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EXHIBIT 4.1
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EXECUTION COPY
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ADVANTA REVOLVING HOME EQUITY LOAN TRUST 1998-A
Class A Asset Backed Notes
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INDENTURE
Dated as of June 1, 1998
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BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
Indenture Trustee
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TABLE OF CONTENTS
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ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE.............................................................2
SECTION 1.1. Definitions..............................................................................2
SECTION 1.2. Incorporation by Reference of the Trust Indenture Act...................................24
SECTION 1.3. Rules of Construction...................................................................24
SECTION 1.4. Action by or Consent of Noteholders.....................................................24
SECTION 1.5. Conflict with TIA.......................................................................24
ARTICLE II. THE NOTES ...........................................................................................25
SECTION 2.1. Form....................................................................................25
SECTION 2.2. Execution, Authentication and Delivery..................................................25
SECTION 2.3. Registration; Registration of Transfer and Exchange.....................................26
SECTION 2.4. Xxxxxxxxx, Xxxxxxxxx, Lost or Stolen Notes..............................................27
SECTION 2.5. Persons Deemed Owners...................................................................28
SECTION 2.6. Payment of Principal and Interest; Defaulted Interest...................................28
SECTION 2.7. Cancellation............................................................................29
SECTION 2.8. Release of Collateral...................................................................29
SECTION 2.9. Book-Entry Notes........................................................................29
SECTION 2.10. Notices to Clearing Agency..............................................................30
SECTION 2.11. Definitive Notes........................................................................30
ARTICLE III. COVENANTS...........................................................................................31
SECTION 3.1. Payment of Principal and Interest.......................................................31
SECTION 3.2. Maintenance of Office or Agency.........................................................31
SECTION 3.3. Money for Payments to be Held in Trust..................................................31
SECTION 3.4. Existence...............................................................................32
SECTION 3.5. Protection of Trust Estate..............................................................33
SECTION 3.6. Opinions as to Trust Estate.............................................................33
SECTION 3.7. Performance of Obligations; Servicing of Mortgage Loans.................................34
SECTION 3.8. Negative Covenants......................................................................35
SECTION 3.9. Annual Statement as to Compliance.......................................................36
SECTION 3.10. Issuer May Not Consolidate or Transfer Assets...........................................36
SECTION 3.11. No Other Business.......................................................................36
SECTION 3.12. No Borrowing............................................................................36
SECTION 3.13. Guarantees, Loans, Advances and Other Liabilities.......................................36
SECTION 3.14. Capital Expenditures....................................................................37
SECTION 3.15. Compliance with Laws....................................................................37
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SECTION 3.16. Restricted Payments.....................................................................37
SECTION 3.17. Notice of Rapid Amortization Events and Events of Servicing Termination.................37
SECTION 3.18. Further Instruments and Acts............................................................37
SECTION 3.19. Amendments of Sale and Servicing Agreement and Trust Agreement..........................37
SECTION 3.20. Income Tax Characterization.............................................................37
ARTICLE IV. SATISFACTION AND DISCHARGE...........................................................................38
SECTION 4.1. Satisfaction and Discharge of Indenture.................................................38
SECTION 4.2. Application of Trust Money..............................................................39
SECTION 4.3. Repayment of Monies Held by Note Paying Agent...........................................39
ARTICLE V. REMEDIES..............................................................................................39
SECTION 5.1. Rights Upon a Rapid Amortization Event..................................................39
SECTION 5.2. Limitation of Suits.....................................................................39
SECTION 5.3. Unconditional Rights of Noteholders To Receive Principal and Interest...................40
SECTION 5.4. Restoration of Rights and Remedies......................................................40
SECTION 5.5. Rights and Remedies Cumulative..........................................................41
SECTION 5.6. Delay or Omission Not a Waiver..........................................................41
SECTION 5.7. Control by Noteholders..................................................................41
SECTION 5.8. Undertaking for Costs...................................................................41
SECTION 5.9. Waiver of Stay or Extension Laws........................................................42
SECTION 5.10. Action on Notes.........................................................................42
SECTION 5.11. Performance and Enforcement of Certain Obligations......................................42
SECTION 5.12. Subrogation.............................................................................42
SECTION 5.13. Preference Claims.......................................................................43
ARTICLE VI. THE INDENTURE TRUSTEE................................................................................44
SECTION 6.1. Duties of Indenture Trustee.............................................................44
SECTION 6.2. Rights of Indenture Trustee.............................................................46
SECTION 6.3. Individual Rights of Indenture Trustee..................................................47
SECTION 6.4. Indenture Trustee's Disclaimer..........................................................47
SECTION 6.5. Notice of Defaults......................................................................47
SECTION 6.6. Reports by Indenture Trustee to Holders.................................................47
SECTION 6.7. Compensation and Indemnity..............................................................47
SECTION 6.8. Replacement of Indenture Trustee........................................................48
SECTION 6.9. Successor Indenture Trustee by Xxxxxx...................................................50
SECTION 6.10. Appointment of Co-Indenture Trustee or Separate Indenture Trustee.......................50
SECTION 6.11. Eligibility: Disqualification...........................................................51
SECTION 6.12. Preferential Collection of Claims Against Issuer........................................52
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SECTION 6.13. Appointment and Powers..................................................................52
SECTION 6.14. Performance of Duties...................................................................52
SECTION 6.15. Limitation on Liability.................................................................52
SECTION 6.16. Reliance Upon Documents.................................................................52
SECTION 6.17. Representations and Warranties of the Indenture Trustee.................................53
SECTION 6.18. Waiver of Setoffs.......................................................................53
SECTION 6.19. Control by the Controlling Party........................................................53
SECTION 6.20. Trustee May Enforce Claims Without Possession of Notes..................................53
SECTION 6.21. Suits for Enforcement...................................................................54
SECTION 6.22. Mortgagor Claims........................................................................54
ARTICLE VII. NOTEHOLDERS' LISTS AND REPORTS......................................................................55
SECTION 7.1. Issuer To Furnish To Indenture Trustee Names and Addresses of Noteholders...............55
SECTION 7.2. Preservation of Information; Communications to Noteholders..............................55
SECTION 7.3. Reports by Issuer.......................................................................55
SECTION 7.4. Reports by Indenture Trustee............................................................56
ARTICLE VIII. PAYMENTS AND STATEMENTS TO NOTEHOLDERS AND CERTIFICATEHOLDERS; ACCOUNTS,
DISBURSEMENTS AND RELEASES..............................................................56
SECTION 8.1. Collection of Money.....................................................................56
SECTION 8.2. Release of Trust Estate.................................................................56
SECTION 8.3. Establishment of Accounts...............................................................57
SECTION 8.4. The Policy..............................................................................57
SECTION 8.5. Pre-Funding Account and Capitalized Interest Account....................................58
SECTION 8.6. Flow of Funds...........................................................................58
SECTION 8.7. Investment of Accounts..................................................................59
SECTION 8.8. Eligible Investments....................................................................60
SECTION 8.9. Reports by Indenture Trustee............................................................61
SECTION 8.10. Additional Reports by Indenture Trustee.................................................64
SECTION 8.11. Opinion of Counsel......................................................................65
ARTICLE IX. SUPPLEMENTAL INDENTURES..............................................................................65
SECTION 9.1. Supplemental Indentures Without Consent of Noteholders..................................65
SECTION 9.2. Supplemental Indentures with Consent of Noteholders.....................................66
SECTION 9.3. Execution of Supplemental Indentures....................................................68
SECTION 9.4. Effect of Supplemental Indenture........................................................68
SECTION 9.5. Conformity With Trust Indenture Act.....................................................68
SECTION 9.6. Reference in Notes to Supplemental Indentures...........................................68
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ARTICLE X. REDEMPTION OF NOTES...................................................................................68
SECTION 10.1. Redemption..............................................................................68
SECTION 10.2. Surrender of Notes......................................................................70
SECTION 10.3. Form of Redemption Notice...............................................................70
SECTION 10.4. Notes Payable on Redemption Date........................................................71
ARTICLE XI. MISCELLANEOUS........................................................................................71
SECTION 11.1. Compliance Certificates and Opinions, etc...............................................71
SECTION 11.2. Form of Documents Delivered to Indenture Trustee........................................72
SECTION 11.3. Acts of Noteholders.....................................................................73
SECTION 11.4. Notices, etc. to Indenture Trustee, Issuer and Rating Agencies..........................73
SECTION 11.5. Notices to Noteholders; Xxxxxx..........................................................74
SECTION 11.6. Alternate Payment and Notice Provisions.................................................75
SECTION 11.7. Conflict with Trust Indenture Act.......................................................75
SECTION 11.8. Effect of Headings and Table of Contents................................................75
SECTION 11.9. Successors and Assigns..................................................................75
SECTION 11.10. Separability............................................................................75
SECTION 11.11. Benefits of Indenture...................................................................75
SECTION 11.12. Legal Holidays..........................................................................76
SECTION 11.13. Governing Law...........................................................................76
SECTION 11.14. Counterparts............................................................................76
SECTION 11.15. Recording of Indenture..................................................................76
SECTION 11.16. Trust Obligation........................................................................76
SECTION 11.17. No Petition.............................................................................76
SECTION 11.18. Inspection..............................................................................77
SECTION 11.19. Limitation of Liability.................................................................77
ARTICLE XII. RAPID AMORTIZATION EVENTS...........................................................................77
SECTION 12.1. Rapid Amortization Events...............................................................77
EXHIBITS
Exhibit A -- Form of Class A Note
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INDENTURE dated as of June 1, 1998, between ADVANTA REVOLVING HOME EQUITY
LOAN TRUST 1998-A, a Delaware business trust (the "Issuer"), and BANKERS TRUST
COMPANY OF CALIFORNIA, N.A., a national banking association, as trustee (the
"Indenture Trustee").
Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Holders of the Issuer's Class A Asset Backed
Notes (the "Class A Notes"):
As security for the payment and performance by the Issuer of its
obligations under this Indenture and the Class A Notes, the Issuer has agreed to
assign the Collateral (as defined below) to the Indenture Trustee on behalf of
the Noteholders.
Ambac Assurance Corporation (the "Insurer") has issued and delivered a
financial guaranty insurance policy, dated as of the Closing Date (the
"Policy"), pursuant to which the Insurer guarantees the Guaranteed Distributions
(as defined below).
As an inducement to the Insurer to issue and deliver the Policy, the Issuer
and the Insurer have executed and delivered the Insurance Agreement, dated as of
June 24, 1998 (as amended from time to time, the "Insurance Agreement"), among
the Insurer, the Issuer, Advanta Mortgage Conduit Services, Inc. and the
Indenture Trustee.
As an additional inducement to the Insurer to issue the Policy, and as
security for the performance by the Issuer of the Insurer Issuer Secured
Obligations and as security for the performance by the Issuer of the Indenture
Trustee Issuer Secured Obligations, the Issuer has agreed to grant and assign
the Collateral (as defined below) to the Indenture Trustee for the benefit of
the Issuer Secured Parties, as their respective interests may appear.
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GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing Date, for
the benefit of the Issuer Secured Parties, all of the Issuer's right, title and
interest in and to the following (collectively, the "Collateral"): (i) certain
adjustable rate home equity revolving credit line loans (the "Mortgage Loans")
(including any Additional Balances) made or to be made under certain Credit Line
Agreements and conveyed to the Issuer; (ii) collections in respect of the
Mortgage Loans with due dates after the Initial Cut-Off Date, (iii) property
that secured a Mortgage Loan that has been acquired by foreclosure or deed in
lieu of foreclosure; (iv) rights of the Sponsor under hazard insurance policies
covering the Mortgaged Properties; (v) the Policy; (vi) amounts on deposit in
the Note Account; (vii) amounts on deposit in the Pre-Funding Account; (viii)
amounts on deposit in the Capitalized Interest Account; (ix) amounts on deposit
in the Principal and Interest Account; (x) any and all Subsequent Mortgage Loans
(including any Additional Balances related thereto); (xi) all rights under the
Purchase Agreement assigned to the Issuer (including all representations and
warranties of the Originator contained therein) and all rights of the Issuer
under the Sale and Servicing Agreement; and (xii) any and all proceeds of the
foregoing.
The foregoing Grant is made in trust to the Indenture Trustee, for the
benefit, first, of the Holders of the Notes, and second, of the Insurer. The
Indenture Trustee hereby acknowledges such Grant, accepts the trusts under this
Indenture in accordance with the provisions of this Indenture and agrees to
perform the duties required of it by this Indenture to the best of its ability
to the end that the interests of such parties, recognizing the priorities of
their respective interests, may be adequately and effectively protected.
ARTICLE I.
Definitions and Incorporation by Reference
SECTION 1.1. Definitions. Except as otherwise specified herein, the
following terms have the respective meanings set forth below for all purposes of
this Indenture. In addition, other capitalized terms used herein and not defined
herein shall have their respective meanings as set forth in the Sale and
Servicing Agreement.
"Accelerated Principal Payments": With respect to any Payment Date, a
payment received as a payment of principal by the Noteholders of the Class A
Notes, for the purpose of increasing the Overcollateralization Amount to the
Specified Overcollateralization Amount applicable to such Payment Date, and to
be paid from amounts remaining in the Note Account on such Payment Date, after
deduction of the amounts described in clauses (i) through (vii) of Section
8.6(b) hereof on such Payment Date;
"Account": Any account established in accordance with Section 8.3 hereof or
Section 4.8 of the Sale and Servicing Agreement.
"Act" has the meaning specified in Section 11.3(a).
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"Affiliate" means, with respect to any specified Person, any other Person
controlling, controlled by or under common control with such Person. For the
purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"AMHC": Advanta Mortgage Holding Company, a Delaware corporation and the
corporate parent of Advanta Mortgage Corp. USA, and the indirect corporate
parent of Advanta Mortgage Conduit Services, Inc.
"Authorized Newspapers": Any of the following, The Wall Street Journal, the
New York Times, the Washington Post, the Los Angeles Times or such other
newspaper determined by the Indenture Trustee in its sole judgment.
"Authorized Officer": With respect to any Person, any person who is
authorized to act for such Person in matters relating to this Agreement, and
whose action is binding upon such Person and, with respect to the Indenture
Trustee, the Master Servicer and the Sponsor, initially including those
individuals whose names appear on the lists of Authorized Officers delivered on
the Closing Date.
"Available Funds": As defined in Section 8.4(a) hereof.
"Available Funds Shortfall": As defined in Section 8.4(b) hereof.
"Billing Cycle": With respect to any Mortgage Loan and Remittance Period,
the billing period specified in the related Credit Line Agreement and with
respect to which amounts billed are received during such Remittance Period.
"Book Entry Notes" means a beneficial interest in the Notes, ownership and
transfers of which shall be made through book entries by a Clearing Agency as
described in Section 2.9.
"Business Day": Any day that is not a Saturday, Sunday or other day on
which commercial banking institutions in the State of New York or in the city in
which the principal Corporate Trust Office of the Indenture Trustee is located,
are authorized or obligated by law or executive order to be closed.
"Capitalized Interest Account": The Capitalized Interest Account
established in accordance with Section 8.3 hereof and maintained by the
Indenture Trustee.
"Capitalized Interest Account Deposit": $35,296.04.
"Capitalized Interest Amount": With respect to any Determination Date, the
amount on deposit in the Capitalized Interest Account.
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"Capitalized Interest Requirement": As to any Payment Date occurring during
the Pre-Funding Period, the difference, if any, between (x) the interest due on
the Class A Notes on such Payment Date plus the Premium Amount, the Indenture
Trustee's Fee and the Owner Trustee's Fee as of such Payment Date and (y) the
sum of (i) one month's interest on the aggregate Principal Balances of all
Mortgage Loans as of the close of business on the last day of the immediately
preceding Remittance Period, calculated at the Class A Interest Rate, plus the
Premium Amount, the Indenture Trustee's Fee and the Owner Trustee's Fee as of
such Payment Date and (ii) any Pre-Funding Earnings to be transferred to the
Note Account on such Payment Date pursuant to Section 8.5(c) hereof.
"Certificate": As defined in the Trust Agreement.
"Certificate of Trust": means the certificate of trust of the Issuer
substantially in the form of Exhibit B to the Trust Agreement.
"Certificateholders": The holders of the Certificates issued pursuant to
the Trust Agreement.
"Civil Relief Act": The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
"Class A Formula Rate": For any Interest Accrual Period, (x) with respect
to any Payment Date which occurs on or prior to the Optional Redemption Date,
LIBOR plus 0.17% per annum and (y) for any Payment Date thereafter, LIBOR plus
0.34% per annum.
"Class A Interest Distribution Amount": With respect to any Payment Date,
the product of (x) one-twelfth of the Class A Interest Rate applicable to such
Payment Date and (y) the Class A Principal Balance immediately prior to such
Payment Date (based on a 360-day year and the actual number of days in the prior
calendar month).
"Class A Interest Rate": As to any Payment Date, the lesser of (i) the
Class A Formula Rate and (ii) the Net Funds Cap Rate.
"Class A Note": Any Note designated as a "Class A Asset Backed Note" on the
face thereof in substantially the form of Exhibit A hereto.
"Class A Note Balance": The Class A Principal Balance.
"Class A Principal Balance": As of any time of determination, the Original
Class A Principal Balance of the Class A Notes less any amounts actually
distributed theretofore as principal thereon to the Class A Notes on all prior
Payment Dates.
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act.
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"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
"Closing Date": June 24, 1998.
"Code": The Internal Revenue Code of 1986, as amended, and any successor
statute.
"Collateral": As defined in the Recitals hereof.
"Combined Loan-to-Value Ratio": With respect to any Mortgage Loan as of
any date, the percentage equivalent of a fraction, the numerator of which is the
sum of (i) the Credit Limit and (ii) the outstanding principal balance as of the
date of execution of the related Credit Line Agreement (or as of any subsequent
date, if any, as of which such outstanding principal balance may be determined
in connection with an increase in the Credit Limit for such Mortgage Loan) of
any mortgage loan or mortgage loans that are senior in priority to the Mortgage
Loan and which is secured by the same Mortgaged Property and the denominator of
which is the lesser of (i) the Appraised Value of the related Mortgaged Property
as set forth in the Mortgage File on such date of execution or on such
subsequent date, if any, or (ii) in the case of a Mortgaged Property purchased
within one year of such date of execution, the purchase price thereof.
"Controlling Party" means the Insurer, so long as no Insurer Default shall
have occurred and be continuing, and the Indenture Trustee, for so long as an
Insurer Default shall have occurred and be continuing.
"Corporate Trust Office": The Indenture Trustee's office at 0 Xxxx Xxxxx,
00xx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000.
"Credit Limit": As to any Mortgage Loan, the maximum principal balance
permitted under the terms of the related Credit Line Agreement.
"Credit Limit Utilization Rate": As to any Mortgage Loan, the percentage
equivalent of a fraction the numerator of which is the Principal Balance for
such Mortgage Loan and the denominator of which is the related Credit Limit.
"Credit Line Agreement": With respect to any Mortgage Loan, the related
home equity line of credit agreement, security instrument and promissory note
executed by the related Mortgagor and any amendment or modification thereof.
"Cut-Off Date": With respect to each Initial Mortgage Loan, the Initial
Cut-Off Date. With respect to any Subsequent Mortgage Loan, the Subsequent
Cut-Off Date related to such Subsequent Mortgage Loan. With respect to each
Qualified Replacement Mortgage, the Replacement Cut-off Date related to such
Qualified Replacement Mortgage.
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"Cut-Off Date Pool Balance": The aggregate Principal Balances of all the
Mortgage Loans as of the related Cut-Off Date; as of the Initial Cut-Off Date,
$75,130,216.06.
"Cut-Off Date Principal Balance": With respect to any Mortgage Loan, the
unpaid principal balance thereof as of the related Cut-Off Date.
"Debt Service Reduction": With respect to any Mortgage Loan, a reduction by
a court of competent jurisdiction of the Minimum Monthly Payment due on such
Mortgage Loan.
"Default" means any occurrence that is, or with notice or the lapse of time
or both would become, a Rapid Amortization Event.
"Deficiency Amount": (a) For any Payment Date, any shortfalls in amounts
available in the Note Account to pay, in full on such Payment Date, the Class A
Interest Distribution Amount (excluding any Net Funds Cap Carry-Forward Amounts,
any Prepayment Interest Shortfalls and any Relief Act Shortfalls), and (b) for
any Payment Date, any shortfalls in amounts available in the Note Account to pay
the Overcollateralization Deficit and (c) on the Final Scheduled Payment Date,
any shortfall in amounts available in the Note Account to pay the outstanding
Class A Principal Balance.
"Deficient Valuation": With respect to any Mortgage Loan, a valuation of
the related Mortgaged Property by a court of competent jurisdiction in an amount
less than the then outstanding Principal Balance of the Mortgage Loan, which
valuation results from a proceeding initiated under the United States Bankruptcy
Code.
"Definitive Notes" has the meaning specified in Section 2.9.
"Delinquent": A Mortgage Loan is "delinquent" if any payment due thereon is
not made by the close of business on the day such payment is scheduled to be
due. A Mortgage Loan is "30 days delinquent" if such payment has not been
received by the close of business on the corresponding day of the month
immediately succeeding the month in which such payment was due, or, if there is
no such corresponding day (e.g., as when a 30-day month follows a 31-day month
in which a payment was due on the 31st day of such month) then on the last day
of such immediately succeeding month. Similarly for "60 days delinquent," "90
days delinquent" and so on.
"Depository": The Depository Trust Company, 0 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 and any successor Depository hereafter named.
"Designated Depository Institution": With respect to the Principal and
Interest Account, an institution whose deposits are insured by the Bank
Insurance Fund or the Savings Association Insurance Fund of the FDIC, the
long-term deposits of which shall be rated (x) A or better by S&P and (y) A2 or
better by Moody's and in one of the two highest short-term rating categories,
unless otherwise approved in writing by the Insurer and each of Moody's and S&P,
and which is any of the following: (i) a federal savings and loan association
duly organized, validly existing and in good standing under the federal banking
laws, (ii) an institution duly
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organized, validly existing and in good standing under the applicable banking
laws of any state, (iii) a national banking association duly organized, validly
existing and in good standing under the federal banking laws, (iv) a principal
subsidiary of a bank holding company, or (v) approved in writing by the Insurer,
Moody's and S&P and, in each case acting or designated by the Master Servicer as
the depository institution for the Principal and Interest Account; provided,
however, that any such institution or association shall have combined capital,
surplus and undivided profits of at least $100,000,000. Notwithstanding the
foregoing, the Principal and Interest Account may be held by an institution
otherwise meeting the preceding requirements except that the only applicable
rating requirement shall be that the unsecured and uncollateralized debt
obligations thereof shall be rated Baa3 or better by Moody's if such institution
has trust powers and the Principal and Interest Account is held by such
institution in its trust capacity and not in its commercial capacity.
"Determination Date": As to each Payment Date, the third Business Day next
preceding such Payment Date or such earlier day as shall be agreed to by the
Insurer and Indenture Trustee.
"Direct Participant" or "DTC Participant": Any broker-dealer, bank or other
financial institution for which the Depository holds the Class A Notes from time
to time as a securities depository.
"Draw": With respect to any Mortgage Loan, an additional borrowing by the
Mortgagor subsequent to the related Cut-Off Date in accordance with the related
Credit Line Agreement.
"Draw Period": With respect to any Mortgage Loan, the period of time
specified in the related Credit Line Agreement whereby a Mortgagor may make a
Draw under the related Credit Line Agreement, not to exceed three years unless
extended pursuant to such Credit Line Agreement.
"Eligible Investments": Those investments so designated pursuant to Section
8.8 hereof.
"ERISA" means Employee Retirement Income Security Act of 1974, as amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"FDIC": The Federal Deposit Insurance Corporation, or any successor
thereto.
"FHLMC": The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created pursuant to the Emergency Home
Finance Act of 1970, as amended, or any successor thereof.
"Final Scheduled Payment Date": The Payment Date in August, 2023 whereby
the Class A Noteholders of the Class A Notes shall be entitled to receive a
payment of principal in an amount equal to the outstanding Class A Principal
Balance. The Final Scheduled Payment
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Date is the date which is one year after the date which is the latest possible
maturity date of a Mortgage Loan which amortizes according to its terms.
