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ADVANTA REVOLVING HOME EQUITY LOAN TRUST 2000-A
Advanta Revolving Home Equity Loan Asset Backed Notes, Series 2000-A,
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INDENTURE
Dated as of April 1, 2000
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BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
Indenture Trustee
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Table of Contents
Page
ARTICLE I
Definitions and Incorporation by Reference ......................................................... 2
SECTION 1.1 Definitions .................................................... 2
SECTION 1.2 Incorporation by Reference of the Trust Indenture Act .......... 2
SECTION 1.3 Rules of Construction .......................................... 2
SECTION 1.4 Action by or Consent of Noteholders ............................ 3
SECTION 1.5 Conflict with TIA .............................................. 3
ARTICLE II
The Notes .......................................................................................... 3
SECTION 2.1 Form ........................................................... 3
SECTION 2.2 Execution, Authentication and Delivery ......................... 3
SECTION 2.3 Registration; Registration of Transfer and Exchange ............ 4
SECTION 2.4 Mutilated, Destroyed, Lost or Stolen Notes ..................... 5
SECTION 2.5 Persons Deemed Owners .......................................... 6
SECTION 2.6 Payments on Notes; LIBOR Calculation ........................... 6
SECTION 2.7 Cancellation ................................................... 7
SECTION 2.8 Release of Trust Estate ........................................ 7
SECTION 2.9 Book-Entry Notes ............................................... 8
SECTION 2.10 Notices to Clearing Agency ..................................... 8
SECTION 2.11 Definitive Notes ............................................... 9
SECTION 2.12 Surrender of Notes Upon Final Payment .......................... 9
ARTICLE III
Covenants .......................................................................................... 9
SECTION 3.1 Payment of Principal and Interest .............................. 9
SECTION 3.2 Maintenance of Office or Agency ................................ 10
SECTION 3.3 Money for Payments to be Held in Trust ......................... 10
SECTION 3.4 Existence ...................................................... 11
SECTION 3.5 Protection of Trust Estate. .................................... 11
SECTION 3.6 Opinions as to Trust Estate .................................... 12
SECTION 3.7 Performance of Obligations; Servicing of Mortgage Loans ........ 12
. SECTION 3.8 Negative Covenants ............................................. 13
SECTION 3.9 Annual Statement as to Compliance .............................. 14
SECTION 3.10 Trust May Not Consolidate or Transfer Assets ................... 14
SECTION 3.11 No Other Business .............................................. 14
SECTION 3.12 No Borrowing ................................................... 15
SECTION 3.13 Guarantees, Loans, Advances and Other Liabilities .............. 15
SECTION 3.14 Capital Expenditures ........................................... 15
SECTION 3.15 Compliance with Laws ........................................... 15
SECTION 3.16 Restricted Payments ............................................ 15
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SECTION 3.17 Notice of Rapid Amortization Events, Events of
Default and Events of Servicing Termination .................. 16
SECTION 3.18 Further Instruments and Acts ................................... 16
SECTION 3.19 Amendments of Sale and Servicing Agreement and Trust Agreement . 16
SECTION 3.20 Income Tax Characterization .................................... 16
ARTICLE IV
Satisfaction and Discharge ......................................................................... 16
SECTION 4.1 Satisfaction and Discharge of Indenture ........................ 16
SECTION 4.2 Application of Trust Money ..................................... 18
SECTION 4.3 Repayment of Monies Held by Note Paying Agent .................. 18
ARTICLE V
Rapid Amortization Events and Events of Default .................................................... 18
SECTION 5.1 Rapid Amortization Events ...................................... 18
SECTION 5.2 Consequences of Rapid Amortization Event ....................... 19
SECTION 5.3 [Reserved] ..................................................... 20
SECTION 5.4 Events of Default .............................................. 20
SECTION 5.5 Collection of Indebtedness and Suits for
Enforcement by Indenture Trustee .............................. 21
SECTION 5.6 Remedies for Event of Default .................................. 21
SECTION 5.7 Indenture Trustee May File Proofs of Claim ..................... 22
SECTION 5.8 Indenture Trustee May Enforce Claims Without
Possession of Notes ........................................... 23
SECTION 5.9 Application of Money Collected ................................. 23
SECTION 5.10 Limitation of Suits ............................................ 24
SECTION 5.11 Unconditional Rights of Noteholders To Receive
Principal and Interest ........................................ 24
SECTION 5.12 Restoration of Rights and Remedies ............................. 25
SECTION 5.13 Rights and Remedies Cumulative ................................. 25
SECTION 5.14 Delay or Omission Not a Waiver ................................. 25
SECTION 5.15 Control by Noteholders ......................................... 25
SECTION 5.16 Undertaking for Costs .......................................... 26
SECTION 5.17 Waiver of Stay or Extension Laws ............................... 26
SECTION 5.18 Action on Notes ................................................ 26
SECTION 5.19 Performance and Enforcement of Certain Obligations ............. 26
SECTION 5.20 Subrogation .................................................... 27
SECTION 5.21 Preference Claims .............................................. 27
ARTICLE VI
The Indenture Trustee .............................................................................. 28
SECTION 6.1 Duties of Indenture Trustee .................................... 28
SECTION 6.2 Rights of Indenture Trustee .................................... 30
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SECTION 6.3 Individual Rights of Indenture Trustee ......................... 31
SECTION 6.4 Indenture Trustee's Disclaimer ................................. 31
SECTION 6.5 Notice of Defaults ............................................. 31
SECTION 6.6 Reports by Indenture Trustee to Noteholders .................... 31
SECTION 6.7 Compensation and Indemnity ..................................... 31
SECTION 6.8 Replacement of Indenture Trustee ............................... 32
SECTION 6.9 Successor Indenture Trustee by Xxxxxx .......................... 33
SECTION 6.10 Appointment of Co-Indenture Trustee or Separate
Indenture Trustee ............................................. 34
SECTION 6.11 Eligibility: Disqualification .................................. 35
SECTION 6.12 Preferential Collection of Claims Against Trust ................ 35
SECTION 6.13 Appointment and Powers ......................................... 35
SECTION 6.14 Performance of Duties .......................................... 36
SECTION 6.15 Limitation on Liability ........................................ 36
SECTION 6.16 Reliance Upon Documents ........................................ 36
SECTION 6.17 Representations and Warranties of the Indenture Trustee ........ 36
SECTION 6.18 Waiver of Setoffs .............................................. 37
SECTION 6.20 Trustee May Enforce Claims Without Possession of Notes ......... 37
SECTION 6.21 Suits for Enforcement .......................................... 38
SECTION 6.22 Mortgagor Claims ............................................... 38
ARTICLE VII
Noteholders' Lists and Reports ..................................................................... 39
SECTION 7.1 Trust To Furnish To Indenture Trustee Names and
Addresses of Noteholders ..................................... 39
SECTION 7.2 Preservation of Information; Communications to Noteholders ..... 39
SECTION 7.3 Reports by Trust ............................................... 39
SECTION 7.4 Reports by Indenture Trustee ................................... 40
ARTICLE VIII
Payments and Statements to Noteholders and Certificateholders;
Accounts, Disbursements and Releases ............................................................... 40
SECTION 8.1 Collection of Money ............................................ 40
SECTION 8.2 Release of Trust Estate ........................................ 40
SECTION 8.3 Establishment of Accounts ...................................... 41
SECTION 8.4 The Payments Under the Policy .................................. 41
SECTION 8.5 Pre-Funding Account and Capitalized Interest Account ........... 42
SECTION 8.6 Flow of Funds; Allocation of Realized Loss Amounts ............. 42
SECTION 8.7 Investment of Accounts ......................................... 44
SECTION 8.8 Eligible Investments ........................................... 45
SECTION 8.9 Reports by Indenture Trustee ................................... 46
SECTION 8.10 Additional Reports by Indenture Trustee ........................ 48
SECTION 8.11 Opinion of Counsel ............................................. 48
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ARTICLE IX
Supplemental Indentures ............................................................................ 49
SECTION 9.1 Supplemental Indentures Without Consent of Noteholders ......... 49
SECTION 9.2 Supplemental Indentures with Consent of Noteholders ............ 50
SECTION 9.3 Execution of Supplemental Indentures ........................... 51
SECTION 9.4 Effect of Supplemental Indenture ............................... 52
SECTION 9.5 Conformity With Trust Indenture Act ............................ 52
SECTION 9.6 Reference in Notes to Supplemental Indentures .................. 52
ARTICLE X
Redemption of Notes ................................................................................ 52
SECTION 10.1 Redemption ..................................................... 52
SECTION 10.2 Surrender of Notes ............................................. 53
SECTION 10.3 Form of Redemption Notice ...................................... 54
SECTION 10.4 Notes Payable on Redemption Date ............................... 54
ARTICLE XI
Miscellaneous ...................................................................................... 55
SECTION 11.1 Compliance Certificates and Opinions, etc. ..................... 55
SECTION 11.2 Form of Documents Delivered to Indenture Trustee ............... 55
SECTION 11.3 Acts of Noteholders ............................................ 56
SECTION 11.4 Notices, etc. to Indenture Trustee, Trust and Rating Agencies .. 56
SECTION 11.5 Notices to Noteholders; Waiver ................................. 57
SECTION 11.6 Alternate Payment and Notice Provisions ........................ 58
SECTION 11.7 Conflict with Trust Indenture Act .............................. 58
SECTION 11.8 Effect of Headings and Table of Contents ....................... 58
SECTION 11.9 Successors and Assigns ......................................... 58
SECTION 11.10 Separability ................................................ 59
SECTION 11.11 Benefits of Indenture .......................................... 59
SECTION 11.12 Legal Holidays ................................................. 59
SECTION 11.13 Governing Law .................................................. 59
SECTION 11.14 Counterparts ................................................... 59
SECTION 11.15 Recording of Indenture ......................................... 59
SECTION 11.16 Trust Obligation ............................................... 60
SECTION 11.17 No Petition .................................................... 60
SECTION 11.18 Inspection ..................................................... 60
SECTION 11.19 Limitation of Liability ........................................ 61
SECTION 11.20 Rights of the Insurer to Exercise Rights of Noteholders ........ 61
SECTION 11.21 Consent and Direction of Insurer ............................... 61
SECTION 11.22 Rules by Indenture Trustee ..................................... 61
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SCHEDULES AND EXHIBITS
Schedule I - Schedule of Mortgage Loans
Exhibit A - Form of Note
Exhibit B - Form of Indenture Trustee Monthly Report
Annex I - Defined Terms
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INDENTURE dated as of April 1, 2000, between ADVANTA REVOLVING HOME
EQUITY LOAN TRUST 2000-A, a Delaware business trust (the "Trust"), and BANKERS
TRUST COMPANY OF CALIFORNIA, N.A., a national banking association, as indenture
trustee (the "Indenture Trustee").
PREAMBLE
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Noteholders of the Advanta Revolving Home
Equity Loan Asset Backed Notes, Series 2000-A (the "Notes"):
As security for the payment and performance by the Trust of its
obligations under this Indenture and the Notes, the Trust has agreed to assign
the Trust Estate (as defined below) to the Indenture Trustee for the benefit of
the Noteholders and the Insurer.
Ambac Assurance Corporation (the "Insurer") has issued and delivered
the certificate guaranty insurance policy, dated as of the Closing Date (the
"Policy"), pursuant to which the Insurer guarantees the Insured Amount with
respect to the Notes.
The Trust and the Insurer have executed and delivered the Insurance and
Indemnity Agreement, dated as of April 27, 2000 (as amended from time to time,
the "Insurance Agreement"), among the Insurer, Advanta Mortgage Corp. USA, the
Trust, Advanta Conduit Receivables, Inc. and the Indenture Trustee.
