iv) for which filings or other actions required in Section 4.5 have
not been taken, (v) which has ceased to be an Eligible Loan, or (vi) for which
all amounts due in respect of such Loan have been paid in full.
(b) Upon delivery of (i) a Collateral Assignment for such Substitute
Loan, (ii) receipt and verification by the Custodian of the related Loan
Documents for such Substitute Loan in accordance with the related Custody
Agreement, and (iii) such other requirements specified for such Series, the
Trustee on behalf of the Trust Estate shall release the Loan requested to be
released and shall request that the Administrator prepare a Request for Release
which the Trustee will deliver to the Custodian to release the related Loan
Documents to the Company, and the Trustee shall assign without representation or
warranty and without recourse to the Company all of the Trust Estate's right,
title and interest in such Loan. Upon such substitution, such Loan will be
released from the lien of the Indenture. Such documents of assignment shall be
prepared in accordance with Section 4.2 hereof.
ARTICLE 5.
SERVICING OF ASSETS
35
SECTION 5.1. APPOINTMENT OF SERVICER. For each Series hereunder,
there shall be designated a Servicing Agreement for the servicing,
administration and collection of the Loans and the Trustee shall enforce the
provisions thereof on behalf of the Noteholders. Unless otherwise specified for
a Series, each Servicing Agreement will provide that the Administrator will
perform collection functions for all Loans which are 30 days or more delinquent.
SECTION 5.2. APPOINTMENT OF ADMINISTRATOR; MONTHLY ADMINISTRATION
FEE. (a) Epic agrees to act as the Administrator under this Indenture and the
Noteholders by their acceptance of Notes consent to Epic acting as Administrator
subject to the terms and conditions hereof. The Administrator shall have no
right to voluntarily resign from its duties and obligations hereunder.
(b) The Administrator shall conduct the duties specified herein
(together, the "Administrator Duties") in accordance with (i) customary and
prudent business practices for the performance of similar activities,
all applicable laws, rules and regulations and contracts with respect to it, its
business and properties, (ii) to the extent consistent with the foregoing, in
the same manner in which, and the same care, skill, prudence and diligence with
which, it performs similar management and administrative services for its own
account or on behalf of other Persons giving due consideration to customary and
prudent business practices.
(c) As compensation for its services hereunder, subject to the terms
and conditions hereof and thereof, the Trustee shall remit, from funds provided
to it, to the Administrator such fees as may be designated from time to time in
respect of a particular Series.
SECTION 5.3. DUTIES AND RESPONSIBILITIES OF THE ADMINISTRATOR. (a)
In addition to the other duties specified in this Indenture and in the related
Servicing Agreement, the Administrator Duties shall, on behalf of the Trust
Estate, consist of:
(i) remarketing time-share properties;
(ii) collecting of Loans that are 30 days or more past due,
including the mailing of routine past due notices, preparing and mailing of
collection letters, contacting delinquent Obligors by telephone to encourage
payment, and the mailing of reminder notices to the delinquent Obligors;
(iii) arranging for and administering repossessions and
foreclosures of the Properties related to the Loans;
(iv) disposing of each Property related to a Loan whether
following repossession, foreclosure or otherwise;
(v) provided that no Event of Default has occurred and is
continuing with respect to the related Series, modifying the terms of Loans,
PROVIDED, HOWEVER, the
36
Administrator shall not modify, waive or amend the terms of any Loan unless a
default on such Loan has occurred or is imminent or unless such modification,
amendment or waiver shall not (i) alter the interest rate on or the principal
balance of such Loan, (ii) alter the final maturity of, or any other terms
of, such Loan which would have a material adverse affect on Noteholders,
(iii) materially impair the Property underlying such Loan or (iv) reduce
materially the likelihood that payments of interest and principal on such
Loan shall be made when due; PROVIDED, FURTHER, the Administrator may grant
an extension of the final maturity of a Loan if the Administrator, in its
sole discretion, determines that (a) such Loan is in default or default on
such Loan is likely to occur in the foreseeable future, and (b) that the
value of the Loan will be enhanced by such extension; PROVIDED, FURTHER, that
the Administrator shall not (1) grant more than one extension per calendar
year with respect to a Loan or (2) grant an extension for more than one
calendar month with respect to a Loan;
(vi) working with Obligors in connection with any transfer of
ownership of a Property by an Obligor to another Person, whereby the
Administrator may consent to the assumption by such Person of the Loan related
to such Property; PROVIDED, HOWEVER, in connection with any such assumption, the
rate of interest borne by, the maturity date of, the principal amount of, the
timing of payments of principal and interest in respect of, and all other
material terms of, the related Loan shall not be changed; PROVIDED, FURTHER,
that the Administrator must have the written consent of the Noteholders of any
Series which would be affected by such assumption;
(vii) reporting tax information to Obligors as required by law;
and
(viii) delivering to the Trustee and to any Noteholder with a
Percentage of at least 50% in respect of a Series upon the request of such
Noteholder the Schedule of Loans allocated to such Series as amended from time
to time, on each Assignment Date.
(b) Other than in connection with its duties to effect liquidations
of Properties and its obligation to make repurchases of Loans hereunder, Epic
shall not sell, assign (by operation of law or otherwise) or otherwise dispose
of, or create or suffer to exist any Adverse Claim upon or written respect to,
any Loan (or any right to receive income in respect thereof), or any Collection
Account.
SECTION 5.4. EVENT OF ADMINISTRATOR TERMINATION. With respect to
each Series and upon an Event of Administrator Termination (as defined for each
Series), the Administrator may be removed and replaced with a successor
Administrator by an Act of the Noteholders.
ARTICLE 6.
EVENTS OF DEFAULT; REMEDIES
SECTION 6.1. EVENTS OF DEFAULT.
37
"Event of Default," wherever used herein with respect to Notes of any
Series, means any one of the following:
(a) (i) default in the making of Principal Payments or Interest
Payments in respect of any Note of that Series when such become due and payable,
and continuance of such default for ten Business Days; or (ii) failure to make
any deposit when due hereunder or under the applicable Servicing Agreement and
continuance of such default for one Business Day; or
(b) a non-monetary default in the performance, or breach, of any
covenant of the Company or the Administrator in this Indenture and applicable to
such Series (other than a covenant dealing with a default in the performance of
which or the breach of which is specifically dealt with elsewhere in this
Section 6.1) and continuance of such default or breach for a period of 30 days
after the earliest of (i) any officer of the Company or the Administrator first
acquiring knowledge thereof, (ii) the Trustee's giving written notice thereof to
the Company or (iii) the holders of a majority of the then Outstanding Principal
Amount of the Notes of such Series giving written notice thereof to the Company
and the Trustee; or
(c) if any representation or warranty of the Company or the
Administrator made in this Indenture and applicable to such Series shall prove
to be incorrect in any material respect as of the time when the same shall have
been made, and such breach is not remedied within 30 days after notice of breach
from the Trustee or the holders of a majority of Outstanding Principal Amount of
the Notes of such Series; or
(d) the entry by a court having jurisdiction in the premises of (i) a
decree or order for relief in respect of the Company in an involuntary case or
proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization, or other similar law or (ii) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment, or composition of or in respect
of the Company under any applicable federal or state law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator, or other
similar official of the Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the continuance of
any such decree or order for relief or any such other decree or order unstayed
and in effect for a period of 60 consecutive days; or
(e) the commencement by the Company of a voluntary case or proceeding
under any applicable federal or state bankruptcy, insolvency, reorganization, or
other similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by it to the entry of a decree or order
for relief in respect of the Company in an involuntary case or proceeding under
any applicable federal or state bankruptcy, insolvency, reorganization, or other
similar law or to the commencement of any bankruptcy or insolvency case or
proceeding against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under any applicable federal or state law, or
the consent by it to the filing of such petition or to the
38
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator, or similar official of the Company or of any
substantial part of its property, or the making by it of an assignment for
the benefit of creditors, or the Company's failure to pay its debts generally
as they become due, or the taking of corporate action by the Company in
furtherance of any such action; or
(f) any other Event of Default provided with respect to Notes of that
Series and with respect to the Variable Funding Notes, as specified in Article
13 hereof.
SECTION 6.2. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
(a) If an Event of Default of the kind specified in Section 6.1(d) or
Section 6.1(e) occurs, the unpaid principal amount of the Notes of each Series
shall automatically become due and payable at par together with all accrued and
unpaid interest thereon, without presentment, demand, protest or notice of any
kind, all of which are hereby waived by the Company. If an Event of Default
(other than an Event of Default of the kind described in Section 6.1(d) or
Section 6.1(e)) with respect to Notes of any Series occurs and is continuing,
then and in every such case the Trustee shall, if so directed by the Holders of
Notes evidencing at least 66-2/3% of the then Outstanding Principal Amount of
the most senior Class of such Series (or if the Notes of such Class are no
longer Outstanding, the Holders of Notes evidencing at least 66-2/3% of the then
Outstanding Principal Amount of the next most senior Class, and so on), or the
Holders of at least 66-2/3% of the then Outstanding Principal Amount of Notes of
such Series may, declare the unpaid principal amount of all the Notes of such
Series to be due and payable immediately, by a notice in writing to the Company
(and to the Trustee if given by Noteholders), and upon any such declaration such
principal amount shall become immediately due and payable together with all
accrued and unpaid interest thereon, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Company.
Interest on all amounts due and payable under this Section 6.2 shall accrue
interest at the rate specified for each Series.
(b) At any time after such a declaration of acceleration 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 provided, the Holders of
a like percentage of Notes of such Series by written notice to the Company and
the Trustee, may rescind and annul such declaration and its consequences if:
(i) the Company has paid or deposited with the Trustee a sum
sufficient to pay:
(A) all Principal Payments on any Notes of such Series
which have become due otherwise than by such declaration of
acceleration and interest thereon from the date when the same
first became due until the date of payment or deposit at the
appropriate Note Rate, plus two percent (2%) per annum,
39
(B) all Interest Payments due with respect to any
Notes of such Series and, to the extent that payment of such
interest is lawful, interest upon overdue interest from the date
when the same first became due until the date of payment or
deposit at a rate per annum equal to the appropriate Note Rates,
and
(C) all sums paid or advanced by the Trustee hereunder
and the reasonable compensation, expenses, disbursements, and
advances of each of the Trustee, the Servicer and the
Administrator, its agents and counsel;
and
(ii) all Events of Default with respect to Notes of that
Series, other than the non-payment of the Outstanding Principal Amount of
the Notes of such Series which become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 6.13.