"First Mortgage Loan": A Mortgage Loan which constitutes a first priority
mortgage lien with respect to any Mortgaged Property.
"Fixed Allocation Percentage": 98%.
"FNMA": The Federal National Mortgage Association, a federally-chartered
and privately-owned corporation existing under the Federal National Mortgage
Association Charter Act, as amended, or any successor thereof.
"Grant" means mortgage, pledge, bargain, sell, warrant, alienate, remise,
release, convey, assign, transfer, create, xxxxx x xxxx upon and a security
interest in and right of set-off against, deposit, set over and confirm pursuant
to this Indenture. A Grant of the Collateral or of any other agreement or
instrument shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of the Collateral and all other monies payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
proceedings in the name of the Granting party or otherwise and generally to do
and receive anything that the Granting party is or may be entitled to do or
receive thereunder or with respect thereto.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Note Register.
"Indebtedness" means, with respect to any Person at any time, (a)
indebtedness or liability of such Person for borrowed money whether or not
evidenced by bonds, debentures, notes or other instruments, or for the deferred
purchase price of property or services (including trade obligations); (b)
obligations of such Person as lessee under leases which should have been or
should be, in accordance with generally accepted accounting principles, recorded
as capital leases; (c) current liabilities of such Person in respect of unfunded
vested benefits under plans covered by Title IV of ERISA; (d) obligations issued
for or liabilities incurred on the account of such Person; (e) obligations or
liabilities of such Person arising under acceptance facilities; (f) obligations
of such Person under any guarantees, endorsements (other than for collection or
deposit in the ordinary course of business) and other contingent obligations to
purchase, to provide funds for payment, to supply funds to invest in any Person
or otherwise to assure a creditor against loss; (g) obligations of such Person
secured by any lien on property or assets of such Person, whether or not the
obligations have been assumed by such Person; or (h) obligations of such Person
under any interest rate or currency exchange agreement.
"Indemnification Agreement": The Indemnification Agreement dated as of June
24, 1998 among the Sponsor, the Insurer and the Underwriter.
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"Indenture" means this Indenture as amended and supplemented from time to
time.
"Indenture Trustee": Bankers Trust Company of California, N.A., located on
the date of execution of this Agreement at 0 Xxxx Xxxxx, 00xx Xxxxx, Xxxxxx,
Xxxxxxxxxx 00000, not in its individual capacity but solely as Indenture Trustee
under this Agreement, and any successor hereunder.
"Indenture Trustee's Fee": With respect to any Payment Date, the product of
(x) one-twelfth of .015% and (y) the Pool Balance as of the end of the
immediately preceding Remittance Period.
"Indenture Trustee Issuer Secured Obligations" means all amounts and
obligations which the Issuer may at any time owe to the Indenture Trustee for
the benefit of the Noteholders under this Indenture or the Notes.
"Independent" means, when used with respect to any specified Person, that
the person (a) is in fact independent of the Issuer, any other obligor upon the
Notes, the Sponsor and any Affiliate of any of the foregoing persons, (b) does
not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Sponsor or any Affiliate of
any of the foregoing Persons and (c) is not connected with the Issuer, any such
other obligor, the Sponsor or any Affiliate of any of the foregoing Persons as
an officer, employee, promoter, underwriter, trustee, partner, director or
Person performing similar functions.
"Independent Certificate" means a certificate or opinion to be delivered to
the Indenture Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.1, prepared by an
Independent appraiser or other expert appointed pursuant to an Issuer Order and
approved by the Indenture Trustee in the exercise of reasonable care, and such
opinion or certificate shall state that the signer has read the definition of
"Independent" in this Indenture and that the signer is Independent within the
meaning thereof.
"Indirect Participant" shall mean any financial institution for whom any
Direct Participant holds an interest in the Class A Notes.
"Initial Cut-Off Date": With respect to the Initial Mortgage Loans, the
close of business on June 5, 1998.
"Initial Mortgage Loans": Mortgage Loans delivered by the Sponsor to the
Trust on the Closing Date.
"Initial Premium": The initial premium payable by the Sponsor on behalf of
the Trust to the Insurer in consideration of the delivery to the Indenture
Trustee of the Policy.
"Initial Specified Overcollateralization Amount": As defined in the
Insurance Agreement.
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"Insurance Agreement": The Insurance Agreement dated as of June 24, 1998
among the Sponsor, the Master Servicer, the Indenture Trustee and the Insurer,
as it may be amended from time to time.
"Insurance Policy": Any hazard, title or primary mortgage insurance policy
relating to a Mortgage Loan.
"Insurance Proceeds": Proceeds paid by any insurer (other than the Insurer)
pursuant to any Insurance Policy covering a Mortgage Loan, or amounts required
to be paid by the Master Servicer pursuant to the last sentence of the first
paragraph of Section 4.11(b) of the Sale and Servicing Agreement, or the
penultimate sentence of Section 4.11(c) of the Sale and Servicing Agreement, net
of any component thereof (i) covering any expenses incurred by or on behalf of
the Master Servicer in connection with obtaining such proceeds, (ii) that is
applied to the restoration or repair of the related Mortgaged Property, (iii)
released to the Mortgagor in accordance with the Master Servicer's normal
servicing procedures, or (iv) required to be paid to any holder of a mortgage
senior to such Mortgage Loan.
"Insured Payment": As of any Payment Date, (i) any Deficiency Amount and
(ii) any Preference Amount.
"Insurer": Ambac Assurance Corporation or any successor thereto, as issuer
of the Policy.
"Insurer Default" means the failure by the Insurer to make a payment
required under the Policy in accordance with the terms thereof.
"Insurer Issuer Secured Obligations" means all amounts and obligations
which the Issuer may at any time owe to or on behalf of the Insurer under this
Indenture, the Insurance Agreement or any other Operative Document.
"Interest Accrual Period": With respect to the Class A Notes, the period
commencing on the prior Payment Date (or on the Closing Date with respect to the
July 27, 1998 Payment Date) and ending on the day immediately preceding such
Payment Date.
"Interest Collections": For any Payment Date, amounts collected during the
related Remittance Period, including the portion of Net Liquidation Proceeds
allocated to interest pursuant to the terms of the Credit Line Agreements, less
the Servicing Fee for the related Remittance Period.
"Interest Determination Date": With respect to any Interest Accrual Period
for the Class A Notes (other than the initial Interest Accrual Period), the
second London Business Day preceding such first day of such Interest Accrual
Period.
"Interest Remittance Amount": As of any Remittance Date, the sum, without
duplication, of (i) all interest collected by the Master Servicer during the
related Remittance Period with respect to the Mortgage Loans (net of the
Servicing Fee), except that with respect to
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Prepaid Installments, interest shall be remitted in the related Remittance
Period and (ii) all Net Liquidation Proceeds actually collected by the Master
Servicer with respect to the Mortgage Loans during the related Remittance Period
(to the extent such Net Liquidation Proceeds relate to interest).
"Issuer" means the party named as such in this Indenture until a successor
replaces it and, thereafter, means the successor and, for purposes of any
provision contained herein and required by the TIA, each other obligor on the
Notes.
"Issuer Order" and "Issuer Request" means a written order or request signed
in the name of the Issuer by any one of its Authorized Officers and delivered to
the Indenture Trustee.
"Issuer Secured Obligations" means the Insurer Issuer Secured Obligations
and the Indenture Trustee Issuer Secured Obligations.
"Issuer Secured Parties" means each of the Indenture Trustee in respect of
the Indenture Trustee Issuer Secured Obligations and the Insurer in respect of
the Insurer Issuer Secured Obligations.
"Late Payment Rate": For any Payment Date, the rate of interest, as it is
publicly announced by Citibank, N.A. at its principal office in New York, New
York as its prime rate (any change in such prime rate of interest to be
effective on the date such change is announced by Citibank, N.A.) plus 2%. The
Late Payment Rate shall be computed on the basis of a year of 365 days
calculating the actual number of days elapsed. In no event shall the Late
Payment Rate exceed the maximum rate permissible under any applicable law
limiting interest rates.
"LIBOR": With respect to any Interest Accrual Period for the Class A Notes,
the rate determined by the Indenture Trustee on the related Interest
Determination Date appearing on the Telerate Screen Page 3750, as of 11:00 AM,
London Time, on the second LIBOR Business Day prior to the first day of such
Interest Accrual Period. If such rate does not appear on such page (or such
other page as may replace that page on that service, or if such service is no
longer offered, such other service for displaying LIBOR or comparable rates as
may be selected by the Sponsor after consultation with the Indenture Trustee),
the rate will be the Reference Bank Rate.
"LIBOR Business Day": Any day other than (i) a Saturday or a Sunday or (ii)
a day on which banking institutions in the State of New York or in the city of
London, England are required or authorized by law to be closed.
"Lifetime Rate Cap": With respect to each Mortgage Loan with respect to
which the related Credit Line Agreement provides for a lifetime rate cap, the
maximum Loan Rate permitted over the life of such Mortgage Loan under the terms
of the related Credit Line Agreement.
"Liquidated Mortgage Loan": As defined in the Sale and Servicing Agreement.
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"Liquidation Expenses": Expenses which are incurred by the Master Servicer
or any Sub-Servicer in connection with the liquidation of any defaulted Mortgage
Loan, such expenses, including, without limitation, legal fees and expenses, and
any unreimbursed Servicing Advances expended by the Master Servicer or any
Sub-Servicer pursuant to Section 4.9 of the Sale and Servicing Agreement with
respect to the related Mortgage Loan.
"Liquidation Proceeds": With respect to any Liquidated Mortgage Loan, any
amounts (including the proceeds of any Insurance Policy but excluding any
amounts drawn on the Policy) recovered by the Master Servicer in connection with
such Liquidated Mortgage Loan, whether through Indenture Trustee's sale,
foreclosure sale or otherwise.
"Loan Rate": With respect to any Mortgage Loan and as of any day, the per
annum rate of interest applicable under the related Credit Line Agreement to the
calculation of interest for such day on the Principal Balance of such Mortgage
Loan.
"Loan Rate Cap": With respect to each Mortgage Loan, the lesser of (i) the
Lifetime Rate Cap, if any, or (ii) the applicable state usury ceiling, if any.
"London Business Day": A day on which banks are open for dealing in foreign
currency, and exchange in London and New York City.
"Managed Amortization Period": The Period commencing on July 27, 1998 and
ending on the earlier to occur of (x) the July, 2001 Payment Date and (y) the
Payment Date which immediately precedes the occurrence of a Rapid Amortization
Event.
"Margin": With respect to each Mortgage Loan with an adjustable rate, the
fixed percentage amount set forth in the related Credit Line Agreement which
amount is added to Prime in accordance with the terms of the related Credit Line
Agreement to determine, on each Interest Determination Date, the Loan Rate for
such Mortgage Loan, subject to any maximum.
"Master Servicer": Advanta Mortgage Corp. USA, a Delaware corporation, and
its permitted successors and assigns.
"Master Servicer Affiliate": A Person (i) controlling, controlled by or
under common control with the Master Servicer and (ii) which is qualified to
service residential mortgage loans.
"Maximum Principal Payment": With respect to any Payment Date, the Fixed
Allocation Percentage of the Principal Collections relating to such Payment
Date.
"Maximum Step-Down Amount": As of any Payment Date, the excess of (i) the
aggregate, cumulative amount of Overcollateralization Reduction Amount for such
current, and all prior, Payment Dates over (ii) the aggregate, cumulative amount
of all payments made with respect to Step-Down Amounts for all prior Payment
Dates; provided, that for any Payment Date on which the Specified
Overcollateralization Amount exceeds the Overcollateralization Amount, the
Step-Down Amount will be reduced (but not below zero) by the amount of any such
excess.
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"Minimum Monthly Payment": With respect to any Mortgage Loan and any month,
the minimum amount required to be paid by the related Mortgagor in that month.
"Minimum Originator's Interest": With respect to any date, an amount equal
to 2% of the Trust Collateral Value.
"Monthly Remittance Amount": As of any Remittance Date, the sum of (i) the
Interest Remittance Amount for such Remittance Date and (ii) the Principal
Remittance Amount for such Remittance Date.
"Moody's": Xxxxx'x Investors Service, Inc.
"Mortgage": The mortgage, deed of trust or other instrument creating a
first or junior lien on an estate in fee simple interest in real property
securing a Credit Line Agreement.
"Mortgage Files": As defined in the Sale and Servicing Agreement.
"Mortgage Loans": As defined in the Sale and Servicing Agreement.
"Mortgagor": The obligor on a Credit Line Agreement.
"Net Funds Cap Carry-Forward Amount": In the event that, on any Payment
Date, the Net Funds Cap Rate is less than the Class A Formula Rate (i.e., the
Class A Interest Rate equals the Net Funds Cap Rate), the excess of the amount
of interest due based on the Class A Formula Rate, over the interest due based
on the Net Funds Cap Rate, together with interest thereon at the then-applicable
Class A Formula Rate.
"Net Funds Cap Rate": For any Interest Accrual Period, (x) the fraction,
expressed as an annual percentage rate, (i) the numerator of which is twelve
times the interest due on the Mortgage Loans during the prior Remittance Period,
net of the amount of Prepayment Interest Shortfalls, Relief Act Shortfalls,
Servicing Fee, Indenture Trustee's Fee, Owner Trustee's Fee and Premium Amount
for the related Remittance Period and (ii) the denominator of which is the Trust
Collateral Value immediately prior to the related Payment Date (y) less,
commencing on the tenth Payment Date, 0.50%.
"Net Liquidation Proceeds": As to any Liquidated Mortgage Loan, Liquidation
Proceeds net of, without duplication, Liquidation Expenses and unreimbursed
Servicing Advances and accrued and unpaid Servicing Fees through the date of
liquidation relating to such Liquidated Mortgage Loan. In no event shall Net
Liquidation Proceeds with respect to any Liquidated Mortgage Loan be less than
zero.
"Net Principal Collections": With respect to any Payment Date, the excess
of (x) Principal Collections with respect to the related Remittance Period over
(y) the aggregate principal amount of all Additional Balances arising during
such related Remittance Period; provided that in no event will Net Principal
Collections be less than zero with respect to any Payment Date.
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"Note" means a Class A Note.
"Note Account": The Note Account established in accordance with Section 8.3
hereof and maintained by the Indenture Trustee.
"Note Owner" means, with respect to a Book-Entry Note, the person who is
the owner of such Book-Entry Note or following the issuance of Definitive Notes,
the registered owner of the Notes.
"Note Paying Agent" means the Indenture Trustee or any other Person that
meets the eligibility standards for the Indenture Trustee specified in Section
6.11 and is authorized by the Issuer to make payments to and distributions from
the Note Account, including payment of principal of or interest on the Notes on
behalf of the Issuer.
"Note Register" and "Note Registrar" have the respective meanings specified
in Section 2.3.
"Officer's Certificate" means a certificate signed by any Authorized
Officer of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.1 and TIA Section 314,
and delivered to the Indenture Trustee.
"Operative Documents": Collectively, this Indenture, the Trust Agreement,
the Sale and Servicing Agreement, the Subsequent Transfer Agreements, the
Policy, the Class A Notes, the Indemnification Agreement and the Insurance
Agreement.
"Opinion of Counsel" means one or more opinions of counsel who may, except
as otherwise expressly provided in this Indenture, be employees of or counsel to
the Issuer and, if addressed to the Insurer, satisfactory to the Insurer, and
which shall comply with any applicable requirements of Section 11.1, and if
addressed to the Insurer, satisfactory to the Insurer.
"Optional Redemption Date": The date on which the Sponsor exercises its
right of optional redemption of the Class A Notes pursuant to Section 10.1(b)
herein.
"Original Class A Principal Balance": $80,000,000.
"Original Cut-Off Date Pool Balance": The Pool Balance calculated as of the
Initial Cut-Off Date.
"Original Pre-Funded Amount": The amount deposited in the Pre-Funding
Account on the Closing Date, from the proceeds of the sale of the Class A Notes,
which amount is $6,502,437.00.
"Original Principal Amount": With respect to any particular Class A Note,
an amount equal to the product of (i) the Percentage Interest of such Class A
Note and (ii) the Original Class A Principal Balance.
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"Original Principal Balance": With respect to each Credit Line Agreement,
the principal amount of such Credit Line Agreement or the mortgage note relating
to a Senior Lien, as the case may be, on the date of origination thereof.
"Originator": Advanta National Bank.
"Originator's Interest": As of any Payment Date, is the excess, if any, of
(x) the Trust Collateral Value as of such Payment Date over (y) the Class A
Principal Balance as of such Payment Date (after taking into account reductions
therein on such Payment Date).
"Outstanding": With respect to all Notes, as of any date of determination,
all such Notes xxxxxxxxxxx executed and delivered hereunder except:
(i) Notes theretofore cancelled by the Indenture Trustee or delivered
to the Indenture Trustee for cancellation;
(ii) Notes or portions thereof for which full and final payment money
in the necessary amount has been theretofore deposited with the Indenture
Trustee in trust for the Class A Noteholders of such Notes;
(iii) Notes in exchange for or in lieu of which other Notes have been
executed and delivered pursuant to this Agreement, unless proof
satisfactory to the Indenture Trustee is presented that any such Notes are
held by a bona fide purchaser; and
(iv) Notes alleged to have been destroyed, lost or stolen for which
replacement Notes have been issued as provided for in Section 2.4 hereof.
"Overcollateralization Amount": As of any Payment Date, the lesser of (x)
the Originator's Interest as of such date and (y) the Specified
Overcollateralization Amount for such Payment Date.
"Overcollateralization Deficiency Amount": With respect to any Payment
Date, the difference, if any, between (i) the Specified Overcollateralization
Amount applicable to such Payment Date and (ii) the Overcollateralization Amount
applicable to such Payment Date.
"Overcollateralization Deficit": With respect to any Payment Date, the
amount, if any, by which (i) the aggregate Class A Principal Balance, after
taking into account the payment to the Class A Noteholders of the Class A Notes
of all principal from sources other than the Policy on such Payment Date,
exceeds (ii) the Trust Collateral Value as of such Payment Date.
"Overcollateralization Reduction Amount": With respect to any Payment Date
on which the Originator's Interest is greater than the Specified
Overcollateralization Amount, the amount of any decrease in the Specified
Overcollateralization Amount that is permitted by the Insurer.
"Owner Trustee": Wilmington Trust Company, not in its individual capacity
but solely as Owner Trustee under the Trust Agreement, its successors in
interest or any successor Owner Trustee under the Trust Agreement.
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"Owner Trustee's Fee": A fee which is separately agreed to between the
Sponsor and the Owner Trustee.
"Payment Date": Any date on which the Indenture Trustee is required to make
distributions to the Class A Noteholders, which shall be the 25th day of each
month, commencing in the month following the Closing Date or, if such day is not
a Business Day, then on the succeeding Business Day.
"Percentage Interest": As to any Class A Note that percentage, expressed as
a fraction, the numerator of which is the Class A Principal Balance of such
Class A Note as of the related Cut-Off Date and the denominator of which is the
Original Class A Principal Balance of all Class A Notes; and as to any
Certificate, that Percentage Interest set forth on such Certificate.
"Person": Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Policy": The financial guaranty insurance policy dated June 24, 1998,
issued by the Insurer to the Indenture Trustee for the benefit of the
Noteholders.
"Policy Claim Amount": With respect to any Payment Date, an amount equal to
the related Available Funds Shortfall plus the related Preference Amount.
"Pool Balance": With respect to any date, the Principal Balances of the
Mortgage Loans as of such date.
"Pool Factor": A seven-digit decimal which the Indenture Trustee shall
compute monthly expressing the Class A Principal Balance as of each Payment Date
(after giving effect to any distribution of principal on such Payment Date) as a
proportion of the Original Class A Principal Balance. On the Closing Date, the
Pool Factor will be 1.0000000. Thereafter, the Pool Factor shall decline to
reflect reductions in the related Class A Principal Balance resulting from
distributions of principal to the Class A Notes.
"Predecessor Note" means, 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 mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
"Preference Amount": As defined in the Policy.
"Pre-Funded Amount": With respect to any Determination Date, the amount on
deposit in the Pre-Funding Account.
"Pre-Funded Mortgage Loans": Subsequent Mortgage Loans assigned to the
Trust in consideration of amounts released to the Originator from the
Pre-Funding Account.
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"Pre-Funding Account": The Pre-Funding Account established in accordance
with Section 8.3 hereof and maintained by the Indenture Trustee.
"Pre-Funding Earnings": With respect to any Payment Date, the actual
investment earnings then on deposit in the Pre-Funding Account.
"Pre-Funding Period": The period commencing on the Closing Date and ending
on the earliest to occur of (i) the date on which the amount on deposit in the
Pre-Funding Account (exclusive of any investment earnings) is less than
$100,000, (ii) the date on which a Rapid Amortization Event occurs and (iii)
July 20, 1998.
"Pre-Funding Transfer Date": Any Subsequent Transfer Date on which
Pre-Funded Mortgage Loans are assigned to the Trust.
"Premium Amount": As to any Payment Date, the product of (x) one-twelfth of
the Premium Percentage and (y) the Class A Principal Balance on such Payment
Date (before taking into account any distributions of the Scheduled Principal
Distribution Amount to be made on such Payment Date).
"Premium Percentage": As defined in the Insurance Agreement.
"Prepaid Installment": With respect to any Mortgage Loan, any installment
of principal thereof and interest thereon received prior to the scheduled due
date for such installment, intended by the Mortgagor as an early payment thereof
and not as a Prepayment with respect to such Mortgage Loan.
"Prepayment": Any payment of principal of a Mortgage Loan which is received
by the Master Servicer in advance of the scheduled due date for the payment of
such principal (other than the principal portion of any Prepaid Installment),
and the proceeds of any Insurance Policy which are to be applied as a payment of
principal on the related Mortgage Loan shall be deemed to be Prepayments for all
purposes of this Agreement.
"Prepayment Interest Shortfall": With respect to any Remittance Period, for
each Mortgage Loan that was the subject during the related Remittance Period of
a Prepayment, an amount equal to the excess, if any, of (i) 30 days' interest on
the Principal Balance of such Mortgage Loan as of the first day of such
Remittance Period at a per annum rate equal to the Loan Rate (or at such lower
rate as may be in effect for such Mortgage Loan pursuant to application of the
Civil Relief Act, any Deficient Valuation and/or any Debt Service Reduction)
minus the Servicing Fee over (ii) the amount of interest actually remitted by
the Mortgagor in connection with such Prepayment less the Servicing Fee for such
Mortgage Loan in such month.
"Preservation Expenses": Expenditures made by the Master Servicer or any
Sub-Servicer in connection with a foreclosed Mortgage Loan prior to the
liquidation thereof, including, without limitation, expenditures for real estate
property taxes, hazard insurance premiums, property restoration or preservation.
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"Prime": The Prime rate of interest charged from time to time as set forth
in the related Credit Line Agreement.
"Principal and Interest Account": Collectively, each principal and interest
account created by the Master Servicer or any Sub-Servicer pursuant to Section
4.8(a) of the Sale and Servicing Agreement.
"Principal Balance": As to any Mortgage Loan, other than a Liquidated
Mortgage Loan, and as of any date, the related Cut-Off Date Principal Balance,
plus (i) any Additional Balance in respect of such Mortgage Loan, minus (ii) all
collections credited as principal against the Principal Balance of any such
Mortgage Loan in accordance with the related Credit Line Agreement prior to such
day. For purposes of this definition, a Liquidated Mortgage Loan shall be deemed
to have a Principal Balance of zero as of the first day of the Remittance Period
following the Remittance Period in which such Mortgage Loan becomes a Liquidated
Mortgage Loan and at all times thereafter.
"Principal Collections": As to any Payment Date, the sum of all payments by
or on behalf of Mortgagors and any other amounts constituting principal
(including, but not limited to Substitution Amounts and any portion of Insurance
Proceeds or Net Liquidation Proceeds allocable to principal of the applicable
Mortgage Loan, but excluding Foreclosure Profits) collected by the Master
Servicer under the Mortgage Loans during the related Remittance Period. The
terms of the related Credit Line Agreement shall determine the portion of each
payment in respect of a Mortgage Loan that constitutes principal or interest.