GRANTING CLAUSE
The Trust hereby Grants to the Indenture Trustee at the Closing Date,
for the benefit of the Noteholders and the Insurer, all of the Trust's right,
title and interest in and to the following (collectively, the "Trust Estate"):
(i) certain adjustable rate revolving home equity credit line loans (the
"Mortgage Loans") (including any Additional Balances) made or to be made under
certain Credit Line Agreements and conveyed to the Trust; (ii) all principal and
interest collected in respect of the Mortgage Loans on and after the related
Cut-Off Date; (iii) property that secured a Mortgage Loan to the extent that it
has been acquired by foreclosure or deed in lieu of foreclosure; (iv) all rights
acquired by the Trust under any Mortgage Insurance Policies covering the
Mortgaged Properties; (v) the Policy; (vi) all amounts on deposit from time to
time in the Note Account (excluding investment earnings thereon); (vii) all
amounts on deposit from time to time in the Principal and Interest Account
(excluding any investment earnings thereon); (viii) all rights of the Sponsor
under the Purchase Agreement assigned to the Trust pursuant to the Sale and
Servicing Agreement (including all of the Sponsor's rights and remedies in the
event of certain breaches by the Originators of their respective representations
and warranties under the Purchase Agreement); (ix) all rights of the Trust under
the Sale and Servicing Agreement; (x) all Mortgage Files and other documents
relating to the foregoing; (xi) all amounts on deposit in the Pre-Funding
Account; (xii) all amounts on deposit in the Capitalized Interest Account
(excluding any investment earnings thereon); and (xiii) any and all proceeds of
the foregoing except as otherwise provided herein.
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The foregoing Grant is made in trust to the Indenture Trustee, for the
benefit of the Noteholders and the Insurer. The Indenture Trustee hereby
acknowledges and accepts such Xxxxx 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 1
Definitions and Incorporation by Reference
SECTION 1.1 Definitions.
Except as otherwise specified herein, capitalized terms are used in
this Indenture as defined in Annex 1. Defined terms that are used only in one
section or only in another definition may be omitted from the list of defined
terms in Annex 1. Defined terms include, as appropriate, all genders and the
plural as well as the singular.
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 Trust.
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;
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(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 Indenture 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.
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
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
ARTICLE 2.1 Form.
The Notes, together with the Indenture Trustee's certificate of
authentication, shall be in substantially the form set forth in Exhibit A
hereto, 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 Notes set forth in Exhibit A, are part of the terms of this Indenture.
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SECTION 2.2 Execution, Authentication and Delivery.
The Notes shall be executed on behalf of the Trust 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 Trust shall bind the Trust,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The Indenture Trustee shall authenticate and deliver the Notes for
original issue in an aggregate principal amount of $400,000,000.
Each Note shall be dated the date of its authentication. The Notes
shall be issuable as registered Notes in the minimum denomination of $1,000 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
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 Trust shall cause to be kept a register (the "Note Register") in
which, subject to such reasonable regulations as it may prescribe, the Trust
shall provide for the registration of Notes and the transfers of Notes. The
Indenture Trustee is hereby initially appointed "Note Registrar" for the purpose
of registering Notes and transfers of Notes as herein provided. Upon any
resignation of any Note Registrar, the Trust 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 Trust
as Note Registrar, the Trust 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 Noteholders 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 Trust, to be maintained as provided in Section 3.2, and if the
requirements of Section 8-401(a) of the UCC are met, the Trust shall execute or
cause the Indenture Trustee to authenticate one or more new Notes, in any
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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 Trust with Section 8-401 of the UCC.
At the option of the Noteholder, 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(a) of the UCC are met, the Trust 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 Trust 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 Trust, 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
Noteholder or such Noteholder's attorney duly 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 Noteholder for any registration of
transfer or exchange of Notes, but the Note Registrar may require payment from a
Noteholder 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.
The Note Registrar shall not register the transfer of a Note unless the
transferee has delivered a representation letter in form and substance
satisfactory to the Note Registrar to the effect that either (i) the transferee
is not an employee benefit plan or other retirement plan or arrangement subject
to Title I of ERISA or Section 4975 of the Code and is not acting on behalf of
or investing the assets of any such plan or arrangement or (ii) the transferee's
acquisition and continued holding of the Note qualifies for exemptive relief
under a prohibited transaction class exemption issued by the U.S. Department of
Labor. Each transferee of a Book-Entry Note shall be deemed to make one of the
foregoing representations.
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 Trust, the Sponsor, the
Indenture Trustee and the Insurer such security or indemnity as may be required
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by it to hold the Trust, the Sponsor, the Indenture Trustee and the Insurer
harmless, then, in the absence of notice to the Trust, 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 Trust
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 Trust 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 Trust 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 Trust,
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 Trust or the Indenture Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section, the Trust
may require the payment by the Noteholder of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto and any
other reasonable expenses (including the fees and expenses of the Indenture
Trustee) connected therewith.
Every replacement Note issued pursuant to this Section in replacement
of any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Trust, 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
Trust, the Indenture Trustee and the Insurer and any agent of the Trust, 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 and interest, if any, on such Note
and for all other purposes whatsoever, whether or not such Note be overdue, and
none of the Trust, the Insurer, the Indenture
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Trustee nor any agent of the Trust, the Insurer or the Indenture Trustee shall
be affected by notice to the contrary.
SECTION 2.6 Payments on Notes; LIBOR Calculation.
(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 Trust 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 related
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.
On each Interest Determination Date, the Indenture Trustee shall
determine the London interbank offered rate for one-month U.S. dollar deposits
("LIBOR") for the next Interest Accrual Period as follows:
first, on the basis of offered rates for one month United States dollar
deposits, as this rate appears on Telerate Screen Page 3750, as of 11:00 am
London time;
second, if the rate does not appear on Telerate Screen Page 3750 as of
11:00 am London time, LIBOR shall be the arithmetic mean of the offered
quotations of two or more Reference Banks, rounded to the nearest whole multiple
of 1/16%; and
third, if on the Interest Determination Date fewer than two Reference
Banks provide offered quotations, LIBOR for the Interest Accrual Period shall be
the higher of (x) LIBOR as determined on the previous Interest Determination
Date and (y) the Reserve Interest Rate.
(b) If the Trust defaults in a payment of interest on the Notes,
the Trust shall pay interest on such defaulted interest at the applicable Note
Interest Rate to the extent lawful.
SECTION 2.7 Cancellation.
All Notes surrendered for payment, registration of transfer, exchange
or redemption shall, if surrendered to any Person other than the Indenture
Trustee, be delivered to the Indenture Trustee and shall be promptly canceled by
the Indenture Trustee. The Trust may at any time deliver to the Indenture
Trustee for cancellation any Notes previously authenticated and delivered
hereunder which the Trust may have acquired in any manner whatsoever, and all
Notes so delivered shall be promptly canceled by the Indenture
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Trustee. No Notes shall be authenticated in lieu of or in exchange for any Notes
canceled as provided in this Section, except as expressly permitted by this
Indenture. All canceled Notes 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 Trust 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 Trust Estate.
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
Order 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, the Trust. 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 Noteholder, 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;
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(v) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Noteholders
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 Noteholders 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 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 in at least a
majority of the Note Balance 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 Trust shall execute and
the Indenture Trustee shall authenticate the Definitive Notes in accordance with
the instructions of the Clearing Agency. None of the Trust, 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.
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SECTION 2.12 Surrender of Notes Upon Final Payment.
(a) Upon written notice from the Trust, 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 Trust
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 at least 5
Business Days 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 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.
(b) 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 any 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.
ARTICLE III
Covenants
SECTION 3.1 Payment of Principal and Interest.
The Trust will duly and punctually pay the principal of and interest on
the Notes in accordance with the terms of the Notes and this Indenture. 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 Trust to such Noteholder for all purposes
of this Indenture.
SECTION 3.2 Maintenance of Office or Agency.
The Trust will maintain 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 Trust in respect of the Notes and this
Indenture may be served. The Trust hereby initially appoints the Indenture
Trustee to serve as its agent for the foregoing purposes. The Trust 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 Trust
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 Trust hereby
appoints the Indenture Trustee as its agent to receive all such surrenders,
notices and demands.
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SECTION 3.3 Money for Payments to be Held in Trust.
The Trust 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 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 Trust (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 Trust 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 Trust; and the Noteholder shall thereafter, as an
unsecured general creditor, look only to the Trust for payment thereof (but only
to the extent of the amounts so paid to the Trust), and all liability of the
Indenture Trustee or such Note Paying Agent with respect to such trust money
shall thereupon cease.
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SECTION 3.4 Existence.
Except as otherwise permitted by the provisions of Section 3.10, the
Trust 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 Trust hereunder is or becomes, organized under the laws of any
other state or of the United States of America, in which case the Trust 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 Trust intends the security interest granted pursuant to this
Indenture in favor of the Indenture Trustee to be prior to all other liens in
respect of the Trust Estate, and the Trust shall take all actions necessary to
obtain and maintain, in favor of the Indenture Trustee, for the benefit of the
Noteholders and the Insurer, a first lien on and a first priority, perfected
security interest in the Trust Estate. The Trust 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 Noteholders and the Insurer 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 Trust Estate;
(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 Trust 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 to monitor the compliance of the Trust 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 Trust.
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SECTION 3.6 Opinions as to Trust Estate.
(a) On the Closing Date, the Trust shall furnish to the
Indenture Trustee and the Insurer an Opinion of Counsel addressed to the Insurer
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, 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 Noteholders
and the Insurer, created by this Indenture.
(b) Within 90 days after the beginning of each calendar year,
beginning with the year 2001, the Trust shall furnish to the Indenture Trustee
and the Insurer, an Opinion of Counsel addressed to each 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 Trust 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 Trust 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 Trust shall be deemed to be
action taken by the Trust. Initially, the Trust has contracted with the Master
Servicer to assist the Trust in performing its duties under this Indenture.
(c) The Trust 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
or any other Operative Document in accordance with
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and within the time periods provided for herein and therein. Except as otherwise
expressly provided therein, the Trust shall not waive, amend, modify, supplement
or terminate any Operative Document or any provision thereof without the prior
written consent of the Insurer, the Noteholders holding at least a majority of
the Note Balance or the Indenture Trustee (with the prior written consent of the
Insurer)
(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 Agreement or of an Event of Servicing Termination under
the Insurance Agreement, the Trust 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 Trust is taking in respect
of such default. If an Event of Servicing Termination or an Insurance Agreement
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 or the Insurance Agreement with respect to the Mortgage
Loans, the Trust shall take all reasonable steps available to it to remedy (or
cause to be remedied) such failure.
(e) The Trust 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 without the prior written consent of the Insurer.
SECTION 3.8 Negative Covenants.
So long as any Notes are Outstanding, the Trust 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 Trust,
including those included in the Trust Estate, without the
prior written consent of the Insurer (provided, that if an
Insurer Default has occurred and is continuing, the
Noteholders holding at least 51% of the Note Balance may
direct the Indenture Trustee to sell or dispose of the Trust
Estate in accordance with Section 5.6).
(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
or the Insurer 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
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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.
SECTION 3.9 Annual Statement as to Compliance.
The Trust will deliver to the Indenture Trustee and the Insurer within
90 days after the end of each fiscal year of the Trust (commencing with the
fiscal year ended December 31, 2000), 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 Trust 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 Trust 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 Trust May Not Consolidate or Transfer Assets.
(a) The Trust may not consolidate or merge with or into any
other Person.
(b) Except as otherwise provided in the Sale and Servicing
Agreement, and unless the Insurer has otherwise consented in writing,
the Trust 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 Trust 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 Trust 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, except that the Trust shall not incur any Indebtedness that
would cause it, or any portion thereof, to be treated as a "taxable mortgage
pool" under Section 7701(i) of the Code. The proceeds of
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the Notes shall be used exclusively to fund the Trust's purchase of the Trust
Estate and to pay the Trust'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 Trust 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.
SECTION 3.14 Capital Expenditures.
The Trust 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 Trust 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 Trust to perform its
obligations under the Notes, this Indenture or any Operative Document.
SECTION 3.16 Restricted Payments.
The Trust 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 Trust or otherwise with respect to any ownership
or equity interest or security in or of the Trust 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 Trust 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 Trust will not, directly or indirectly,
make payments to or distributions from the Note Account except in accordance
with this Indenture and the other Operative Documents.
SECTION 3.17 Notice of Rapid Amortization Events, Events of
Default and Events of Servicing Termination.
Upon a Responsible Officer of the Owner Trustee having actual knowledge
thereof, the Trust agrees to give the Indenture Trustee, the Insurer and the
Rating Agencies prompt written notice of each
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Rapid Amortization Event, Event of Default 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 Trust 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 Trust shall not agree to any amendment to Section 7.13 of the Sale
and Servicing Agreement or Section 11.1 of the Trust Agreement, if the effect of
such amendment is to eliminate the requirements under such agreement that the
Indenture Trustee, the Insurer or the Noteholders consent to amendments under
such agreement.
SECTION 3.20 Income Tax Characterization.