No such rescission shall affect any subsequent Event of Default or impair any
right consequent thereon.
SECTION 6.3. REMEDIES.
(a) If an Event of Default with respect to Notes of any Series occurs
and is continuing of which a Responsible Officer of the Trustee has actual
knowledge, the Trustee shall immediately give notice to each Noteholder of such
Series as set forth in Section 7.2 and shall solicit such Noteholders for
advice. The Trustee shall then take such action as so directed by the Holders
of at least 66-2/3% of the Outstanding Principal Amount of the Notes of such
Series, subject to the provisions of this Indenture and as provided with respect
to each Series.
(b) Following any acceleration of the Notes of any Series, the
Trustee shall have all of the rights, powers and remedies with respect to the
Trust Estate allocated to such Series as are available to secured parties under
the UCC or other applicable law, subject to subsection (d) below. Such rights,
powers and remedies may be exercised by the Trustee in its own name as trustee
of an express trust.
(c) (i) If an Event of Default specified in Section 6.1(a) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Company for the whole amount of
principal and interest remaining unpaid with respect to the affected Series of
Notes.
(ii) If an Event of Default occurs and is continuing, the
Trustee may in its discretion, and at the instruction of an aggregate
Percentage of greater than 50% of the Noteholders of each affected Series
shall, proceed to protect and enforce its rights and the rights of the
Noteholders of such Series by
40
such appropriate judicial or other proceedings as the Trustee shall deem
most effectual 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. The Trustee shall notify the Company, the
Administrator, the Servicer, the Noteholders of such Series of any such
action.
(d) If (i) the Trustee shall have received instructions within 45
days from the date notice pursuant to Section 6.3(a) is first given from holders
of each Class of Notes of such Series evidencing more than 50% of the aggregate
unpaid principal amount of such Class of Notes, to the effect that such Persons
approve of or request the liquidation of the Assets allocated to such Series or
(ii) upon an Event of Default set forth in Section 6.1(d) or (e), the Trustee
shall to the extent lawful, promptly sell, dispose of or otherwise liquidate the
Assets allocated to such Series in a commercially reasonable manner and on
commercially reasonable terms, which shall include the solicitation of
competitive bids; provided, however, that, upon an Event of Default set forth in
Section 6.1(d) or (e), Holders of the Notes evidencing more than 50% of the
aggregate principal amount of each Class of Notes of such Series may notify the
Trustee that such liquidation shall not occur. The Trustee may obtain a prior
determination from any such conservator, receiver or liquidator of the Company
that the terms and manner of any proposed sale, disposition or liquidation are
commercially reasonable.
SECTION 6.4. TRUSTEE MAY FILE PROOFS OF CLAIM. (a) In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company, or any other obligor upon the Notes, or the
property of the Company, or such other obligor or their creditors, the Trustee
(irrespective of whether the principal of the Notes shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Company for the payment of
overdue principal or interest) shall be entitled and empowered, by intervention
in such proceeding or otherwise:
(i) to file and prove a claim for the whole amount of
principal and interest owing and unpaid in respect of the Notes or any
amounts owing on the Loans or the other assets constituting the Trust
Estate and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and any predecessor
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee and any predecessor Trustee,
their agents and counsel) and of the Noteholders allowed in such judicial
proceeding;
(ii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same; and
(iii) to participate as a member, voting or otherwise, of any
official committee of creditors appointed in such matter;
41
and any custodian, receiver, liquidator, assignee, trustee, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Noteholder to make such payments to the Trustee and to pay to the Trustee
any amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee and any predecessor Trustee, their agents and counsel,
and any other amounts due the Trustee and any predecessor Trustee under Section
7.6.
(b) Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Noteholder any
plan of reorganization, agreement, adjustment or composition affecting the Notes
or the rights of any Noteholder thereof or affecting the Loans or the other
assets constituting the Trust Estate or to authorize the Trustee to vote in
respect of the claim of any Noteholder in any such proceeding.
SECTION 6.5. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF NOTES.
All rights of action and claims under this Indenture, the Notes, the Loans or
the other assets constituting the Trust Estate may be prosecuted and enforced by
the Trustee without the possession of any of the Notes or the production thereof
in any proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provisions for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee and any
predecessor Trustee, their agents and counsel, be for the benefit of the
Noteholders in respect of which such judgment has been recovered, and pursuant
to the priorities contemplated by Section 3.4.
SECTION 6.6. APPLICATION OF MONEY COLLECTED. Any money collected by
the Trustee pursuant to this Article 6 shall be deposited in the applicable
Collection Account or Accounts for disbursement in accordance with the
provisions of Article 3.
SECTION 6.7. LIMITATION ON SUITS. No Noteholder of any Series shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture or for any other remedy hereunder, unless:
(a) there is a continuing Event of Default with respect to such
Series and such Noteholder has previously given written notice to the Trustee of
a continuing Event of Default;
(b) such Noteholder or Noteholders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be incurred
in compliance with such request;
(c) the Trustee, for 30 days after its receipt of such notice,
request and offer of indemnity, has failed to institute any such proceeding; and
(d) no direction inconsistent with such written request has been
given to the Trustee during such 30-day period by the Noteholders of at least
66-2/3% in
42
aggregate principal amount of the Outstanding Notes of such Series;
it being understood and intended that no one or more of such Noteholders shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Noteholders, or to obtain or to seek to obtain priority or preference over
any other Noteholders or to enforce any right under this Indenture, except in
the manner herein provided and for the ratable benefit of all such Noteholders.
It is further understood and intended that so long as any portion of the Notes
remains Outstanding, Epic shall not have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture (other than for the
enforcement of Section 3.4) or for the appointment of a receiver or trustee
(including without limitation a proceeding under the Bankruptcy Code), or for
any other remedy hereunder. Nothing in this Section 6.7 shall be construed as
limiting the rights of otherwise qualified Noteholders to petition a court for
the removal of a Trustee pursuant to Section 7.8 hereof.
SECTION 6.8. UNCONDITIONAL RIGHT OF NOTEHOLDERS TO RECEIVE PRINCIPAL
AND INTEREST.
Notwithstanding any other provision in this Indenture, other than the
provisions hereof limiting the right to recover amounts due on the Notes to
recoveries from the property of the allocated Trust Estate, the Holder of any
Note shall have the absolute and unconditional right to receive payment of the
principal of and interest on such Note on the Maturities for such payments,
including the Stated Maturity, and such right shall not be impaired without the
consent of such Noteholder.
SECTION 6.9. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Noteholder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Noteholder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Noteholders
shall be restored severally and respectively to their former positions hereunder
and thereafter all rights and remedies of the Trustee and the Noteholders
continue as though no such proceeding had been instituted.
SECTION 6.10. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost, or stolen Notes in the last paragraph of
Section 2.4, no right or remedy herein conferred upon or reserved to the Trustee
or to the Noteholders is intended to be exclusive of any other right or remedy,
and every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other
43
appropriate right or remedy.
SECTION 6.11. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Note to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Noteholders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Noteholders, as the
case may be.
SECTION 6.12. CONTROL BY NOTEHOLDERS.
Except as may otherwise be provided in this Indenture, until such time
as the conditions specified in Sections 10.1(a)(i) and (ii) have been satisfied
in full, the Holders of at least 66-2/3% of the then Outstanding Principal
Amount of the Notes of any Series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with respect
to the Notes of such Series. Notwithstanding the foregoing,
(i) no such direction shall be in conflict with any rule of
law or with this Indenture;
(ii) the Trustee shall not be required to follow any such
direction which the Trustee reasonably believes might result in any
personal liability on the part of the Trustee for which the Trustee is not
adequately indemnified; and
(iii) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with any such direction; PROVIDED that
the Trustee shall give notice of any such action to each Noteholder of such
Series.
SECTION 6.13. WAIVER OF EVENTS OF DEFAULT.
(a) The Holders of at least 66-2/3% of the then Outstanding Principal
Amount of the Notes of any Series may, by one or more instruments in writing,
waive any Event of Default on behalf of all Noteholders of such Series hereunder
and its consequences, except a continuing Event of Default:
(i) in respect of the payment of the principal of or interest
on any Note (which may only be waived by the Holder of such Note), or
(ii) in respect of a covenant or provision hereof which under
Article 9 cannot be modified or amended without the consent of the Holder
of each Outstanding Note affected (which only may be waived by the Holders
of all Outstanding Notes affected).
(b) A copy of each waiver pursuant to Section 6.13(a) shall be
44
furnished by the Company to the Trustee and each Noteholder. Upon any such
waiver, such Event of Default shall cease to exist and shall be deemed to have
been cured, for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other Event of Default or impair any right consequent
thereon.
SECTION 6.14. UNDERTAKING FOR COSTS.
All parties to this Indenture agree (and each Holder of any Note 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 any suit instituted by the
Trustee, to any suit instituted by any Noteholder, or group of Noteholders,
holding in the aggregate more than 10% of the then Outstanding Principal Amount
of the Notes of any Series, or to any suit instituted by any Noteholder for the
enforcement of the payment of the principal of or interest on any Note on or
after the Maturities for such payments, including the Stated Maturity as
applicable.
SECTION 6.15. WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted allocated to a Series of
Notes.
SECTION 6.16. SALE OF TRUST ESTATE.
(a) The power to effect any sale of any portion of the Trust Estate
allocated to a Series of Notes pursuant to Section 6.3 shall not be exhausted by
any one or more sales as to any portion of the Trust Estate remaining unsold,
but shall continue unimpaired until the entire Trust Estate so allocated shall
have been sold or all amounts payable on the Notes of such Series shall have
been paid. The Trustee may from time to time, upon directions in accordance
with Section 6.12, postpone any public sale by public announcement made at the
time and place of such sale.
(b) To the extent permitted by applicable law, the Trustee shall not
sell to a third party the Trust Estate, or any portion thereof except as
permitted under Section 6.3(d).