"Principal Remittance Amount": As of any Remittance Date, the sum, without
duplication, of (i) the principal actually collected by the Master Servicer with
respect to Mortgage Loans during the related Remittance Period, (ii) the
Principal Balance of each such Mortgage Loan that either was repurchased by the
Originator or purchased by the Master Servicer on such Remittance Date, to the
extent such Principal Balance was actually deposited in the Principal and
Interest Account, (iii) any Substitution Amounts delivered by the Originator in
connection with a substitution of a Mortgage Loan, to the extent such
Substitution Amounts were actually deposited in the Principal and Interest
Account on such Remittance Date, and (iv) all Net Liquidation Proceeds actually
collected by the Master Servicer with respect to the Mortgage Loans during the
related Remittance Period (to the extent such Liquidation Proceeds related to
principal).
"Proceeding" means any suit in equity, action at law or other judicial or
administrative proceeding.
"Prospectus": That certain Prospectus dated October 30, 1997 naming Advanta
Mortgage Conduit Services, Inc. and Advanta Mortgage Corp. USA as registrants
and describing certain mortgage loan asset-backed securities to be issued from
time to time as described in related Prospectus Supplements.
"Prospectus Supplement": That certain Prospectus Supplement dated June 19,
1998, describing the Class A Notes issued by the Trust.
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"Purchase Agreement" means the Mortgage Loan Purchase Agreement dated as of
June 1, 1998 between the Originator and the Sponsor with respect to the Mortgage
Loans.
"Rapid Amortization Commencement Date": The earlier of (i) the Payment Date
in July, 2001 and (ii) the Payment Date next succeeding the Remittance Period in
which a Rapid Amortization Event is deemed to occur pursuant to Section 12.1.
"Rapid Amortization Event": As defined in Section 12.1.
"Rapid Amortization Period": The period which follows the earlier to occur
of (x) the end of the Managed Amortization Period and (y) the occurrence of a
Rapid Amortization Event.
"Rating Agency" means Moody's and Standard & Poor's. If such agency or a
successor is no longer in existence, "Rating Agency" shall be such statistical
credit rating agency, or other comparable Person, designated by the Sponsor and
the Insurer, notice of which designation shall be given to the Indenture
Trustee. References herein to the highest short term unsecured rating category
of a Rating Agency shall means A1+ or better in the case of Standard & Poor's
and P1 or better in the case of Moody's, and in the case of any other Rating
Agency shall mean the ratings such other Rating Agency deems equivalent to the
foregoing ratings. References herein to the highest long-term rating category of
a Rating Agency shall mean "AAA" in the case of Standard & Poor's and "Aaa" in
the case of Moody's, and in the case of any other Rating Agency, the rating such
other Rating Agency deems equivalent to the foregoing ratings.
"Realized Loss": As to any Liquidated Mortgage Loan, the amount, if any, by
which the Principal Balance thereof as of the date of liquidation is in excess
of Net Liquidation Proceeds realized thereon.
"Record Date": With respect to each Payment Date, the last Business Day of
the calendar month immediately preceding the calendar month in which such
Payment Date occurs.
"Redemption Date" means, in the case of a redemption of the Notes pursuant
to Section 10.1(a), the Payment Date specified by the Master Servicer or the
Issuer pursuant to Section 10.2(a).
"Redemption Price" means, in the case of a redemption of the Notes pursuant
to Section 10.1(a), an amount equal to the unpaid principal amount of the then
outstanding principal amount of each class of Notes being redeemed plus accrued
and unpaid interest thereon to but excluding the Redemption Date.
"Reference Bank Rate" shall be determined on the basis of the rates at
which deposits in U.S. Dollars are offered by the reference banks (which shall
be three major banks that are engaged in transactions in the London interbank
market, selected by the Sponsor after consultation with the Indenture Trustee)
as of 11:00 A.M., London time, on the day that is two LIBOR Business Days prior
to the immediately preceding Payment Date to prime banks in the
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London interbank market for a period of one month in amounts approximately equal
to the principal amount of the Class A Notes then outstanding. The Indenture
Trustee will request the principal London office of each of the Reference Banks
to provide a quotation of its rate. If at least two such quotations are
provided, the rate will be the arithmetic mean of the quotations. If on such
date fewer than two quotations are provided as requested, the rate will be the
arithmetic mean of the rates quoted by one or more major banks in New York City,
selected by the Sponsor after consultation with the Indenture Trustee, as of
11:00 A.M., New York City time, on such date for loans in U.S. Dollars to
leading European banks for a period of one month in amounts approximately equal
to the principal amount of the Class A Notes then outstanding. If no such
quotations can be obtained, the rate will be LIBOR for the prior Payment Date.
"Reference Banks": Bankers Trust Company, Xxxxxxx'x Bank PLC, The Bank of
Tokyo and National Westminster Bank PLC; provided that if any of the foregoing
banks are not suitable to serve as a Reference Bank, then any leading banks
selected by the Indenture Trustee which are engaged in transactions in
Eurodollar deposits in the international Eurocurrency market (i) with an
established place of business in London, (ii) not controlling, under the control
of or under common control with the Originator or any affiliate thereof, (iii)
whose quotations appear on the Telerate Screen Page 3750 on the relevant
Interest Determination Date and (iv) which have been designated as such by the
Indenture Trustee.
"Registration Statement": The Registration Statement filed by the Sponsor
with the Securities and Exchange Commission, including all amendments thereto
and including the Prospectus and the Prospectus Supplement relating to the Class
A Notes constituting a part thereof.
"Reimbursement Amount": As of any Payment Date, the sum of (x)(i) all
payments made pursuant to the Policy previously received by the Indenture
Trustee and all Preference Amounts previously paid to the Indenture Trustee by
the Insurer and in each case not previously repaid to the Insurer pursuant to
Section 8.6(b)(vii) hereof plus (ii) interest accrued on each such payment made
pursuant to the Policy not previously repaid calculated at the Late Payment Rate
from the date the Indenture Trustee received the related payment made pursuant
to the Policy and (y)(i) any amounts then due and owing to the Insurer under the
Insurance Agreement plus (ii) interest on such amounts at the Late Payment Rate.
The Insurer shall notify the Indenture Trustee and the Sponsor of the amount of
any Reimbursement Amount.
"Relief Act Shortfall": With respect to any Remittance Period, for any
Mortgage Loan as to which there has been a reduction in the amount of interest
collectible thereon for the most recently ended Remittance Period as a result of
the application of the Civil Relief Act, the amount, if any, by which (i)
interest collectible on such Mortgage Loan during the most recently ended
calendar month is less than (ii) the sum of (a) one month's interest on the
Principal Balance of such Mortgage Loan at the rate equal to the sum of the
Class A Interest Rate, the rate at which the Indenture Trustee's Fee is
calculated and the Premium Percentage, plus (b) the aggregate Servicing Fee for
such Mortgage Loan payable to the Master Servicer in such calendar month.
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"Remittance Date": Any date on which the Master Servicer is required to
remit monies on deposit in the Principal and Interest Account to the Indenture
Trustee, which shall be the 18th day or, if such day is not a Business Day, the
next preceding Business Day, of each month, commencing in the month following
the month in which the Closing Date occurs.
"Remittance Period": As to any Payment Date, the calendar month preceding
the month of such Payment Date.
"REO Property": A Mortgaged Property acquired by the Master Servicer or any
Sub-Servicer on behalf of the Trust through foreclosure or deed-in-lieu of
foreclosure in connection with a defaulted Mortgage Loan.
"Replacement Cut-Off Date": With respect to any Qualified Replacement
Mortgage, the first day of the calendar month in which such Qualified
Replacement Mortgage is conveyed to the Trust.
"Representation Letter" shall mean letters to, or agreements with, the
Depository to effectuate a book entry system with respect to the Class A Notes
registered in the Register under the nominee name of the Depository.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement dated
as of June 1, 1998, among the Issuer, the Sponsor, the Master Servicer and the
Indenture Trustee, as the same may be amended or supplemented from time to time.
"Schedule of Mortgage Loans": The Schedule of Mortgage Loans, attached
hereto as Schedule II, as it may be further supplemented in connection with
Subsequent Transfers.
"Scheduled Principal Distribution Amount": On any Payment Date during the
Managed Amortization Period, the excess (but in no event less than zero) of (x)
the lesser of (i) the Maximum Principal Payment and (ii) the Net Principal
Collections over (y) the Step-Down Amount, if any, with respect to such Payment
Date. Beginning with the first Payment Date in the Rapid Amortization Period,
the excess of (x) the Maximum Principal Payment over (y) the Step-Down Amount,
if any, with respect to such Payment Date.
"Second Mortgage Loan": A Mortgage Loan which constitutes a second priority
mortgage lien with respect to the related Mortgaged Property.
"Securities Act": The Securities Act of 1933, as amended.
"Servicing Advance": As defined in the Sale and Servicing Agreement.
"Servicing Fee": With respect to any Payment Date, the product of (i)
one-twelfth of the Servicing Fee Rate and (ii) the aggregate Principal Balance
of the Mortgage Loans on the first day of the Remittance Period preceding such
Payment Date (or at the Cut-Off Date with respect to the first Payment Date).
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"Servicing Fee Rate": 0.50% per annum.
"Specified Overcollateralization Amount": As defined in the Insurance
Agreement.
"Sponsor": Advanta Mortgage Conduit Services, Inc., a Delaware Corporation.
"Standard & Poor's": Standard & Poor's, a division of The XxXxxx-Xxxx
Companies.
"Step-Down Amount": As of any Payment Date, the lesser of (x) the Maximum
Step-Down Amount for such Payment Date and (y) the Maximum Principal Payment or
the Net Principal Collections as applicable to such Payment Date; provided, that
for any Payment Date on which the Specified Overcollateralization Amount exceeds
the Overcollateralization Amount, the Step-Down Amount shall be reduced (but not
below zero) by the amount of any such excess.
"Subsequent Cut-Off Date": With respect to any Subsequent Mortgage Loan,
the opening of business on the first day of the calendar month in which the
related Subsequent Transfer Date occurs.
"Subsequent Mortgage Loans" As defined in the Sale and Servicing Agreement.
"Subsequent Transfer Agreement": Each Subsequent Transfer Agreement dated
as of a Subsequent Transfer Date executed by the Indenture Trustee and the
Sponsor substantially in the form of Exhibit L of the Sale and Servicing
Agreement, by which Subsequent Mortgage Loans are assigned to the Trust.
"Subsequent Transfer Date": The date specified in each Subsequent Transfer
Agreement, which must, with respect to any Payment Date, be a date occurring
during the calendar month in which such Payment Date occurs, at least five
Business Days prior to the Remittance Date occurring in such month.
"Substitution Amount": In connection with the delivery of any Qualified
Replacement Mortgage, if the outstanding principal amount of such Qualified
Replacement Mortgage as of the applicable Replacement Cut-Off Date is less than
the Principal Balance of the Mortgage Loan being replaced as of such Replacement
Cut-Off Date, an amount equal to such difference together with accrued and
unpaid interest on such amount calculated at the Loan Rate net of the Servicing
Fee, if any, of the Mortgage Loan being replaced.
"Telerate Screen Page 3750": The display designated as page 3750 on the
Telerate Service (or such other page as may replace page 3750 on that service
for the purpose of displaying London interbank offered rates of major banks).
"Termination Date" means the latest of (i) the termination of the Policy
and the return of the Policy to the Insurer for cancellation, (ii) the date on
which the Insurer shall have received payment and performance of all Insurer
Issuer Secured Obligations and (iii) the date on
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which the Indenture Trustee shall have received payment and performance of all
Indenture Trustee Issuer Secured Obligations.
"Trust": Advanta Revolving Home Equity Loan Trust 1998-A.
"Trust Agreement": The Trust Agreement dated as of June 1, 1998 between the
Issuer and the Sponsor.
"Trust Collateral Value": As of any Payment Date, the sum of (i) the Pool
Balance at the end of the prior calendar month, (ii) the aggregate Principal
Balances as of the related Cut-Off Dates of all Subsequent Mortgage Loans
previously assigned to the Trust during the calendar month in which such Payment
Date occurs and (iii) the amounts, if any, on deposit in the Pre-Funding Account
at the close of business on such Payment Date.
"Trust Estate": Collectively, all money, instruments and other property, to
the extent such money, instruments and other property are subject or intended to
be held in trust, and in the subtrusts, for the benefit of the Class A
Noteholders and the Insurer, including all proceeds thereof including, without
limitation, (i) the Initial Mortgage Loans, Qualified Replacement Mortgages and
Subsequent Mortgage Loans, (ii) such amounts, including Eligible Investments, as
from time to time may be held in all Accounts (except as otherwise provided
herein), (iii) any Mortgaged Property, the Class A Noteholdership of which has
been effected on behalf of the Trust as a result of foreclosure or acceptance by
the Master Servicer or any Sub-Servicer of a deed in lieu of foreclosure and
that has not been withdrawn from the Trust, (iv) any Insurance Policies relating
to the Mortgage Loans and any rights of the Trust and the Originator under any
Insurance Policies, (v) Net Liquidation Proceeds with respect to any Liquidated
Mortgage Loan, (vi) the Policy, (vii) such amounts held in the Capitalized
Interest Account, and (viii) such amounts held in the Pre-Funding Account, the
Principal and Interest Account and the Note Account.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, as
amended and as in force on the date hereof, unless otherwise specifically
provided.
"UCC" means, unless the context otherwise requires, the Uniform Commercial
Code, as in effect in the relevant jurisdiction, as amended from time to time.
"Underwriter": X.X. Xxxxxx Securities Inc.
"Unpaid Class A Note Interest Shortfall": As of any Payment Date, the
amount, if any, by which (x) the Class A Interest Distribution Amount for the
prior Payment Date, plus the Unpaid Class A Note Interest Shortfall, if any,
with respect to such prior Payment Date, exceeded (y) the amount actually
distributed to the Noteholders pursuant to Section 8.6(b)(iii) on such prior
Payment Date.
Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to them in the Sale and Servicing Agreement or the Trust
Agreement.
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SECTION 1.2. Incorporation by Reference of the Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"Indenture Trustee" or "institutional trustee" means the Indenture Trustee.
"obligor" on the indenture securities means the Issuer.
All other TIA terms used in this Indenture that are defined by the TIA, or
defined by Commission rule have the meaning assigned to them by such
definitions.
SECTION 1.3. Rules of Construction. Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means "including without limitation"; and
(v) words in the singular include the plural and words in the
plural include the singular.
SECTION 1.4. Action by or Consent of Noteholders. Whenever any provision of
this Agreement refers to action to be taken, or consented to, by Noteholders,
such provision shall be deemed to refer to the Noteholder of record as of the
Record Date immediately preceding the date on which such action is to be taken,
or consent given, by Noteholders. Solely for the purposes of any action to be
taken, or consented to, by Noteholders, any Note registered in the name of
Headlands Mortgage Company or any Affiliate thereof shall be deemed not to be
outstanding; provided, however, that, solely for the purpose of determining
whether the Indenture Trustee or the Owner Trustee is entitled to rely upon any
such action or consent, only Notes which the Owner Trustee or the Indenture
Trustee, respectively, knows to be so owned shall be so disregarded.
SECTION 1.5. Conflict with TIA. If any provision hereof limits, qualifies
or conflicts with a provision of the TIA that is required under the TIA to be
part of and govern this
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Indenture, the latter provision shall control and all provisions required by the
TIA are hereby incorporated by reference. If any provision of this Indenture
modifies or excludes any provision of the TIA that may be so modified or
excluded, the latter provisions shall be deemed to apply to this Indenture as so
modified or to be excluded, as the case may be.
ARTICLE II.
The Notes
SECTION 2.1. Form. The Class A Notes, together with the Indenture Trustee's
certificate of authentication, shall be in substantially the form set forth in
Exhibit A, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined by the
officers executing such Notes, as evidenced by their execution of the Notes. Any
portion of the text of any Note may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Note.
Each Note shall be dated the date of its authentication. The terms of the
Note set forth in Exhibit A are part of the terms of this Indenture.
SECTION 2.2. Execution, Authentication and Delivery. The Notes shall be
executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be original or
facsimile.
Notes bearing the original or facsimile signature of individuals who were
at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The Indenture Trustee, upon receipt of a written Issuer Order, shall
authenticate and deliver Class A Notes for original issue in an aggregate
principal amount of $80,000,000. The Class A Notes outstanding at any time may
not exceed such amounts except as provided in Section 2.6.
Each Note shall be dated the date of its authentication. The Notes shall be
issuable as registered Notes in the minimum denomination of $1000 and in
integral multiples of $1,000 in excess thereof.
No Note shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose, unless there appears attached to such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate attached to any Note shall be
conclusive evidence, and the only evidence, that such Note has been duly
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authenticated and delivered hereunder. Subject to Section 2.11, the Notes shall
be Book-Entry Notes.
SECTION 2.3. Registration; Registration of Transfer and Exchange. The
Issuer shall cause to be kept a register (the "Note Register") in which, subject
to such reasonable regulations as it may prescribe, the Issuer shall provide for
the registration of Notes and the registration of transfers of Notes. The
Indenture Trustee shall be "Note Registrar" for the purpose of registering Notes
and transfers of Notes as herein provided. Upon any resignation of any Note
Registrar, the Issuer shall promptly appoint a successor or, if it elects not to
make such an appointment, assume the duties of Note Registrar.
If a Person other than the Indenture Trustee is appointed by the Issuer as
Note Registrar, the Issuer will give the Indenture Trustee prompt written notice
of the appointment of such Note Registrar and of the location, and any change in
the location, of the Note Register, and the Indenture Trustee shall have the
right to inspect the Note Register at all reasonable times and to obtain copies
thereof. The Indenture Trustee shall have the right to rely upon a certificate
executed on behalf of the Note Registrar by an Authorized Officer thereof as to
the names and addresses of the Holders of the Notes and the principal amounts
and number of such Notes.
Upon surrender for registration or transfer of any Note at the office or
agency of the Issuer to be maintained as provided in Section 3.2, and if the
requirements of Section 8-401(1) of the UCC are met, the Issuer shall execute or
cause the Indenture Trustee to authenticate one or more new Notes, in any
authorized denominations, of the same class and a like aggregate principal
amount. A Noteholder may also obtain from the Indenture Trustee, in the name of
the designated transferee or transferees one or more new Notes, in any
authorized denominations, of the same class and a like aggregate principal
amount. Such requirements shall not be deemed to create a duty in the Indenture
Trustee to monitor the compliance by the Issuer with Section 8-401 of the UCC.
At the option of the Holder, Notes may be exchanged for other Notes in any
authorized denominations, of the same class and a like aggregate principal
amount, upon surrender of the Notes to be exchanged at such office or agency.
Whenever any Notes are so surrendered for exchange, and if the requirements of
Section 8-401(1) of the UCC are met, the Issuer shall execute and upon its
request the Indenture Trustee shall authenticate the Notes which the Noteholder
making the exchange is entitled to receive. Such requirements shall not be
deemed to create a duty in the Indenture Trustee to monitor the compliance by
the Issuer with Section 8-401 of the UCC.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be (i) duly endorsed by, or be accompanied by a written
instrument of transfer in the form attached to Exhibit A, duly executed by the
Holder thereof or such Xxxxxx's attorney duly
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authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar all in accordance
with the Exchange Act, and (ii) accompanied by such other documents as the Note
Registrar may require.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Note Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 2.4 or 9.6 not involving any transfer.
Any Noteholder using the assets of (i) an employee benefit plan (as defined
in Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) that is subject to the provisions of Title I of ERISA, (ii) a
plan described in Section 4975(e)(1) of the Internal Revenue Code of 1986, as
amended, or (iii) any entity whose underlying assets include plan assets by
reason of a plan's investment in the entity to purchase the Notes, or to whom
the Notes are transferred, will be deemed to have represented that the
acquisition and continued holding of the Notes will be covered by a U.S.
Department of Labor Class Exemption.
SECTION 2.4. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Note Registrar, or the Note Registrar
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (ii) there is delivered to the Indenture Trustee and the Insurer such
security or indemnity as may be required by it to hold the Issuer, the Indenture
Trustee and the Insurer harmless, then, in the absence of notice to the Issuer,
the Note Registrar or the Indenture Trustee that such Note has been acquired by
a bona fide purchaser, and provided that the requirements of Section 8-405 of
the UCC are met, the Issuer shall execute and upon its request the Indenture
Trustee shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Note, a replacement Note (such requirement
shall not be deemed to create a duty in the Indenture Trustee to monitor the
compliance by the Issuer with Section 8-405); provided, however, that if any
such destroyed, lost or stolen Note, but not a mutilated Note, shall have become
or within seven days shall be due and payable, or shall have been called for
redemption, the Issuer may, instead of issuing a replacement Note, direct the
Indenture Trustee, in writing, to pay such destroyed, lost or stolen Note when
so due or payable or upon the Redemption Date without surrender thereof. If,
after the delivery of such replacement Note or payment of a destroyed, lost or
stolen Note pursuant to the proviso to the preceding sentence, a bona fide
purchaser of the original Note in lieu of which such replacement Note was issued
presents for payment such original Note, the Issuer, the Indenture Trustee and
the Insurer shall be entitled to recover such replacement Note (or such payment)
from the Person to whom it was delivered or any Person taking such replacement
Note from such Person to whom such replacement Note was delivered or any
assignee of such Person, except a bona fide purchaser, and shall be entitled to
recover upon the security or indemnity provided therefor to the extent of any
loss, damage, cost or expense incurred by the Issuer or the Indenture Trustee in
connection therewith.
Upon the issuance of any replacement Note under this Section, the Issuer
may require the payment by the Holder of such Note of a sum sufficient to cover
any tax or other
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governmental charge that may be imposed in relation thereto and any other
reasonable expenses (including the fees and expenses of the Indenture Trustee)
connected therewith.
Every replacement Note issued pursuant to this Section in replacement of
any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.5. Persons Deemed Owners. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and the
Insurer and any agent of the Issuer, the Indenture Trustee and the Insurer may
treat the Person in whose name any Note is registered (as of the related Record
Date) as the owner of such Note for the purpose of receiving payments of
principal of and interest, if any on such Note and for all other purposes
whatsoever, whether or not such Note be overdue, and none of the Issuer, the
Insurer, the Indenture Trustee nor any agent of the Issuer, the Insurer or the
Indenture Trustee shall be affected by notice to the contrary.
SECTION 2.6. Payment of Principal and Interest; Defaulted Interest. (a) The
Notes shall accrue interest as provided herein, and such amount shall be due and
payable on each Payment Date as specified herein. Any installment of interest or
principal, if any, payable on any Note which is punctually paid or duly provided
for by the Issuer on the applicable Payment Date shall be paid to the Person in
whose name such Note (or one or more Predecessor Notes) is registered on the
Record Date, by check mailed first-class, postage prepaid, to such Person's
address as it appears on the Note Register on such Record Date, except that,
unless Definitive Notes have been issued pursuant to Section 2.11, with respect
to Notes registered on the Record Date in the name of the nominee of the
Clearing Agency (initially, such nominee to be Cede & Co.), payment will be made
by wire transfer in immediately available funds to the account designated by
such nominee and except for the final installment of principal payable with
respect to such Note on a Payment Date or on the Final Scheduled Payment Date
(and except for the Redemption Price for any Note called for redemption pursuant
to Section 10.1(a)) which shall be payable as provided below. The funds
represented by any such checks returned undelivered shall be held in accordance
with Section 3.3.
(b) Upon written notice from the Issuer, the Indenture Trustee shall notify
the Person in whose name a Note is registered at the close of business on the
Record Date preceding the Payment Date on which the Issuer expects that the
final installment of principal of and interest on such Note will be paid. Such
notice shall be mailed or transmitted by facsimile prior to such final Payment
Date and shall specify that such final installment will be payable only upon
presentation and surrender of such Note and shall specify the place where such
Note may
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be presented and surrendered for payment of such installment. Notices in
connection with redemptions of Notes shall be mailed to Noteholders as provided
in Section 10.2.
(c) If the Issuer defaults in a payment of interest on the Notes, the
Issuer shall pay defaulted interest (plus interest on such defaulted interest to
the extent lawful) at the applicable Interest Rate to the extent lawful. The
Issuer may pay such defaulted interest to the Persons who are Noteholders on a
subsequent special record date, which date shall be at least five Business Days
prior to the payment date. The Issuer shall fix or cause to be fixed any such
special record date and payment date, and, at least 15 days before any such
special record date, the Issuer shall mail to each Noteholder and the Indenture
Trustee a notice that states the special record date, the payment date and the
amount of defaulted interest to be paid.