For purposes of federal income, state and local income and franchise
and any other income taxes, the Trust will treat the Notes as indebtedness and
hereby instructs the Indenture Trustee to treat the Notes as indebtedness for
federal and state tax reporting purposes.
ARTICLE IV
Satisfaction and Discharge
SECTION 4.1 Satisfaction and Discharge of Indenture.
Upon receipt by the Indenture Trustee of all amounts to satisfy all
payment obligations with respect to 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 and the Insurer 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 a
Issuer Order and at the expense of the Trust, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture with respect to the
Notes, when 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 Trust
and thereafter repaid to the Trust or discharged from such trust, as provided in
Section 3.3) have been
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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 Trust,
and in the case of (2)(i), (ii) or (iii) above
(A) the Trust, has irrevocably deposited or caused to
be irrevocably deposited with the Indenture Trustee cash or direct obligations
of or obligations guaranteed by the United States of America (which will mature
prior to the date such amounts are payable), in trust for such purpose, in an
amount sufficient to pay and discharge the entire indebtedness on such Notes not
theretofore delivered to the Indenture Trustee for cancellation when due at
their respective Final Scheduled Payment Dates or Redemption Date (if Notes
shall have been called for redemption pursuant to Section 10.1(a)), as the case
may be;
(B) the Trust has paid or caused to be paid all
amounts due the Insurer and the Indenture Trustee; and
(C) the Trust has delivered to the Indenture Trustee
and the Insurer an Officer's Certificate and an Opinion of Counsel, and, if
required by the TIA 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.
Notwithstanding anything herein to the contrary, in the event that the
principal and/or interest due on the Notes or any other amounts payable by the
Insurer pursuant to the terms of the Policy shall be paid by the Insurer
pursuant to the Policy, the Notes shall remain Outstanding for all purposes, not
be defeased or otherwise satisfied and not be considered paid by the Trust, and
the assignment and pledge of the Trust Estate and all covenants, agreements and
other obligations of the Trust to the Noteholders shall continue to exist and
shall run to the benefit of the Insurer, and the Insurer shall be subrogated to
the rights of such Noteholders.
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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
Noteholders of the particular Notes for the payment or redemption of which such
monies have been deposited with the Indenture Trustee.
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 immediately 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
Rapid Amortization Events and Events of Default
SECTION 5.1 Rapid Amortization Events.
The following shall constitute "Rapid Amortization Events":
(a) failure on the part of the Master Servicer or Sponsor (i)
to make a payment or deposit required under the Sale and Servicing Agreement
within five 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;
(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 Noteholders or the Insurer are materially and adversely affected: provided,
however, that a Rapid Amortization Event shall not be deemed to occur if such
representation or warranty relates to a Mortgage Loan and the Sponsor has
reacquired or made a substitution for such Mortgage Loan during such period (or
within an additional 60 days with the prior written consent of the Insurer) in
accordance with the provisions of the Sale and Servicing Agreement;
(c) either (1) the entry of a decree or order for relief by a
court having jurisdiction in respect of one of the Originators or the Sponsor in
an involuntary case under the federal bankruptcy laws, as now or hereafter in
effect, or any other present or future federal or state bankruptcy, insolvency
or similar law, or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of either of the Originators
or the Sponsor or of any substantial part of its property, or ordering the
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winding up or liquidation of the affairs of the Trust and the continuance of any
such decree or order unstayed and in effect for a period of 60 consecutive days;
or
(2) the commencement by one of the Originators or the
Sponsor of a voluntary case under the federal bankruptcy laws, as now or
hereafter in effect, or any other present or future federal or state bankruptcy,
insolvency or similar law, or the consent by either of the Originators or the
Sponsor to the appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Originators or the Sponsor or of any substantial part of the property of any of
them or the making by any of the Originators or the Sponsor of an assignment for
the benefit of creditors or the failure by any of the Originators or the Sponsor
generally to pay its debts as such debts become due or the taking of corporate
action by the Originators or the Sponsor in furtherance of any of the foregoing;
(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 of Servicing Termination;
(f) a draw is made under the Policy; and
(g) a default in the payment of any interest when the same
becomes due and payable and the continuance of such default for a period of five
days or a default in the payment in full of the Note Balance on the Final
Scheduled Payment Date.
In the case of any event described (i) in clause (a) through (f), a
Rapid Amortization Event will be deemed to have occurred only if, after any
applicable grace period described herein or in the Sale and Servicing Agreement
either (A) the Insurer or (B) the Indenture Trustee or Noteholders holding at
least 51% of the Note Balance, in each case, with the prior written consent of
the Insurer, by written notice to the Sponsor, the Originators, the Rating
Agencies, the Master Servicer, the Indenture Trustee (if given by a party other
than the Indenture Trustee) and the Insurer (if given by a party other than the
Insurer); provided that, in the event such a declaration is made by the Insurer,
the Insurer shall give notice thereof to the Indenture Trustee and the Indenture
Trustee shall forward such notice to each of the above-mentioned parties)
declare that a Rapid Amortization Event has occurred as of the date of such
notice, or (ii) in clause (g), the Indenture Trustee or Noteholders holding at
least 51% of the Note Balance may by such written notice declare that a Rapid
Amortization Event has occurred as of the date of such notice. Within 15 days,
the Indenture Trustee will publish a notice of the occurrence of such event.
SECTION 5.2 Consequences of Rapid Amortization Event.
If a Rapid Amortization Event shall have occurred and be continuing,
(a) the Rapid Amortization Period shall immediately commence and the Noteholders
shall be entitled on each Payment Date thereafter to an amount equal to the
Maximum Principal Payment less the Overcollateralization Reduction Amount
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and (b) if the Rapid Amortization Event is one described in 5.1(c) above, on the
day of any such filing or appointment no further Additional Balances will be
transferred to the Trust, and such Originator will promptly give notice to the
Indenture Trustee and the Insurer of any such filing or appointment.
SECTION 5.3 [Reserved]
SECTION 5.4 Events of Default.
(a) The following occurrences shall constitute an "Event
of Default":
(i) a default in the payment of any interest when the
same becomes due and payable and the continuance of such default for a
period of five days or a default in the payment in full of the Note
Balance on the Final Scheduled Payment Date;
(ii) failure on the part of the Trust to perform in
any material respect any covenant or agreement under the Indenture
(other than a covenant in Section 5.4(a)(i) above) or the breach of a
representation or warranty of the Trust, which continues for a period
of thirty days after notice thereof is given; and
(iii) the entry of a decree or order for relief by a
court having jurisdiction in respect of the Trust, in an involuntary
case under the federal bankruptcy laws, as now or hereafter in effect,
or any other present or future federal or state bankruptcy, insolvency
or similar law, or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Trust
or of any substantial part of its property, or ordering the winding up
or liquidation of the affairs of the Trust and the continuance of any
such decree or order unstayed and in effect for a period of 60
consecutive days, or
(b) If an Event of Default shall have occurred and be
continuing, with the prior written consent of the Insurer, the Indenture Trustee
may, and at the direction of the Insurer or of Noteholders holding not less than
51% of the Note Balance with the prior written consent of the Insurer shall,
declare the Notes to be immediately due and payable by a notice in writing to
the Trust (and to the Indenture Trustee if given by Noteholders), and upon any
such declaration, the Notes, in an amount equal to the Note Balance, together
with accrued and unpaid interest thereon to the date of such acceleration, shall
become immediately due and payable.
(c) At any time after such a declaration of acceleration of
maturity of the Notes has been made and before a judgment or decree for payment
of the money due has been obtained by the Indenture Trustee as hereinafter
provided, the Insurer or the Noteholders holding at least 51% of the Note
Balance, with the prior written consent of the Insurer, by written notice to the
Trust and the Indenture Trustee, may direct the Indenture Trustee to rescind and
annul such declaration and its consequences if:
(i) The Trust has paid or deposited with the
Indenture Trustee a sum sufficient to pay:
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(A) all payments of principal of,
and interest on, all Notes and all other amounts that would then be due
hereunder or upon such Notes if the Event of Default giving rise to such
acceleration had not occurred; and
(B) all sums paid or advanced by
the Indenture Trustee hereunder and the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee, its agents and counsel; and
(ii) all Events of Default with respect to the Notes,
other than the nonpayment of the principal of Notes that have become
due solely by such acceleration, have been cured or waived.
No such recission shall affect any subsequent Event of Default or impair any
right consequent thereon.
SECTION 5.5 Collection of Indebtedness and Suits for
Enforcement by Indenture Trustee.
Subject to the following sentence, if an Event of Default with respect
to the Notes occurs and is continuing, the Indenture Trustee may, with the prior
written consent of the Insurer, and shall, at the written direction of the
Insurer, proceed to protect and enforce its rights and the rights of the
Noteholders and the Insurer by any Proceedings the Indenture Trustee deems
appropriate to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or enforce any other proper remedy. Any
proceedings brought by the Indenture Trustee on behalf of the Noteholders and
the Insurer or any Noteholder against the Trust shall be limited to the
preservation, enforcement and foreclosure of the liens, assignments, rights and
security interests under the Indenture and no attachment, execution or other
unit or process shall be sought, issued or levied upon any assets, properties or
funds of the Trust, other than the Trust Estate. If there is a foreclosure of
any such liens, assignments, rights and security interests under this Indenture,
by private power of sale or otherwise, no judgment for any deficiency upon the
indebtedness represented by the Notes may be sought or obtained by the Indenture
Trustee or any Noteholder against the Trust. The Indenture Trustee shall be
entitled to recover the costs and expenses expended by it pursuant to this
Article V including reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee, its agents and counsel.
SECTION 5.6 Remedies for Event of Default.
(a) If an Event of Default shall have occurred and be
continuing and the Notes have been declared due and payable and such declaration
and its consequences have not been rescinded and annulled, the Indenture Trustee
may, at the written direction of the Insurer, for the benefit of the Noteholders
and the Insurer, do one or more of the following:
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(i) institute Proceedings for the collection of all
amounts then payable on the Notes, or under this Indenture, whether by
declaration or otherwise, enforce any judgment obtained, and collect
from the Trust moneys adjudged due;
(ii) sell the Trust Estate or any portion thereof or
rights or interest therein, at one or more public or private sales
called and conducted in any manner permitted by law;
(iii) institute Proceedings from time to time for the
complete or partial foreclosure of this Indenture with respect to the
Trust Estate;
(iv) exercise any remedies of a secured party under
the Uniform Commercial Code and take any other appropriate action to
protect and enforce the rights and remedies of the Indenture Trustee or
the Noteholders and the Insurer hereunder; and
(v) refrain from selling the Trust Estate and
apply all Monthly Remittance Amounts pursuant to Section 5.9.
SECTION 5.7 Indenture Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, composition or other judicial
Proceeding relative to the Trust upon any of the Notes or the property of the
Trust, the Indenture Trustee (irrespective of whether the Notes shall then be
due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Indenture Trustee shall have made any demand on the
Trust for the payment of any overdue principal or interest) shall, at the
direction of the Insurer, be entitled and empowered, by intervention in such
Proceeding or otherwise to:
(a) file and prove a claim for the whole amount of principal
and interest owing and unpaid in respect of the Notes and file such other papers
or documents as may be necessary or advisable in order to have the claims of the
Indenture Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee, its agents and
counsel) and of the Noteholders and the Insurer allowed in such Proceeding; and
(b) collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same; and any receiver,
assignee, Indenture Trustee, liquidator, or sequestrator (or other similar
official) in any such Proceeding is hereby authorized by each Noteholder and the
Insurer to make such payments to the Indenture Trustee and, in the event that
the Indenture Trustee shall consent to the making of such payments directly to
the Noteholders and the Insurer, to pay to the Indenture Trustee any amount due
to it for the reasonable compensation, expenses, disbursements and advances of
the Indenture Trustee, its agents and counsel.
Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or accept or adopt on behalf of any
Noteholder or the Insurer any plan of reorganization, arrangement,
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adjustment or composition affecting any of the Notes or the rights of any
Noteholder, or the Insurer, or to authorize the Indenture Trustee to vote in
respect of the claim of any Noteholder or the Insurer in any such Proceeding.
Any plan of reorganization, arrangement, adjustment or composition relative to
the Trust or any other obligor upon any of the Notes or the property of the
Trust or of such obligor or their creditors and affecting the Notes or the
rights of the Insurer under this Indenture or the Insurance Agreement must be
acceptable to the Insurer and, as long as no Insurer Default exists and is
continuing, the Insurer shall be entitled to exercise the voting rights of the
Noteholders regarding such plan, reorganization, arrangement, adjustment or
composition.