45
(c) In connection with a sale of all or any portion of the Trust
Estate:
(i) any one or more Noteholders may bid for and purchase the
property offered for sale, and upon compliance with the terms of sale may
hold, retain, and possess and dispose of such property, without further
accountability, and any Noteholder may, in paying the purchase money
therefore, deliver in lieu of cash any Outstanding Notes 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 Notes, in case
the amounts so payable thereon shall be less than the amount due thereon,
shall be returned to the Noteholders after being appropriately stamped to
show such partial payment;
(ii) the Trustee shall execute and deliver an appropriate
instrument of conveyance prepared by the Administrator transferring its
interest without representation or warranty and without recourse in any
portion of the Trust Estate in connection with a sale thereof;
(iii) the Trustee is hereby irrevocably appointed the agent and
attorney-in-fact of the Company 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;
(iv) no purchaser or transferee at such a sale 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; and
(v) The method, manner, time, place and terms of any sale of
all or any portion of the Trust Estate shall be commercially reasonable.
ARTICLE 7.
THE TRUSTEE
SECTION 7.1. CERTAIN DUTIES. (a) The Trustee undertakes to perform
such duties and only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read into this
Indenture against the Trustee (including, without limitation, the duties
referred to in each Servicing Agreement during the continuance of an Event of
Servicing Termination, or an Event of Administrator Termination resulting in the
appointment of the Trustee as Successor Servicer under any Servicing Agreement).
(b) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; but in the case of
any such certificates or opinions which by any provision hereof are specifically
required to be furnished to the
46
Trustee, the Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this Indenture, provided
however, the Trustee shall not be required to verify or recalculate the
contents thereof.
(c) If specified for a Series, in case an Event of Default, an Event
of Servicing Termination (resulting in the appointment of the Trustee as
Successor Servicer under any Servicing Agreement) or an Event of Administrator
Termination (resulting in the appointment of the Trustee as successor
Administrator under any Servicing Agreement) has occurred and is continuing with
respect to any Series, the Trustee shall exercise such of the rights and powers
vested in it by this Indenture, and use the same degree of care and skill in
their exercise, as a prudent Person would exercise or use under the
circumstances in the conduct of such Person's own affairs; PROVIDED, HOWEVER,
that no provision in this Indenture shall be construed to limit the obligations
of the Trustee to provide notices under Section 7.2.
(d) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Noteholders pursuant to this Indenture, unless such Noteholders shall
have offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction.
(e) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, EXCEPT that:
(i) this Section shall not be construed to limit the effect of
Section 7.1(a) and (b);
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer unless it shall be proved that
the Trustee shall have been negligent in ascertaining the pertinent facts;
and
(iii) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
written direction of the holders of the requisite principal amount of the
outstanding Notes, or in accordance with any written direction delivered to
it under Section 6.2(a), relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture.
(f) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section 7.1.
(g) The Trustee makes no representations or warranties with respect
to the Assets or the validity or sufficiency of any assignment of the Loans to
the Company or to the Trust Estate.
47
(h) Notwithstanding anything to the contrary herein, the Trustee is
not required 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.
SECTION 7.2. NOTICE OF EVENTS OF DEFAULT. The Trustee shall promptly
(but in any event within 5 Business Days) notify the Administrator, the Servicer
and the Noteholders of any Series upon a Responsible Officer obtaining actual
knowledge of any event which constitutes an Event of Default, an Event of
Servicing Termination, or an Event of Administrator Termination or would
constitute an Event of Default, an Event of Servicing Termination, or an Event
of Administrator Termination but for the requirement that notice be given or
time elapse or both, in each case with respect to such Series; PROVIDED,
FURTHER, that this Section 7.2 shall not limit the obligations of the Trustee to
provide notices expressly required by this Indenture.
SECTION 7.3. CERTAIN MATTERS AFFECTING THE TRUSTEE. Subject to the
provisions of Section 7.1:
(a) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
(b) Any request or direction of any Noteholders, the Administrator,
the Company, or the Servicer mentioned herein shall be in writing;
(c) Whenever in the performance of its duties hereunder the Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officer's Certificate or Opinion of Counsel;
(d) The Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be deemed authorization in respect of
any action taken, suffered, or omitted by it hereunder in good faith and in
reliance thereon;
(e) Prior to the occurrence of an Event of Default, an Event of
Servicing Termination, or an Event of Administrator Termination, or after the
curing of all Events of Default, Events of Servicing Termination or Events of
Administrator Termination which may have occurred, 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 document, unless
requested in writing so to do by Noteholders of any affected Series holding an
aggregate Percentage of more than 50%; PROVIDED, HOWEVER, that if the payment
within a reasonable time to the Trustee of the costs, expenses or liabilities
48
likely to be incurred by it in the making of such investigation is, in the
reasonable opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, 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 Administrator or, if paid by the Trustee, shall be reimbursed by the
Administrator upon demand; and
(f) 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 (which may be Affiliates of the Trustee) and the
Trustee shall not be liable for any acts or omissions of such agents, attorneys
or custodians appointed with due care by it hereunder.
SECTION 7.4. TRUSTEE NOT LIABLE FOR NOTES OR LOANS. (a) The Trustee
makes no representations as to the validity or sufficiency of this Indenture or
any Related Document, the Notes (other than the authentication thereof) or of
any Loan. The Trustee shall not be accountable for the use or application by
the Company of funds paid to the Company in consideration of conveyance of the
Loans to the Trust Estate.
(b) Except if specified for a Series, if the Trustee acts as
Successor Servicer pursuant to the related Servicing Agreement, the Trustee
shall have no responsibility or liability for or with respect to: the
validity of any security interest in any Property; the existence or
validity of any Loan, the validity of the assignment of any Loan to the
Trust Estate or of any intervening assignment; the review of any Loan, any
Loan File or the Electronic Ledger (as defined in the Servicing Agreement),
the completeness of any Loan File, the receipt by the Custodian of any Loan
or Loan File (it being understood that the Trustee has not reviewed and
does not intend to review such matters); the performance or enforcement of
any Loan; the compliance by the Administrator, the Company or the Servicer
with any covenant or the breach by the Administrator or the Company of any
warranty or representation made hereunder or in any related document or the
accuracy of any such warranty or representation; the acts or omissions of
the Administrator, the Servicer or any Obligor; or any action of the
Administrator or the Servicer taken in the name of the Trustee.
SECTION 7.5. TRUSTEE MAY OWN NOTES. The Trustee in its individual or
any other capacity may become the owner or pledgee of Notes with the same rights
as it would have if it were not Trustee.
SECTION 7.6. THE ADMINISTRATOR TO PAY TRUSTEE'S FEES AND EXPENSES.
The Administrator agrees to reimburse the Trustee upon its request for all
agreed-upon third-party expenses, disbursements and advances incurred or made by
the Trustee in its capacity as such in accordance with any provision of this
Indenture (including the
49
reasonable compensation and the expenses and disbursement of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith. The obligations of the
Administrator under this Section 7.6 shall survive the termination of this
Indenture and the resignation or removal of the Trustee. The compensation of
the Trustee shall not be limited by any law on compensation of a trustee of
an express trust.
SECTION 7.7. ELIGIBILITY REQUIREMENTS FOR TRUSTEE. Other than the
initial Trustee, the Trustee hereunder shall at all times (a) be a corporation,
depository institution, or trust company organized and doing business under the
laws of the United States of America or any state thereof authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $250,000,000, (b) be subject to supervision or examination by
federal or state authority, (c) be capable of maintaining an Eligible Bank
Account and (d) have a long-term unsecured debt rating of not less than Baa2
from the Rating Agencies, and shall be acceptable to Noteholders of each Series
with a Percentage of more than 50%. If such institution publishes reports of
condition at least annually, pursuant to or to the requirements of the aforesaid
supervising or examining authority, then for the purpose of this Section 7.7,
the combined capital and surplus of such institution shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 7.7, the Trustee shall resign
immediately in the manner and with the effect specified in Section 7.8.
SECTION 7.8. RESIGNATION OR REMOVAL OF TRUSTEE. (a) The Trustee may
at any time resign and be discharged with respect to the Notes of one or more
Series by giving 90 days' written notice thereof to the Administrator, the
Servicer, the Company, the Noteholders of such Series. Upon receiving such
notice of resignation, the Administrator shall promptly appoint a successor
Trustee not objected to by Noteholders of such Series with a Percentage of more
than 50% within 30 days after prior written notice, by written instrument, in
quintuplicate, one counterpart of which instrument shall be delivered to each of
the Company, the Servicer, the successor Trustee and the predecessor Trustee.
If no successor Trustee shall have been so appointed and have accepted
appointment within 90 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 7.7 and shall fail to resign after
written request therefor by the Administrator, or if at any time the Trustee
shall be legally unable to act, or shall be adjudged a bankrupt or insolvent, or
a receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Administrator or Noteholders of each Series with a Percentage greater than 50%
may direct, and the Administrator shall follow such direction and remove the
Trustee. If it
50
removes the Trustee under the authority of the immediately preceding
sentence, the Administrator shall promptly appoint a successor Trustee not
objected to by Noteholders of each Series with a Percentage of more than 50%,
within 30 days after prior written notice, by written instrument, in
quintuplicate, one counterpart of which instrument shall be delivered to each
of the Company, the Servicer, the Noteholders, the successor Trustee and the
predecessor Trustee.
(c) The Trustee may be removed by the Administrator at any time by
giving written notice thereof to the Trustee and each of the Holders of the
Notes then outstanding. Such removal by the Administrator will become effective
unless the Holders of at least 51% of the principal amount of the Notes of each
Series then outstanding deliver a written statement to the Administrator
opposing such removal within 30 days following receipt of such notice of removal
from the Administrator.
(d) Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 7.8 shall
not become effective until acceptance of appointment by the successor Trustee as
provided in Section 7.9.