(d) Promptly following the date on which all principal of and interest on
the Notes has been paid in full and the Notes have been surrendered to the
Indenture Trustee, the Indenture Trustee shall, upon written notice from the
Master Servicer of the amounts, if any, that the Insurer has paid in respect of
the Notes under the Policy or otherwise which has not been reimbursed to it,
deliver such surrendered Notes to the Insurer to the extent not previously
cancelled or destroyed.
SECTION 2.7. Cancellation. Subject to Section 2.6(d), all Notes surrendered
for payment, registration of transfer, exchange or redemption shall, if
surrendered to any Person other than the Indenture Trustee, be delivered to the
Indenture Trustee and shall be promptly canceled by the Indenture Trustee.
Subject to Section 2.6(d), the Issuer may at any time deliver to the Indenture
Trustee for cancellation any Notes previously authenticated and delivered
hereunder which the Issuer may have acquired in any manner whatsoever, and all
Notes so delivered shall be promptly canceled by the Indenture Trustee. No Notes
shall be authenticated in lieu of or in exchange for any Notes canceled as
provided in this Section, except as expressly permitted by this Indenture.
Subject to Section 2.6(d), all canceled Notes may be held or disposed of by the
Indenture Trustee in accordance with its standard retention or disposal policy
as in effect at the time unless the Issuer shall direct by an Issuer Order that
they be destroyed or returned to it; provided that such Issuer Order is timely
and the Notes have not been previously disposed of by the Indenture Trustee.
SECTION 2.8. Release of Collateral. The Indenture Trustee shall, on or
after the Termination Date, release any remaining portion of the Trust Estate
from the lien created by this Indenture and deposit in the Note Account any
funds then on deposit in any other Account. The Indenture Trustee shall release
property from the lien created by this Indenture pursuant to this Section 2.8
only upon receipt by it of an Issuer Request accompanied by an Officer's
Certificate, an Opinion of Counsel and (if required by the TIA) Independent
Certificates in accordance with TIA Sections 314(c) and 314(d)(1) meeting the
applicable requirements of Section 11.1.
SECTION 2.9. Book-Entry Notes. The Notes, upon original issuance, will be
issued in the form of typewritten Notes representing the Book-Entry Notes, to be
delivered to The Depository Trust Company or its custodian, the initial Clearing
Agency, by, or on behalf of,
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the Issuer. Such Notes shall initially be registered on the Note Register in the
name of Cede & Co., the nominee of the initial Clearing Agency, and no Note
Owner will receive a Definitive Note representing such Note Owner's interest in
such Note, except as provided in Section 2.11. Unless and until definitive,
fully registered Notes (the "Definitive Notes") have been issued to Note Owners
pursuant to Section 2.11:
(i) the provisions of this Section shall be in full force and
effect;
(ii) the Note Registrar and the Indenture Trustee shall be
entitled to deal with the Clearing Agency for all purposes of this
Indenture (including the payment of principal of and interest on the
Notes and the giving of instructions or directions hereunder) as the
sole Holder of the Notes, and shall have no obligation to the Note
Owners;
(iii) to the extent that the provisions of this Section conflict
with any other provisions of this Indenture, the provisions of this
Section shall control;
(iv) the rights of Note Owners shall be exercised only through
the Clearing Agency and shall be limited to those established by law
and agreements between such Note Owners and the Clearing Agency and/or
the Clearing Agency Participants. Unless and until Definitive Notes
are issued pursuant to Section 2.11, the initial Clearing Agency will
make book-entry transfers among the Clearing Agency Participants and
receive and transmit payments of principal of and interest on the
Notes to such Clearing Agency Participants;
(v) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Holders of Notes
evidencing a specified percentage of the Outstanding Amount of the
Notes, the Clearing Agency shall be deemed to represent such
percentage only to the extent that it has received instructions to
such effect from Note Owners and/or Clearing Agency Participants
owning or representing, respectively, such required percentage of the
beneficial interest in the Notes and has delivered such instructions
to the Indenture Trustee; and
(vi) Note Owners may receive copies of any reports sent to
Noteholders pursuant to this Indenture, upon written request, together
with a certification that they are Note Owners and payment of
reproduction and postage expenses associated with the distribution of
such reports, from the Indenture Trustee at the Corporate Trust
Office.
SECTION 2.10. Notices to Clearing Agency. Whenever a notice or other
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Note Owners pursuant to Section
2.11, the Indenture Trustee shall give all such notices and communications
specified herein to be given to Holders of the Notes to the Clearing Agency, and
shall have no obligation to the Note Owners.
SECTION 2.11. Definitive Notes. If (i) the Master Servicer advises the
Indenture Trustee in writing that the Clearing Agency is no longer willing or
able to properly
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discharge its responsibilities with respect to the Notes, and the Master
Servicer is unable to locate a qualified successor, (ii) the Master Servicer at
its option advises the Indenture Trustee in writing that it elects to terminate
the book-entry system through the Clearing Agency or (iii) after the occurrence
of a Rapid Amortization Event, Note Owners representing beneficial interests
aggregating at least a majority of the Outstanding Amount of the Notes advise
the Indenture Trustee through the Clearing Agency in writing that the
continuation of a book entry system through the Clearing Agency is no longer in
the best interests of the Note Owners, then the Clearing Agency shall notify all
Note Owners and the Indenture Trustee of the occurrence of any such event and of
the availability of Definitive Notes to Note Owners requesting the same. Upon
surrender to the Indenture Trustee of the typewritten Note or Notes representing
the Book-Entry Notes by the Clearing Agency, accompanied by registration
instructions, the Issuer shall execute and the Indenture Trustee shall
authenticate the Definitive Notes in accordance with the instructions of the
Clearing Agency. None of the Issuer, the Note Registrar or the Indenture Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Notes, the Indenture Trustee shall recognize the
Holders of the Definitive Notes as Noteholders.
ARTICLE III.
Covenants
SECTION 3.1. Payment of Principal and Interest. The Issuer will duly and
punctually pay the principal of and interest on the Notes in accordance with the
terms of the Notes and this Indenture. Without limiting the foregoing, the
Issuer will cause to be distributed all amounts on deposit in the Note Account
on a Payment Date deposited therein pursuant to the Sale and Servicing Agreement
for the benefit of the Class A Notes, to Class A Noteholders. Amounts properly
withheld under the Code or any applicable state tax laws by any Person from a
payment to any Noteholder of interest and/or principal shall be considered as
having been paid by the Issuer to such Noteholder for all purposes of this
Indenture.
SECTION 3.2. Maintenance of Office or Agency. The Issuer will maintain in
Irvine, California, an office or agency where Notes may be surrendered for
registration, transfer or exchange of the Notes, and where notices and demands
to or upon the Issuer in respect of the Notes and this Indenture may be served.
The Issuer hereby initially appoints the Indenture Trustee to serve as its agent
for the foregoing purposes. The Issuer will give prompt written notice to the
Indenture Trustee of the location, and of any change in the location, of any
such office or agency. If at any time the Issuer shall fail to maintain any such
office or agency or shall fail to furnish the Indenture Trustee with the address
thereof, such surrenders, notices and demands may be made or served at the
Corporate Trust Office, and the Issuer hereby appoints the Indenture Trustee as
its agent to receive all such surrenders, notices and demands.
SECTION 3.3. Money for Payments to be Held in Trust. The Issuer will cause
each Note Paying Agent other than the Indenture Trustee to execute and deliver
to the Indenture Trustee and the Insurer an instrument in which such Note Paying
Agent shall agree with the
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Indenture Trustee (and if the Indenture Trustee acts as Note Paying Agent, it
hereby so agrees), subject to the provisions of this Section, that such Note
Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and pay such sums to such Persons as
herein provided;
(ii) give the Indenture Trustee written notice of any default by
the Issuer (or any other obligor upon the Notes) of which it has
actual knowledge in the making of any payment required to be made with
respect to the Notes;
(iii) at any time during the continuance of any such default,
upon the written request of the Indenture Trustee, forthwith pay to
the Indenture Trustee all sums so held in trust by such Note Paying
Agent;
(iv) immediately resign as a Note Paying Agent and forthwith pay
to the Indenture Trustee all sums held by it in trust for the payment
of Notes if at any time it ceases to meet the standards required to be
met by a Note Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code and any applicable
state tax laws with respect to the withholding from any payments made
by it on any Notes of any applicable withholding taxes imposed thereon
and with respect to any applicable reporting requirements in
connection therewith.
The Issuer may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, by Issuer Order direct
any Note Paying Agent to pay to the Indenture Trustee all sums held in trust by
such Note Paying Agent, such sums to be held by the Indenture Trustee upon the
same trusts as those upon which the sums were held by such Note Paying Agent;
and upon such a payment by any Note Paying Agent to the Indenture Trustee, such
Note Paying Agent shall be released from all further liability with respect to
such money.
Subject to applicable laws with respect to the escheat of funds, any money
held by the Indenture Trustee or any Note Paying Agent in trust for the payment
of any amount due with respect to any Note and remaining unclaimed for two years
after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuer on Issuer Request, and shall be deposited by the
Indenture Trustee in the Note Account; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Indenture Trustee or such Note Paying Agent with
respect to such trust money shall thereupon cease.
SECTION 3.4. Existence. Except as otherwise permitted by the provisions of
Section 3.10, the Issuer will keep in full effect its existence, rights and
franchises as a business trust under the laws of the State of Delaware (unless
it becomes, or any successor Issuer
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hereunder is or becomes, organized under the laws of any other state or of the
United States of America, in which case the Issuer will keep in full effect its
existence, rights and franchises under the laws of such other jurisdiction) and
will obtain and preserve its qualification to do business in each jurisdiction
in which such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Trust Estate, the Notes, and each other
instrument or agreement included in the Trust Estate.
SECTION 3.5. Protection of Trust Estate. The Issuer intends the security
interest granted pursuant to this Indenture in favor of the Issuer Secured
Parties to be prior to all other liens in respect of the Trust Estate, and the
Issuer shall take all actions necessary to obtain and maintain, in favor of the
Indenture Trustee, for the benefit of the Issuer Secured Parties, a first lien
on and a first priority, perfected security interest in the Trust Estate. The
Issuer will from time to time prepare (or shall cause to be prepared), execute
and deliver all such supplements and amendments hereto and all such financing
statements, continuation statements, instruments of further assurance and other
instruments, and will take such other action necessary or advisable to:
(i) Grant more effectively all or any portion of the Trust
Estate;
(ii) maintain or preserve the lien and security interest (and the
priority thereof) in favor of the Indenture Trustee for the benefit of
the Issuer Secured Parties created by this Indenture or carry out more
effectively the purposes hereof;
(iii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(iv) enforce any of the Collateral;
(v) preserve and defend title to the Trust Estate and the rights
of the Indenture Trustee in such Trust Estate against the claims of
all persons and parties; and
(vi) pay all taxes or assessments levied or assessed upon the
Trust Estate when due.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required by the Indenture Trustee pursuant to this Section;
provided that, such designation shall not be deemed to create a duty in the
Indenture Trustee or the Indenture Trustee to monitor the compliance of the
Issuer with respect to its duties under this Section 3.5 or the adequacy of any
financing statement, continuation statement or other instrument prepared by the
Issuer.
SECTION 3.6. Opinions as to Trust Estate. (a) On the Closing Date, the
Issuer shall furnish to the Indenture Trustee and the Insurer an Opinion of
Counsel stating that, in the opinion of such counsel, such actions have been
taken with respect to the recording and filing of this Indenture, any indentures
supplemental hereto, and any other requisite documents, and with respect to the
execution and filing of any financing statements and continuation statements,
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as are necessary to perfect and make effective the first priority lien and
security interest in favor of the Indenture Trustee, for the benefit of the
Issuer Secured Parties, created by this Indenture.
(b) Within 90 days after the beginning of each calendar year, beginning
with the first calendar year beginning more than six months after the Closing
Date, the Issuer shall furnish to the Indenture Trustee and the Insurer, an
Opinion of Counsel either stating that, in the opinion of such counsel, such
actions have been taken with respect to the recording, filing, re-recording and
refiling of this Indenture, any indentures supplemental hereto and any other
requisite documents and with respect to the execution and filing of any
financing statements and continuation statements as are necessary to maintain
the lien and security interest created by this Indenture and reciting the
details of such action or stating that in the opinion of such counsel, no such
action is necessary to maintain such lien and security interest. Such Opinion of
Counsel shall also describe the recording, filing, re-recording and refiling of
this Indenture, any indentures supplemental hereto and any other requisite
documents and the execution and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be required
to maintain the lien and security interest of this Indenture.
SECTION 3.7. Performance of Obligations; Servicing of Mortgage Loans. (a)
The Issuer will not take any action and will use its best efforts not to permit
any action to be taken by others that would release any Person from any of such
Person's material covenants or obligations under any instrument or agreement
included in the Trust Estate or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any such instrument or agreement, except as
ordered by any bankruptcy or other court or as expressly provided in this
Indenture, the Operative Documents or such other instrument or agreement.
(b) The Issuer may contract with other Persons acceptable to the Insurer to
assist it in performing its duties under this Indenture, and any performance of
such duties by a Person identified to the Indenture Trustee and the Insurer in
an Officer's Certificate of the Issuer shall be deemed to be action taken by the
Issuer. Initially, the Issuer has contracted with the Master Servicer to assist
the Issuer in performing its duties under this Indenture.
(c) The Issuer will punctually perform and observe all of its obligations
and agreements contained in this Indenture, the Operative Documents and in the
instruments and agreements included in the Trust Estate, including, but not
limited to, preparing (or causing to be prepared) and filing (or causing to be
filed) all UCC financing statements and continuation statements required to be
filed by the terms of this Indenture and the Sale and Servicing Agreement in
accordance with and within the time periods provided for herein and therein.
Except as otherwise expressly provided therein, the Issuer shall not waive,
amend, modify, supplement or terminate any Operative Document or any provision
thereof without the consent of the Indenture Trustee, the Insurer or the Holders
of at least a majority of the Outstanding Amount of the Notes.
(d) If an Authorized Officer of the Owner Trustee shall have actual
knowledge of the occurrence of an Event of Servicing Termination under the Sale
and Servicing
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Agreement, the Issuer shall promptly notify the Indenture Trustee, the Insurer
and the Rating Agencies thereof in accordance with Section 11.4, and shall
specify in such notice the action, if any, the Issuer is taking in respect of
such default. If an Event of Servicing Termination shall arise from the failure
of the Master Servicer to perform any of its duties or obligations under the
Sale and Servicing Agreement with respect to the Mortgage Loans, the Issuer
shall take all reasonable steps available to it to remedy such failure.
(e) The Issuer agrees that it will not waive timely performance or
observance by the Master Servicer or the Sponsor of their respective duties
under the Operative Documents (x) without the prior consent of the Insurer or
(y) if the effect thereof would adversely affect the Holders of the Notes.
SECTION 3.8. Negative Covenants. So long as any Notes are Outstanding, the
Issuer shall not:
(i) except as expressly permitted by this Indenture or the
Operative Documents, sell, transfer, exchange or otherwise dispose of
any of the properties or assets of the Issuer, including those
included in the Trust Estate, without the consent of the Insurer
(which consent may not be unreasonably withheld; provided, that if an
Insurer Default has occurred and is continuing, the Noteholders
representing 66-2/3% of the Noteholders may direct the Indenture
Trustee to sell or dispose of the Trust Estate if the Indenture
Trustee receives the Liquidation Price, as described in Section 12.1.
(ii) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Notes (other than
amounts properly withheld from such payments under the Code) or assert
any claim against any present or former Noteholder by reason of the
payment of the taxes levied or assessed upon any part of the Trust
Estate; or
(iii) (A) permit the validity or effectiveness of this Indenture
to be impaired, or permit the lien in favor of the Indenture Trustee
created by this Indenture to be amended, hypothecated, subordinated,
terminated or discharged, or permit any Person to be released from any
covenants or obligations with respect to the Notes under this
Indenture except as may be expressly permitted hereby, (B) permit any
lien, charge, excise, claim, security interest, mortgage or other
encumbrance (other than the lien of this Indenture) to be created on
or extend to or otherwise arise upon or burden the Trust Estate or any
part thereof or any interest therein or the proceeds thereof (other
than tax liens, mechanics' liens and other liens that arise by
operation of law, in each case on a Mortgaged Property and arising
solely as a result of an action or omission of the related Mortgagor),
(C) permit the lien of this Indenture not to constitute a valid first
priority (other than with respect to any such tax, mechanics' or other
lien) security interest in the Trust Estate or (D) amend, modify or
fail to comply with the provisions of the Operative Documents without
the prior written consent of the Insurer, which consent may not be
unreasonably withheld.
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SECTION 3.9. Annual Statement as to Compliance. The Issuer will deliver to
the Indenture Trustee and the Insurer, within 90 days after the end of each
fiscal year of the Issuer (commencing with the fiscal year ended December 31,
1998), and otherwise in compliance with the requirements of TIA Section
314(a)(4) an Officer's Certificate stating, as to the Authorized Officer signing
such Officer's Certificate, that
(i) a review of the activities of the Issuer during such year and
of performance under this Indenture has been made under such
Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based on
such review, the Issuer has complied with all conditions and covenants
under this Indenture throughout such year, or, if there has been a
default in the compliance of any such condition or covenant,
specifying each such default known to such Authorized Officer and the
nature and status thereof.
SECTION 3.10. Issuer May Not Consolidate or Transfer Assets. (a) The Issuer
may not consolidate or merge with or into any other Person.
(b) Except as otherwise provided in the Sale and Servicing Agreement, the
Issuer shall not convey or transfer all or substantially all of its properties
or assets, including those included in the Trust Estate, to any Person.
SECTION 3.11. No Other Business. The Issuer shall not engage in any
business other than purchasing, owning, selling and managing the Mortgage Loans
and other assets in the manner contemplated by this Indenture and the Operative
Documents and activities incidental thereto.
SECTION 3.12. No Borrowing. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
Indebtedness except for (i) the Notes, (ii) obligations owing from time to time
to the Insurer under the Insurance Agreement and (iii) any other Indebtedness
permitted by or arising under the Operative Documents. The proceeds of the Notes
shall be used exclusively to fund the Issuer's purchase of the Mortgage Loans
and the other assets specified in the Sale and Servicing Agreement, to fund the
Pre-Funding Account and the Capitalized Interest Account and to pay the Issuer's
organizational, transactional and start-up expenses.
SECTION 3.13. Guarantees, Loans, Advances and Other Liabilities. Except as
contemplated by the Sale and Servicing Agreement or this Indenture, the Issuer
shall not make any loan or advance or credit to, or guarantee (directly or
indirectly or by an instrument having the effect of assuring another's payment
or performance on any obligation or capability of so doing or otherwise),
endorse or otherwise become continently liable, directly or indirectly, in
connection with the obligations, stocks or dividends of, or own, purchase,
repurchase or acquire (or agree contingently to do so) any stock, obligations,
assets or securities of, or any other interest in, or make any capital
contribution to, any other Person.
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SECTION 3.14. Capital Expenditures. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
SECTION 3.15. Compliance with Laws. The Issuer shall comply with the
requirements of all applicable laws, the non-compliance with which would,
individually or in the aggregate, materially and adversely affect the ability of
the Issuer to perform its obligations under the Notes, this Indenture or any
Operative Document.
SECTION 3.16. Restricted Payments. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the Issuer or to the Master Servicer, (ii) redeem, purchase, retire or
otherwise acquire for value any such ownership or equity interest or security or
(iii) set aside or otherwise segregate any amounts for any such purpose;
provided, however, that the Issuer may make, or cause to be made, distributions
to the Master Servicer, the Owner Trustee, the Indenture Trustee and the
Certificateholders as permitted by, and to the extent funds are available for
such purpose under, the Sale and Servicing Agreement, this Indenture, or Trust
Agreement. The Issuer will not, directly or indirectly, make payments to or
distributions from the Note Account except in accordance with this Indenture and
the Operative Documents.
SECTION 3.17. Notice of Rapid Amortization Events and Events of Servicing
Termination. Upon a Responsible Officer of the Owner Trustee having actual
knowledge thereof, the Issuer agrees to give the Indenture Trustee, the Insurer
and the Rating Agencies prompt written notice of each Rapid Amortization Event
hereunder or Event of Servicing Termination under the Sale and Servicing
Agreement.
SECTION 3.18. Further Instruments and Acts. Upon request of the Indenture
Trustee or the Insurer, the Issuer will execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper to
carry out more effectively the purpose of this Indenture.
SECTION 3.19. Amendments of Sale and Servicing Agreement and Trust
Agreement. The Issuer shall not agree to any amendment to Section 9.01 of the
Sale and Servicing Agreement or Section 11.1 of the Trust Agreement to eliminate
the requirements thereunder that the Indenture Trustee, the Insurer or the
Holders of the Notes consent to amendments thereto as provided therein.
SECTION 3.20. Income Tax Characterization. For purposes of federal income,
state and local income and franchise and any other income taxes, the Issuer will
treat the Notes as indebtedness of the Sponsor and hereby instructs the
Indenture Trustee to treat the Notes as indebtedness of the Sponsor for federal
and state tax reporting purposes.
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ARTICLE IV.
Satisfaction and Discharge
SECTION 4.1. Satisfaction and Discharge of Indenture. Upon payment in full
of the Notes, this Indenture shall cease to be of further effect with respect to
the Notes except as to (i) rights of registration of transfer and exchange, (ii)
substitution of mutilated, destroyed, lost or stolen Notes, (iii) rights of
Noteholders to receive payments of principal thereof and interest thereon, (iv)
Sections 3.3, 3.4, 3.5, 3.8, 3.10, 3.12, 3.13 and 3.20, (v) the rights,
obligations and immunities of the Indenture Trustee hereunder (including the
rights of the Indenture Trustee under Section 6.7 and the obligations of the
Indenture Trustee under Section 4.2) and (vi) the rights of Noteholders as
beneficiaries hereof with respect to the property so deposited with the
Indenture Trustee payable to all or any of them, and the Indenture Trustee, on
written demand in the form of an Issuer Order and at the expense of the Issuer,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture with respect to the Notes, when
(A) either
(1) all Notes theretofore authenticated and delivered (other than
(i) Notes that have been destroyed, lost or stolen and that have been
replaced or paid as provided in Section 2.4 and (ii) Notes for which
payment money has theretofore been deposited in trust or segregated
and held in trust by the Issuer and thereafter repaid to the Issuer or
discharged from such trust, as provided in Section 3.3) have been
delivered to the Indenture Trustee for cancellation and the Policy has
terminated and been returned to the Insurer for cancellation and all
amounts owing to the Insurer have been paid in full; or
(2) all Notes not theretofore delivered to the Indenture Trustee
for cancellation
(i) have become due and payable,
(ii) will become due and payable at their respective Final
Scheduled Payment Dates within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Indenture Trustee for the giving
of notice of redemption by the Indenture Trustee in the name, and
at the expense, of the Issuer,
and in the case of (i), (ii) or (iii) above
(A) the Issuer, has irrevocably deposited or caused to be irrevocably
deposited with the Indenture Trustee cash or direct obligations of or
obligations guaranteed by the United States of America (which will mature prior
to the date such amounts are payable), in trust for such purpose, in an amount
sufficient to pay and discharge the entire indebtedness on such Notes not
theretofore delivered to the Indenture Trustee for cancellation when due on the
Final
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Scheduled Payment Date or Redemption Date (if Notes shall have been called for
redemption pursuant to Section 10.1(a)), as the case may be;
(B) the Issuer has paid or caused to be paid all Insurer Issuer Secured
Obligations and all Indenture Trustee Issuer Secured Obligations; and
(C) the Issuer has delivered to the Indenture Trustee and the Insurer an
Officer's Certificate, an Opinion of Counsel and if required by the TIA, the
Indenture Trustee or the Insurer an Independent Certificate from a firm of
certified public accountants, each meeting the applicable requirements of
Section 11.1(a) and each stating that all conditions precedent herein provided
relating to the satisfaction and discharge of this Indenture have been complied
with.
SECTION 4.2. Application of Trust Money. All monies deposited with the
Indenture Trustee pursuant to Section 4.1 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Note Paying Agent, as
the Indenture Trustee may determine, to the Holders of the particular Notes for
the payment or redemption of which such monies have been deposited with the
Indenture Trustee, of all sums due and to become due thereon for principal and
interest.