SECTION 5.8 Indenture Trustee May Enforce Claims Without
Possession of Notes.
All rights of action and claims under this Indenture or any of 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 any such Proceeding instituted by the Indenture Trustee,
at the direction of the Insurer, shall be brought in its own name as Indenture
Trustee of an express trust, and any recovery of judgment shall be for the
ratable benefit of the Noteholders and the Insurer in respect of which such
judgment has been recovered after payment of amounts required to be paid
pursuant to clause (i) of Section 5.9.
SECTION 5.9 Application of Money Collected.
If the Notes have been declared due and payable following an Event of
Default and such declaration and its consequences have not been rescinded or
annulled, any money collected by the Indenture Trustee with respect to the Notes
pursuant to this Article V or otherwise and any other monies that may then be
held or thereafter received by the Indenture Trustee as security for the Notes
shall be applied in the following order, at the date or dates fixed by the
Indenture Trustee and, in case of the payment of the entire amount due on
account of principal of, and interest on, the Notes, upon presentation and
surrender thereof:
(i) to the Indenture Trustee and the Owner Trustee,
any unpaid Indenture Trustee Fee and unpaid Owner Trustee Fee,
respectively, then due and any other amounts payable and due to the
Indenture Trustee and the Owner Trustee under this Indenture and the
Trust Agreement, including any costs or expenses incurred by it in
connection with the enforcement of the remedies provided for in this
Article;
(ii) to the Insurer, any unpaid Premium Amount, then
due and payable pursuant to the Insurance Agreement;
(iii) to the Master Servicer, any amounts required to
pay the Master Servicer for any unpaid Servicing Fees then due and any
other amounts payable and due to the Master Servicer;
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(iv) to the payment of the Interest Distribution
Amount and Note Interest Shortfall then due and unpaid upon the Note
Balance through the day preceding the date upon which such payment is
made;
(v) to the Insurer, all amounts due pursuant to the
Insurance Agreement;
(vi) to the payment of the Note Balance then due and
unpaid;
(vii) to the Noteholders, the Net Funds Cap
Carry-Forward Amount;
(viii) to the Master Servicer, any unreimbursed
Servicing Advances, including Nonrecoverable Advances; and
(ix) to the Certificateholders, any amount remaining
on deposit in the Note Account.
SECTION 5.10 Limitation of Suits.
No Noteholder shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless:
(i) the Noteholders holding not less than 25% of the
Note Balance have made a written request to the Indenture Trustee to
institute such proceeding in respect of such Event of Default in its
own name as Indenture Trustee hereunder; and
(ii) the Noteholders 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;
and
(iii) the Indenture Trustee for 60 days after its
receipt of such notice, request and offer of indemnity has failed to
institute such proceedings; and
(iv) no direction inconsistent with such written
request has been given to the Indenture Trustee during such 60-day
period by the Noteholders holding a majority of the Note Balance; and
(v) an Insurer Default shall be continuing;
it being understood and intended that no Noteholders 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 Noteholders or
to obtain or to seek to obtain priority or preference over any other Noteholders
or to enforce any right under this Indenture, except in the manner herein
provided.
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In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Noteholders, each
holding less than a majority of the Note Balance, the Indenture Trustee in its
sole discretion may determine what action, if any, shall be taken,
notwithstanding any other provisions of this Indenture.
SECTION 5.11 Unconditional Rights of Noteholders To Receive
Principal and Interest.
Notwithstanding any other provisions in this Indenture, a Noteholder
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 Noteholder. The obligation to pay the principal of and
interest on the Notes is solely that of the Trust, the payment of which shall be
made solely from the Trust Estate, and none of the Owner Trustee, the
Originators, the Sponsor or the Master Servicer shall have any liability with
respect thereto.
SECTION 5.12 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 Trust, the Insurer, 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, the Insurer and the Noteholders shall
continue as though no such proceeding had been instituted.
SECTION 5.13 Rights and Remedies Cumulative.
No right or remedy herein conferred upon or reserved to the Controlling
Party or to the related 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 5.14 Delay or Omission Not a Waiver.
No delay or omission of the Indenture Trustee, Controlling Party or any
Noteholder to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article V or by law to the Indenture Trustee, the Insurer or to the Noteholders
may be exercised from time to time, and as often as may be deemed expedient, by
the Indenture Trustee, the Insurer or by the Noteholders, as the case may be.
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SECTION 5.15 Control by Noteholders.
If the Indenture Trustee is the Controlling Party, the Noteholders
holding a majority of the Note Balance, with the prior written 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 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 related Noteholders not consenting
to such action.
SECTION 5.16 Undertaking for Costs.
All parties to this Indenture agree, and each Noteholder by such
Noteholder'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 the Insurer, any
Noteholder, or group of Noteholders with the prior written consent of the
Insurer, in each case holding in the aggregate more than 10% of the Note Balance
or (c) any suit instituted by any Noteholder for the enforcement of the payment
of principal of or interest on any Note on or after the respective due dates
expressed in such Note and in this Indenture (or, in the case of redemption, on
or after the Redemption Date).
SECTION 5.17 Waiver of Stay or Extension Laws.
The Trust 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 Trust (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.
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SECTION 5.18 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,
the Insurer or the Noteholders shall be impaired by the recovery of any judgment
by the Indenture Trustee or the Insurer against the Trust 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 Trust.
SECTION 5.19 Performance and Enforcement of Certain
Obligations.
(a) Promptly following a request from the Indenture Trustee
(at the direction of the Insurer) to do so and at the Master Servicer's expense,
the Trust 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 Trust
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 Trust 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 an
Event of Default has occurred and is continuing, the Indenture Trustee may, and,
at the written direction of the Noteholders holding at least 51% of the Note
Balance shall, exercise all rights, remedies, powers, privileges and claims of
the Trust 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 Trust thereunder and to give
any consent, request, notice, direction, approval, extension or waiver under the
Sale and Servicing Agreement, and any right of the Trust to take such action
shall be suspended.
SECTION 5.20 Subrogation.
The Indenture Trustee shall receive as attorney-in-fact of each
Noteholder any Insured Payment from the Insurer pursuant to the Policy. Any and
all Insured Payments 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. In addition to
the rights of the Insurer set forth in Section 11.20 hereof, the Insurer may
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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 5.21 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 Noteholders 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
Noteholder, 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 5.20, 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.
ARTICLE VI
The Indenture Trustee
SECTION 6.1 Duties of Indenture Trustee.
(a) If an Event of Default has occurred and is continuing, the
Indenture Trustee shall exercise the rights and powers vested in it by this
Indenture and 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
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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 an Event of Default:
(i) The Indenture Trustee undertakes to perform such
duties and only such duties as are specifically set forth in this
Indenture and no implied covenants or obligations shall be read into
this Indenture against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the
Indenture Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Indenture Trustee and
conforming to the requirements of this Indenture; however, the
Indenture Trustee shall examine the certificates and opinions to
determine whether or not they conform 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 5.15;
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 Noteholders holding not less than 51% of
the Note Balance.
(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 Trust.
(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.
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(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.
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 selected by it with due care with respect to legal
matters relating to this Indenture and the Notes
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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 Noteholders
or the Controlling Party pursuant to the provisions of this Indenture, unless
such Noteholders 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 an Event of Default, Insurance
Agreement Event of Servicing Termination 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 Noteholders holding not less than 25% of the Note
Balance; 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 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 Trust 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 Trust's use of the
proceeds from the Notes, and it shall not be responsible for any statement of
the Trust 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.
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SECTION 6.5 Notice of Defaults.
If an Event of Default, 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 a notice of such event to each Noteholder and to the Insurer within 10 days
after the Indenture Trustee has knowledge or notice of the occurrence of such
event. 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 Noteholders.
Upon written request, the Note Paying Agent or the Master Servicer shall
on behalf of the Trust deliver to each Noteholder such information as may be
reasonably required to enable such Noteholder to prepare its Federal and state
income tax returns required by law.
SECTION 6.7 Compensation and Indemnity.
Pursuant to Section 8.6(b)(i) and subject to Section 6.18 herein, the
Trust shall, or shall cause the Master Servicer to, pay to the Indenture
Trustee, on each Payment Date, reasonable compensation for its services rendered
hereunder. The Indenture Trustee's compensation shall not be limited by any law
on compensation of a trustee of an express trust. Pursuant to Section
8.6(b)(xii) herein, the Trust shall cause the Master Servicer to reimburse the
Indenture Trustee for all reasonable out-of-pocket expenses incurred or made by
it in accordance with any provision of this Indenture (including the reasonable
compensation and expenses and disbursements of any of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to its
negligence or willful misconduct. The Indenture Trustee and any director,
officer, employee or agent of the Indenture Trustee shall be indemnified by the
Master Servicer pursuant to Section 4.4(b) of the Sale and Servicing Agreement
and held harmless against any loss, liability, or expense incurred or paid to
third parties in connection with the acceptance or administration of its trusts
hereunder or the Notes, other than any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or negligence in the performance of the
Indenture Trustee's duties hereunder or by reason of reckless disregard of the
Indenture Trustee's obligations and duties hereunder.
SECTION 6.8 Replacement of Indenture Trustee.
The Indenture Trustee may resign at any time by so notifying the Trust,
the Insurer and the Master Servicer by written notice.
The Trust may, with the prior written consent of the Insurer and, at the
request of the Insurer shall, remove the Indenture Trustee, if:
(i) the Indenture Trustee fails to comply with Section 6.11;
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(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 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 or is
prohibited by law from, 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 Trust
shall promptly appoint a successor Indenture Trustee acceptable to the Sponsor,
the Master Servicer and the Insurer by written instrument. One executed original
of such instrument of appointment and acceptance of appointment shall be
delivered to the resigning or removed Indenture Trustee, the Master Servicer,
the successor Indenture Trustee and the Insurer. 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 Indenture Trustee resigns or is removed, the retiring Indenture
Trustee, the Trust or the Noteholders holding a majority of the Note Balance may
petition any court of competent jurisdiction for the appointment of a successor
Indenture Trustee.
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If the Indenture Trustee fails to comply with this Section 6.8 or
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.
Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section, the Master Servicer's indemnity obligations under Section 6.7
shall continue for the benefit of the predecessor 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, provided that the resulting, surviving or transferee corporation
satisfies the eligibility requirements of Section 6.11. Prior to any such
consolidation, merger or conversion, the Indenture Trustee shall provide written
notice to the Trust, the Insurer, the Master Servicer and the Sponsor of such
event and of its effective date.
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 prior written consent of the Insurer (unless required by law),
and the Master Servicer acting jointly, except that following the occurrence of
an Event of Servicing Termination, the Indenture Trustee acting alone, 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 and
the Insurer, 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. The Indenture Trustee shall remain primarily
liable for the actions of any co-trustee.
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(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred
or imposed upon the Indenture Trustee shall be conferred or imposed upon
and exercised or performed by the Indenture Trustee and such separate
trustee or co-trustee jointly (it being understood that such separate
trustee or co-trustee is not authorized to act separately without the
Indenture Trustee joining in such act), except to the extent that under
any law of any jurisdiction in which any particular act or acts are to
be performed the Indenture Trustee shall be incompetent or unqualified
to perform such act or acts, in which event such rights, powers, duties
and obligations (including the holding of title to the 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 Indenture and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute
the Indenture Trustee, its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Indenture on its behalf and in its name. If any separate trustee
or co-trustee shall die, 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, and such fees shall not be a
responsibility of the Trust.
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SECTION 6.11 Eligibility: Disqualification.
There shall at all times be a Trustee hereunder which shall be a
corporation or association organized and doing business under the laws of the
United States of America or of any State authorized under such laws to exercise
corporate trust powers, subject to supervision or examination by the United
States of America or any such State having a rating or ratings acceptable to the
Insurer or, in the event of an Insurer Default, the Sponsor and having (x)
short-term, unsecured debt rated at least A-1 by Moody's (or such lower rating
as may be acceptable to Moody's and the Insurer) and (y) a short-term deposit
rating of at least A-1 from S&P (or such lower rating as may be acceptable to
S&P and the Insurer. 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 and the Sponsor 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 Trust are
outstanding if the requirements for such exclusion set forth in TIA Section
310(b)(1) are met.
SECTION 6.12 Preferential Collection of Claims Against Trust.