SECTION 7.9. SUCCESSOR TRUSTEE. (a) Any successor Trustee appointed
as provided in Section 7.8 shall execute, acknowledge and deliver to each of the
Administrator, the Company, the Servicer, the Noteholders and to its predecessor
Trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor Trustee shall become effective and
such successor Trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder with like effect as if originally named a Trustee. The
predecessor Trustee shall deliver or cause to be delivered to the successor
Trustee or its custodian any related documents and statements held by it or its
custodian hereunder; and the Administrator and the Company and the predecessor
Trustee shall execute and deliver such instruments and do such other things as
may reasonably be required for the full and certain vesting and confirmation in
the successor Trustee of all such rights, powers, duties and obligations.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Notes of one or more (but not all) Series, the Company, the
retiring Trustee and each successor Trustee with respect to the Notes of one or
more Series shall execute and deliver an indenture supplemental hereto wherein
each successor Trustee shall accept such appointment and which (i) shall contain
such provisions as shall be necessary or desirable to transfer and confirm to,
and to vest in, each successor Trustee all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Notes of that or those Series to
which the appointment of such successor Trustee relates, (ii) if the retiring
Trustee is not retiring with respect to all Notes, shall contain such provisions
as shall be deemed necessary or desirable to confirm that all the rights,
powers, trusts and duties of the retiring Trustee with respect to the Notes of
51
that or those Series as to which the retiring Trustee is not retiring shall
continue to be vested in the retiring Trustee, and (iii) shall add to or change
any of the provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the Trust Estate hereunder by more than one
Trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such Trustees co-trustees of the same allocated trust
and that each such Trustee shall be trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by any other
such Trustee; and upon the execution and delivery of such supplemental indenture
the resignation or removal of the retiring Trustee shall become effective to the
extent provided therein and each such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Notes of that or those
Series to which the appointment of such successor Trustee relates; but, on
request of the Company or any successor Trustee, such retiring Trustee shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to the Notes of that
or those Series to which the appointment of such successor Trustee relates.
Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor trustee all such rights, powers and trusts referred to in the
preceding paragraph.
(c) No successor Trustee shall accept appointment as provided in this
Section 7.9 unless at the time of such acceptance such successor Trustee shall
be eligible under the provisions of Section 7.7.
(d) Upon acceptance of appointment by a successor Trustee as provided
in this Section 7.9, the Administrator shall mail notice of the succession of
such Trustee hereunder to each Noteholder of each affected Series at its address
as shown in the Note Register. If the Administrator fails to mail such notice
within 10 days after acceptance of appointment by the successor Trustee, the
successor Trustee shall cause such notice to be mailed at the expense of the
Company and the Administrator.
SECTION 7.10. MERGER OR CONSOLIDATION OF TRUSTEE. Any corporation
into which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, PROVIDED such corporation shall be eligible
under the provisions of Section 7.7, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
SECTION 7.11. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE. (a) At
any time or times 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 or
in which any action of the Trustee may be required to be performed or taken, the
Trustee, the Administrator,
52
the Servicer or the Holders of at least 51% of the Outstanding Principal
Amount of the Notes of each affected Series, by an instrument in writing
signed by it or them, may appoint, at the reasonable expense of the Trust
Estate, one or more individuals or corporations to act as separate trustee or
separate trustees or co-trustee, acting jointly with the Trustee, of all or
any part of the Trust Estate, to the full extent that local law makes it
necessary for such separate trustee or separate trustees or co-trustee acting
jointly with the Trustee to act. Notwithstanding the appointment of any
separate or co-trustee, the Trustee shall remain obligated and liable for the
obligations of the Trustee under this Indenture.
(b) The Trustee and, at the request of the Trustee, the
Administrator shall execute, acknowledge and deliver all such instruments as
may be required by the legal requirements of any jurisdiction or by any such
separate trustee or separate trustees or co-trustee for the purpose of more
fully confirming such title, rights, or duties to such separate trustee or
separate trustees or co-trustee. Upon the acceptance in writing of such
appointment by any such separate trustee or separate trustees or co-trustee,
it, he, she or they shall be vested with such title to the Trust Estate or
any part thereof, and with such rights, powers, duties and obligations as
shall be specified in the instrument of appointment, and such rights, powers,
duties and obligations shall be conferred or imposed upon and exercised or
performed by the Trustee, or the Trustee and such separate trustee or
separate trustees or co-trustees jointly with the Trustee subject to all the
terms of this Indenture, 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 shall be exercised
and performed by such separate trustee or separate trustees or co-trustee, as
the case may be. Any separate trustee or separate trustees or co-trustee
may, at any time by an instrument in writing, constitute the Trustee its
attorney-in-fact and agent with full power and authority to do all acts and
things and to exercise all discretion on its behalf and in its name. In any
case any such separate trustee or co-trustee shall die, become incapable of
acting, resign or be removed, the title to the Trust Estate and all assets,
property, rights, power duties and obligations and duties of such separate
trustee or co-trustee shall, so far as permitted by law, vest in and be
exercised by the Trustee, without the appointment of a successor to such
separate trustee or co-trustee unless and until a successor is appointed.
(c) All provisions of this Indenture which are for the benefit of the
Trustee shall extend to and apply to each separate trustee or co-trustee
appointed pursuant to the foregoing provisions of this Section 7.11.
(d) Every additional trustee and separate trustee hereunder shall, to
the extent permitted by law, be appointed and act and the Trustee shall act,
subject to the following provisions and conditions: (i) all powers, duties and
obligations and rights conferred upon the Trustee in respect of the receipt,
custody, investment and payment of monies shall be exercised solely by the
Trustee; (ii) all other rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed and exercised or
performed by the Trustee and such additional trustee or trustees and
53
separate trustee or trustees jointly 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 Properties in any such jurisdiction) shall be
exercised and performed by such additional trustee or trustees or separate
trustee or trustees; (iii) no power hereby given to, or exercisable by, any
such additional trustee or separate trustee shall be exercised hereunder by
such trustee except jointly with, or with the consent of, the Trustee; and
(iv) no trustee hereunder shall be personally liable by reason of any act or
omission of any other trustee hereunder.
If at any time, the Trustee shall deem it no longer necessary or prudent in
order to conform to such law, the Trustee shall execute and deliver all
instruments and agreements necessary or proper to remove any additional trustee
or separate trustee.
(e) Any request, approval or consent in writing by the Trustee to any
additional trustee or separate trustee shall be sufficient warrant to such
additional trustee or separate trustee, as the case may be, to take such action
as may be so requested, approved or consented to.
(f) Notwithstanding any other provision of this Section 7.11, the
powers of any additional trustee or separate trustee shall not exceed those of
the Trustee hereunder.
SECTION 7.12. PAYING AGENT AND NOTE REGISTRAR RIGHTS. So long as the
Trustee is the Paying Agent and Note Registrar, the Paying Agent and Note
Registrar shall be entitled to the rights, benefits and immunities of the
Trustee as set forth in Article 7 to the same extent and as fully as though
named in place of the Trustee.
ARTICLE 8.
COVENANTS
SECTION 8.1. PAYMENT OF PRINCIPAL AND INTEREST.
The Company will cause the due and punctual payment of the principal
of and interest on the Notes in accordance with the terms of the Notes and this
Indenture.
SECTION 8.2. MAINTENANCE OF OFFICE OR AGENCY; CHIEF EXECUTIVE OFFICE.
(a) The Company will maintain at the Corporate Trust Office an office
or agency where Notes may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Notes and this Indenture may be served. The Company hereby appoints the Trustee
as its agent to receive all such presentations, surrenders, notices and demands.
54
(b) The Company will not change the location of its principal place
of business without giving the Trustee at least 30 Business Days' prior written
notice thereof.
SECTION 8.3. MONEY FOR PAYMENTS TO NOTEHOLDERS TO BE HELD IN TRUST.
(a) All payments of amounts due and payable with respect to any Notes
that are to be made from amounts withdrawn from the Trust Accounts pursuant to
Section 3.4 or Section 6.6 shall be made on behalf of the Company by the
Trustee, and no amounts so withdrawn from the applicable Collection Account for
payments of Notes shall be paid over to the Company under any circumstances
except as provided in this Section 8.3, in Section 3.4 or Section 6.6.
(b) In making payments hereunder, the Trustee will hold all sums held
by it for the payment of amounts due with respect to the Notes in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided.
(c) Whenever the Company shall have one or more Paying Agents, it
will, prior to each due date of the principal of or interest on any Notes,
deposit with a Paying Agent a sum sufficient to pay the principal or interest so
becoming due, such sum to be held in trust for the benefit of the Noteholders
entitled to such principal or interest, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its action or failure
so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will hold all sums held by it for the payment of the principal
of or interest on Notes in trust for the benefit of the Persons entitled thereto
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided.
(d) Except as required by applicable law, any money held by the
Trustee in trust for the payment of any amount due with respect to any Note and
remaining unclaimed for three years after such amount has become due and payable
to the Noteholder shall be discharged from such trust and, subject to applicable
escheat laws, and so long as no Event of Default has occurred and is continuing,
paid to the Company upon request; otherwise, such amounts shall be redeposited
in the Collection Account as Available Funds, and such Noteholder shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof (but only to the extent of the amounts so paid to the Company),
and all liability of the Trustee with respect to such trust money shall
thereupon cease.
SECTION 8.4. CORPORATE EXISTENCE; MERGER; CONSOLIDATION, ETC.
(a) The Company will keep in full effect its existence, rights and
franchises as a corporation under the laws of the State of Delaware, and will
obtain and preserve its qualification to do business as a foreign corporation in
each jurisdiction in
55
which such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes or any of the Loans.
(b) The Company shall at all times observe and comply in all material
respects with (i) all laws applicable to it, (ii) all requirements of law in the
declaration and payment of dividends on its capital stock, and (iii) all
requisite and appropriate corporate and other formalities (including without
limitation meetings of the Company's Board of Directors and, if required by law,
its charter or otherwise, meetings and votes of the shareholders of the Company
to authorize corporate action) in the management of its business and affairs and
the conduct of the transactions contemplated hereby.
(c) The Company shall not issue or register the transfer of any of
its common stock to any Person other than Epic or an Affiliate of Epic.
(d) The Company shall not (i) consolidate or merge with or into any
other Person or convey or transfer its properties and assets substantially as an
entirety to any other Person or (ii) commingle its assets with those of any
other Person.
SECTION 8.5. PROTECTION OF TRUST ESTATE; FURTHER ASSURANCES.