SECTION 4.3. Repayment of Monies Held by Note Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to the Notes,
all monies then held by any Note Paying Agent other than the Indenture Trustee
under the provisions of this Indenture with respect to such Notes shall, upon
demand of the Issuer, be paid to the Indenture Trustee to be held and applied
according to Section 3.3 and thereupon such Note Paying Agent shall be released
from all further liability with respect to such monies.
ARTICLE V.
Remedies
SECTION 5.1. Rights Upon a Rapid Amortization Event. If a Rapid
Amortization Event as described in Article XII shall have occurred and be
continuing, the Rapid Amortization Period shall immediately commence and the
Class A Noteholders shall be entitled on each Payment Date to an amount equal to
the Maximum Principal Payment. The rights contained in this Article V are in
addition to any rights which the Noteholders possess pursuant to Article XII.
SECTION 5.2. Limitation of Suits. No Holder of any Note shall have any
right to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(i) such Holder has previously given written notice to the Indenture
Trustee of a continuing Rapid Amortization Event;
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(ii) the Holders of not less than 25% of the Outstanding Amount of the
Notes have made written request to the Indenture Trustee to institute such
proceeding in respect of such Rapid Amortization Event in its own name as
Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture Trustee
indemnity reasonably satisfactory to it against the costs, expenses and
liabilities to be incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such
proceedings;
(v) no direction inconsistent with such written request has been given
to the Indenture Trustee during such 60-day period by the Holders of a
majority of the Outstanding Amount of the Notes; and
(vi) an Insurer Default shall have occurred and be continuing;
it being understood and intended that no Holders of Notes shall have any right
in any manner whatsoever by virtue of, or by availing of, any provision of this
Indenture to affect, disturb or prejudice the rights of any other Holders of
Notes or to obtain or to seek to obtain priority or preference over any other
Holders or to enforce any right under this Indenture, except in the manner
herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of Notes,
each representing less than a majority of the Outstanding Amount of the Notes,
the Indenture Trustee in its sole discretion may determine what action, if any,
shall be taken, notwithstanding any other provisions of this Indenture.
SECTION 5.3. Unconditional Rights of Noteholders To Receive Principal and
Interest. Notwithstanding any other provisions in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest, if any, on such Note on or after the
respective due dates thereof expressed in such Note or in this Indenture (or, in
the case of redemption, on or after the Redemption Date) and to institute suit
for the enforcement of any such payment, and such right shall not be impaired
without the consent of such Holder.
SECTION 5.4. Restoration of Rights and Remedies. If the Controlling Party
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, then and in every such case the Issuer, the Indenture Trustee and
the Noteholders shall, subject to any determination in such proceeding, be
restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Indenture Trustee and the Noteholders
shall continue as though no such proceeding had been instituted.
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SECTION 5.5. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Controlling Party or to the Noteholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.6. Delay or Omission Not a Waiver. No delay or omission of the
Indenture Trustee, Controlling Party or any Holder of any Note to exercise any
right or remedy accruing upon any Default or Rapid Amortization Event shall
impair any such right or remedy or constitute a waiver of any such Default or
Rapid Amortization Event or an acquiescence therein. Every right and remedy
given by this Article V or by law to the Indenture Trustee or to the Noteholders
may be exercised from time to time, and as often as may be deemed expedient, by
the Indenture Trustee or by the Noteholders, as the case may be.
SECTION 5.7. Control by Noteholders. If the Indenture Trustee is the
Controlling Party, the Holders of a majority of the Outstanding Amount of the
Notes, with the consent of the Insurer, shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Indenture Trustee pursuant to Section 12.1 with respect to the Notes or
exercising any trust or power conferred on the Indenture Trustee; provided that
(i) such direction shall not be in conflict with any rule of law or
with this Indenture;
(ii) the Indenture Trustee may take any other action deemed proper by
the Indenture Trustee that is not inconsistent with such direction;
provided, however, that, subject to Section 6.1, the Indenture Trustee need not
take any action that it determines might involve it in liability or might
materially adversely affect the rights of any Noteholders not consenting to such
action.
SECTION 5.8. Undertaking for Costs. All parties to this Indenture agree,
and each Holder of any Note by such Xxxxxx's acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to (a) any suit instituted by the
Indenture Trustee, (b) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the
Outstanding Amount of the Notes or (c) any suit instituted by any Noteholder for
the enforcement of the payment of principal of or interest on
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any Note on or after the respective due dates expressed in such Note and in this
Indenture (or, in the case of redemption, on or after the Redemption Date).
SECTION 5.9. Waiver of Stay or Extension Laws. The Issuer covenants (to the
extent that it may lawfully do so) that it will not at any time insist upon, or
plead or in any manner whatsoever, claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture; and
the Issuer (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Indenture
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
SECTION 5.10. Action on Notes. The Indenture Trustee's right to seek and
recover judgment on the Notes or under this Indenture shall not be affected by
the seeking, obtaining or application of any other relief under or with respect
to this Indenture. Neither the lien of this Indenture nor any rights or remedies
of the Indenture Trustee or the Noteholders shall be impaired by the recovery of
any judgment by the Indenture Trustee against the Issuer or by the levy of any
execution under such judgment upon any portion of the Trust Estate or upon any
of the assets of the Issuer.
SECTION 5.11. Performance and Enforcement of Certain Obligations. (a)
Promptly following a request from the Indenture Trustee to do so and at the
Master Servicer's expense, the Issuer agrees to take all such lawful action as
the Indenture Trustee may request to compel or secure the performance and
observance by the Sponsor and the Master Servicer, as applicable, of each of
their obligations to the Issuer under or in connection with the Sale and
Servicing Agreement in accordance with the terms thereof, and to exercise any
and all rights, remedies, powers and privileges lawfully available to the Issuer
under or in connection with the Sale and Servicing Agreement to the extent and
in the manner directed by the Indenture Trustee, including the transmission of
notices of default on the part of the Sponsor or the Master Servicer thereunder
and the institution of legal or administrative actions or proceedings to compel
or secure performance by the Sponsor or the Master Servicer of each of their
obligations under the Sale and Servicing Agreement.
(b) If the Indenture Trustee is a Controlling Party and if a Rapid
Amortization Event has occurred and is continuing, the Indenture Trustee may,
and, at the written direction of the Holders of 66-2/3% of the Outstanding
Amount of the Notes shall, exercise all rights, remedies, powers, privileges and
claims of the Issuer against the Sponsor or the Master Servicer under or in
connection with the Sale and Servicing Agreement, including the right or power
to take any action to compel or secure performance or observance by the Sponsor
or the Master Servicer of each of their obligations to the Issuer thereunder and
to give any consent, request, notice, direction, approval, extension or waiver
under the Sale and Servicing Agreement, and any right of the Issuer to take such
action shall be suspended.
SECTION 5.12. Subrogation. The Indenture Trustee shall receive as
attorney-in-fact of each Noteholder any Policy Claim Amount from the Insurer.
Any and all Policy Claim
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Amounts disbursed by the Indenture Trustee from claims made under the Policy
shall not be considered payment by the Trust, and shall not discharge the
obligations of the Trust with respect thereto. The Insurer shall, to the extent
it makes any payment with respect to the Notes, become subrogated to the rights
of the recipient of such payments to the extent of such payments. Subject to and
conditioned upon any payment with respect to the Notes by or on behalf of the
Insurer, the Indenture Trustee shall assign to the Insurer all rights to the
payment of interest or principal with respect to the Notes which are then due
for payment to the extent of all payments made by the Insurer, and the Insurer
may exercise any option, vote, right, power or the like with respect to the
Notes to the extent that it has made payment pursuant to the Policy.
SECTION 5.13. Preference Claims. (a) In the event that the Indenture
Trustee has received a certified copy of an order of the appropriate court that
any payment on a Note has been avoided in whole or in part as a preference
payment under applicable bankruptcy law, the Indenture Trustee shall so notify
the Insurer, shall comply with the provisions of the Policy to obtain payment by
the Insurer of such avoided payment, and shall, at the time it provides notice
to the Insurer, notify Holders of the Notes by mail that, in the event that any
Noteholder's payment is so recoverable, such Noteholder will be entitled to
payment pursuant to the terms of the Policy. The Indenture Trustee shall furnish
to the Insurer at its written request, the requested records it holds in its
possession evidencing the payments of principal of and interest on Notes, if
any, which have been made by the Indenture Trustee and subsequently recovered
from Noteholders, and the dates on which such payments were made. Pursuant to
the terms of the Policy, the Insurer will make such payment on behalf of the
Noteholder to the receiver, conservator, debtor-in-possession or trustee in
bankruptcy named in the Final Order (as defined in the Policy) and not to the
Indenture Trustee or any Noteholder directly.
(b) The Indenture Trustee shall promptly notify the Insurer of any
proceeding or the institution of any action (of which the Indenture Trustee has
actual knowledge) seeking the avoidance as a preferential transfer under
applicable bankruptcy, insolvency, receivership, rehabilitation or similar law
(a "Preference Claim") of any distribution made with respect to the Notes. Each
Holder, by its purchase of Notes, and the Indenture Trustee hereby agree that so
long as an Insurer Default shall not have occurred and be continuing, the
Insurer may at any time during the continuation of any proceeding relating to a
Preference Claim direct all matters relating to such Preference Claim including,
without limitation, (i) the direction of any appeal of any order relating to any
Preference Claim and (ii) the posting of any surety, supersedes or performance
bond pending any such appeal at the expense of the Insurer, but subject to
reimbursement as provided in the Insurance Agreement. In addition, and without
limitation of the foregoing, as set forth in Section 5.12, the Insurer shall be
subrogated to, and each Noteholder and the Indenture Trustee hereby delegate and
assign, to the fullest extent permitted by law, the rights of the Indenture
Trustee and each Noteholder in the conduct of any proceeding with respect to a
Preference Claim, including, without limitation, all rights of any party to an
adversary proceeding action with respect to any court order issued in connection
with any such Preference Claim.
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ARTICLE VI.
The Indenture Trustee
SECTION 6.1. Duties of Indenture Trustee. (a) If a Rapid Amortization Event
has occurred and is continuing, the Indenture Trustee shall exercise the rights
and powers vested in it by this Indenture and the Operative Documents and use
the same degree of care and skill in its exercise as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs; provided, however, that if the Indenture Trustee is acting as Master
Servicer, it shall use the same degree of care and skill as is required of the
Master Servicer under the Sale and Servicing Agreement.
(b) Except during the continuance of a Rapid Amortization Event:
(i) The Indenture Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; however, the Indenture Trustee shall
examine the certificates and opinions to determine whether or not they
conform on their face to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is proved
that the Indenture Trustee was negligent in ascertaining the pertinent
facts;
(iii) the Indenture Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.11; and
(iv) the Indenture Trustee shall not be charged with knowledge of any
failure by the Master Servicer to comply with the obligations of the Master
Servicer referred to in clauses (i) and (ii) of Section 5.1 of the Sale and
Servicing Agreement unless a Responsible Officer of the Indenture Trustee
at the Corporate Trust Office obtains actual knowledge of such failure or
occurrence or the Indenture Trustee receives written notice of such failure
or occurrence from the Master Servicer, the Insurer or the Holders of Notes
evidencing Voting Rights aggregating not less than 51%.
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(d) The Indenture Trustee shall not be liable for interest on any
money received by it except as the Indenture Trustee may agree in writing
with the Issuer.
(e) No provision of this Indenture shall require the Indenture Trustee
to expend or risk its own funds or otherwise incur financial liability in
the performance of any of its duties hereunder or in the exercise of any of
its rights or powers, if it shall have reasonable grounds to believe that
repayment of such funds or indemnity reasonably satisfactory to it against
such risk or liability is not reasonably assured to it.
(f) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section and to the provisions of
the TIA.
(g) The Indenture Trustee shall, upon two Business Days' prior written
notice to the Indenture Trustee, permit any representative of the Insurer,
during the Indenture Trustee's normal business hours, to examine all books
of account, records, reports and other papers of the Indenture Trustee
relating to the Notes, to make copies and extracts therefrom and to discuss
the Indenture Trustee's affairs and actions, as such affairs and actions
relate to the Indenture Trustee's duties with respect to the Notes, with
the Indenture Trustee's officers and employees responsible for carrying out
the Indenture Trustee's duties with respect to the Notes.
(h) The Indenture Trustee shall, and hereby agrees that it will,
perform all of the obligations and duties required of it under the Sale and
Servicing Agreement.
(i) The Indenture Trustee shall, and hereby agrees that it will, hold
the Policy in trust, and will hold any proceeds of any claim on the Policy
in trust solely for the use and benefit of the Noteholders.
(j) In no event shall Bankers Trust Company of California, N.A., in
any of its capacities hereunder, be deemed to have assumed any duties of
the Owner Trustee under the Delaware Business Trust Statute, common law, or
the Trust Agreement.
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SECTION 6.2. Rights of Indenture Trustee. (a) The Indenture Trustee may
rely on any document reasonably believed by it to be genuine and to have been
signed or presented by the proper person. The Indenture Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel. The Indenture Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on the Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys or a custodian or nominee.
(d) The Indenture Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Indenture Trustee's conduct does
not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Notes shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.
(f) The Indenture Trustee shall be under no obligation to institute,
conduct or defend any litigation under this Indenture or in relation to this
Indenture, at the request, order or direction of any of the Holders of Notes or
the Controlling Party, pursuant to the provisions of this Indenture, unless such
Holders of Notes or the Controlling Party shall have offered to the Indenture
Trustee reasonable security or indemnity against the costs, expenses and
liabilities that may be incurred therein or thereby; provided, however, that the
Indenture Trustee shall, upon the occurrence of a Rapid Amortization Event or
Event of Servicing Termination as defined in the Sale and Servicing Agreement
(that has not been cured or waived), exercise the rights and powers vested in it
by this Indenture or the Sale and Servicing Agreement with reasonable care and
skill.
(g) The Indenture Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so by the Insurer or
by the Holders of Notes evidencing not less than 25% of the Outstanding Amount
thereof; provided, however, that if the payment within a reasonable time to the
Indenture Trustee of the costs, expenses or liabilities likely to be incurred by
it in the making of such investigation is, in the opinion of the Indenture
Trustee, not reasonably assured to the Indenture Trustee by the security
afforded to it by the terms of this Indenture or the Sale and Servicing
Agreement, the Indenture Trustee may require indemnity reasonably satisfactory
to it
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against such cost, expense or liability as a condition to so proceeding; the
reasonable expense of every such examination shall be paid by the Person making
such request, or, if paid by the Indenture Trustee shall be reimbursed by the
Person making such request upon demand.
(h) The Indenture Trustee shall not be accountable, shall have no liability
and makes no representation as to any acts or omissions hereunder of the Master
Servicer until such time as, and only to the extent that, the Indenture Trustee
may be required to act as Master Servicer.
SECTION 6.3. Individual Rights of Indenture Trustee. The Indenture Trustee
in its individual or any other capacity may become the owner or pledgee of Notes
and may otherwise deal with the Issuer or its Affiliates with the same rights it
would have if it were not Indenture Trustee. Any Note Paying Agent, Note
Registrar, co-registrar or co-paying agent may do the same with like rights.
However, the Indenture Trustee must comply with Sections 6.11 and 6.12.
SECTION 6.4. Indenture Trustee's Disclaimer. The Indenture Trustee shall
not be responsible for and makes no representation as to the validity or
adequacy of this Indenture, the Trust Estate or the Notes, it shall not be
accountable for the Issuer's use of the proceeds from the Notes, and it shall
not be responsible for any statement of the Issuer in the Indenture or in any
document issued in connection with the sale of the Notes or in the Notes other
than the Indenture Trustee's certificate of authentication.
SECTION 6.5. Notice of Defaults. If a Rapid Amortization Event, an Event of
Servicing Termination or any other Default occurs and is continuing and if it is
either known by, or written notice of the existence thereof has been delivered
to, a Responsible Officer of the Indenture Trustee, the Indenture Trustee shall
mail to each Noteholder and to the Insurer of such event within 10 days after
such knowledge or notice occurs. Except in the case of a Default in payment of
principal of or interest on any Note, the Indenture Trustee may withhold the
notice if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of Noteholders.
SECTION 6.6. Reports by Indenture Trustee to Holders. Upon written request,
the Note Paying Agent or the Master Servicer shall on behalf of the Issuer
deliver to each Noteholder such information as may be reasonably required to
enable such Holder to prepare its Federal and state income tax returns required
by law.
SECTION 6.7. Compensation and Indemnity. (a) Pursuant to Section 8.6 and
subject to Section 6.18 herein, the Issuer shall, or shall cause the Master
Servicer to, pay to the Indenture Trustee from time to time compensation for its
services. The Indenture Trustee's compensation shall not be limited by any law
on compensation of a trustee of an express trust. The Issuer shall or shall
cause the Master Servicer to reimburse the Indenture Trustee for all reasonable
out-of-pocket expenses incurred or made by it, including costs of collection, in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation and expenses, disbursements and advances of the
Indenture Trustee's agents,
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counsel, accountants and experts. The Issuer shall or shall cause the Master
Servicer to indemnify the Indenture Trustee and its respective officers,
directors, employees and agents against any and all loss, liability or expense
(including attorneys' fees and expenses) incurred by each of them in connection
with the acceptance or the administration of this trust and the performance of
its duties hereunder. The Indenture Trustee shall notify the Issuer and the
Master Servicer promptly of any claim for which it may seek indemnity. Failure
by the Indenture Trustee to so notify the Issuer and the Master Servicer shall
not relieve the Issuer of its obligations hereunder or the Master Servicer of
its obligations under Article VIII of the Sale and Servicing Agreement. The
Issuer shall or shall cause the Master Servicer to defend the claim, the
Indenture Trustee may have separate counsel and the Issuer shall or shall cause
the Master Servicer to pay the fees and expenses of such counsel. Neither the
Issuer nor the Master Servicer need reimburse any expense or indemnify against
any loss, liability or expense incurred by the Indenture Trustee through the
Indenture Trustee's own willful misconduct, negligence or bad faith. The
indemnification provided in this Section 6.7(a) shall survive the discharge or
termination of this Indenture and the resignation or removal of the Indenture
Trustee.
(b) The Issuer's payment obligations to the Indenture Trustee pursuant to
this Section shall survive the discharge of this Indenture. Notwithstanding
anything else set forth in this Indenture or the Operative Documents, the
Indenture Trustee agrees that the obligations of the Issuer (but not the Master
Servicer) to the Indenture Trustee hereunder and under the Operative Documents
shall be recourse to the Trust Estate only and specifically shall not be
recourse to the assets of the Issuer or any Securityholder. In addition, the
Indenture Trustee agrees that its recourse to the Issuer, the Trust Estate, the
Sponsor and amounts held in the Note Account, the Capitalized Interest Account,
and the Pre-Funding Account shall be limited to the right to receive the
distributions referred to herein.
SECTION 6.8. Replacement of Indenture Trustee. The Indenture Trustee may
resign at any time by so notifying the Issuer and the Insurer by written notice.
Upon receiving such notice of resignation, the Issuer shall promptly appoint a
successor Indenture Trustee (approved in writing by the Insurer, so long as such
approval is not unreasonably withheld) by written instrument, in duplicate, one
copy of such instrument shall be delivered to the resigning Indenture Trustee
(who shall deliver a copy to the Master Servicer) and one copy to the successor
Trustee; provided, however, that any such successor Xxxxxxxxx Trustee shall be
subject to the prior written approval of the Master Servicer, which approval
shall not be unreasonably withheld. The Issuer may and, at the request of the
Insurer shall, remove the Indenture Trustee, if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) a court having jurisdiction in the premises in respect of the
Indenture Trustee in an involuntary case or proceeding under federal or
state banking or bankruptcy laws, as now or hereafter constituted, or any
other applicable federal or state bankruptcy, insolvency or other similar
law, shall have entered a decree or order granting relief or appointing a
receiver, liquidator, assignee, custodian, trustee, conservator,
sequestrator (or similar official) for the Indenture Trustee or for any
substantial part of the Indenture
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Trustee's property, or ordering the winding-up or liquidation of the
Indenture Trustee's affairs;
(iii) an involuntary case under the federal bankruptcy laws, as now or
hereafter in effect, or another present or future federal or state
bankruptcy, insolvency or similar law is commenced with respect to the
Indenture Trustee and such case is not dismissed within 60 days;
(iv) the Indenture Trustee commences a voluntary case under any
federal or state banking or bankruptcy laws, as now or hereafter
constituted, or any other applicable federal or state bankruptcy,
insolvency or other similar law, or consents to the appointment of or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
conservator, sequestrator (or other similar official) for the Indenture
Trustee or for any substantial part of the Indenture Trustee's property, or
makes any assignment for the benefit of creditors or fails generally to pay
its debts as such debts become due or takes any corporate action in
furtherance of any of the foregoing; or
(v) the Indenture Trustee otherwise becomes incapable of acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists in
the office of Indenture Trustee for any reason (the Indenture Trustee in such
event being referred to herein as the retiring Indenture Trustee), the Issuer
shall promptly appoint a successor Indenture Trustee acceptable to the Insurer.
If the Issuer fails to appoint such a successor Indenture Trustee, the Insurer
may appoint a successor Indenture Trustee.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee, to the Insurer and to the Issuer.
Thereupon the resignation or removal of the retiring Indenture Trustee shall
become effective, and the successor Indenture Trustee shall have all the rights,
powers and duties of the retiring Indenture Trustee under this Indenture. The
successor Indenture Trustee shall mail a notice of its succession to
Noteholders. The retiring Indenture Trustee shall promptly transfer all property
held by it as Indenture Trustee to the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 30 days after
the retiring Indenture Trustee resigns or is removed, the retiring Indenture
Trustee, the Issuer or the Holders of a majority in Outstanding Amount of the
Notes may petition any court of competent jurisdiction for the appointment of a
successor Indenture Trustee acceptable to the Insurer.
If the Indenture Trustee fails to comply with Section 6.11, any Noteholder
may petition any court of competent jurisdiction for the removal of the
Indenture Trustee and the appointment of a successor Indenture Trustee
acceptable to the Insurer.
Any resignation or removal of the Indenture Trustee and appointment of a
successor Indenture Trustee pursuant to any of the provisions of this Section
shall not become effective until acceptance of appointment by the successor
Indenture Trustee pursuant to Section 6.8 and payment of all fees and expenses
owed to the outgoing Indenture Trustee.
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Notwithstanding the replacement of the Indenture Trustee pursuant to this
Section, the Issuer's and the Master Servicer's indemnity obligations under
Section 6.7 shall continue for the benefit of the retiring Indenture Trustee and
the Master Servicer shall pay any amounts owing to the Indenture Trustee.
SECTION 6.9. Successor Indenture Trustee by Xxxxxx. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another corporation
or banking association, the resulting, surviving or transferee corporation
without any further act shall be the successor Indenture Trustee.
In case at the time such successor or successors by merger, conversion or
consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture any of the Notes shall have been authenticated but not delivered,
any such successor to the Indenture Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force which it is anywhere in the Notes or in this Indenture
provided that the certificate of the Indenture Trustee shall have.
SECTION 6.10. Appointment of Co-Indenture Trustee or Separate Indenture
Trustee. (a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust may at the time be located, the Indenture Trustee
with the consent of the Insurer shall have the power and may execute and deliver
all instruments to appoint one or more Persons to act as a co-trustee or
co-trustees, or separate trustee or separate trustees, of all or any part of the
Trust (including, for purposes of this Section 6.10, all or any part of the
Trust Estate), and to vest in such Person or Persons, in such capacity and for
the benefit of the Noteholders, such title to the Trust, or any part hereof,
and, subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Indenture Trustee may consider necessary
or desirable. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 6.11 and no
notice to Noteholders of the appointment of any co-trustee or separate trustee
shall be required under Section 6.8 hereof.