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 Noteholders and
the Insurer hereby appoints Bankers Trust Company of California, N.A. as the
Indenture Trustee with respect to the Trust Estate, 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 Noteholders and the Insurer, 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 Noteholder and the Insurer 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.
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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 of
the Controlling Party and with the indemnification described in Section 6.7
hereof. 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 Trust 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 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 Trust and to each
Noteholder and the Insurer 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.
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(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 Trust or the Noteholders 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 Indenture 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,
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 and the Insurer, 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 or under the Operative Documents shall occur
and be continuing, the Indenture Trustee, if the Controlling Party has given its
prior written consent (and if not the Controlling Party, with the prior written
consent of the Insurer), may proceed to protect and enforce its rights and the
rights of the Noteholders and the Insurer, under this Indenture 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 Indenture or in aid
of the execution of any power granted in this Indenture or for the enforcement
of any other legal, equitable or other remedy, as the Indenture Trustee, being
advised by counsel selected by it with due care, shall deem most effectual to
protect and enforce any of the rights of the Indenture Trustee, the Insurer and
the Noteholders.
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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 Noteholders, 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 the Noteholders 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 against the Trust.
(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 the Noteholders.
(e) The Indenture Trustee will cooperate with and assist the
Master Servicer, the Insurer, the Sponsor, or the Noteholders 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 Trust 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 expenses of the Indenture Trustee resulting
from any affirmative claims for recovery asserted or collected by Mortgagors
under the Mortgage Loans and such amounts shall not be a responsibility of the
Trust.
ARTICLE VII
Noteholders' Lists and Reports
SECTION 7.1 Trust To Furnish To Indenture Trustee Names and Addresses of
Noteholders.
The Trust 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 Noteholders 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 Trust of any such
request, a list of similar form and content as of a date not more than 10
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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 Trust shall furnish to the Insurer or the Trust in writing
upon their written request and at such other times as the Insurer or the Trust
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 Noteholders contained
in the most recent list furnished to the Indenture Trustee as provided in
Section 7.1 and the names and addresses of Noteholders 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 Trust, the Indenture Trustee and the Note Registrar shall
have the protection of TIA Section 312(c).
SECTION 7.3 Reports by Trust.
(a) The Trust shall:
(i) send to the Indenture Trustee, within 15 days after
the Trust 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 Trust may be required to file with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act;
(ii) send to 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 Trust with the conditions and covenants of
this Indenture as may be required from time to time by such rules and
regulations; and
(iii) supply to the Indenture Trustee (and the Indenture
Trustee shall transmit by mail to all Noteholders described in TIA
Section 313(c)) such summaries of any information, documents and reports
required to be filed by the Trust 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 Trust otherwise determines, the fiscal year of the
Trust shall end on December 31 of each year.
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SECTION 7.4 Reports by Indenture Trustee.
If required by TIA Section 313(a), within 60 days after each December
31, beginning with December 31, 2000, 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 Trust 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, with the prior written
consent of the Insurer, and shall, at the direction of the Insurer, take such
action (after the applicable cure period) 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 Trust and the provisions of this Indenture shall in each case, with the
prior written consent of the Insurer, 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 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 all Reimbursement Amounts due to the Insurer pursuant to the Insurance
Agreement have been paid and confirmed in writing by the Insurer, release any
remaining portion of the Trust Estate that secured the Notes from the lien of
this Indenture and release to the Trust or any other Person entitled thereto any
funds then on deposit in the Accounts. The
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Indenture Trustee shall release property from the lien of this Indenture
pursuant to this Section 8.2(b) only upon receipt of an Issuer Order accompanied
by an Officer's Certificate, an Opinion of Counsel and, if required by the TIA,
Independent Certificates in accordance with TIA Sections 314(c) and
314(d)(1) meeting the applicable requirements of Section 11.1, and the prior
written consent of the Insurer.
(c) The foregoing notwithstanding, the Indenture Trustee shall
release Mortgage Loans from the lien of this Indenture pursuant to the Sale and
Servicing Agreement.
SECTION 8.3 Establishment of Accounts.
The Sponsor shall cause to be established at a Designated Depository
Institution, and the Indenture Trustee shall maintain, the Note Account, the
Pre-Funding Account and the Capitalized Interest Account, each to be held by the
Indenture Trustee in the name of the Trust for the benefit of the Noteholders
and the Insurer, as their interests may appear.
SECTION 8.4 The Payments Under the Policy.
(a) On each Determination Date the Indenture Trustee shall
calculate the Deficiency Amount, if any, with respect to the immediately
following Payment Date.
(b) If the Indenture Trustee determines pursuant to paragraph (a)
above that a Deficiency Amount would exist, 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
Deficiency Amount.
(c) Upon receipt of payments made pursuant to the Policy, but in
no event later than the Payment Date, so long as the Insurer receives adequate
notice, from the Insurer on behalf of the 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(c) hereof to
the Noteholders.
(d) The Indenture Trustee shall (i) receive payments made
pursuant to the Policy as attorney-in-fact for each Noteholder and (ii) disburse
such Insured Payment to the Noteholders as set forth in Section 8.6(c) hereof.
The Insurer shall be entitled to receive the Reimbursement Amount pursuant to
Section 8.6(c)(viii) hereof with respect to each Insured Payment made by the
Insurer. The Indenture Trustee hereby agrees on behalf of each Noteholder and
the Trust for the benefit of the Insurer that it recognizes that to the extent
the Insurer makes payments pursuant to the Policy, either directly or indirectly
(as by paying through the Indenture Trustee), to the Noteholders, the Insurer
will be subrogated to the Noteholders and will be entitled to receive such
Reimbursement Amount.
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SECTION 8.5 Pre-Funding Account and Capitalized Interest Account.
(a) On the Closing Date, the Indenture Trustee will deposit, on
behalf of the Noteholders, the Pre-Funded Amount in the Pre-Funding Account and
the Capitalized Interest Amount in the Capitalized Interest Account from the
proceeds of the sale of the Notes.
(b) On any Subsequent Transfer Date, the Sponsor shall instruct
the Indenture Trustee in writing pursuant to the Subsequent Transfer Agreement
to withdraw from the Pre-Funding Account an amount equal to 94.8% of the
aggregate Principal Balances of the Subsequent Mortgage Loans transferred to the
Trust on such Subsequent Transfer Date and pay such amount to or upon the order
of the Sponsor upon satisfaction of the conditions set forth in Section 2.6 of
the Sale and Servicing Agreement.
(c) On each Payment Date during the Pre-Funding Period, the
Indenture Trustee shall transfer the Pre-Funding Earnings and the Capitalized
Interest Requirement, if any, for such Payment Date from the Pre-Funding Account
or Capitalized Interest Account, respectively, to the Note Account.
(d) On the Payment Date immediately following the end of the
Pre-Funding Period, the Indenture Trustee shall withdraw any amounts remaining
on deposit in the Pre-Funding Account and any Pre-Funding Earnings earned to
such Payment Date and shall deposit such amounts in the Note Account.
(e) On the Payment Date immediately following the end of the
Pre-Funding Period, any amounts remaining in the Capitalized Interest Account
(after taking into account the transfer on such Payment Date described in clause
(c) above) shall be paid to or upon the order of the Sponsor, and the
Capitalized Interest Account shall be closed.
SECTION 8.6 Flow of Funds; Allocation of Realized Loss Amounts.
(a) The Indenture Trustee shall deposit into the Note Account,
without duplication, immediately upon receipt, the Available Funds for the
related Payment Date.
(b) On each Payment Date, the Indenture Trustee shall, from
Available Funds on deposit in the Note Account (other than funds on deposit
relating to any Insured Payments), 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. Insured
Payments shall be applied only to payments specified under clauses (iii) (iv)
and (vii) below and, in the case of the Final Scheduled Payment Date, clause (v)
below:
(i) to the Indenture Trustee, the Indenture Trustee Fee
then due and to the Owner Trustee, the Owner Trustee Fee then
due;
(ii) to the Insurer, the Premium Amount then due;
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(iii) to the Noteholders, the Interest Distribution
Amount;
(iv) to the Noteholders, the Note Interest Shortfall, if
any;
(v) to the Noteholders, the Scheduled Principal
Distribution Amount for such Payment Date;
(vi) on the Payment Date immediately following the end
of the Pre- Funding Period, to the Noteholders, as a
distribution of principal, any Pre-Funded Amount remaining in
the Pre-Funding Account;
(vii) to the Noteholders, as a distribution of
principal, the Overcollateralization Deficit for such Payment
Date;
(viii) to the Insurer, the Reimbursement Amount, if any,
then due to it;
(ix) to the Noteholders, the Accelerated Principal
Payment for such Payment Date;
(x) to the Noteholders, the amount of any Net Funds Cap
Carry-Forward Amount then due;
(xi) 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;
(xii) to the Indenture Trustee and the Owner Trustee,
for the reimbursement of expenses of the Indenture Trustee and
the Owner Trustee not reimbursed pursuant to Section 8.6(b)(i)
above which expenses were incurred in connection with its duties
and obligations hereunder; and
(xiii) to the Certificateholders, any Available Funds
remaining on deposit in the Note Account.
(c) On each Payment Date during the continuance of any Insurer
Default no Premium Amount shall be paid to the Insurer (unless the Insurer or
its custodian, trustee, agent, receiver, custodian, or similar official
continues to make payments required under the Policy) and any amounts otherwise
payable to the Insurer as Premium Amounts shall be retained in the Note Account
but segregated from Available Funds. On any Payment Date wherein such Insurer
Default has been cured, the Premium Amounts shall be paid to the Insurer.
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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 (excluding
investment earnings thereon) 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 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 may direct such investments. No investment in any Account shall
mature later than the Business Day immediately preceding the next Payment Date.
(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 (except in
its capacity as obligor on any such investment) but shall be liable for loss of
investment earnings if the funds held in the Accounts are not invested in
accordance with this Indenture.
(d) The Indenture Trustee shall hold funds in the Accounts held
by the Indenture Trustee in Eligible Investments specified in clause (i) of
Section 8.8 upon the occurrence of either of the following events:
(i) the Master Servicer or the Insurer shall have failed
to give investment directions to the Indenture Trustee; or
(ii) the Master Servicer or the Insurer shall have failed
to give investment directions to the Indenture Trustee by 5:00 PM
California time (or such other time as may be agreed by the Master
Servicer and the Indenture Trustee) on the Business Day prior to receipt
of such funds.
Any investment earnings on funds held in the Note Account shall be for
the account of the Master Servicer and may only be withdrawn from the Note
Account by the Indenture Trustee to be remitted to the Master Servicer on each
respective Payment Date. Any references herein to amounts on deposit in the Note
Account shall refer to amounts net of such investment earnings. The Master
Servicer shall deposit the amount of any investment losses immediately into the
Note Account as realized and upon notification from the Indenture Trustee.
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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) Federal Home Loan Banks' consolidated debt obligations.
(d) Federal funds, unsecured certificates of deposit, time
deposits, bankers' acceptances and repurchase agreements (having original
maturities of not more than 365 days) of any bank, the short-term debt
obligations of which have been rated "A-1+" or better by S&P and "P-1" by
Xxxxx'x.
(e) Farmers Home Administration certificates of beneficial
interest.
(f) General Services Administration participation certificates.
(g) Maritime Administration guaranteed Title XI Financings.
(h) Small Business Administration guaranteed participation
certificates and guaranteed pool certificates.
(i) U.S. Department of Housing and Urban Development local
authority bonds.
(j) Washington Metro Area Transit Authority guaranteed transit
bonds.
(k) Farm Credit System consolidated system wide bonds and notes.
(l) FNMA debt obligations.
(m) Student Loan Marketing Association debt obligations.
(n) Financing Corp. debt obligations.
(o) Resolution Funding Corp. debt obligations.
(p) 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.
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(q) Investments in money market funds rated "AAAm" or "AAAm-G" by
S&P and "AAA" or "P-1" by Xxxxx'x.
(r) Other investments approved in writing by the Insurer and
acceptable to Xxxxx'x and S&P as evidenced by a letter from each Rating Agency.
Provided that no instrument described above is permitted: (1) 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; (2) to 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; or (3) to have an "r" highlighter affixed to its
rating.
SECTION 8.9 Reports by Indenture Trustee.