The Company will from time to time execute and deliver all such
supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance, and other
instruments, and will take such other action as may be necessary or advisable
to:
(i) Grant more effectively the Assets comprising all or any
portion of the Trust Estate;
(ii) maintain or preserve the lien of this Indenture or carry
out more effectively the purposes hereof;
(iii) publish notice of, or protect the validity of, any Grant
made or to be made by this Indenture and perfect the security interest
contemplated hereby in favor of the Trustee in each of the Loans and all
other property included in the Trust Estate; PROVIDED, that the Company
shall not be required to cause the recordation of the Trustee's name as
lienholder on the related title documents for the Properties so long as no
Event of Default has occurred and is continuing;
(iv) enforce or cause the Servicer or the Administrator to
enforce any of the Loans in accordance with the Servicing Standard,
PROVIDED, HOWEVER, the Company will not cause the Servicer or the
Administrator to obtain on behalf of the Trustee or the Noteholders of the
related Series, any Property or to take any actions with respect to any
property the result of which would adversely affect the interests of the
Trustee or such Noteholders (including, but not limited to actions which
would cause the Trustee or the related Noteholders to be considered a
holder of title, mortgagee-in-possession, or otherwise, or an "owner" or
"operator" of Property not in compliance with applicable
56
environmental statutes);
(v) preserve and defend title to the Loans (including the
right to receive all payments due or to become due thereunder), the
interests in the Properties, or other property included in the Trust Estate
and preserve and defend the rights of the Trustee in the Trust Estate
(including the right to receive all payments due or to become due
thereunder) against the claims of all Persons and parties other than as
permitted hereunder; and
(vi) cause the Trustee to be added as an additional named
insured on each of the Insurance Policies.
The Company, upon the Company's failure to do so, hereby designates the Trustee
and the Servicer its agent and attorney-in-fact to execute any financing
statement or continuation statement required pursuant to this Section 8.5;
PROVIDED, HOWEVER, that such designation shall not be deemed to create a duty in
the Trustee to monitor the compliance of the Company with the foregoing
covenants, and PROVIDED, FURTHER, that the duty of the Trustee to execute any
instrument required pursuant to this Section 8.5 shall arise only if a
Responsible Officer of the Trustee has actual knowledge of any failure of the
Company to comply with the provisions of this Section 8.5.
SECTION 8.6. SERVICING AGREEMENT.
(a) If any Authorized Officer of the Administrator shall have
knowledge of the occurrence of a default under any Servicing Agreement, the
Administrator shall promptly notify the Trustee and the Noteholders of each
affected Series, and shall specify in such notice the action, if any, the
Administrator and the Company is taking in respect of such default. Unless
consented to by the Holders of at least 66-2/3% of the then Outstanding
Principal Amount of the Notes of each affected Series, the Company may not waive
any material default under or amend the Servicing Agreement in a manner
materially adverse to the Noteholders of such Series.
SECTION 8.7. ADDITIONAL COVENANTS.
(a) The Company will not:
(i) sell, transfer, exchange or otherwise dispose of any
portion of the Trust Estate except as expressly permitted by this
Indenture;
(ii) claim any credit on, or make any deduction from, the
principal of, or interest on, any of the Notes by reason of the payment of
any taxes levied or assessed upon any portion of the Trust Estate; or
(iii) (A) permit the validity or effectiveness of this Indenture
or any Grant hereby to be impaired, or permit the lien of this Indenture to
be amended, hypothecated, subordinated, terminated or discharged, or permit
any Person to be released from any covenants or obligations under this
Indenture, except as may be expressly permitted hereby, (B) permit any
lien, charge, security interest,
57
mortgage or other encumbrance to be created on or to 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 the lien of this
Indenture, or (C) except as otherwise contemplated in this Indenture,
permit the lien of this Indenture not to constitute a valid first
priority security interest in the Trust Estate.
(b) NOTICE OF EVENT OF DEFAULT. Immediately upon becoming aware of
the existence of any condition or event which constitutes a Default or an Event
of Default, the Company shall deliver to the Trustee a written notice describing
its nature and period of existence and what action the Company is taking or
proposes to take with respect thereto.
(c) REPORT ON PROCEEDINGS. Promptly upon the Company's becoming
aware of (i) any proposed or pending investigation of it by any governmental
authority or agency; or (ii) any pending or proposed court or administrative
proceeding which involves or may involve the possibility of materially and
adversely affecting the properties, business, prospects, profits or condition
(financial or otherwise) of the Company, the Company shall deliver to the
Trustee a written notice specifying the nature of such investigation or
proceeding and what action the Company is taking or proposes to take with
respect thereto and evaluating its merits.
SECTION 8.8. TAXES.
Epic shall pay all Taxes of the Company when due and payable or levied
against the Company's assets, properties or income, including any property that
is part of the Trust Estate. Epic will not seek reimbursement from the Company
for any such Taxes except to the extent of funds of the Company which may,
consistent with this Indenture, be distributed to Epic.
ARTICLE 9.
SUPPLEMENTAL INDENTURES
SECTION 9.1. SUPPLEMENTAL INDENTURES.
(a) The Company, by a Company Order, and the Trustee, at any time and
from time to time, may enter into one or more indentures supplemental hereto, in
form satisfactory to the Trustee, for any of the following purposes:
(i) without the consent of any Noteholder; (x) to correct or
amplify the description of any property at any time subject to the lien of
this Indenture, or to better assure, convey and confirm unto the Trustee
any property subject or required to be subjected to the lien of this
Indenture; PROVIDED such action pursuant to this clause (i) shall not
adversely affect the interests of the Noteholders of any Series in any
respect; or
(y) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Notes of one or
58
more Series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 7.9; or
(z) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to
matters or questions arising under this Indenture; provided that such
action pursuant to this clause (z) shall not adversely affect the
interests of the Holders of Notes of any Series; or
(ii) at the option of a Variable Funding Noteholder to
establish a Series permitted upon an exchange under Section 13.6.
(b) The Trustee shall promptly deliver, at least 5 Business Days
prior to the effectiveness thereof, to each Noteholder of an affected Series a
copy of any supplemental indenture entered into pursuant to this Section 9.1(a).
SECTION 9.2. SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS.
(a) With the consent of the Holders of not less than 66-2/3% of the
then Outstanding Principal Amount of the Notes of each Series affected by such
supplemental indenture and by Act of said Noteholders delivered to the Company
and the Trustee, the Company, by a Company Order, and the Trustee may 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 Noteholders of
such Series under this Indenture; PROVIDED, that no supplemental indenture
shall, without the consent of the Holder of each Outstanding Note affected
thereby,
(i) change the Stated Maturity of any Note or the Principal
Payments or Interest Payments due or to become due on any Payment Date with
respect to any Note, or change the priority of payment thereof as set forth
herein, or reduce the principal amount thereof or the Note Rate thereon, or
change the place of payment where, or the coin or currency in which, any
Note or the interest thereon is payable, or impair the right to institute
suit for the enforcement of any such payment on or after the Maturity
thereof;
(ii) reduce the percentage of the Outstanding Principal Amount
of the Notes of any Series, the consent of whose Noteholders is required
for any such supplemental indenture, for any waiver of compliance with
provisions of this Indenture or Events of Default and their consequences,
provided for in this Indenture;
(iii) modify any of the provisions of this Section or Section
6.13 except to increase any percentage or fraction set forth therein or to
provide that certain other provisions of this Indenture cannot be modified
or waived without
59
the consent of the Holder of each Outstanding Note affected thereby;
(iv) modify or alter the provisions of the proviso to the
definition of the term "Outstanding"; or
(v) permit the creation of any lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the
Trust Estate or, except as provided in the applicable Servicing Agreement,
terminate the lien of this Indenture on any property at any time subject
hereto or deprive any Noteholder of the security afforded by the lien of
this Indenture;
PROVIDED, no such supplemental indenture may modify or change any terms
whatsoever of the Indenture that could be construed as increasing the Company's
or Epic's discretion hereunder.
(b) The Trustee shall promptly deliver to each Noteholder of an
affected Series a copy of any supplemental indenture entered into pursuant to
Section 9.2(a).
SECTION 9.3. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by, any
supplemental indenture (a) pursuant to Section 9.1 of this Indenture or (b)
pursuant to Section 9.2 of this Indenture without the consent of each holder of
the Notes to the execution of the same, or the modifications thereby of the
trusts created by this Indenture, the Trustee shall be entitled to receive, and
(subject to Section 7.1) 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 supplemental indenture which affects the Trustee's
own rights, duties, obligations, or immunities under this Indenture or
otherwise.
SECTION 9.4. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Notes theretofore or thereafter authenticated and delivered hereunder shall
be bound thereby.
SECTION 9.5. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES.
Notes of any Series authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. New Notes of any Series so
modified as to conform, in the opinion of the Trustee and the Company, to any
such supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding Notes of
such Series.
60
ARTICLE 10.
SATISFACTION AND DISCHARGE
SECTION 10.1. SATISFACTION AND DISCHARGE OF INDENTURE.
(a) This Indenture shall cease to be of further effect (except as to
any surviving rights of registration of transfer or exchange of Notes herein
expressly provided for), and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when:
(i) 100 days shall have elapsed since either:
(A) all Notes theretofore authenticated and delivered (other than
(1) Notes which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 2.4 and (2) Notes for
whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to
the Company or discharged from such trust, as provided in Section
8.3(c)) have been delivered to the Trustee for cancellation; or
(B) the final installments of principal on all such Notes not
theretofore delivered to the Trustee for cancellation:
(1) have become due and payable, or
(2) will become due and payable at their Stated Maturity, as
applicable, within one year,
and the Company has irrevocably deposited or caused to be deposited
with the Trustee as trust funds in trust for the purpose an amount
sufficient to pay and discharge the entire indebtedness on such Notes
not theretofore delivered to the Trustee for cancellation, for
principal and interest to the date of such deposit (in the case of
Notes which have become due and payable) or to the Stated Maturity
thereof;
(ii) the Company and the Administrator have paid or caused to
be paid all other sums payable hereunder by the Company and the
Administrator for the benefit of the Noteholders and the Trustee; and
(iii) the Company has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of
this Indenture have been complied with.
At such time, the Trustee shall deliver to the Company all cash, securities and
other property held by it as part of the Trust Estate other than funds deposited
with the
61
Trustee pursuant to Section 10.1(a)(i)(B), for the payment and discharge of
the Notes.
(b) Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 7.6 and, if money
shall have been deposited with the Trustee pursuant to Section 10.1(a)(i)(B),
the obligations of the Trustee under Section 10.2 and Section 8.3(c) shall
survive.
SECTION 10.2. APPLICATION OF TRUST MONEY.
Subject to the provisions of Section 8.3(c), all money deposited with
the Trustee pursuant to Sections 10.1 and 8.3 shall be held in trust and applied
by it, in accordance with the provisions of the Notes and this Indenture, to the
payment to the Persons entitled thereto, of the principal and interest for whose
payment such money has been deposited with the Trustee.