(b) Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Indenture Trustee shall be conferred or imposed upon and exercised
or performed by the Indenture Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed
the Indenture Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such
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rights, powers, duties and obligations (including the holding of title to
the Trust or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or co-trustee, but
solely at the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of any
act or omission of any other trustee hereunder, including acts or omissions
of predecessor or successor trustees; and
(iii) the Indenture Trustee and the Master Servicer acting jointly may
at any time accept the resignation of or remove any separate trustee or
co-trustee except that following the occurrence of an Event of Servicing
Termination, the Indenture Trustee acting alone may accept the resignation
of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture
Trustee shall be deemed to have been given to each of the then separate
trustees and co-trustees, as effectively as if given to each of them. Every
instrument appointing any separate trustee or co-trustee shall refer to
this Agreement and the conditions of this Article VI. Each separate trustee
and co-trustee, upon its acceptance of the trusts conferred, shall be
vested with the estates or property specified in its instrument of
appointment, either jointly with the Indenture Trustee or separately, as
may be provided therein, subject to all the provisions of this Indenture,
specifically including every provision of this Indenture relating to the
conduct of, affecting the liability of, or affording protection to, the
Indenture Trustee. Every such instrument shall be filed with the Indenture
Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under
or in respect of this Agreement on its behalf and in its name. If any
separate trustee or co-trustee shall die, dissolve, become insolvent,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by
the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
(e) The Master Servicer shall be responsible for the fees of any
co-trustee or separate trustee appointed hereunder.
SECTION 6.11. Eligibility: Disqualification. The Indenture Trustee shall at
all times satisfy the requirements of TIA Section 310(a). The Indenture Trustee
shall have a combined capital and surplus of at least $50,000,000 as set forth
in its most recent published annual report of condition. The Indenture Trustee
shall provide copies of such reports to the Insurer upon request. The Indenture
Trustee shall comply with TIA Section 310(b), including the optional provision
permitted by the second sentence of TIA Section 310(b)(9); provided, however,
that there shall be excluded from the operation of TIA Section 310(b)(1) any
indenture or indentures under which other securities of the Issuer are
outstanding if the requirements for such exclusion set forth in TIA Section
310(b)(1) are met.
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SECTION 6.12. Preferential Collection of Claims Against Issuer. The
Indenture Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). An Indenture Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated.
SECTION 6.13. Appointment and Powers. Subject to the terms and conditions
hereof, each of the Issuer Secured Parties hereby appoints Bankers Trust Company
of California, N.A. as the Indenture Trustee with respect to the Collateral, and
Bankers Trust Company of California, N.A. xxxxxx accepts such appointment and
agrees to act as Indenture Trustee with respect to the Trust Estate for the
Issuer Secured Parties, to maintain custody and possession of such Trust Estate
(except as otherwise provided hereunder) and to perform the other duties of the
Indenture Trustee in accordance with the provisions of this Indenture and the
other Operative Documents. Each Issuer Secured Party hereby authorizes the
Indenture Trustee to take such action on its behalf, and to exercise such
rights, remedies, powers and privileges hereunder, as the Controlling Party may
direct and as are specifically authorized to be exercised by the Indenture
Trustee by the terms hereof, together with such actions, rights, remedies,
powers and privileges as are reasonably incidental thereto. The Indenture
Trustee shall act upon and in compliance with the written instructions of the
Controlling Party delivered pursuant to this Indenture promptly following
receipt of such written instructions; provided that the Indenture Trustee shall
not act in accordance with any instructions (i) which are not authorized by, or
in violation of the provisions of, this Indenture or (ii) for which the
Indenture Trustee has not received reasonable indemnity. Receipt of such
instructions shall not be a condition to the exercise by the Indenture Trustee
of its express duties hereunder, except where this Indenture provides that the
Indenture Trustee is permitted to act only following and in accordance with such
instructions.
SECTION 6.14. Performance of Duties. The Indenture Trustee shall have no
duties or responsibilities except those expressly set forth in this Indenture
and the other Operative Documents to which the Indenture Trustee is a party or
as directed by the Controlling Party in accordance with this Indenture. The
Indenture Trustee shall not be required to take any discretionary actions
hereunder except at the written direction and with the indemnification of the
Controlling Party. The Indenture Trustee shall, and hereby agrees that it will,
perform all of the duties and obligations required of it under the Sale and
Servicing Agreement.
SECTION 6.15. Limitation on Liability. Neither the Indenture Trustee nor
any of its directors, officers, employees and agents shall be liable for any
action taken or omitted to be taken by it or them hereunder, or in connection
herewith, except that the Indenture Trustee shall be liable for its negligence,
bad faith or willful misconduct; nor shall the Indenture Trustee be responsible
for the validity, effectiveness, value, sufficiency or enforceability against
the Issuer of this Indenture or any of the Trust Estate (or any part thereof).
SECTION 6.16. Reliance Upon Documents. In the absence of negligence, bad
faith or willful misconduct on its part, the Indenture Trustee shall be entitled
to rely on any communication, instrument, paper or other document reasonably
believed by it to be genuine and correct and to have been signed or sent by the
proper Person or Persons and shall have no
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liability in acting, or omitting to act, where such action or omission to act is
in reasonable reliance upon any statement or opinion contained in any such
document or instrument.
SECTION 6.17. Representations and Warranties of the Indenture Trustee. The
Indenture Trustee represents and warrants to the Issuer and to each Issuer
Secured Party as follows:
(a) Due Organization. The Indenture Trustee is a national banking
association, duly organized, validly existing and in good standing under the
laws of the United States and is duly authorized and licensed under applicable
law to conduct its business as presently conducted.
(b) Corporate Power. The Indenture Trustee has all requisite right, power
and authority to execute and deliver this Indenture and to perform all of its
duties as the Indenture Trustee hereunder.
(c) Due Authorization. The execution and delivery by the Indenture Trustee
of this Indenture and the other Operative Documents to which it is a party, and
the performance by the Indenture Trustee of its duties hereunder and thereunder,
have been duly authorized by all necessary corporate proceedings, are required
for the valid execution and delivery by the Indenture Trustee, or the
performance by the Indenture Trustee, of this Indenture and such other Operative
Documents.
(d) Xxxxx and Binding Indenture. The Indenture Trustee has duly executed
and delivered this Indenture and each other Operative Document to which it is a
party, and each of this Indenture and each such other Operative Document
constitutes the legal, valid and binding obligation of the Indenture Trustee,
enforceable against the Indenture Trustee in accordance with its terms, except
as (i) such enforceability may be limited by bankruptcy, insolvency,
reorganization and similar laws relating to or affecting the enforcement of
creditors' rights generally and (ii) the availability of equitable remedies may
be limited by equitable principles of general applicability.
SECTION 6.18. Waiver of Setoffs. The Indenture Trustee hereby expressly
waives any and all rights of setoff that the Indenture Trustee may otherwise at
any time have under applicable law with respect to any Account and agrees that
amounts in the Accounts shall at all times be held and applied solely in
accordance with the provisions hereof.
SECTION 6.19. Control by the Controlling Party. The Indenture Trustee shall
comply with notices and instructions given by the Issuer only if accompanied by
the written consent of the Controlling Party.
SECTION 6.20. Trustee May Enforce Claims Without Possession of Notes. All
rights of action and claims under this Agreement or the Notes may be prosecuted
and enforced by the Indenture Trustee without the possession of any of the Notes
or the production thereof in any proceeding relating thereto, and such
proceeding instituted by the Indenture Trustee shall be brought in its own name
or in its capacity as Indenture Trustee. Any recovery of judgment shall,
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after provision for the payment of the reasonable compensation, expenses,
disbursement and advances of the Indenture Trustee, its agents and counsel, be
for the ratable benefit of the Noteholders in respect of which such judgment has
been recovered.
SECTION 6.21. Suits for Enforcement. In case an Event of Servicing
Termination or other default by the Master Servicer or the Sponsor hereunder
shall occur and be continuing, the Indenture Trustee, if the Controlling Party
(and if not the Controlling Party, with the consent of the Insurer), may proceed
to protect and enforce its rights and the rights of the Noteholders under this
Agreement by a suit, action or proceeding in equity or at law or otherwise,
whether for the specific performance of any covenant or agreement contained in
this Agreement or in aid of the execution of any power granted in this Agreement
or for the enforcement of any other legal, equitable or other remedy, as the
Indenture Trustee, being advised by counsel, shall deem most effectual to
protect and enforce any of the rights of the Indenture Trustee and the
Noteholders.
SECTION 6.22. Mortgagor Claims. In connection with any offset defenses, or
affirmative claim for recovery, asserted in legal actions brought by Mortgagors
under one or more Mortgage Loans based upon provisions therein or upon other
rights or remedies arising from any requirements of law applicable to the
Mortgage Loans:
(a) The Indenture Trustee is the holder of the Mortgage Loans only as
trustee on behalf of the holders of the Notes, and not as a principal or in any
individual or personal capacity.
(b) The Indenture Trustee shall not be personally liable for, or obligated
to pay Mortgagors, any affirmative claims asserted thereby, or responsible to
holders of the Notes for any offset defense amounts applied against Mortgage
Loan payments, pursuant to such legal actions.
(c) The Indenture Trustee will pay, solely from available Trust money,
affirmative claims for recovery by Xxxxxxxxxx only pursuant to final judicial
orders or judgments, or judicially-approved settlement agreements, resulting
from such legal actions.
(d) The Indenture Trustee will comply with judicial orders and judgments
which require its actions or cooperation in connection with Xxxxxxxxxx' legal
actions to recover affirmative claims against holders of the Notes.
(e) The Indenture Trustee will cooperate with and assist the Master
Servicer, the Sponsor, or holders of the Notes in their defense of legal actions
by Xxxxxxxxxx to recover affirmative claims if such cooperation and assistance
is not contrary to the interests of the Indenture Trustee as a party to such
legal actions and if the Indenture Trustee is satisfactorily indemnified for all
liability, costs and expenses arising therefrom.
(f) The Issuer hereby agrees to cause the Master Servicer to indemnify,
hold harmless and defend the Indenture Trustee from and against any and all
liability, loss, costs and
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expenses of the Indenture Trustee resulting from any affirmative claims for
recovery asserted or collected by Xxxxxxxxxx under the Mortgage Loans.
ARTICLE VII.
Noteholders' Lists and Reports
SECTION 7.1. Issuer To Furnish To Indenture Trustee Names and Addresses of
Noteholders. The Issuer will furnish or cause to be furnished to the Indenture
Trustee (a) not more than five days after the earlier of (i) each Record Date
and (ii) three months after the last Record Date, a list, in such form as the
Indenture Trustee may reasonably require, of the names and addresses of the
Holders as of such Record Date, (b) at such other times as the Indenture Trustee
may request in writing, within 30 days after receipt by the Issuer of any such
request, a list of similar form and content as of a date not more than 10 days
prior to the time such list is furnished; provided, however, that so long as the
Indenture Trustee is the Note Registrar, no such list shall be required to be
furnished. The Indenture Trustee or, if the Indenture Trustee is not the Note
Registrar, the Issuer shall furnish to the Insurer or the Issuer in writing upon
their written request and at such other times as the Insurer or the Issuer may
request a copy of the list.
SECTION 7.2. Preservation of Information; Communications to Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders contained in the most recent
list furnished to the Indenture Trustee as provided in Section 7.1 and the names
and addresses of Holders received by the Indenture Trustee in its capacity as
Note Registrar. The Indenture Trustee may destroy any list furnished to it as
provided in such Section 7.1 upon receipt of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA Section 312(b) with other
Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall have the
protection of TIA Section 312(c).
SECTION 7.3. Reports by Issuer. (a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the Issuer
is required to file the same with the Commission, copies of the annual
reports and copies of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Issuer may be
required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act;
(ii) file with the Indenture Trustee and the Commission in accordance
with rules and regulations prescribed from time to time by the Commission
such additional information, documents and reports with respect to
compliance by the Issuer with the
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conditions and covenants of this Indenture as may be required from time to
time by such rules and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee shall
transmit by mail to all Noteholders described in TIA Section 313(c)) such
summaries of any information, documents and reports required to be filed by
the Issuer pursuant to clauses (i) and (ii) of this Section 7.3(a) as may
be required by rules and regulations prescribed from time to time by the
Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
SECTION 7.4. Reports by Indenture Trustee. If required by TIA Section
313(a), within 60 days after each August 31, beginning with August 31, 1998, the
Indenture Trustee shall mail to each Noteholder as required by TIA Section
313(c) a brief report dated as of such date that complies with TIA Section
313(a). The Indenture Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Noteholders shall be
filed by the Indenture Trustee with the Commission and each stock exchange, if
any, on which the Notes are listed. The Issuer shall notify the Indenture
Trustee if and when the Notes are listed on any stock exchange.
ARTICLE VIII.
Payments and Statements to Noteholders and Certificateholders;
Accounts, Disbursements and Releases
SECTION 8.1. Collection of Money. Except as otherwise expressly provided
herein, the Indenture Trustee may demand payment or delivery of, and shall
receive and collect, directly and without intervention or assistance of any
fiscal agent or other intermediary, all money and other property payable to or
receivable by the Indenture Trustee pursuant to this Indenture and the Sale and
Servicing Agreement. The Indenture Trustee shall apply all such money received
by it as provided in this Indenture and the Sale and Servicing Agreement. Except
as otherwise expressly provided in this Indenture or in the Sale and Servicing
Agreement, if any default occurs in the making of any payment or performance
under any agreement or instrument that is part of the Trust Estate, the
Indenture Trustee may take such action as may be appropriate to enforce such
payment or performance, including the institution and prosecution of appropriate
proceedings.
SECTION 8.2. Release of Trust Estate. (a) Subject to Section 8.11 and the
payment of its fees and expenses pursuant to Section 6.7, the Indenture Trustee
may, and when required by the Issuer and the provisions of this Indenture shall,
execute instruments to release property from the lien of this Indenture, in a
manner and under circumstances that are not inconsistent with the provisions of
this Indenture or the Sale and Servicing Agreement. No party relying upon an
instrument executed by the Indenture Trustee as provided in this Article VIII
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shall be bound to ascertain the Indenture Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the application of any
monies.
(b) The Indenture Trustee shall, at such time as there are no Notes
outstanding and all sums due the Indenture Trustee pursuant to Section 6.7 and
to the Insurer pursuant to the Insurance Agreement have been paid, release any
remaining portion of the Trust Estate that secured the Notes from the lien of
this Indenture and release to the Issuer or any other Person entitled thereto
any funds then on deposit in the Accounts. The Indenture Trustee shall release
property from the lien of this Indenture pursuant to this Section 8.2(b) only
upon receipt of an Issuer Request accompanied by an Officer's Certificate, an
Opinion of Counsel and (if required by the TIA) Independent Certificates in
accordance with TIA Sections 314(c) and 314(d)(1) meeting the applicable
requirements of Section 11.1.
SECTION 8.3. Establishment of Accounts. The Sponsor shall cause to be
established, and the Indenture Trustee shall maintain, at the corporate trust
office of the Indenture Trustee, a Note Account, a Pre-Funding Account and a
Capitalized Interest Account, each to be held by the Indenture Trustee in the
name of the Trust for the benefit of the Class A Noteholders and the Insurer, as
their interests may appear.
SECTION 8.4. The Policy. On each Determination Date the Indenture Trustee
shall determine with respect to the immediately following Payment Date, the
amount (the "Available Funds") to be on deposit in the Note Account on such
Payment Date, as described in Section 8.6(a) hereof (excluding the amounts of
any payments made pursuant to the Policy, the Indenture Trustee's Fee, the Owner
Trustee's Fee, the Servicing Fee and the Premium Amount, but including amounts
transferred from the Capitalized Interest Account and the Pre-Funding Account).
(a) If (i) the Available Funds for such Payment Date are not sufficient to
pay the Class A Interest Distribution Amount and/or (ii) following the
application of all Available Funds, an Overcollateralization Deficit would exist
(either such event being an "Available Funds Shortfall"), the Indenture Trustee
shall complete a Notice in the form of Exhibit A to the Policy and submit such
notice to the Insurer no later than 12:00 noon New York City time on the second
Business Day preceding such Payment Date as a claim for a payment in an amount
equal to the aggregate Available Funds Shortfall.
(b) Upon receipt of payments made pursuant to the Policy from the Insurer
on behalf of Class A Noteholders, the Indenture Trustee shall deposit such
payments in the Note Account and shall distribute such payments, or the proceeds
thereof, in accordance with Section 8.6 hereof to the Class A Noteholders.
(c) The Indenture Trustee shall (i) receive payments made pursuant to the
Policy as attorney-in-fact of each Class A Noteholder receiving any Insured
Payment from the Insurer and (ii) disburse such Insured Payment to the Class A
Noteholders as set forth in Section 8.6 hereof. The Insurer shall be entitled to
receive the related Reimbursement Amount pursuant to Section 8.6(b)(vii) hereof
with respect to each Insured Payment made by the Insurer. The
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Indenture Trustee hereby agrees on behalf of each Class A Noteholder and the
Trust for the benefit of the Insurer that it recognizes that to the extent the
Insurer makes payments made pursuant to the Policy, either directly or
indirectly (as by paying through the Indenture Trustee), to the Class A
Noteholders, the Insurer will be entitled to receive such related Reimbursement
Amount.
SECTION 8.5. Pre-Funding Account and Capitalized Interest Account. (a) On
the Closing Date, the Indenture Trustee will deposit from the proceeds of the
sale of the Class A Notes, on behalf of the Class A Noteholders and the Insurer,
in the Pre-Funding Account, the Original Pre-Funded Amount and in the
Capitalized Interest Account, the Capitalized Interest Account Deposit.
(b) On each Pre-Funding Transfer Date, the Sponsor shall instruct the
Indenture Trustee to withdraw from the Pre-Funding Account and release to the
Originator an amount equal to 100% of the Principal Balance of the Pre-Funded
Mortgage Loans transferred to the Trust on such Pre-Funding Transfer Date upon
satisfaction of the conditions set forth in Section 2.4 of the Sale and
Servicing Agreement with respect to such transfer.
(c) On the Payment Date occurring in July, 1998, the Indenture Trustee
shall transfer from the Pre-Funding Account to the Note Account the Pre-Funding
Earnings, if any, applicable to such Payment Date.
(d) On each Payment Date occurring during the Pre-Funding Period, the
Indenture Trustee shall transfer from the Capitalized Interest Account to the
Note Account the Capitalized Interest Requirement, if any, for such Payment
Dates.
On the Payment Date which immediately follows the end of the Pre-Funding
Period, and following any withdrawals from the Capitalized Interest Account on
such Payment Date, the Capitalized Interest Account shall be closed and any
remaining amount on deposit therein shall be paid to the Originator.
SECTION 8.6. Flow of Funds. (a) The Indenture Trustee shall deposit to the
Note Account, without duplication, upon receipt, (i) any payments made pursuant
to the Policy, (ii) the proceeds of any liquidation of the assets of the Trust,
the Monthly Remittance Amount remitted by the Master Servicer or any
Sub-Servicer, together with any Substitution Amounts, and any Loan Purchase
Price amounts received by the Indenture Trustee, (iii) on the Payment Dates
occurring in July, 1998, the Pre-Funding Earnings transferred by the Indenture
Trustee pursuant to Section 8.5(c) hereof, (iv) the Capitalized Interest
Requirement to be transferred on such Payment Dates from the Capitalized
Interest Account, pursuant to Section 8.5(d) hereof and (v) the portion of the
amount, if any, to be transferred on such Payment Date from the Pre-Funding
Account, pursuant to Section 8.6(b)(v) hereof.
(b) With respect to the Note Account, on each Payment Date, the Indenture
Trustee shall make the following allocations, disbursements and transfers in the
following order of priority, and each such allocation, transfer and disbursement
shall be treated as having occurred only after all preceding allocations,
transfers and disbursements have occurred:
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(i) first, to the Indenture Trustee, the Indenture Trustee's Fee then
due and to the Owner Trustee, the Owner Trustee's Fee then due;
(ii) second, from amounts then on deposit in the Account, the Premium
Amount to the Insurer for such Payment Date.
(iii) third, to the Class A Noteholders, the Class A Interest
Distribution Amount and the Unpaid Class A Note Interest Shortfall, if any,
for such Payment Date;
(iv) fourth, to the Class A Noteholders, as a distribution of
principal, the Overcollateralization Deficit for such Payment Date;
(v) fifth, if such Payment Date is the first Payment Date following
the end of the Pre-Funding Period, to the Class A Noteholders as a
distribution of principal any amount remaining in the Pre-Funding Account
(after taking into account all transfers of Subsequent Mortgage Loans on or
prior to such Payment Date);
(vi) sixth, to the Class A Noteholders as a distribution of principal,
the Scheduled Principal Distribution Amount for such Payment Date;
(vii) seventh, to the Insurer, the Reimbursement Amount, if any, then
due to it;
(viii) eighth, to the Class A Noteholders as a distribution of
principal up to an amount equal to the Overcollateralization Deficiency
Amount (the "Accelerated Principal Payment");
(ix) ninth, to the Master Servicer, reimbursement for Servicing
Advances to the extent not previously reimbursed and reimbursement for
Servicing Advances which have been deemed Nonrecoverable Advances;
(x) tenth, to the Class A Noteholders, the amount of any Net Funds Cap
Carry-Forward Amount then due; and
(xi) eleventh, to the Certificateholders, which shall initially be the
Originator, any amount remaining on deposit in the Note Account.
SECTION 8.7. Investment of Accounts. (a) So long as no event described in
Section 5.1(a) of the Sale and Servicing Agreement shall have occurred and be
continuing, and consistent with any requirements of the Code, all or a portion
of the Accounts held by the Indenture Trustee shall be invested and reinvested
by the Indenture Trustee in the name of the Indenture Trustee for the benefit of
the Class A Noteholders and the Insurer, as directed in writing by the Master
Servicer, in one or more Eligible Investments bearing interest or sold at a
discount. During the continuance of an event described in Section 5.1(a) of the
Sale and Servicing Agreement and following any removal of the Master Servicer,
the Insurer shall direct such investments. No investment in any Account shall
mature later than the Business Day immediately preceding the next Payment Date.
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(b) If any amounts are needed for disbursement from any Account held by the
Indenture Trustee and sufficient uninvested funds are not available to make such
disbursement, the Indenture Trustee shall cause to be sold or otherwise
converted to cash a sufficient amount of the investments in such Account. No
investments will be liquidated prior to maturity unless the proceeds thereof are
needed for disbursement.
(c) The Indenture Trustee shall not in any way be held liable by reason of
any insufficiency in any Account held by the Indenture Trustee resulting from
any loss on any Eligible Investment included therein.
(d) The Indenture Trustee shall hold funds in the Accounts held by the
Indenture Trustee uninvested upon the occurrence of either of the following
events:
(i) the Master Servicer or the Insurer, as the case may be, shall have
failed to give investment directions to the Indenture Trustee; or
(ii) the Master Servicer or the Insurer, as the case may be, shall
have failed to give investment directions to the Indenture Trustee by 11:15
a.m. New York time (or such other time as may be agreed by the Master
Servicer or the Insurer, as the case may be, and the Indenture Trustee) on
any Business Day (any such investment by the Indenture Trustee pursuant to
this clause (ii) to mature on the next Business Day after the date of such
investment).
SECTION 8.8. Eligible Investments. The following are Eligible Investments:
(a) Direct general obligations of the United States or the obligations of
any agency or instrumentality of the United States fully and unconditionally
guaranteed, the timely payment or the guarantee of which constitutes a full
faith and credit obligation of the United States.
(b) Federal Housing Administration debentures.
(c) FHLMC participation certificates and senior debt obligations.
(d) Federal Home Loan Banks' consolidated senior debt obligations.
(e) FNMA mortgage-backed securities (other than stripped mortgage
securities which are valued greater than par on the portion of unpaid principal)
and senior debt obligations.
(f) Federal funds, certificates of deposit, time and demand deposits, and
bankers' acceptances (having original maturities of not more than 365 days) of
any domestic bank, the short-term debt obligations of which have been rated A-1
or better by S&P and P-1 by Xxxxx'x.
(g) Investment agreements approved by the Insurer provided:
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1. The agreement is with a bank or insurance company which has an
unsecured, uninsured and unguaranteed obligation (or claims-paying
ability) rated Aa2 or better by Xxxxx'x and AA or better by S&P, or is
the lead bank of a parent bank holding company with an uninsured,
unsecured and unguaranteed obligation meeting such rating
requirements, and
2. Monies invested thereunder may be withdrawn without any
penalty, premium or charge upon not more than one day's notice
(provided such notice may be amended or canceled at any time prior to
the withdrawal date), and
3. The agreement is not subordinated to any other obligations of
such insurance company or bank, and
4. The same guaranteed interest rate will be paid on any future
deposits made pursuant to such agreement, and
5. The Indenture Trustee and the Insurer receive an opinion of
counsel that such agreement is an enforceable obligation of such
insurance company or bank.