(a) On each Payment Date, to the extent that the related report
described in Section 4.3 of the Sale and Servicing Agreement has been received
by the Indenture Trustee, the Indenture Trustee shall provide to each
Noteholder, the Master Servicer, the Insurer, each Underwriter, the Sponsor, S&P
and 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 and the Master
Servicer from time to time, but in every case setting forth, among other things,
the following information:
(i) the total amount of the distribution with respect to
the Notes and the Certificates;
(ii) the amount of such distributions allocable to
principal;
(iii) the amount of such distributions allocable to
interest;
(iv) the amount of any Note Interest Shortfall in such
distribution;
(v) the amount of any Insured Payment included in the
amounts distributed 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 Noteholders in computing
their market discount;
(vii) the total of any Substitution Amounts and any Loan
Reacquisition Price amounts included in such distribution;
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(viii) the amounts, if any, of any Realized Losses for the related
Remittance Period;
(ix) the Servicing Fee for the related Remittance Period;
(x) the Note Balance and the Pool Factor, each after giving effect to
such distribution;
(xi) the Pool Principal Balance as of the end of the preceding
Remittance Period;
(xii) the Note Interest Rate applicable to the distribution on the
following Payment Date;
(xiii) the number and principal balances of any Mortgage Loans
reacquired by the Sponsor pursuant to Sections 2.2(b), 2.5, 3.3(c) and 3.4 of
the Sale and Servicing Agreement;
(xiv) the Overcollateralization Deficit;
(xv) the amount of any Net Funds Cap Carry-Forward Amount;
(xvi) the amount of any Overcollateralization Reduction Amount;
(xvii) the current level of the Overcollateralization Amount;
(xviii)the total number, aggregate Principal Balance and the percentage
(based on the Pool Principal Balance) of all Mortgage Loans, other than Mortgage
Loans relating to Mortgagors in bankruptcy proceedings, Mortgage Loans in
foreclosure proceedings and Mortgage Loans that have converted to REO Property,
that are (a) 30-59 days Delinquent, (b) 60-89 days Delinquent, (c) 90-119 days
Delinquent, (d) 120-149 days Delinquent, (e) 150-179 days Delinquent and (f) 180
or more days Delinquent;
(xix) the total number, aggregate Principal Balance and percentage
(based on the Pool Principal Balance) of all Mortgage Loans in foreclosure
proceedings and that are (a) less than 30 days Delinquent, (b) 30-59 days
Delinquent, (c) 60-89 days Delinquent, (d) 90-119 days Delinquent, (e) 120-149
days Delinquent, (f) 150-179 days Delinquent and (g) 180 or more days
Delinquent;
(xx) the total number, aggregate Principal Balance and percentage
(based on the Pool Principal Balance) of all Mortgage Loans relating to
Mortgagors in bankruptcy proceedings and that are (a) less than 30 days
Delinquent, (b) 30-59 days Delinquent, (c) 60-89 days Delinquent, (d) 90-119
days Delinquent, (e) 120-149 days Delinquent, (f) 150-179 days Delinquent and
(g) 180 or more days Delinquent;
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(xxi) the total number, aggregate Principal Balance and
percentage (based on the Pool 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
clauses (xix) and (xx);
(xxii) the book value of any REO Property; and
(xxiii)during the Pre-Funding Period, (1) the remaining
Pre-Funded Amount, (2) the Capitalized Interest Amount, (3) the
Pre-Funding Earnings Amount and (4) the aggregate Principal Balance of
Subsequent Mortgage Loans purchased by the Trust during the related
Remittance Period and cumulatively.
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. If the Notes are then in book-entry form, DTC will supply such
reports to the Noteholders as are in accordance with its procedures.
SECTION 8.10 Additional Reports by Indenture Trustee.
(a) The Indenture Trustee shall report monthly 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.
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 the
Servicer Report in respect of the Mortgage Loans furnished to it by the Master
Servicer pursuant to Section 4.3 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 investigation, and of the action taken by
the Sponsor under Section 3.4(b) of the Sale and Servicing Agreement with
respect thereto.
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SECTION 8.11 Opinion of Counsel.
The Indenture Trustee shall receive at least seven days' notice when
requested by the Trust 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 Noteholders, but with the prior
written consent of the Insurer, as evidenced in a writing delivered to the
Indenture Trustee, the Trust and the Indenture Trustee 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, the Trust
and the Insurer 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 Trust, and the
assumption by any such successor of the covenants of the Trust herein
and in the Notes contained;
(iii) to add to the covenants of the Trust, for the
benefit of the Noteholders and the Insurer, or to surrender any right or
power herein conferred upon the Trust;
(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 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 (1)
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adversely affect the interests of the Noteholders (2) or as evidenced in
writing by the Rating Agencies, result in a reduction of the
then-current rating on 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 Trust and the Indenture Trustee, when authorized by an
Issuer Order, may, also without the consent of any of the Noteholders, but with
the prior written consent of the Insurer, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Noteholders under this Indenture;
provided, however, that such action shall not (1) as evidenced in writing by the
Rating Agencies, delivered to the Indenture Trustee and the Insurer, reduce the
then-current rating on the Notes or (2) as evidenced by an Opinion of Counsel
addressed to the Insurer and the Indenture Trustee, materially and adversely
affect the interests of any Noteholder.
SECTION 9.2 Supplemental Indentures with Consent of Noteholders.
The Trust and the Indenture Trustee, when authorized by an Issuer Order,
may, with prior notice to the Rating Agencies, and with the prior written
consent of the Insurer and of the Noteholders holding at least 51% of the Note
Balance, by Act of such Noteholders delivered to the Trust 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 Noteholders 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 Noteholder 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 Note Balance, the
consent of the Noteholders of which is required for any such
supplemental indenture, or the consent of the Noteholders 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 Note Balance, the consent
of the Noteholders of which is required to direct the Indenture Trustee
to direct the Trust to sell or liquidate the Trust Estate pursuant to
Section 5.6;
(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 Noteholder of
each 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
Noteholder 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 all
Noteholders, 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.
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Promptly after the execution by the Trust and the Indenture Trustee of
any supplemental indenture pursuant to this Section, the Indenture Trustee shall
mail to the Noteholders to which such amendment or supplemental indenture
relates a notice setting forth in general terms the substance of such
supplemental indenture. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
SECTION 9.3 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 Trust and the
Noteholders 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
Trust or the Indenture Trustee shall so determine, new Notes so modified as to
conform, in the opinion of the Indenture Trustee and the Trust, to any such
supplemental indenture may be prepared and executed by the Trust and
authenticated and delivered by the Indenture Trustee in exchange for the Notes.
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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 10.1(b), to the Master Servicer or any Master Servicer Affiliate of
the Trust Estate, (ii) 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 5.6 hereof) or the
disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and (iii) the Payment Date in August 2024;
provided, however, that (x) no such redemption shall occur unless all amounts
due and owing to the Insurer as a Reimbursement Amount have been paid and (y) 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 Notes shall be subject to optional redemption by the
Master Servicer or any Master Servicer Affiliate on any Payment Date after the
Payment Date on which the Pool Principal Balance has been reduced to an amount
less than or equal to 10% of the Original Note Balance and all amounts due and
owing to the Insurer as a Reimbursement Amount have been paid. Such redemption
shall only be permitted if the party exercising such option pays to the
Indenture Trustee an amount equal to the sum of (1) the Note Balance, (2)
accrued and unpaid interest thereon at the Note Interest Rate through the day
preceding such Payment Date and (3) all related Reimbursement Amounts (such
amount, the "Redemption Price"). In connection with such redemption, 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.
Notwithstanding the above, the party exercising such option to redeem the Notes
shall obtain the prior written consent of the Insurer, if such redemption would
result in a draw on the Policy.
(c) Promptly following any such redemption, the Indenture Trustee
shall release the Mortgage Files to the Master Servicer, or otherwise upon its
order, in a manner similar to that described in Section 4.14 of the Sale and
Servicing Agreement.
(d) If the Notes are to be redeemed pursuant to Section 10.1(b),
the Master Servicer or the Trust shall furnish notice of such election to the
Indenture Trustee not later than 15 days prior to the Redemption Date and the
Trust shall deposit with the Indenture Trustee in the Note Account the
Redemption Price of the Notes not less than five Business Days 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.
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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 (1st) 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 first (1st) day and not later than the
tenth (10th) day of 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 Note and remaining unclaimed by
the related 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; and such
Noteholder shall thereafter, as an unsecured general creditor, look only to the
Certificateholders for payment thereof (but only to the extent of the amounts so
paid to the Insurer or the Certificateholders), 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. 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
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 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 Noteholder 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 Noteholder'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 Trust 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 Trust. Failure to give notice of
redemption, or any defect therein, to any Noteholder 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
related Redemption Price and (unless the Trust shall default in the payment of
the related Redemption Price) no interest shall accrue on such Redemption Price
for any period after the date to which accrued interest is calculated for
purposes of calculating such Redemption Price.
ARTICLE XI
Miscellaneous
SECTION 11.1 Compliance Certificates and Opinions, etc.
Upon any application or request by the Trust to the Indenture Trustee to
take any action under any provision of this Indenture, and where specified in
this Indenture, the Trust 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 addressed to the Indenture Trustee and the Insurer
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.
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Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(i) a statement that, 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
(ii) 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 Trust 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 Trust, stating that the information with
respect to such factual matters is in the possession of the Master Servicer, the
Sponsor or the Trust, 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 Trust
shall deliver any document as a condition of the granting of such application,
or as evidence of the Trust's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Trust 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.
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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 Trust. 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 Trust, 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 any Noteholder shall bind the Noteholder 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 Trust in reliance thereon, whether or not notation of
such action is made upon such Note.
SECTION 11.4 Notices, etc. to Indenture Trustee, Trust and Rating
Agencies.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Noteholders or other communications provided or permitted by this
Indenture to be made upon, given or furnished to or filed shall be in writing
and shall be deemed to be given when delivered to:
(a) The Indenture Trustee at its Corporate Trust Office,
Attention: Advanta Series 2000-A and any notice delivered by facsimile shall be
addressed to the Corporate Trust Office, telecopy number (000) 000-0000, by any
Noteholder or by the Trust .
(b) The Trust by the Indenture Trustee or by any Noteholder
addressed to: Advanta Revolving Home Equity Loan Trust 2000-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 previously furnished in writing to the Indenture Trustee by
the Trust. The Trust shall promptly transmit any notice received by it from the
Noteholders to the Indenture Trustee.
(c) The Insurer by the Trust or the Indenture Trustee as follows:
To the Insurer: Ambac Assurance Corporation
-00-
00
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Finance Department -MBS
Fax: (000) 000-0000
Confirmation: (000) 000-0000
In each case in which a notice or other communication to the Insurer
refers to an Event of Servicing Termination, a claim on the Policy or with
respect to which failure on the part of the Insurer to respond shall be deemed
to constitute consent or acceptance, then a copy of such notice or other
communication should also be sent to the attention of the general counsel (fax
No. 000-000-0000 and with the same confirmation number as stated above) and
should be marked "URGENT MATERIAL ENCLOSED".
Notices required to be given to the Rating Agencies by the Trust, the
Indenture Trustee or the Owner Trustee shall be sent by first class mail 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 Xxxxx Xxxxxx, 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 Trust may enter into any agreement with any Noteholder
providing for a method of payment, or notice by the Indenture Trustee or any
Note Paying Agent to such Noteholder, 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 Trust 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
Trust 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.
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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.
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 Trust 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.
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SECTION 11.16 Trust Obligation.
No recourse may be taken, directly or indirectly, with respect to the
obligations of the Trust, the Sponsor, the Originators, 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 Originators, the Master Servicer, the Indenture
Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a
beneficial interest in the Trust or (iii) any partner, owner, beneficiary,
agent, officer, director, employee or agent of the Sponsor, the Originators, the
Master Servicer, the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Trust, the Sponsor, the
Originators, the Master Servicer, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Sponsor, the Originators, 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 Trust 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 not at
any time institute against the Sponsor, the Trust, or any Certificateholder or
join in any institution against the Sponsor, the Trust or any Certificateholder
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 Trust agrees that, on reasonable prior notice, it will permit any
representative of the Indenture Trustee or of the Insurer, during the Trust's
normal business hours, to examine all the books of account, records, reports,
and other papers of the Trust, to make copies and extracts therefrom, to cause
such books to be audited by independent certified public accountants, and to
discuss the Trust's affairs, finances and accounts with the Trust'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.
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SECTION 11.19 Limitation of Liability.