SECTION 10.3. TRUST TERMINATION DATE. Upon the full application of
(a) moneys deposited pursuant to this Article 10 or (b) proceeds of the Assets
pursuant to Sections 3.4 or 6.6, the Trust Estate created by this Indenture
shall be deemed to have terminated (the "Trust Termination Date").
ARTICLE 11.
REPRESENTATIONS AND WARRANTIES
SECTION 11.1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to the Trustee and the Noteholders, as of each
Issuance Date and on each day until the discharge of this Indenture, as follows:
(a) The Company is a wholly-owned bankruptcy remote subsidiary of
Epic Resorts, LLC and is a corporation duly organized, validly existing and in
good standing under the laws of the state of Delaware and is duly qualified to
do business, and is in good standing in each jurisdiction in which the nature of
its business requires it to be so qualified and which permits such
qualification;
(b) The Company has the power and authority to own and convey all of
its properties and to execute and deliver this Indenture and the Related
Documents and to perform the transactions contemplated hereby and thereby;
(c) The Company is operated in such a manner and is constituted so
that it would not be substantively consolidated in the bankruptcy trust estate
of any Affiliate, such that the separate existence of the Company and any
Affiliate would be disregarded, and to such end:
(i) the Company maintains separate records, books of account
and financial statements from those of Epic and each other Affiliate of
Epic;
(ii) the Company does not commingle any of its assets or funds
with those of Epic or any of the other Affiliates of Epic;
62
(iii) the Company maintains a separate board of directors with
at least two independent directors and observes all separate corporate
formalities, and all decisions with respect to the Company's business and
daily operations have been and shall be independently made by the officers
of the Company pursuant to resolutions of its board of directors;
(iv) other than contributions of capital, payment of dividends
and return of capital, no transactions have been entered into between the
Company and Epic or between the Company and any of the other Affiliates of
Epic except such transactions as are contemplated by this Indenture and the
Related Documents;
(v) except for such administration and collection and
functions as Epic may perform on behalf of the Company and the Trust Estate
pursuant to this Indenture and the Related Documents, the Company acts
solely in its own name and through its own authorized officers and agents
and the Company does not act as agent of Epic or any other Person in any
capacity;
(vi) except for any funds received from Epic (or from Epic
indirectly by way of any of the other Affiliates of Epic) as a capital
contribution, the Company shall not accept for its own account funds from
Epic or any of the other Affiliates of Epic; and the Company shall not
allow Epic or any of the other Affiliates of Epic otherwise to supply funds
to, or guarantee any obligation of, the Company;
(vii) the Company shall not guarantee, or otherwise become
liable with respect to, any obligation of Epic or any of the other
Affiliates of Epic; and
(viii) the Company shall at all times hold itself out to the
public under the Company's own name as a legal entity separate and distinct
from Epic and the other Affiliates of Epic.
(d) The Company is a special purpose company and has not engaged, and
does not presently engage and shall not engage, in any activity other than the
activities undertaken pursuant to this Indenture and the Related Documents and
contemplated hereby and thereby and activities ancillary or incident thereto,
and has no Debt other than the Notes;
(e) The execution, delivery and performance by the Company of this
Indenture, the Related Documents and the transactions contemplated hereby and
thereby, (i) have been duly authorized by all necessary corporate or other
action on the part of the Company, (ii) do not contravene or cause the
Company to be in default under (A) the Company's certificate of incorporation
or bylaws, (B) any contractual restriction contained in any indenture, loan
or credit agreement, lease, mortgage, security agreement, bond, note, or
other agreement or instrument binding on or affecting the Company or its
property, or (C) any law, rule, regulation, order, writ, judgment, award,
injunction, or decree applicable to, binding on or affecting the
63
Company or its property, and (iii) do not result in or require the creation
of any Adverse Claim upon or with respect to any of the property of the
Company;
(f) This Indenture and the Related Documents have each been duly
executed and delivered on behalf of the Company;
(g) No consent of, or other action by, and no notice to or filing
with, any Governmental Authority or any other party, is required for the due
execution, delivery and performance by the Company of this Indenture or any of
the Related Documents or for the perfection of or the exercise by the Trustee or
the Noteholders of any of their rights or remedies thereunder which have not
been duly obtained;
(h) This Indenture and each other Related Document is the legal,
valid and binding obligation of the Company enforceable against the Company in
accordance with its respective terms; except as such enforcement may be limited
by bankruptcy, insolvency, reorganization, receivership, moratorium or other
laws relating to or affecting the rights of creditors generally, and by general
principles of equity (regardless of whether such enforcement is considered in a
proceeding in law or in equity);
(i) There is no pending or threatened action, suit or proceeding, nor
any injunction, writ, restraining order or other order of any nature against or
affecting the Company, its officers or directors, or the property of the
Company, in any court or tribunal, or before any arbitrator of any kind or
before or by any Governmental Authority (i) asserting the invalidity of this
Indenture or any of the Related Documents, (ii) seeking to prevent the sale and
assignment of any Loan or the consummation of any of the transactions
contemplated thereby, (iii) seeking any determination or ruling that might
materially and adversely affect (A) the performance by the Company of this
Indenture or any of the Related Documents or the interests of the Noteholders,
(B) the validity or enforceability of this Indenture or any of the Related
Documents, (C) any Loan, or (D) the Intended Tax Characterization, or
(iv) asserting a claim for payment of money adverse to the Company or the
conduct of its business or which is inconsistent with the due consummation of
the transactions contemplated by this Indenture or any of the Related Documents;
(j) The principal place of business and chief executive office of the
Company are located at the address in Pennsylvania indicated in Section 12.5 and
there are now no, and there have not been any, other locations where the Company
is located (as that term is used in the UCC) or keeps Records except, after the
date of this Indenture, as disclosed in writing to the Trustee and the
Noteholders and the Administrator at least 30 Business Days prior to any such
change;
(k) The legal name of the Company is as set forth in the beginning of
this Indenture and the Company has not changed its name since its formation, and
during such period, the Company did not use, nor does the Company now use any
tradenames, fictitious names, assumed names or "doing business as" names;
(l) The Company does not have any Subsidiaries;
64
(m) The Company is solvent and will not become insolvent after giving
effect to the transactions contemplated by this Indenture and each of the
Related Documents; the Company's transfers of Assets to the Trust Estate have
been and will be made for reasonably equivalent value and fair consideration;
and the Company, after giving effect to the transactions contemplated by this
Indenture and each of the Related Documents, will have an adequate amount of
capital to conduct its business in the future; and
(n) The Company has complied in all material respects with all
applicable laws, rules, regulations, and orders with respect to it, its business
and properties and all of the Assets.
SECTION 11.2. REPRESENTATIONS AND WARRANTIES AS TO EACH LOAN. (a) In
connection with the establishment of each Series of Notes (other than the
Variable Funding Notes), each of the Company and Epic will make the
representations and warranties designated with respect to such Series. With
respect to the Variable Funding Notes, each of the Company and Epic will make
the representations and warranties in Section 2.3 of the Credit Agreement.
(b) The Company and the Administrator each hereby certifies that the
representations and warranties contemplated in this Section 11.2 shall survive
the transfer of the Loans to the Trust Estate.
ARTICLE 12.
MISCELLANEOUS
SECTION 12.1. INDEMNITIES OF THE ADMINISTRATOR.
(a) The Administrator agrees to indemnify (i) the Trust Estate from,
and hold it harmless against, any and all losses, liabilities, damages, claims
or expenses (including reasonable attorneys' fees of counsel) arising as a
result of the Administrator's acts or omissions (subject to the administration
standard set forth in Section 5.2(b)) in violation of this Indenture and (ii)
the Trustee, any separate trustee or co-trustee, if any, their directors,
officers, employees and agents, from, and hold it harmless against, any and all
losses, liabilities, damages, claims, expenses (including attorney's fees and
disbursements), fines or penalties, or judgments arising out of or in connection
with the performance by the Trustee, separate trustee, if any, or co-trustee, if
any, of its duties hereunder or in connection with the Trust Estate, or the
issuance of the Notes except to the extent the Trustee's, separate trustee's or
co-trustee's own bad faith, willful misconduct or negligence has been judicially
determined to have contributed to the loss, liability, damage, claim or expense.
(b) This Section 12.1 shall survive the termination of this Indenture
or the resignation or removal of the Trustee in respect of rights accrued prior
to such resignation or removal.
65
SECTION 12.2. OFFICER'S CERTIFICATE AND OPINION OF COUNSEL AS TO
CONDITIONS PRECEDENT.
Upon any request or application by the Company (or any other obligor
upon the Notes) to the Trustee to take any action under this Indenture, the
Company (or such other obligor) shall furnish to the Trustee:
(a) an Officer's Certificate (which shall include the statements set
forth in Section 12.3) stating that, in the opinion of the signer, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(b) an Opinion of Counsel (which shall include the statements set
forth in Section 12.3) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been complied with.
SECTION 12.3. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(b) 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;
(c) a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been complied with.
SECTION 12.4. NOTICES. (a) All communications, instructions,
directions and notices to the parties thereto shall be (i) in writing (which may
be by telecopy, followed by delivery of original documentation within one
Business Day), (ii) effective when received and (iii) delivered or mailed first
class mail, postage prepaid to it at the following address:
If to the Company:
Epic Master Funding Corporation
First Avenue, Suite 900
King of Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
00
Xxxxxxxxx Number: (000) 000-0000
Telephone Number: (000) 000-0000
If to the Administrator:
Epic Resorts, LLC
First Avenue, Suite 900
King of Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Facsimile Number: (000) 000-0000
Telephone Number: (000) 000-0000
If to the Trustee:
Marine Midland Bank
Corporate Trust Department
000 Xxxxxxxx, 00xx Xx.
Xxx Xxxx, Xxx Xxxx 00000
Facsimile Number: (000) 000-0000
Telephone Number: (000) 000-0000
or at such other address as the party may designate by notice to the other
parties hereto, which shall be effective when received.
(b) All communications and notices pursuant hereto to a Noteholder
shall be in writing and delivered or mailed first class mail, postage prepaid or
overnight courier at the address shown in the Note Register. The Trustee agrees
to deliver or mail to each Noteholder upon receipt, all notices and reports that
the Trustee may receive hereunder and under any Servicing Agreement and Related
Documents. Unless otherwise provided herein, the Trustee may consent to any
requests received under such documents or, at its option, follow the directions
of Noteholders with a Percentage of greater than 50% within 30 days after prior
written notice to the Noteholders. All notices to Noteholders (or any Class
thereof) shall be sent simultaneously. Expenses for such communications and
notices shall be borne by the Administrator.