(h) Commercial paper (having original maturities of not more than 365
days) rated A-1 or better by S&P and P-1 or better by Xxxxx'x.
(i) Investments in money market funds rated AAAm or AAAm-G by S&P and
AAA or P-1 by Xxxxx'x.
(j) Investments approved in writing by the Insurer and acceptable to
Xxxxx'x and S&P.
Provided that no instrument described above is permitted to evidence either the
right to receive (a) only interest with respect to obligations underlying such
instrument or (b) both principal and interest payments derived from obligations
underlying such instrument and the interest and principal payments with respect
to such instrument provided a yield to maturity at par greater than 120% of the
yield to maturity at par of the underlying obligations; and provided, further,
that no instrument described above may be purchased at a price greater than par
if such instrument may be prepaid or called at a price less than its purchase
price prior to stated maturity.
SECTION 8.9. Reports by Indenture Trustee. (a) On each Payment Date, to the
extent that the related report described in Section 4.8(d)(ii) of the Sale and
Servicing Agreement has been received by the Indenture Trustee, the Indenture
Trustee shall provide to each Class A Noteholder, to the Master Servicer, to the
Insurer, to each Underwriter, to the Sponsor, to S&P and to Xxxxx'x a written
report in substantially the form set forth as Exhibit B hereto, as such form may
be revised by the Indenture Trustee, the Master Servicer, Xxxxx'x and S&P from
time to time, but in every case setting forth the information requested on
Exhibit B hereto and the following information:
(i) the Class A Note Distribution Amount;
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(ii) the amount of such distributions allocable to principal;
(iii) the amount of such distributions allocable to interest and the
related Class A Note;
(iv) the amount of any Unpaid Class A Note Interest Shortfall in such
distribution;
(v) the amount of any Insured Payment included in the amounts
distributed to the Notes on such Payment Date;
(vi) information furnished by the Sponsor pursuant to Section
6049(d)(7)(C) of the Code and the regulations promulgated thereunder to
assist the Class A Noteholders in computing their market discount;
(vii) the total of any Substitution Amounts and any Loan Purchase
Price amounts included in such distribution;
(viii) for Payment Dates during the Pre-Funding Period, the remaining
Pre-Funded Amount;
(ix) for the final Subsequent Transfer Date, the amount of any
remaining Pre-Funded Amount that has not been used to fund the purchase of
Subsequent Mortgage Loans and that will be distributed to the Class A
Noteholders as principal, if any, on the immediately following Payment
Date;
(x) the amounts, if any, of any Realized Losses for the related
Remittance Period; and
(xi) the amount, if any, of principal in such distribution, separately
stating the components thereof;
(xii) the Servicing Fee for such Payment Date;
(xiii) the Class A Principal Balance and the Pool Factor, each after
giving effect to such distribution;
(xiv) the Pool Balance as of the end of the preceding Remittance
Period and the Pool Balance at the close of business on the last day of the
related Remittance Period;
(xv) the number and aggregate Principal Balances of Mortgage Loans as
to which the Minimum Monthly Payment is Delinquent for 30-59 days, 60-89
days and 90 or more days, respectively, as of the end of the preceding
Remittance Period;
(xvi) the book value (within the meaning of 12 C.F.R. Section 571.13
or comparable provision) of any REO Property;
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(xvii) the Class A Interest Rate applicable to the distribution on the
following Payment Date;
(xviii) the number and principal balances of any Mortgage Loans
retransferred to the Sponsor pursuant to (a) Section 2.2 and (b) Section
2.5 of the Sale and Servicing Agreement;
(xix) the Overcollateralization Deficit;
(xx) the aggregate Principal Balance of the Subsequent Mortgage Loans
delivered during the related Remittance Period;
(xxi) the amount of the Accelerated Principal Payment, if any, for the
related Payment Date;
(xxii) the amount of any Net Funds Cap Carry-Forward Amount;
(xxiii) the amount of any Step-Down Amount;
(xxiv) the amount of the Originator's Interest; and
(xxv) the current level of the Overcollateralization Amount.
Items (i) through (iii) above shall, with respect to each Note, be
presented on the basis of a Note having a $1,000 denomination. In addition, by
January 31 of each calendar year following any year during which the Notes are
outstanding, the Indenture Trustee shall furnish a report to each holder of
record at any time during each calendar year as to the aggregate of amounts
reported pursuant to (i), (ii) and (iii) with respect to the Notes for such
calendar year.
(b) In addition, on each Payment Date the Indenture Trustee will distribute
to each Holder, to the Insurer, to the Underwriter, to the Master Servicer, to
the Sponsors, to S&P and to Xxxxx'x, together with the information described in
Subsection (a) preceding, the following information as of the close of business
on the last Business Day of the prior calendar month, which is hereby required
to be prepared by the Master Servicer and furnished to the Indenture Trustee for
such purpose on or prior to the related Remittance Date:
(i) the total number of Mortgage Loans and the Principal Balances
thereof, together with the number, aggregate Principal Balances of such
Mortgage Loans and the percentage (based on the aggregate Principal Balance
of the Mortgage Loans) of the aggregate Principal Balance of such Mortgage
Loans to the aggregate Principal Balance of all Mortgage Loans (a) 30-59
days Delinquent, (b) 60-89 days Delinquent and (c) 90 or more days
Delinquent;
(ii) the number, aggregate Principal Balances of all Mortgage Loans
and percentage (based on the aggregate Principal Balance of the Mortgage
Loans) of the aggregate Principal Balance of such Mortgage Loans to the
aggregate Principal Balance
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of all Mortgage Loans in foreclosure proceedings (and whether any such
Mortgage Loans are also included in any of the statistics described in the
foregoing clause (i));
(iii) the number, aggregate Principal Balances of all Mortgage Loans
and percentage (based on the aggregate Principal Balance of the Mortgage
Loans) of the aggregate Principal Balance of such Mortgage Loans to the
aggregate Principal Balance of all Mortgage Loans relating to Mortgagors in
bankruptcy proceedings (and whether any such Mortgage Loans are also
included in any of the statistics described in the foregoing clause (i));
(iv) the number, aggregate Principal Balances of all Mortgage Loans
and percentage (based on the aggregate Principal Balance of the Mortgage
Loans) of the aggregate Principal Balance of such Mortgage Loans to the
aggregate Principal Balance of all Mortgage Loans relating to REO
Properties (and whether any such Mortgage Loans are also included in any of
the statistics described in the foregoing clause (i));
(v) the book value of any REO Property;
(vi) the number and dollar amount of Mortgage Loans repurchased
pursuant to Section 4.10; and
(vii) the aggregate dollar amount of Mortgage Loans modified as to
Combined Loan-to-Value Ratio in excess of the original values and the
aggregate dollar amount of Mortgage Loans modified as to margins below the
Cut-Off Date margins.
(c) The foregoing reports shall be sent be to an Class A Noteholder only
insofar as such holder owns a Note.
SECTION 8.10. Additional Reports by Indenture Trustee. (a) The Indenture
Trustee shall report to the Sponsor, the Master Servicer and the Insurer with
respect to the amount then held in each Account (including investment earnings
accrued or scheduled to accrue) held by the Indenture Trustee and the identity
of the investments included therein, as the Sponsor, the Master Servicer or the
Insurer may from time to time request. Without limiting the generality of the
foregoing, the Indenture Trustee shall, at the request of the Sponsor, the
Master Servicer or the Insurer, transmit promptly to the Sponsor, the Master
Servicer and the Insurer copies of all accounting of aggregate receipts in
respect of the Mortgage Loans furnished to it by the Master Servicer pursuant to
Section 4.8(d)(ii) of the Sale and Servicing Agreement and shall notify the
Sponsor, the Master Servicer and the Insurer if any such receipts have not been
received by the Indenture Trustee.
(b) From time to time, at the request of the Insurer, the Indenture Trustee
shall report to the Insurer with respect to its actual knowledge, without
independent investigation, of any breach of any of the representations or
warranties relating to individual Mortgage Loans set forth in Section 3.3(a) of
the Sale and Servicing Agreement. On the date that is eighteen months after the
Closing Date, the Indenture Trustee shall provide the Insurer with a written
report of all of such inaccuracies to such date of which it has actual
knowledge, without independent
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investigation, and of the action taken by the Sponsors under Section 3.4(b) of
the Sale and Servicing Agreement with respect thereto.
SECTION 8.11. Opinion of Counsel. The Indenture Trustee shall receive at
least seven days' notice when requested by the Issuer to take any action
pursuant to Section 8.2(a), accompanied by copies of any instruments involved,
and the Indenture Trustee shall also require as a condition to such action, an
Opinion of Counsel, stating the legal effect of any such action, outlining the
steps required to complete the same, and concluding that all conditions
precedent to the taking of such action have been complied with and such action
will not materially and adversely impair the security for the Notes or the
rights of the Noteholders or the Insurer in contravention of the provisions of
this Indenture; provided, however, that such Opinion of Counsel shall not be
required to express an opinion as to the fair value of the Trust Estate. Counsel
rendering any such opinion may rely, without independent investigation, on the
accuracy and validity of any certificate or other instrument delivered to the
Indenture Trustee in connection with any such action.
ARTICLE IX.
Supplemental Indentures
SECTION 9.1. Supplemental Indentures Without Consent of Noteholders. (a)
Without the consent of the Holders of any Notes but with the consent of the
Insurer, as evidenced to the Indenture Trustee, the Issuer and the Indenture
Trustee, when authorized by an Issuer Order, at any time and from time to time,
may enter into one or more indentures supplemental hereto (which shall conform
to the provisions of the Trust Indenture Act as in force at the date of the
execution thereof), in form satisfactory to the Indenture Trustee, for any of
the following purposes:
(i) to correct or amplify the description of any property at any time
subject to the lien of this Indenture, or better to assure, convey and
confirm unto the Indenture Trustee any property subject or required to be
subjected to the lien of this Indenture, or to subject to the lien of this
Indenture additional property;
(ii) to evidence the succession, in compliance with the applicable
provisions hereof, of another person to the Issuer, and the assumption by
any such successor of the covenants of the Issuer herein and in the Notes
contained;
(iii) to add to the covenants of the Issuer, for the benefit of the
Holders of the Notes, or to surrender any right or power herein conferred
upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property to
or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any provision
herein or in any supplemental indenture which may be inconsistent with any
other provision herein or
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in any supplemental indenture or to make any other provisions with respect
to matters or questions arising under this Indenture or in any supplemental
indenture; provided that such action shall not adversely affect the
interests of the Holders of the Notes;
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Notes and to add to or
change any of the provisions of this Indenture as shall be necessary to
facilitate the administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Article VI; or
(vii) to modify, eliminate or add to the provisions of this Indenture
to such extent as shall be necessary to effect the qualification of this
Indenture under the TIA or under any similar federal statute hereafter
enacted and to add to this Indenture such other provisions as may be
expressly required by the TIA.
The Indenture Trustee is hereby authorized to join in the execution of
any such supplemental indenture and to make any further appropriate agreements
and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, may, also without the consent of any of the Holders of the Notes but with
the prior written consent of the Insurer and with prior notice to the Rating
Agencies by the Issuer, as evidenced to the Indenture Trustee, enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Holders of
the Notes under this Indenture; provided, however, that such action shall not,
as evidenced by an Opinion of Counsel, adversely affect in any material respect
the interests of any Noteholder.
SECTION 9.2. Supplemental Indentures with Consent of Noteholders. The
Issuer and the Indenture Trustee, when authorized by an Issuer Order, also may,
with prior notice to the Rating Agencies, with the consent of the Insurer and
with the consent of the Holders of not less than a majority of the Outstanding
Notes, by Act of such Holders delivered to the Issuer and the Indenture Trustee,
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or of modifying in any manner the rights of the
Holders of the Notes under this Indenture; provided, however, that, subject to
the express rights of the Insurer under the Operative Documents, no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Note affected thereby:
(i) change the date of payment of any installment of principal of or
interest on any Note, or reduce the principal amount thereof, the interest
rate thereon or the Redemption Price with respect thereto, change the
provision of this Indenture relating to the application of collections on,
or the proceeds of the sale of, the Trust Estate to payment of principal of
or interest on the Notes, or change any place of payment where, or the coin
or currency in which, any Note or the interest thereon is payable;
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(ii) impair the right to institute suit for the enforcement of the
provisions of this Indenture requiring the application of funds available
therefor, as provided in Article V, to the payment of any such amount due
on the Notes on or after the respective due dates thereof (or, in the case
of redemption, on or after the Redemption Date);
(iii) reduce the percentage of the Outstanding Notes, the consent of
the Holders of which is required for any such supplemental indenture, or
the consent of the Holders of which is required for any waiver of
compliance with certain provisions of this Indenture or certain defaults
hereunder and their consequences provided for in this Indenture;
(iv) modify or alter the provisions of the proviso to the definition
of the term "Outstanding";
(v) reduce the percentage of the Outstanding Notes required to direct
the Indenture Trustee to direct the Issuer to sell or liquidate the Trust
Estate pursuant to Section 12.1;
(vi) modify any provision of this Section except to increase any
percentage specified herein or to provide that certain additional
provisions of this Indenture or the Operative Documents cannot be modified
or waived without the consent of the Holder of each Outstanding Note
affected thereby;
(vii) modify any of the provisions of this Indenture in such manner as
to affect the calculation of the amount of any payment of interest or
principal due on any Note on any Payment Date (including the calculation of
any of the individual components of such calculation); or
(viii) 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 otherwise permitted or contemplated herein or in any
of the Operative Documents, terminate the lien of this Indenture on any
property at any time subject hereto or deprive the Holder of any Note of
the security provided by the lien of this Indenture.
The Indenture Trustee may determine whether or not any Notes would be
adversely affected by any supplemental indenture upon receipt of an Opinion of
Counsel to that effect and any such determination shall be conclusive upon the
Holders of all Notes, whether theretofore or thereafter authenticated and
delivered hereunder. The Indenture Trustee shall not be liable for any such
determination made in good faith.
It shall not be necessary for any Act of Noteholders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee of any
supplemental indenture pursuant to this Section, the Indenture Trustee shall
mail to the Holders of the Notes to which such amendment or supplemental
indenture relates a notice setting forth in
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general terms the substance of such supplemental indenture. Any failure of
the Indenture Trustee to mail such notice, or any defect therein, shall
not, however, in any way impair or affect the validity of any such
supplemental indenture.
SECTION 9.3. Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.1 and 6.2, shall be fully protected in relying upon, an
Opinion of Counsel (and, if requested, an Officer's Certificate) stating that
the execution of such supplemental indenture is authorized or permitted by this
Indenture. The Indenture Trustee may, but shall not be obligated to, enter into
any such supplemental indenture that affects the Indenture Trustee's own rights,
duties, liabilities or immunities under this Indenture or otherwise.
SECTION 9.4. Effect of Supplemental Indenture. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and be deemed to be modified and amended in accordance therewith with respect
to the Notes affected thereby, and the respective rights, limitations of rights,
obligations, duties, liabilities and immunities under this Indenture of the
Indenture Trustee, the Issuer and the Holders of the Notes shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
SECTION 9.5. Conformity With Trust Indenture Act. Every amendment of this
Indenture and every supplemental indenture executed pursuant to this Article IX
shall conform to the requirements of the Trust Indenture Act as then in effect
so long as this Indenture shall then be qualified under the Trust Indenture Act.
SECTION 9.6. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes.
ARTICLE X.
Redemption of Notes
SECTION 10.1. Redemption. (a) The Notes are subject to redemption following
the later of (A) the Payment Date following payment in full of all amounts owing
to the Insurer and (B) the earliest of (i) the transfer, under the conditions
specified in Section
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10.1(b), to the Master Servicer of the Noteholders' security interest in each
Mortgage Loan and all property acquired in respect of any Mortgage Loan
remaining in the Trust for an amount equal to the sum of (x) the Class A
Principal Balance, (y) the sum of accrued and unpaid Class A Interest
Distribution Amount through the day preceding the final Payment Date, (ii) the
day following the Payment Date on which the distribution made to Class A
Noteholders has reduced the Class A Principal Balance to zero and no other
amounts are owed to the Class A Noteholders, (iii) the final payment or other
liquidation of the last Mortgage Loan remaining in the Trust (including, without
limitation, the disposition of the Mortgage Loan pursuant to Section 12.1
hereof) or the disposition of all property acquired upon foreclosure or deed in
lieu of foreclosure of any Mortgage Loan and (iv) the Payment Date in February
2024; provided, however, that in no event shall the trust created hereby
continue beyond the expiration of 21 years from the date of death of the last
surviving descendants of Xxxxxx X. Xxxxxxx, the late ambassador of the United
States to the Court of St. Xxxxx, living on the date hereof. Upon termination in
accordance with clause (B)(i) of this Section 10.1(a), the Indenture Trustee
shall execute such documents and instruments of transfer presented by the
Sponsor, in each case without recourse, representation or warranty, and take
such other actions as the Sponsor may reasonably request to effect the transfer
of the Mortgage Loan to the Sponsor.
(b) The Class A Notes shall be subject to optional transfer to the Sponsor
on any Payment Date after the Class A Principal Balance has been reduced to an
amount less than or equal to $8,000,000 (10% of the Original Class A Principal
Balance) and all amounts due and owing to the Insurer as a Reimbursement Amount
have been paid. Such transfer shall only be permitted if the Sponsor delivers to
the Indenture Trustee an amount equal to the sum of the outstanding Class A
Principal Balance and accrued and unpaid interest thereon at the Class A
Interest Rate through the day preceding the final Payment Date plus all
Reimbursement Amounts (such amount, the "Redemption Price"). In connection with
such purchase, the Master Servicer shall remit to the Indenture Trustee all
amounts then on deposit in the Principal and Interest Account for deposit to the
Note Account, which deposit shall be deemed to have occurred immediately
preceding such purchase.
(c) Promptly following any such purchase, the Indenture Trustee will
release the Mortgage Files to the Master Servicer, or otherwise upon their
order, in a manner similar to that described in Section 4.14 of the Sale and
Servicing Agreement.
(d) Advanta National Bank may not participate in any purchase described in
this Section 10.1(b), or fund any portion of the purchase price, unless the
then-outstanding Principal Balances of the Mortgage Loans in the Trust Estate is
less than or equal to five percent of the sum of the aggregate Loan Balances of
all Mortgage Loans in the Trust Estate as of the Initial Cut-Off Date and the
Original Pre-Funded Amount.
(e) If the Notes are to be redeemed pursuant to this Section 10.1(a), the
Master Servicer or the Issuer shall furnish notice of such election to the
Indenture Trustee not later than 45 days prior to the Redemption Date and the
Issuer shall deposit with the Indenture Trustee in the Note Account the
Redemption Price of the Notes not less than five Business Days
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prior to the Redemption Date whereupon all such Notes shall be due and payable
on the Redemption Date upon the furnishing of a notice complying with Section
10.2.
SECTION 10.2. Surrender of Notes. (a) Notice of any termination, specifying
the Payment Date (which shall be a date that would otherwise be a Payment Date)
upon which the Noteholders may surrender their Notes to the Indenture Trustee
for payment of the final distribution and cancellation, shall be given promptly
by the Indenture Trustee (upon receipt of written directions from the Sponsor,
if the Sponsor is exercising its right to transfer of the Mortgage Loans, given
not later than the first day of the month preceding the month of such final
distribution) to the Insurer and to the Master Servicer and by letter to
Noteholders mailed not earlier than the 15th day and not later than the 25th day
of the month next preceding the month of such final distribution specifying (i)
the Payment Date upon which final distribution of the Notes will be made upon
presentation and surrender of Notes at the office or agency of the Indenture
Trustee therein designated, (ii) the amount of any such final distribution and
(iii) that the Record Date otherwise applicable to such Payment Date is not
applicable, distributions being made only upon presentation and surrender of the
Notes at the office or agency of the Indenture Trustee therein specified.
(b) Any money held by the Indenture Trustee in trust for the payment of any
amount due with respect to any Class A Note and remaining unclaimed by the
related Class A Noteholder for the period then specified in the escheat laws of
the State of New York after such amount has become due and payable shall be
discharged from such trust and be paid first, to the Insurer on account of any
Reimbursement Amounts, and second, to the Certificateholders of the Originator's
Interest; and such Class A Noteholder shall thereafter, as an unsecured general
creditor, look only to the Insurer or the Certificateholders of the Originator's
Interest for payment thereof (but only to the extent of the amounts so paid to
the Insurer or the Certificateholders of the Originator's Interest), and all
liability of the Indenture Trustee with respect to such trust money shall
thereupon cease; provided, however, that the Indenture Trustee, before being
required to make any such payment, shall at the expense of the Trust cause to be
published once, in the eastern edition of The Wall Street Journal, notice that
such money remains unclaimed and that, after a date specified therein, which
shall be not fewer than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be paid to the Insurer or the
Certificateholders of the Originator's Interest. The Indenture Trustee shall, at
the direction of the Sponsor, also adopt and employ, at the expense of the
Trust, any other reasonable means of notification of such payment (including,
but not limited to, mailing notice of such payment to Class A Noteholders whose
right to or interest in monies due and payable but not claimed is determinable
from the Note Register at the last address of record for each such Class A
Noteholder).
SECTION 10.3. Form of Redemption Notice. Notice of redemption supplied to
the Indenture Trustee by the Master Servicer under Section 10.1(a) shall be
given by the Indenture Trustee by facsimile or by first-class mail, postage
prepaid, transmitted or mailed prior to the applicable Redemption Date to each
Holder of Notes of record, as of the close of business on the date which is not
less than 5 days prior to the applicable Redemption Date, at such Holder's
address appearing in the Note Register.
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All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) that the Record Date otherwise applicable to such Redemption Date is
not applicable and that payments shall be made only upon presentation and
surrender of such Notes at the place where such Notes are to be surrendered for
payment of the Redemption Price (which shall be the office or agency of the
Issuer to be maintained as provided in Section 3.2); and
(iv) that interest on the Notes shall cease to accrue on the Redemption
Date.
Notice of redemption of the Notes shall be given by the Indenture Trustee
in the name and at the expense of the Issuer. Failure to give notice of
redemption, or any defect therein, to any Holder of any Note shall not impair or
affect the validity of the redemption of any other Note.
SECTION 10.4. Notes Payable on Redemption Date. The Notes to be redeemed
shall, following notice of redemption as required by Section 10.2, on the
Redemption Date become due and payable at the Redemption Price and (unless the
Issuer shall default in the payment of the Redemption Price) no interest shall
accrue on the Redemption Price for any period after the date to which accrued
interest is calculated for purposes of calculating the Redemption Price.
ARTICLE XI.
Miscellaneous
SECTION 11.1. Compliance Certificates and Opinions, etc. Upon any
application or request by the Issuer to the Indenture Trustee to take any action
under any provision of this Indenture, the Issuer shall furnish to the Indenture
Trustee and to the Insurer if the application or request is made to the
Indenture Trustee (i) an Officer's Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with, (ii) an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with and (iii) (if required by the TIA) an Independent Certificate from
a firm of certified public accountants meeting the applicable requirements of
this Section, except that, in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
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(i) a statement that each signatory of such certificate or opinion has
read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such signatory
such condition or covenant has been complied with.
SECTION 11.2. Form of Documents Delivered to Indenture Trustee. In any case
where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such Persons
as to other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his or her certificate or opinion is
based are erroneous. Any such certificate of an Authorized Officer or Opinion of
Counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Master Servicer, the Sponsor or the Issuer, stating that the information with
respect to such factual matters is in the possession of the Master Servicer, the
Sponsor or the Issuer, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of
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the Issuer to have such application granted or to the sufficiency of such
certificate or report. The foregoing shall not, however, be construed to affect
the Indenture Trustee's right to conclusively rely upon the truth and accuracy
of any statement or opinion contained in any such document as provided in
Article VI.
SECTION 11.3. Acts of Noteholders. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Noteholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Noteholders in person
or by 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 Indenture Trustee, and, where it is hereby expressly
required, to the Issuer. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act" of
the Noteholders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 6.1)
conclusive in favor of the Indenture Trustee and the Issuer, if made in the
manner provided in this Section.