It is expressly understood and agreed by the parties hereto that (a)
this Indenture is executed and delivered by Wilmington Trust Company, not
individually or personally but solely as Owner Trustee of the Trust 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 Trust 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 Trust, (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 Indenture 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 Trust or be liable
for the breach or failure of any obligation, representation, warranty or
covenant made or undertaking by the Trust under this Indenture or any related
documents.
SECTION 11.20 Rights of the Insurer to Exercise Rights of Noteholders.
By accepting its Notes, each Noteholder agrees that unless an Insurer
Default exists, the Insurer shall have the right to exercise all rights of the
Noteholders under this Indenture without any further consent of the Noteholders,
including, without limitation:
(i) the right to direct the actions of the Indenture Trustee during
the continuance of an Event of Default; and
(ii) the right to vote on proposed amendments to this Indenture.
In addition, each Noteholder agrees that, unless an Insurer Default
exists, any rights may be exercised by the Noteholders only with the prior
written consent of the Insurer.
Notwithstanding any provision in this Indenture to the contrary, so long
as an Insurer Default has occurred and is continuing, the Insurer shall have no
rights to exercise any voting rights of the Noteholders hereunder, nor shall the
Indenture Trustee be required to obtain the prior written consent of, or act at
the direction of, the Insurer.
SECTION 11.21 Consent and Direction of Insurer.
Unless otherwise specified, with respect to (i) each action which
requires the consent of the Insurer, such consent shall only be required if no
Insurer Default shall have occurred and be continuing and (ii) each action which
the Insurer may take or direct another party to take, such action or direction
may only be taken or given if no Insurer Default shall have occurred and be
continuing.
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SECTION 11.22 Rules by Indenture Trustee.
The Indenture Trustee may make reasonable rules for any meeting of
Noteholders.
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IN WITNESS WHEREOF, the Trust 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 2000-A,
By: WILMINGTON TRUST COMPANY, not
in its individual capacity but solely as
Owner Trustee
By: /s/ Xxxxxx X. XxxXxxxxx
---------------------------
Name: Xxxxxx X. XxxXxxxxx
Title: Vice President
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A., not in its individual capacity
but solely as Indenture Trustee
By: /s/ Xxxx XxXxxxx
---------------------------
Name: Xxxx XxXxxxx
Title: Assistant Secretary
73
EXHIBIT A
[Form of Note]
REGISTERED $__________
No. A-1
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. 00000XXX0
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trust or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
ADVANTA REVOLVING HOME EQUITY LOAN TRUST 2000-A
ADVANTA REVOLVING HOME EQUITY LOAN ASSET-BACKED NOTES,
SERIES 2000-A
Advanta Revolving Home Equity Loan Trust 2000-A, a business trust
organized and existing under the laws of the State of Delaware (herein referred
to as the "Trust"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of _______________________ ($__________),
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 $__________ and
the denominator of which is $400,000,000.00 by (ii) the aggregate amount, if
any, payable from the Note Account in respect of principal on the 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 2024
Payment Date (the "Final Scheduled Payment Date"). Until the principal of this
Note is paid in full or made available for payment, the Trust will pay interest
on this Note at the rate per annum provided in the Indenture on each Payment
Date on the principal amount of this Note outstanding on the preceding Payment
Date (after giving effect to all payments of principal on this Note made on the
preceding Payment Date). Interest on this Note will accrue for each Payment Date
during the period from and including the preceding Payment Date (in the case of
the May 2000 Payment Date, from and including the Closing Date) to but excluding
the current Payment Date. Interest will be computed on the basis of the actual
number of days in the related Interest
Exhibit A-1
74
Accrual Period divided by 360 days. 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 Trust
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 Amounts 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 Trust will treat the Notes as indebtedness and
hereby instructs the Indenture Trustee to treat the Notes as indebtedness for
federal and 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 (1)
to treat the Notes as indebtedness for purposes of federal income, state and
local income and franchise and any other income taxes and (2) that no recourse
may be taken, directly or indirectly, with respect to the obligations of the
Trust, 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 Originators, the Master Servicer, the Indenture
Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a
beneficial interest in the Trust or (iii) any owner, beneficiary, agent,
officer, director or employee of the Sponsor, the Originators, the Master
Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity,
any holder of a beneficial interest in the Trust, the Sponsor, the Originators,
the Master Servicer, the Owner Trustee or the Indenture Trustee or of any
successor or assign of the Sponsor, the Originators, 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.
[Remainder of page intentionally left blank]
Exhibit A-2
75
IN WITNESS WHEREOF, the Trust has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer.
Date: April 27, 2000 ADVANTA REVOLVING HOME EQUITY
LOAN TRUST 2000-A
By: WILMINGTON TRUST COMPANY, not
in its individual capacity but solely as
Owner Trustee under the Trust Agreement
By:_______________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: April 27, 2000 BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
not in its individual capacity but solely as
Indenture Trustee
By:____________________________________
Name:
Title:
Exhibit A-3
76
REVERSE OF NOTE
This Note is one of a duly authorized issue of Notes of the Trust,
designated as the Advanta Revolving Home Equity Loan Asset Backed Notes, Series
2000-A (herein called the "Notes"), all issued under an Indenture dated as of
April 1, 2000 (such indenture, as supplemented or amended, is herein called the
"Indenture"), between the Trust 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 Trust, the Indenture Trustee and the Noteholders.
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 Notes are and will be secured by the Trust Estate pledged as
security therefor as provided in the Indenture.
Principal of the 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 May 25, 2000. 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 an Event of Default has occurred and shall be
continuing, the Notes may be declared immediately due and payable. All principal
payments on the Notes shall be made pro rata to the Noteholders entitled
thereto.
Payments of interest on this Note are due and payable on each Payment
Date, together with the installment of principal, if any, to the extent such
payment is not the final payment of this Note, and shall be made by check mailed
to the Person whose name appears as the Noteholder (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 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 Noteholders 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 Trust, will notify the Person who was the
Noteholder 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
Exhibit A-4
77
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 Trust shall pay interest on overdue installments of interest at the
Note Interest Rate to the extent lawful.
The Policy does not cover any Net Funds Cap Carry-Forward Amount,
Prepayment Interest Shortfalls or Relief Act Shortfalls.
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 Master Servicer or any Master Servicer Affiliate, on any Payment Date
following the Payment Date on which the Pool Principal Balance has been reduced
to 10% or less of the Original Note 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 Trust 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 Noteholder 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 by
accepting the benefits of the Indenture that such Noteholder will not at any
time institute against the Sponsor, or the Trust or join in any institution
against the Sponsor, or the Trust 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 Trust, the Indenture Trustee and the Insurer and any agent of the Trust, 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 Trust, the Indenture Trustee nor any
such agent shall be affected by notice to the contrary.
Exhibit A-5
78
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trust and the rights of the Noteholders under the Indenture at any time by the
Trust with the prior written consent of the Insurer and the Noteholders holding
a majority of the Note Balance at the time Outstanding. Any such consent or
waiver by the Noteholder (or any one of more Predecessor Notes) shall be
conclusive and binding upon such Noteholder and upon all future Noteholders 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 Noteholders issued thereunder but with the prior written
consent of the Insurer.
The term "Trust" as used in this Note includes any successor to the
Trust under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Trust, 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 other Operative Documents, neither Wilmington
Trust Company in its individual capacity, any owner of a beneficial interest in
the Trust, 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 Trust for the sole purposes of binding the interests of
the Trust in the assets of the Trust. The Noteholder by the acceptance hereof
agrees that except as expressly provided in the Indenture or the other Operative
Documents, in the case of an Event of Default under the Indenture, the
Noteholder 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
Trust for any and all liabilities, obligations and undertakings contained in the
Indenture or in this Note.
Exhibit A-6
79
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: ________________ ___________________________________
*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.
Exhibit A-7
80
EXHIBIT B
[Form of Indenture Trustee Monthly Report]
81
ANNEX 1
TO THE INDENTURE
DEFINED TERMS
"Accelerated Principal Payments": With respect to any Payment Date, a
payment to be paid from Excess Cashflow received as a payment of principal by
the Noteholders, for the purpose of increasing the Overcollateralization Amount
to the Specified Overcollateralization Amount, and equal to the lesser of (x)
the amount of such Excess Cashflow and (y) the Overcollateralization Deficiency
Amount.
"Accepted Servicing Practices": The Master Servicer's normal servicing
practices in servicing and administering mortgage loans for its own account,
which in general will conform to the mortgage servicing practices of prudent
mortgage lending institutions which service for their own account mortgage loans
of the same type as the Mortgage Loans in the jurisdictions in which the related
Mortgaged Properties are located.
"Account": The Note Account, the Principal and Interest Account, the
Pre-Funding Account or the Capitalized Interest Account, each of which shall be
(i) an account maintained at a Designated Depository Institution or (ii) if the
applicable account is a segregated trust account, maintained with the corporate
trust department of a federal depository institution or a state chartered
depository institution subject to regulations regarding fiduciary funds on
deposit similar to Title 12 of the Code of Federal Regulations Section 9.10(b),
which in the case of either clause (i) or (ii), has corporate trust powers,
acting in its fiduciary capacity, and in accordance with Section 8.3 of the
Indenture or, with respect to the Principal and Interest Account, Section 4.9 of
the Sale and Servicing Agreement.
"Act": has the meaning specified in Section 11.3(a) of the Indenture.
"Addition Notice": With respect to the transfer of Subsequent Mortgage
Loans to the Trust pursuant to Section 2.6(b) of the Sale and Servicing
Agreement, the notice (which shall be given not later than two Business Days
prior to the related Transfer Date), of the Sponsor's designation of Subsequent
Mortgage Loans to be sold to the Trust, such notice shall include the aggregate
Principal Balance and the approximate weighted average Coupon Rate of such
Subsequent Mortgage Loans.
"Additional Balance": As to any Mortgage Loan and any day, the aggregate
amount of all Draws by the related Mortgagor conveyed to the Trust after the
Closing Date pursuant to Section 2.1 of the Sale and Servicing Agreement, it
being understood that the Trust shall not be required to fund any Additional
Balances.
"Advanta Bank Corp.": A Utah industrial loan corporation, including any
successors and assigns.
"Advanta Finance Corp.": A Nevada corporation, including any successors
and assigns.
"Advanta National Bank": A national banking association located in
Delaware.
Annex 1-1
82
"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 Conduit Receivables, Inc.
"Appraised Value": As to any Mortgaged Property, the value established
by a drive-by inspection, a full appraisal or a statistical property valuation
of such Mortgaged Property.
"Assignee": With respect to any Person, any direct or indirect assignee,
pledgee or other transferee of such Person.
"Assignment of Mortgage": With respect to each Mortgage Loan, an
assignment of the Mortgage, notice of transfer or equivalent instrument, in
recordable form, sufficient under the laws of the jurisdiction wherein the
related Mortgaged Property is located to reflect the recordation of the pledge
of the Mortgage Loan to the Indenture Trustee.
"Assignor": With respect to any Person, any immediate or mediate
assignor, pledgor or other transferor to such Person of any right, title or
interest in or to any property of any kind whatsoever.
"Authorized Officer": With respect to any Person, any person who is
authorized to act for such Person in matters relating to this Indenture, 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": With respect to any Payment Date, the following
amounts, without duplication of any amount described more than once in the
following clauses (i) through (v):
(i) any Insured Payments;
(ii) the proceeds of any final liquidation of the assets of the Trust;
(iii) the Monthly Remittance Amount remitted by the Master Servicer or
any Sub-Servicer;
(iv) on each Payment Date occurring during the Pre-Funding Period, the
Pre-Funding Earnings and the Capitalized Interest Requirement for
such Payment Date; and
(v) at the end of the Pre-Funding Period, any amount remaining in the
Pre-Funding Account in accordance with Section 8.5(d).
Annex 1-2
83
"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 of the Indenture.
"Business Day": Any day that is not a Saturday, Sunday or other day on
which any of the Insurer, the Master Servicer or the Sponsor is closed or
commercial banking institutions in the State of New York or Delaware 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 of the Indenture and maintained by
the Indenture Trustee.
"Capitalized Interest Amount": The amount on deposit in the Capitalized
Interest Account, which shall initially be $2,253,543.85.
"Capitalized Interest Requirement": As to any Payment Date, an amount
equal to the product of (x) the sum of the Note Interest Rate and the rate at
which the Insurer premium is calculated, and (y) the amount on deposit in the
Pre-Funding Account as of the preceding Payment Date (or as of the Closing Date,
in the case of the first Payment Date), less investment earnings on the amounts
on deposit in the Pre-Funding Account as of the preceding Payment Date.