SECTION 12.5. NO PROCEEDINGS. The Noteholders, the Administrator and
the Trustee each hereby agrees that it will not, directly or indirectly
institute, or cause to be instituted, against the Company or the Trust Estate
any proceeding of the type referred to in Section 6.1(e) so long as there shall
not have elapsed one year plus one day since the last maturity of the Notes.
ARTICLE 13.
67
VARIABLE FUNDING NOTES
SECTION 13.1. DESIGNATION.
(a) DESIGNATION OF FUNDING NOTES. There is hereby created a Series
of Notes to be issued pursuant to this Indenture designated as "Epic Master
Funding Corporation -- Variable Funding Notes" (the "Funding Notes"). Forms of
the Funding Notes and of the Trustee's certificate of authentication shall be as
set forth in Exhibit C hereto.
(b) PRINCIPAL AMOUNT OF FUNDING NOTES. The maximum aggregate
principal amount of Funding Notes which may be Outstanding at any time under
this Indenture is limited to $75,000,000.
(c) MINIMUM DENOMINATIONS. The Funding Notes may be issued in
minimum denominations of $500,000 and any integral multiple of $1,000 in excess
thereof; PROVIDED that the foregoing shall not restrict or prevent the transfer
in accordance with Section 2.3 of this Indenture of any Funding Notes having a
remaining Outstanding Principal Amount of other than an integral multiple of
$1,000, or the issuance of a single Funding Note with a denomination less than
$500,000.
(d) ISSUANCE DATE. The Issuance Date in respect of the Funding Notes
shall be the Initial Funding Date.
(e) PAYMENT DATES. The first Payment Date with respect to the
Funding Notes shall be October 10, 1998. Principal and interest payments will
be made on the dates set forth in the Credit Agreement.
(f) INTEREST. The Funding Notes shall be entitled to the Funding
Notes Interest on each Payment Date. Principal and interest shall be payable to
the Holder in whose name a Funding Note is registered on the related Record
Date. No later than the second Business Day of each month, the Initial Lender
will deliver to Epic, the Servicer, the Trustee and the Company, an invoice
reflecting the amount of Funding Notes Interest the Initial Lender is entitled
to for the related Payment Date.
(g) ASSETS. The Assets allocated to the Funding Notes are as set
forth in Schedule 1, as modified from time to time in accordance with this
Indenture.
(h) ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS FOR FUNDING
NOTES. The representations and warranties with respect to Epic, the Company and
the Specified Loans, additional covenants, and conditions precedent to Advances
set forth in Sections 2, 3, 4, 8, 9, and 10 of the Credit Agreement are
incorporated into this Indenture.
(i) ADDITIONAL EVENTS OF DEFAULT AND REMEDIES FOR FUNDING NOTES. The
Events of Default and Remedies therefor described in Sections 11(a) and 11(b) of
the Credit Agreement are incorporated into this Indenture.
68
(j) SERVICER AND CUSTODIAN FOR LOAN DOCUMENTS. Finova Portfolio
Services, Inc. shall act as the Servicer of the Loans and as Custodian of the
Loan Documents.
(k) MAINTENANCE OF BORROWING BASE. Upon notice from a Funding
Noteholder or actual knowledge of a Borrowing Base Deficiency, the Company shall
no later than five Business Days after such notice or knowledge of such
Borrowing Base Deficiency, either prepay principal on the Funding Notes directly
to the Noteholders in whole or in part, or Grant additional Eligible Loans to
the Trustee for the benefit of the holders of the Funding Notes, such that after
giving effect to such prepayment or Grant, or both, a Borrowing Base Deficiency
will not exist.
(l) SUBSTITUTION OF LOANS AND RELEASE OF LIENS. In connection with
Section 4.6 of this Indenture, the Trustee will not release any Loans from the
lien of this Indenture if an Event of Default has occurred and is continuing
without the prior written consent of Holders of the Funding Notes. In addition,
the substitution of more than $200,000 of Loans in any calendar month shall
require the prior written consent of the Holders of the Funding Notes.
SECTION 13.2. CERTAIN DEFINITIONS. Capitalized terms used in this
Article 13 but not defined shall have the meanings set forth in "Variable
Funding Notes Definitions" attached as Appendix A hereto and to the Credit
Agreement.
SECTION 13.3. ESTABLISHMENT AND MAINTENANCE OF FUNDING NOTES
COLLECTION ACCOUNT. Concurrently with the execution and delivery hereof, the
Trustee shall establish the Epic Master Funding Corporation -- Collection
Account, Marine Midland Bank, as Trustee" (the "Funding Notes Collection
Account").
SECTION 13.4. REQUIRED DEPOSITS TO THE FUNDING NOTES COLLECTION
ACCOUNT. (a) The Company shall cause all amounts representing payments in
respect of Specified Loans (including, without limitation all late charges and
all proceeds of any Exchange) to be remitted to the Funding Notes Collection
Account.
(b) The Trustee acting on behalf of the Holders and the Company
each agree (i) that the Funding Notes Collection Account shall be maintained
in the name of the Trustee, (ii) that the Funding Notes Collection Account
shall be subject to the exclusive dominion of the Trustee, and (iii) that the
Trustee shall have the sole right of withdrawal from the Funding Notes
Collection Account. The Company, the Holders and Epic shall timely provide
(but in no event later than two Business Days prior to the related Payment
Date) written remittance information to the Trustee specifying payment
instructions (including with respect to the Funding Notes, the Funding Notes
Interest), with respect to amounts payable on each Payment Date pursuant to
each provision of Section 13.5. The Trustee shall have no liability to the
Company, any Holder or any other Person for failure to pay funds to any
Person in accordance with Section 13.5 in the absence of timely receipt of
such written remittance instructions or in the event of
69
any errors in such written remittance instructions.
SECTION 13.5. APPLICATION OF FUNDS IN THE FUNDING NOTES COLLECTION
ACCOUNT.
(a) On each Payment Date prior to an Acceleration Event (as defined
below), an Exchange or a Securitization Take-out, the Trustee shall disburse the
Available Funds in the Funding Notes Collection Account, in the following
priority:
(i) on October 10, 1998, to the Trustee, the Trustee Fee, and
thereafter, reimbursement to the Trustee of reasonable expenses incurred
during the related Due Period;
(ii) to the Servicer, the Monthly Servicing Fee, plus any
accrued and unpaid Monthly Servicing Fees with respect to any prior Due
Period;
(iii) to the Funding Noteholders, interest in an amount equal to
Funding Notes Interest, plus any accrued and unpaid Funding Notes Interest
from prior Due Periods;
(iv) to the Funding Noteholders, in reduction of the
Outstanding Principal Amount of the Funding Notes, an amount equal to the
Funding Notes Principal Payment Amount;
(v) the remaining funds in the Funding Notes Collection
Account, if any, to the Company.
(b) On each Payment Date occurring upon or after the occurrence of an
Event of Default specified in this Indenture or the Credit Agreement upon which
the Outstanding Principal Amount of the Funding Notes has been accelerated in
accordance with Section 6.2 of this Indenture (each, an "Acceleration Event"),
the Trustee shall disburse the balance of Available Funds in the following
priority:
(i) to the Trustee, reimbursement of reasonable expenses
incurred by the Trustee during the related Due Period and any unreimbursed
reasonable expenses from prior Due Periods;
(ii) to the Servicer, the Monthly Servicing Fee, plus any
accrued and unpaid Monthly Servicer Fee;
(iii) to the Funding Noteholders, interest in an amount equal to
Funding Notes Interest, plus any accrued and unpaid Funding Notes Interest;
(iv) to the Funding Noteholders, all remaining Available Funds
until the Outstanding Principal Amount of the Funding Notes has been
reduced to zero; and
(v) the remainder of funds held in the Funding Notes
Collection
70
Account to the Company;
SECTION 13.6. EXCHANGES FOR NEW SERIES.
(a) From time to time, on any Business Day as long as the Funding
Notes are outstanding, and upon 7 days' written notice to the Administrator and
the Trustee, the Initial Lender on behalf of the Noteholders, may elect to
exchange all or a portion of the unpaid Outstanding Principal Amount of the
Funding Notes for one or more new Series of Notes (the "Term Notes") to be
issued in accordance with Section 2.1(a) of this Indenture (each such election,
an "Exchange").
(b) The Company agrees to cause the creation of such Series of Term
Notes under this Indenture and to execute and order the authentication of the
Notes of such Series so long as the terms of such Series of Term Notes do not
materially impair the value under GAAP of the Company's interest in the
Specified Loans.
(c) The Initial Lender may designate the Specified Loans which will
collateralize each Series of Term Notes issued hereunder at the time of an
Exchange.
(d) The Noteholders may sell, pledge or retain some or all of the
Term Notes after such Exchange.
(e) Any payments on the Specified Loans designated as collateral for
a Series of Term Notes in excess of the aggregate principal amount of and
accrued interest on such Term Notes and any prior Funding Notes from which such
Term Notes were created will be for the Company's account.
(f) At the request of the Initial Lender, the Trustee shall release
the Trust Estate to a subsequent transferee (at the direction of the Initial
Lender), which shall issue securities secured by, or representing interests in,
the Trust Estate (as so transferred), on the terms contemplated herein for the
Term Notes. The Initial Lender and the Company shall be entitled to proceeds
from such subsequent issuance in accordance with this Section 13.6.
SECTION 13.7. RESIGNATION OR REMOVAL OF TRUSTEE. Notwithstanding
Section 7.8(a), the Trustee may at any time resign and be discharged with
respect to the Funding Notes by giving 30 days' written notice thereof to the
Administrator, the Company and the Initial Lender. Upon receiving such notice
of resignation, the Administrator shall promptly appoint a successor Trustee not
objected to by Initial Lender within 30 days after prior written notice, by
written instrument, in quintuplicate, one counterpart of which instrument shall
be delivered to each of the Company, the successor Trustee and the predecessor
Trustee.
71
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Indenture to be duly executed as of the day and year first above written.