(b) The fact and date of the execution by any person of any such instrument
or writing may be proved in any customary manner of the Indenture Trustee.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Notes shall bind the Holder of every Note
issued upon the registration thereof or in exchange therefor or in lieu thereof,
in respect of anything done, omitted or suffered to be done by the Indenture
Trustee or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Note.
SECTION 11.4. Notices, etc. to Indenture Trustee, Issuer and Rating
Agencies. Any request, demand, authorization, direction, notice, consent, waiver
or Act of Noteholders or other documents provided or permitted by this Indenture
to be made upon, given or furnished to or filed with:
(a) The Indenture Trustee by any Noteholder or by the Issuer shall be
sufficient for every purpose hereunder if personally delivered, delivered by
overnight courier or mailed first-class and shall be deemed to have been duly
given upon receipt to the Indenture Trustee at its Corporate Trust Office and
any notice delivered by facsimile shall be addressed to the Corporate Trust
Office, telecopy number (000) 000-0000.
(b) The Issuer by the Indenture Trustee or by any Noteholder shall be in
writing and shall be sufficient for every purpose hereunder if personally
delivered, delivered by facsimile or overnight courier or mailed first class,
and shall deemed to have been duly given upon receipt to the Issuer addressed
to: Advanta Home Equity Loan Trust 1998-A, in care of Wilmington Trust Company,
Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000,
Attention: Corporate Trust Administration, or at any other address
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previously furnished in writing to the Indenture Trustee by Issuer. The Issuer
shall promptly transmit any notice received by it from the Noteholders to the
Indenture Trustee.
(c) The Insurer by the Issuer or the Indenture Trustee shall be sufficient
for any purpose hereunder if in writing and mailed by first-class mail,
personally delivered, or telecopied to the recipient as follows:
To the Insurer: Ambac Assurance Corporation
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx
Structured Finance Department
Telecopy: (000) 000-0000
Notices required to be given to the Rating Agencies by the Issuer, the
Indenture Trustee or the Owner Trustee shall be in writing, personally
delivered, delivered by overnight courier or first class or via facsimile to (i)
in the case of Moody's, at the following address: Xxxxx'x Investors Service,
Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Fax No: (000) 000-0000, and
(ii) in the case of S&P, at the following address: Standard & Poor's Ratings
Group, 00 Xxxxxxxx (00xx Xxxxx), Xxx Xxxx, Xxx Xxxx 00000, Attention: Asset
Backed Surveillance Department, Fax No: (000) 000-0000; or as to each of the
foregoing, at such other address as shall be designated by written notice to the
other parties.
SECTION 11.5. Notices to Noteholders; Waiver. Where this Indenture provides
for notice to Noteholders of any event, such notice shall be sufficiently given
(unless otherwise herein expressly provided) if in writing and mailed,
first-class, postage prepaid to each Noteholder affected by such event, at his
address as it appears on the Note Register, not later than the latest date, and
not earlier than the earliest date, prescribed for the giving of such notice. In
any case where notice to Noteholders is given by mail, neither the failure to
mail such notice nor any defect in any notice so mailed to any particular
Noteholder shall affect the sufficiency of such notice with respect to other
Noteholders, and any notice that is mailed in the manner herein provided shall
conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by any Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Noteholders shall be filed with the Indenture Trustee but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a result of
a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Noteholders when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a
sufficient giving of such notice.
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Where this Indenture provides for notice to the Rating Agencies, failure to
give such notice shall not affect any other rights or obligations created
hereunder.
SECTION 11.6. Alternate Payment and Notice Provisions. Notwithstanding any
provision of this Indenture or any of the Notes to the contrary, the Issuer may
enter into any agreement with any Holder of a Note providing for a method of
payment, or notice by the Indenture Trustee or any Note Paying Agent to such
Holder, that is different from the methods provided for in this Indenture for
such payments or notices, provided that such methods are reasonable and
consented to by the Indenture Trustee (which consent shall not be unreasonably
withheld). The Issuer will furnish to the Indenture Trustee a copy of each such
agreement and the Indenture Trustee will cause payments to be made and notices
to be given in accordance with such agreements.
SECTION 11.7. Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with another provision hereof that is required to
be included in this indenture by any of the provisions of the Trust Indenture
Act, such required provision shall control.
The provisions of TIA Sections 310 through 317 that impose duties on any
person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
SECTION 11.8. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 11.9. Successors and Assigns. All covenants and agreements in this
Indenture and the Notes by the Issuer shall bind its successors and assigns,
whether so expressed or not. All agreements of the Indenture Trustee in this
Indenture shall bind its successors.
SECTION 11.10. Separability. In case any provision in this Indenture or in
the Notes shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 11.11. Benefits of Indenture. The Insurer and its successors and
assigns shall be a third-party beneficiary to the provisions of this Indenture,
and shall be entitled to rely upon and directly to enforce such provisions of
this Indenture. Nothing in this Indenture or in the Notes, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, the Insurer and the Noteholders, and any other party secured
hereunder, and any other person with an ownership interest in any part of the
Trust Estate, any benefit or any legal or equitable right, remedy or claim under
this Indenture. The Insurer may disclaim any of its rights and powers under this
Indenture (in which case the Indenture Trustee may exercise such right or power
hereunder), but not its duties and obligations under the Policy, upon delivery
of a written notice to the Indenture Trustee.
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SECTION 11.12. Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
SECTION 11.13. Governing Law. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.14. Counterparts. This Indenture may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.
SECTION 11.15. Recording of Indenture. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the Trust or any other counsel reasonably acceptable to
the Indenture Trustee and the Insurer) to the effect that such recording is
necessary either for the protection of the Noteholders or any other person
secured hereunder or for the enforcement of any right or remedy granted to the
Indenture Trustee under this Indenture.
SECTION 11.16. Trust Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Sponsor, the
Originator, the Master Servicer, the Owner Trustee or the Indenture Trustee on
the Notes or under this Indenture or any certificate or other writing delivered
in connection herewith or therewith, against (i) the Sponsor, the Originator,
the Master Servicer, the Indenture Trustee or the Owner Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director, employee or
agent of the Sponsor, the Originator, the Master Servicer, the Indenture Trustee
or the Owner Trustee in its individual capacity, any holder of a beneficial
interest in the Issuer, the Sponsor, the Originator, the Master Servicer, the
Owner Trustee or the Indenture Trustee or of any successor or assign of the
Sponsor, the Originator, the Master Servicer, the Indenture Trustee or the Owner
Trustee in its individual capacity, except as any such Person may have expressly
agreed (it being understood that the Indenture Trustee and the Owner Trustee
have no such obligations in their individual capacity) and except that any such
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all purposes of
this Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Articles VI, VII and VIII of the Trust
Agreement.
SECTION 11.17. No Petition. The Indenture Trustee, by entering into this
Indenture, and each Noteholder, by accepting a Note, hereby covenant and agree
that they will
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not at any time institute against the Sponsor, or the Issuer, or join in any
institution against the Sponsor, or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, this Indenture or any
of the Operative Documents.
SECTION 11.18. Inspection. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Indenture Trustee or of the
Insurer, during the Issuer's normal business hours, to examine all the books of
account, records, reports, and other papers of the Issuer, to make copies and
extracts therefrom, to cause such books to be audited by independent certified
public accountants, and to discuss the Issuer's affairs, finances and accounts
with the Issuer's officers, employees, and independent certified public
accountants, all at such reasonable times and as often as may be reasonably
requested. The Indenture Trustee shall and shall cause its representatives to
hold in confidence all such information except to the extent disclosure may be
required by law (and all reasonable applications for confidential treatment are
unavailing) and except to the extent that the Indenture Trustee may reasonably
determine that such disclosure is consistent with its Obligations hereunder.
SECTION 11.19. Limitation of Liability. It is expressly understood and
agreed by the parties hereto that (a) this Agreement is executed and delivered
by Wilmington Trust Company, not individually or personally but solely as Owner
Trustee of the Issuer under the Trust Agreement, in the exercise of the powers
and authority conferred and vested in it, (b) each of the representations,
undertakings and agreements herein made on the part of the Issuer is made and
intended not as personal representations, undertakings and agreements by
Wilmington Trust Company but is made and intended for the purpose for binding
only the Issuer, (c) nothing herein contained shall be construed as creating any
liability on Wilmington Trust Company individually or personally, to perform any
covenant either expressed or implied contained herein, all such liability, if
any, being expressly waived by the parties to this Agreement and by any person
claiming by, through or under them and (d) under no circumstances shall
Wilmington Trust Company be personally liable for the payment of any
indebtedness or expenses of the Issuer or be liable for the breach or failure of
any obligation, representation, warranty or covenant made or undertaking by the
Issuer under this Agreement or any related documents.
ARTICLE XII.
Rapid Amortization Events
SECTION 12.1. Rapid Amortization Events. The following shall constitute
Rapid Amortization Events:
(a) failure on the part of Sponsor (i) to make a payment or deposit
required under the Sale and Servicing Agreement within four Business Days after
the date such payment or deposit is required to be made or (ii) to observe or
perform in any material respect any other covenants or agreements of the Sponsor
set forth in the Sale and Servicing Agreement, which failure continues
unremedied for a period of 60 days after written notice;
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(b) any representation or warranty made by the Sponsor in the Sale and
Servicing Agreement proves to have been incorrect in any material respect when
made and continues to be incorrect in any material respect for a period of 60
days after written notice and as a result of which the interests of the Holders
or the Insurer are materially and adversely affected: provided, however, that a
Rapid Amortization Event shall not be deemed to occur if the Sponsor has
purchased or made a substitution for the related Mortgage Loan or Mortgage Loans
if applicable during such period (or within an additional 60 days with the
consent of the Indenture Trustee and the Insurer) in accordance with the
provisions of the Sale and Servicing Agreement;
(c) the occurrence of certain events of bankruptcy, insolvency or
receivership relating to the Originator;
(d) the Trust becomes subject to regulation by the Securities and Exchange
Commission as an investment company within the meaning of the Investment Company
Act of 1940, as amended;
(e) the occurrence of an event permitting the removal of the Master
Servicer;
(f) default in the payment of any interest, principal or any installment of
principal on any Note when the same becomes due and payable, and such default
continues for a period of five days; and
(g) the aggregate of all draws under the Policy exceeds 1% of the Cut-Off
Date Pool Balance.
In the case of any event described in clause (a), (b), (e) or (g), a Rapid
Amortization Event will be deemed to have occurred only if, after the applicable
grace period, if any, described herein or in the Indenture or Sale and Servicing
Agreement either (i) the Indenture Trustee or Holders holding Class A Notes
evidencing more than 51% of the aggregate principal amount of the Class A Notes
with the consent of the Insurer (so long as there is no continuing default by
the Insurer in the performance of its obligations under the Policy) or the
Insurer (so long as there is no continuing default by the Insurer in the
performance of its obligations under the Policy), by written notice to the
Insurer, the Sponsor, the Originator, the Rating Agencies, and the Master
Servicer (and to the Indenture Trustee, if given by the Holders or the Insurer)
declare that a Rapid Amortization Event has occurred as of the date of such
notice. In the case of any event described in clause (c), (d) or (f), a Rapid
Amortization Event will be deemed to have occurred without any notice or other
action on the part of the Indenture Trustee, the Holders or the Insurer
immediately upon the occurrence of such event.
In addition to the consequences of a Rapid Amortization Event discussed
above, if (i) a default in the payment of the Class A Interest Distribution
Amount occurs on any Payment Date and continues for a period of five days or
(ii) the Originator voluntarily files a bankruptcy petition or goes into
liquidation or any person is appointed a receiver or bankruptcy trustee of the
Originator, on the day of any such filing or appointment no further Additional
Balances will be transferred to the Trust, and the Originator will promptly give
notice to the Indenture Trustee and
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the Insurer of any such filing or appointment. Within 15 days, the Indenture
Trustee will publish a notice of the occurrence of such event. Unless otherwise
instructed within 60 days by either the Insurer or, with the consent of the
Insurer (so long as no Insurer Default shall have occurred and be continuing),
the Holders representing undivided interests aggregating more than 51% of the
aggregate principal amount of the Class A Notes, the Indenture Trustee will
sell, dispose of or otherwise liquidate the Trust Estate in a commercially
reasonable manner and on commercially reasonable terms. Any such sale, disposal
or liquidation and such sale, disposal or liquidation will be "servicing
retained" by the Master Servicer. The net proceeds of such sale will first be
paid to the Insurer to the extent of unreimbursed draws under the Policy and
other amounts owing to the Insurer (but only if an Insurer Default shall not
have occurred and be continuing). The remainder of such net proceeds will then
be distributed to the Holders of the Class A Notes insofar as may be necessary
to required to reduce the Class A Principal Balance, together with all accrued
and unpaid interest due thereon, to zero. The Policy will cover any amount by
which such remaining net proceeds are insufficient to pay the Class A Principal
Balance in full.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused this
Indenture to be duly executed by their respective officers, hereunto duly
authorized, all as of the day and year first above written.
ADVANTA REVOLVING HOME EQUITY LOAN
TRUST 1998-A,
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Owner Trustee,
By: /s/ XXXXX XXXXXX
-------------------------------------
Name: Xxxxx Xxxxxx
Title: Administrative Account Manager
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
not in its individual capacity but solely as Indenture
Trustee
By: /s/ XXXXXXX XXXXXXX
-----------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Assistant Vice President
[Signature Page of Indenture]
87
EXHIBIT A
[Form of Note]
REGISTERED $80,000,000
No. A-__
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. ___________
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
ADVANTA REVOLVING HOME EQUITY LOAN TRUST 1998-A
CLASS A ASSET BACKED NOTES
Advanta Revolving Home Equity Loan Trust 1998-A, a business trust organized
and existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of EIGHTY MILLION DOLLARS ($80,000,000),
such amount payable on each Payment Date in an amount equal to the result
obtained by multiplying (i) a fraction the numerator of which is $80,000,000 and
the denominator of which is $80,000,000 by (ii) the aggregate amount, if any,
payable from the Note Account in respect of principal on the Class A Notes
pursuant to Section 8.6 of the Indenture; provided, however, that the entire
unpaid principal amount of this Note shall be due and payable on the August 25,
2023 Payment Date (the "Final Scheduled Payment Date"). The Issuer will pay
interest on this Note at the rate per annum provided in the Indenture on each
Payment Date until the principal of this Note is paid or made available for
payment, on the principal amount of this Note outstanding on the preceding
Payment Date (after giving effect to all payments of principal made on the
preceding Payment Date). Interest on this Note will accrue for each Payment Date
from the most recent Payment Date on which interest has been paid to but
excluding such Payment Date or, if no interest has yet been paid, from June 24,
1998.
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88
Interest will be computed on the basis of the actual number of days elapsed in a
360-day year. Such principal of and interest on this Note shall be paid in the
manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
The Notes are entitled to the benefits of a financial guaranty insurance
policy (the "Policy") issued by Ambac Assurance Corporation (the "Insurer"),
pursuant to which the Insurer has unconditionally guaranteed payments of the
Insured Payments on each Payment Date, all as more fully set forth in the
Indenture.
For purposes of federal income, state and local income and franchise and
any other income taxes, the Issuer will treat the Notes as indebtedness of the
Issuer and hereby instructs the Indenture Trustee to treat the Notes as
indebtedness of the Issuer for federal state tax reporting purposes.
Each Noteholder or Note Owner, by acceptance of this Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under
the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Sponsor, the Originator, the Master Servicer, the
Indenture Trustee, or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any owner, beneficiary,
agent, officer, director or employee of the Sponsor, the Originator, the Master
Servicer, the Indenture Trustee, or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Sponsor, the
Originator, the Master Servicer, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Sponsor, the Originator, the Master Servicer,
the Indenture Trustee, or the Owner Trustee in its individual capacity, except
as any such Person may have expressly agreed (it being understood that the
Indenture Trustee and the Owner Trustee have no such obligations in their
individual capacity) and except that any such owner or beneficiary shall be
fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note shall
not be entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
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Any Noteholder using the assets of (i) an employee benefit plan (as defined
in Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) that is subject to the provisions of Title I of ERISA, (ii) a
plan described in Section 4975(e)(1) of the Internal Revenue Code of 1986, as
amended, or (iii) any entity whose underlying assets include plan assets by
reason of a plan's investment in the entity to purchase the Notes, or to whom
the Notes are transferred, will be deemed to have represented that the
acquisition and continued holding of the Notes will be covered by a U.S.
Department of Labor Class Exemption.
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IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer.
Date: June 24, 1998 ADVANTA REVOLVING HOME EQUITY LOAN
TRUST 1998-A
By: WILMINGTON TRUST COMPANY, not
in its individual capacity but solely as Owner
Trustee under the Trust Agreement
By:
--------------------------------------
Name:
Title:
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91
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: June 24, 1998 BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
not in its individual capacity but solely as Indenture
Trustee,
By:
----------------------------------------
Name:
Title:
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92
REVERSE OF NOTE
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A Asset Backed Notes (herein called the "Class A
Notes"), all issued under an Indenture dated as of June 1, 1998 (such indenture,
as supplemented or amended, is herein called the "Indenture"), between the
Issuer and Bankers Trust Company of California, N.A., as trustee (the "Indenture
Trustee," which term includes any successor Indenture Trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights and obligations
thereunder of the Issuer, the Indenture Trustee and the Holders of the Notes.
The Notes are subject to all terms of the Indenture. All terms used in this Note
that are defined in the Indenture, as supplemented or amended, shall have the
meanings assigned to them in or pursuant to the Indenture, as so supplemented or
amended.
The Class A Notes are and will be secured by the collateral pledged as
security therefor as provided in the Indenture.
Principal of the Class A Notes will be payable on each Payment Date in an
amount described on the face hereof. "Payment Date" means the twenty-fifth day
of each month, or, if any such date is not a Business Day, the next succeeding
Business Day, commencing July 27, 1998. The term "Payment Date" shall be deemed
to include the Final Scheduled Payment Date.
As described above, the entire unpaid principal amount of this Note shall
be due and payable on the earlier of the Final Scheduled Payment Date and the
Redemption Date, if any, pursuant to Section 10.1(a) of the Indenture.
Notwithstanding the foregoing, if (i) a default in the payment of the Class A
Interest Distribution Amount occurs on any Payment Date and continues for a
period of five days or (ii) the Originator voluntarily files a bankruptcy
petition or goes into liquidation or any person is appointed a receiver or
bankruptcy trustee of the Originator, then (x) the Indenture Trustee will
publish a notice of the occurrence of such event and (y) unless otherwise
instructed within 60 days by either the Insurer or, with the consent of the
Insurer (so long as no Insurer Default shall have occurred and be continuing),
the Holders of the Notes representing at least 51% of the Outstanding Amount of
the Notes, the Indenture Trustee shall sell or liquidate the Trust Estate and
(after payment of certain amounts, if any, owing to the Insurer) shall
distribute the net proceeds therefrom to the Class A Noteholders as provided in
Section 12.1 of the Indenture. All principal payments on the Class A Notes shall
be made pro rata to the Class A Noteholders entitled thereto.
Payments of interest on this Note due and payable on each Payment Date,
together with the installment of principal, if any, to the extent not in full
payment of this Note, shall be made by check mailed to the Person whose name
appears as the Holder of this Note (or one or more Predecessor Notes) on the
Note Register as of the close of business on each Record Date, except that with
respect to Notes registered on the Record Date in the name of the nominee of the
Clearing Agency (initially, such nominee to be Cede & Co.), payments will be
made by wire transfer in immediately available funds to the account designated
by such nominee. Such checks shall be mailed to the Person entitled thereto at
the address of such Person as it appears
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93
on the Note Register as of the applicable Record Date without requiring that
this Note be submitted for notation of payment. Any reduction in the principal
amount of this Note (or any one or more Predecessor Notes) effected by any
payments made on any Payment Date shall be binding upon all future Holders of
this Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not noted hereon. If funds are
expected to be available, as provided in the Indenture, for payment in full of
the then remaining unpaid principal amount of this Note on a Payment Date, then
the Indenture Trustee, in the name of and on behalf of the Issuer, will notify
the Person who was the Holder hereof as of the Record Date preceding such
Payment Date by notice mailed prior to such Payment Date and the amount then due
and payable shall be payable only upon presentation and surrender of this Note
at the Indenture Trustee's principal Corporate Trust Office or at the office of
the Indenture Trustee's agent appointed for such purposes located in The City of
New York.
The Issuer shall pay interest on overdue installments of interest at the
Class A Note Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed pursuant to Section
10.1(b) of the Indenture, in whole, but not in part, at the option of the
Sponsor, on any Payment Date on or after the date on which the Class A Note
Principal Balance is less than or equal to 10% of the Original Class A Note
Principal Balance.
As provided in the Indenture and subject to certain limitations set forth
therein, the transfer of this Note may be registered on the Note Register upon
surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, (i) duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar which requirements
include membership or participation in Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Exchange Act, and (ii) accompanied by such other
documents as the Indenture Trustee may require, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a
Note Owner, a beneficial interest in a Note covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under
the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Sponsor, the Originator, the Master Servicer, the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any owner, beneficiary,
agent, officer, director or
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employee of the Sponsor, the Originator, the Master Servicer, the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Sponsor, the Originator, the Master
Servicer, the Owner Trustee or the Indenture Trustee or of any successor or
assign of the Sponsor, the Originator, the Master Servicer, the Indenture
Trustee or the Owner Trustee in its individual capacity, except as any such
Person may have expressly agreed (it being understood that the Indenture Trustee
and the Owner Trustee have no such obligations in their individual capacity) and
except that any such owner or beneficiary shall be fully liable, to the extent
provided by applicable law, for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any installment or call owing to such
entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a
Note Owner, a beneficial interest in a Note covenants and agrees that by
accepting the benefits of the Indenture that such Noteholder will not at any
time institute against the Sponsor, or the Issuer or join in any institution
against the Sponsor, or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings, under
any United States Federal or state bankruptcy or similar law in connection with
any obligations relating to the Notes, the Indenture or the Operative Documents.
Prior to the due presentment for registration of transfer of this Note, the
Issuer, the Indenture Trustee and the Insurer and any agent of the Issuer, the
Indenture Trustee or the Insurer may treat the Person in whose name this Note
(as of the day of determination or as of such other date as may be specified in
the Indenture) is registered as the owner hereof for all purposes, whether or
not this Note be overdue, and neither the Issuer, the Indenture Trustee nor any
such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Insurer and of the Holders of Notes
representing a majority of the Outstanding Amount of all Notes at the time
Outstanding. Any such consent or waiver by the Holder of this Note (or any one
of more Predecessor Notes) shall be conclusive and binding upon such Holder and
upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof whether
or not notation of such consent or waiver is made upon this Note. The Indenture
also permits the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of Holders of the
Notes issued thereunder but with the consent of the Insurer.
The term "Issuer" as used in this Note includes any successor to the Issuer
under the Indenture.
The Notes are issuable only in registered form in denominations as provided
in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the laws
of the State of New York, without reference to its conflict of law provisions,
and the obligations, rights
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95
and remedies of the parties hereunder and thereunder shall be determined in
accordance with such laws.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Indenture or the Operative Documents, neither Wilmington Trust
Company in its individual capacity, any owner of a beneficial interest in the
Issuer, nor any of their respective beneficiaries, agents, officers, directors,
employees or successors or assigns shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest on,
or performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture, it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Issuer for the sole purposes of binding the interests of the Issuer in
the assets of the Issuer. The Holder of this Note by the acceptance hereof
agrees that except as expressly provided in the Indenture or the Operative
Documents, in the case of an Rapid Amortization Event under the Indenture, the
Holder shall have no claim against any of the foregoing for any deficiency, loss
or claim therefrom; provided, however, that nothing contained herein shall be
taken to prevent recourse to, and enforcement against, the assets of the Issuer
for any and all liabilities, obligations and undertakings contained in the
Indenture or in this Note.
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ASSIGNMENT
Social Security or Taxpayer I.D. or other identifying number of assignee: ______
_______________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints __________________________, attorney, to transfer said Note on the
books kept for registration thereof, with full power of substitution in the
premises.
Dated: ________________ ___________________________________*
Signature Guaranteed:
Dated: ________________ ___________________________________
________________________
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*NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever.
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