EPIC MASTER FUNDING CORPORATION,
as Company
By: /s/ X. X. Xxxxxxx
---------------------------------
Name:
Title:
EPIC RESORTS, LLC,
as Administrator and individually
By: /s/ X. X. Xxxxxxx
---------------------------------
Name:
Title:
MARINE MIDLAND BANK, not in its individual
capacity, but solely as Trustee
By: /s/ Xxxxx Barstock
---------------------------------
Name: Xxxxx Barstock
Title: Assistant Vice President
72
TABLE OF CONTENTS
PAGE
ARTICLE 1. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION. . . . . . 3
SECTION 1.1. General Definitions . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.2. Compliance Certificates and Opinions. . . . . . . . . . . .16
SECTION 1.3. Form of Documents Delivered to Trustee. . . . . . . . . . .17
SECTION 1.4. Acts of Noteholders, etc. . . . . . . . . . . . . . . . . .18
SECTION 1.5. Notice to Noteholders; Waiver . . . . . . . . . . . . . . .19
SECTION 1.6. Effect of Headings and Table of Contents. . . . . . . . . .20
SECTION 1.7. Successors and Assigns. . . . . . . . . . . . . . . . . . .20
SECTION 1.8. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . .20
SECTION 1.9. Legal Holidays. . . . . . . . . . . . . . . . . . . . . . .21
SECTION 1.10. Execution in Counterparts. . . . . . . . . . . . . . . . .21
SECTION 1.11. Inspection . . . . . . . . . . . . . . . . . . . . . . . .21
SECTION 1.12. Survival of Representations and Warranties . . . . . . . .22
SECTION 1.13. Security Forms . . . . . . . . . . . . . . . . . . . . . .22
ARTICLE 2. THE NOTES. . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
SECTION 2.1. General Provisions. . . . . . . . . . . . . . . . . . . . .22
SECTION 2.2. Execution, Authentication, Delivery, and Dating . . . . . .25
SECTION 2.3. Transfer and Exchange . . . . . . . . . . . . . . . . . . .26
SECTION 2.4. Mutilated, Destroyed, Lost and Stolen Notes . . . . . . . .27
SECTION 2.5. Payment of Interest and Principal; Rights Preserved . . . .28
SECTION 2.6. Persons Deemed Owners . . . . . . . . . . . . . . . . . . .29
SECTION 2.7. Cancellation. . . . . . . . . . . . . . . . . . . . . . . .29
SECTION 2.8. Noteholder Lists. . . . . . . . . . . . . . . . . . . . . .29
SECTION 2.9. Treasury Notes. . . . . . . . . . . . . . . . . . . . . . .29
ARTICLE 3. ACCOUNTS; COLLECTION AND APPLICATION OF MONEYS; REPORTS. . . . . .30
SECTION 3.1. Trust Accounts; Investments by Trustee. . . . . . . . . . .30
SECTION 3.2. Establishment and Administration of the Collection
Accounts. . . . . . . . . . . . . . . . . . . . . . . . .32
SECTION 3.3. Establishment and Administration of Cash Collateral
Accounts. . . . . . . . . . . . . . . . . . . . . . . . .33
SECTION 3.4. Distributions . . . . . . . . . . . . . . . . . . . . . . .34
SECTION 3.5. Reports to Noteholders. . . . . . . . . . . . . . . . . . .34
SECTION 3.6. Returned Payments . . . . . . . . . . . . . . . . . . . . .35
ARTICLE 4. THE TRUST ESTATE . . . . . . . . . . . . . . . . . . . . . . . . .35
SECTION 4.1. Acceptance by Trustee . . . . . . . . . . . . . . . . . . .35
SECTION 4.2. Subsequent Transfers. . . . . . . . . . . . . . . . . . . .35
SECTION 4.3. Conditions Precedent to All Transfers . . . . . . . . . . .36
SECTION 4.4. Grant of Security Interest; Tax Treatment . . . . . . . . .37
SECTION 4.5. Further Action Evidencing Assignments . . . . . . . . . . .38
ARTICLE 5. SERVICING OF ASSETS. . . . . . . . . . . . . . . . . . . . . . . .40
SECTION 5.1. Appointment of Servicer . . . . . . . . . . . . . . . . . .40
SECTION 5.2. Appointment of Administrator; Monthly Administration
Fee . . . . . . . . . . . . . . . . . . . . . . . . . . .40
SECTION 5.3. Duties and Responsibilities of the Administrator. . . . . .41
ARTICLE 6. EVENTS OF DEFAULT; REMEDIES. . . . . . . . . . . . . . . . . . . .42
SECTION 6.1. Events of Default . . . . . . . . . . . . . . . . . . . . .42
SECTION 6.2. Acceleration of Maturity; Rescission and Annulment. . . . .44
SECTION 6.3. Remedies. . . . . . . . . . . . . . . . . . . . . . . . . .45
SECTION 6.4. Trustee May File Proofs of Claim. . . . . . . . . . . . . .46
SECTION 6.5. Trustee May Enforce Claims Without Possession of Notes. . .47
SECTION 6.6. Application of Money Collected. . . . . . . . . . . . . . .47
SECTION 6.7. Limitation on Suits . . . . . . . . . . . . . . . . . . . .48
SECTION 6.8. Unconditional Right of Noteholders to Receive Principal
and Interest. . . . . . . . . . . . . . . . . . . . . . .48
SECTION 6.9. Restoration of Rights and Remedies. . . . . . . . . . . . .49
SECTION 6.10. Rights and Remedies Cumulative . . . . . . . . . . . . . .49
SECTION 6.11. Delay or Omission Not Waiver . . . . . . . . . . . . . . .49
SECTION 6.12. Control by Noteholders . . . . . . . . . . . . . . . . . .49
SECTION 6.13. Waiver of Events of Default. . . . . . . . . . . . . . . .50
SECTION 6.14. Undertaking for Costs. . . . . . . . . . . . . . . . . . .50
SECTION 6.15. Waiver of Stay or Extension Laws . . . . . . . . . . . . .51
SECTION 6.16. Sale of Trust Estate . . . . . . . . . . . . . . . . . . .51
ARTICLE 7. THE TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . .52
SECTION 7.1. Certain Duties. . . . . . . . . . . . . . . . . . . . . . .52
SECTION 7.2. Notice of Events of Default . . . . . . . . . . . . . . . .54
SECTION 7.3. Certain Matters Affecting the Trustee . . . . . . . . . . .54
SECTION 7.4. Trustee Not Liable for Notes or Loans . . . . . . . . . . .55
SECTION 7.5. Trustee May Own Notes . . . . . . . . . . . . . . . . . . .56
SECTION 7.6. The Administrator to Pay Trustee's Fees and Expenses. . . .56
SECTION 7.7. Eligibility Requirements for Trustee. . . . . . . . . . . .56
SECTION 7.8. Resignation or Removal of Trustee . . . . . . . . . . . . .57
SECTION 7.9. Successor Trustee . . . . . . . . . . . . . . . . . . . . .58
SECTION 7.10. Merger or Consolidation of Trustee . . . . . . . . . . . .59
ARTICLE 8. COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .62
SECTION 8.1. Payment of Principal and Interest . . . . . . . . . . . . .62
SECTION 8.2. Maintenance of Office or Agency; Chief Executive Office . .62
SECTION 8.3. Money for Payments to Noteholders to be Held in Trust . . .62
SECTION 8.4. Corporate Existence; Merger; Consolidation, etc . . . . . .63
SECTION 8.5. Protection of Trust Estate; Further Assurances. . . . . . .64
SECTION 8.6. Servicing Agreement . . . . . . . . . . . . . . . . . . . .65
SECTION 8.7. Additional Covenants. . . . . . . . . . . . . . . . . . . .65
SECTION 8.8. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . .66
ARTICLE 9. SUPPLEMENTAL INDENTURES. . . . . . . . . . . . . . . . . . . . . .66
SECTION 9.1. Supplemental Indentures . . . . . . . . . . . . . . . . . .66
SECTION 9.2. Supplemental Indentures with Consent of Noteholders . . . .67
SECTION 9.3. Execution of Supplemental Indentures. . . . . . . . . . . .68
SECTION 9.4. Effect of Supplemental Indentures . . . . . . . . . . . . .69
SECTION 9.5. Reference in Notes to Supplemental Indentures . . . . . . .69
ARTICLE 10. SATISFACTION AND DISCHARGE. . . . . . . . . . . . . . . . . . . .69
SECTION 10.1. Satisfaction and Discharge of Indenture. . . . . . . . . .69
SECTION 10.2. Application of Trust Money . . . . . . . . . . . . . . . .70
ARTICLE 11. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . .71
SECTION 11.1. Representations and Warranties of the Company. . . . . . .71
SECTION 11.2. Representations and Warranties as to Each Loan . . . . . .74
ARTICLE 12. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . .74
SECTION 12.1. Indemnities of the Administrator . . . . . . . . . . . . .74
SECTION 12.2. Officer's Certificate and Opinion of Counsel as to
Conditions Precedent . . . . . . . . . . . . . . . . . .75
SECTION 12.3. Statements Required in Certificate or Opinion. . . . . . .75
SECTION 12.4. Notices. . . . . . . . . . . . . . . . . . . . . . . . . .75
SECTION 12.5. No Proceedings . . . . . . . . . . . . . . . . . . . . . .77
ARTICLE 13. VARIABLE FUNDING NOTES. . . . . . . . . . . . . . . . . . . . . .77
SECTION 13.1. Designation. . . . . . . . . . . . . . . . . . . . . . . .77
SECTION 13.2. Certain Definitions. . . . . . . . . . . . . . . . . . . .78
SECTION 13.3. Establishment and Maintenance of Funding Notes
Collection Account . . . . . . . . . . . . . . . . . . .78
SECTION 13.4. Required Deposits to the Funding Notes Collection
Account. . . . . . . . . . . . . . . . . . . . . . . . .79
SECTION 13.5. Application of Funds in the Funding Notes Collection
Account. . . . . . . . . . . . . . . . . . . . . . . . .79
SECTION 13.6. Exchanges for New Series . . . . . . . . . . . . . . . . .80
SECTION 13.7. Resignation or Removal of Trustee. . . . . . . . . . . . .81
SCHEDULE 1 - LIST OF ASSETS ALLOCATED TO EACH SERIES.
EXHIBITS
EXHIBIT A - FORM OF COLLATERAL ASSIGNMENT
EXHIBIT B - FORM OF VARIABLE FUNDING NOTE
EXHIBIT C - FORM OF RULE 144A TRANSFEREE LETTER
EXHIBIT D - FORM OF INVESTOR LETTER