"Certificateholders": The holders of the Certificates issued pursuant to
the Trust Agreement.
"Certificates": The trust certificates evidencing the beneficial
ownership interests in the Trust.
"Civil Relief Act": The Soldiers' and Sailors' Civil Relief Act of 1940,
as amended.
"Clean-Up Call Date": The first date on which the Notes may be redeemed
pursuant to Section 10.1(b) of the Indenture.
"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.
"Clearing Agency": Means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"Closing Date": April 27, 2000.
"Code": The Internal Revenue Code of 1986, as amended, and any successor
statute.
"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 (A) the Credit Limit and (B) as of the date of execution of the related
Credit Line Agreement (or as of any subsequent date, in connection
Annex 1-3
84
with an increase in the Credit Limit for such Mortgage Loan) the sum of the
outstanding principal balance of any mortgage loan or mortgage loans that are
senior in priority to the Mortgage Loan and which are secured by the same
Mortgaged Property and the denominator of which is the lesser of (C) 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 (D) in the
case of a Mortgaged Property purchased within one year of the date of execution
of the Credit Line Agreement, the purchase price thereof.
"Controlling Party": Means (i) the Insurer, so long as no Insurer
Default shall have occurred and be continuing, or (ii) the Indenture Trustee,
for so long as an Insurer Default shall have occurred and be continuing;
provided, however, that the Insurer's rights as Controlling Party shall be
immediately reinstated following the cure of any Insurer Default.
"Corporate Trust Office": The Indenture Trustee's office at 0000 Xxxx
Xx. Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000.
"Coupon Rate": With respect to any Mortgage Loan and as of any day, the
per annum rate of interest, as specified in the Credit Line Agreement,
applicable to the calculation of interest on the outstanding Principal Balance.
"Credit Limit": As to any Mortgage Loan, the maximum principal balance
stated under the terms of the related Credit Line Agreement.
"Credit Limit Utilization Rate": As to any Mortgage Loan, at any time
during the Draw Period, the percentage equivalent of a fraction, the numerator
of which is the outstanding Principal Balance 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 or promissory note executed by the related
Mortgagor and any amendment or modification thereof.
"Cut-Off Date": With respect to each (i) Initial Mortgage Loan, the
Initial Cut-Off Date, (ii) Qualified Replacement Mortgage Loan, the related
Replacement Cut-Off Date or (iii) Subsequent Mortgage Loan, the related
Subsequent Cut-Off Date.
"Cut-Off Date Pool Balance": The sum of (x) the aggregate Cut-Off Date
Principal Balance of the Initial Mortgage Loans ($302,265,974.63), and (y) the
initial Pre-Funded Amount ($113,451,856.05), which sum is $415,717,830.60.
"Cut-Off Date Principal Balance": With respect to any Mortgage Loan, (a)
the unpaid principal balance thereof as of the related Cut-Off Date and (b) for
Mortgage Loans originated after the Cut-Off Date but prior to the Closing Date,
the unpaid principal balance of such Mortgage Loans as of its origination date.
Annex 1-4
85
"Debt Service Reduction": With respect to any Mortgage Loan, as directed
by a court of competent jurisdiction, a reduction of the minimum amount required
to be paid by the related Mortgagor.
"Deficiency Amount": As defined in the Policy.
"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 of the
Indenture.
"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 any Account, a
federal or state chartered depository 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 "A2" or better by Xxxxx'x, the
long term debt obligations of which shall be rated at least "AA-" by S&P and the
commercial paper, short term debt obligations or short-term deposits of which
shall be rated "P-1" or better by Xxxxx'x and "A-1+" or better by S&P, unless
otherwise approved in writing by the Insurer and each of Xxxxx'x 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 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, or (iv) a principal subsidiary of a bank holding company, and, in each
case acting or designated by the Master Servicer or the Indenture Trustee as the
depository institution for the any Account; provided, however, that any such
institution or association shall have combined capital, surplus and undivided
profits of at least $100,000,000.
"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, the Master Servicer and the Indenture Trustee.
Annex 1-5
86
"Document Delivery Requirements": The Sponsor's obligations to deliver
certain legal documents, to prepare and record certain Assignments of Mortgage
or to deliver certain opinions relating to Assignments of Mortgage, in each case
with respect to the Mortgage Loans and upon certain conditions as set forth in
Section 2.1 of the Sale and Servicing Agreement.
"Draw": With respect to any Mortgage Loan, an additional borrowing by
the Mortgagor 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. The Draw Period may be extended pursuant to the terms of the Credit Line
Agreement (provided that any such extension shall be in accordance with the
provisions set forth herein with respect to Mortgage Loan modifications) and the
Sale and Servicing Agreement, and will be limited by the provisions set forth in
Section 2.2 of the Sale and Servicing Agreement.
"Eligible Investments": Those investments so designated pursuant to
Section 8.8 of the Indenture.
"ERISA": Means the Employee Retirement Income Security Act of 1974, as
amended.
"Event of Default": As defined in Section 5.4 of the Indenture.
"Event of Servicing Termination": As defined in Section 5.1 of the Sale
and Servicing Agreement.
"Excess Cashflow": With respect to any Payment Date, the Available Funds
with respect to such Payment Date which remain on deposit in the Note Account
after taking into account the distributions listed in clauses (i) through (viii)
of Section 8.6(b) of the Indenture on such Payment Date.
"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 2024.
"First Mortgage Loan": A Mortgage Loan the Mortgage of which creates a
first priority mortgage lien with respect to any Mortgaged Property.
"Fixed Allocation Percentage": With respect to the Mortgage Loans,
94.8%.
Annex 1-6
87
"FNMA": The Federal National Mortgage Association, a federally chartered
and privately owned corporation existing under the Federal National Mortgage
Association Charter Act as amended, and any successor thereto.
"Foreclosure Profit": With respect to a Liquidated Mortgage Loan, the
amount, if any, by which (x) the aggregate of its Net Liquidation Proceeds
exceeds (y) the sum of (i) the related Principal Balance and (ii) accrued and
unpaid interest thereon at the applicable Coupon Rate from the date interest was
last paid through the date of receipt of the final Liquidation Proceeds.
"Formula Rate ": For any Interest Accrual Period, (x) with respect to
any Payment Date which occurs on or prior to the Clean-Up Call Date, LIBOR plus
0.25% per annum and (y) for any Payment Date thereafter, LIBOR plus 0.50% per
annum.
"Grant": Means mortgage, pledge, bargain, 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 Trust Estate or of any 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 Trust Estate 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.
"Guaranties": The Letter Agreement, dated as of April 27, 2000, among
the Underwriters, the Insurer and AMHC and the Letter Agreement, dated as of
April 27, 2000, among the Insurer, the Indenture Trustee and AMHC.
"HLTV HELOC Mortgage Loan": Any Mortgage Loan with a Combined
Loan-to-Value Ratio of greater than 100%.
"Highest Lawful Rate": As defined in Section 7.12 of the Sale and
Servicing Agreement.
"Indebtedness": 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
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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
April 18, 2000, among the Insurer and the Underwriters.
"Indenture": The Indenture dated as of April 1, 2000 between the Trust
and the Indenture Trustee, as the same may be amended and supplemented from time
to time in accordance with the terms thereof.
"Indenture Trustee": Bankers Trust Company of California, N.A., located
on the date of execution of the Indenture at 0000 Xxxx Xx. Xxxxxx Xxxxx, Xxxxx
Xxx, Xxxxxxxxxx 00000, not in its individual capacity but solely as Indenture
Trustee under the Indenture, and any successor thereunder.
"Indenture Trustee Fee": With respect to any Payment Date, the product
of (x) one-twelfth of the Indenture Trustee Fee Rate and (y) the sum of (i) the
Pool Principal Balance as of the opening of business on the first day of the
related Remittance Period and (ii) the Pre-Funded Amount as of the opening of
business on the first day of the related Remittance Period.
"Indenture Trustee Fee Rate": 0.011% (1.1 basis points) per annum.
"Independent": When used with respect to any specified Person, that the
person (a) is in fact independent of the Trust, 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 Trust, any such other obligor, the Sponsor or any Affiliate of
any of the foregoing Persons and (c) is not connected with the Trust, 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": 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 of the Indenture,
prepared by an Independent appraiser or other expert, and such opinion or
certificate shall state that the signer has read this definition of
"Independent" and that the signer is Independent within the meaning thereof.
"Initial Cut-Off Date": The close of business on March 31, 2000.
"Initial Mortgage Loans": Shall mean the Mortgage Loans conveyed to the
Trust by the Sponsor on the Closing Date.
"Insurance Agreement": The agreement defined in the Preamble of the
Indenture.
"Insurance Agreement Event of Servicing Termination": An Event of
Servicing Termination as defined in the Insurance Agreement.
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"Insured Amounts": With respect to the Notes and any Payment Date, the
Deficiency Amount for such Payment Date.
"Insured Payments": With respect to the Notes and any Payment Date, the
aggregate amount actually paid by the Insurer to the Indenture Trustee in
respect of (i) Insured Amounts for such Payment Date and (ii) Preference Amounts
for any given Business Day.
"Insurer": Ambac Assurance Corporation, a Wisconsin-domiciled stock
insurance corporation, or any successor thereto, as issuer of the Policy.
"Insurer Default": Means the failure and the continuance of such failure
by the Insurer to make a payment required under the Policy in accordance with
the terms thereof.
"Interest Accrual Period": With respect to any Payment Date, the period
from and including the prior Payment Date (or, in the case of the first Payment
Date, from and including the Closing Date) to, but excluding, the current
Payment Date.
"Interest Collections": With respect to the Mortgage Loans during the
related Remittance Period, the sum of (i) all interest payments paid by or on
behalf of Xxxxxxxxxx and collected by the Master Servicer, except that with
respect to Prepaid Installments, interest payments shall be deemed to be paid by
or on behalf of Mortgagors and collected by the Master Servicer in the
Remittance Period to which such payments relate, (ii) any other amounts
constituting interest collected by the Master Servicer, (iii) with respect to
Mortgage Loans other than HTLV Mortgage Loans, the portion of Net Liquidation
Proceeds allocated to interest and (iv) with respect to HLTV Mortgage Loans, the
total amount of "Net Liquidation Proceeds." The terms of the related Credit Line
Agreement shall determine the portion of each payment that constitutes interest
(other than with respect to Net Liquidation Proceeds).
"Interest Determination Date": With respect to any Interest Accrual
Period, the second LIBOR Business Day preceding the first day of such Interest
Accrual Period.
"Interest Distribution Amount": With respect to any Payment Date, the
product of (i) the Note Interest Rate multiplied by the actual number of days in
the Interest Accrual Period divided by 360 days and (ii) the Note Balance as of
the day immediately prior to such Payment Date.
"Interest Remittance Amount": With respect to any Remittance Date, the
sum, without duplication, of (i) Interest Collections for such Remittance
Period, less the Servicing Fee for the related Remittance Period, (ii) the
portion of the Loan Reacquisition Price and the Substitution Amount relating to
interest on the Mortgage Loans reacquired and (iii) the proceeds of any
liquidation of the Trust Estate (to the extent such proceeds relate to
interest).
"Interest Shortfall Amount": With respect to any payment date, the sum
of (i) the amount by which the Interest Distribution Amount exceeded the actual
amount distributed in respect of interest and (ii) any
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unreimbursed Interest Shortfall Amounts from prior payment dates together with
interest on such amounts at the Note Interest Rate.
"Issuer Order" and "Issuer Request": Means a written order or request
signed in the name of the Trust by any one of its Authorized Officers and
delivered to the Indenture Trustee.
"Junior Mortgage Loan": A Mortgage Loan the Mortgage of which creates a
junior priority mortgage lien with respect to the related Mortgaged Property.
"LIBOR": As defined in Section 2.6(b) of the Indenture.
"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 for which the
related Credit Line Agreement provides for a lifetime rate cap, the maximum
Coupon Rate permitted at any time under the terms of the related Credit Line
Agreement.
"Liquidated Mortgage Loan": Either (i) any HLTV HELOC Mortgage Loan that
has been Delinquent for a period of 180 consecutive days (irrespective of any
grace periods) or as to which the Master Servicer has determined that it has
recovered all amounts it expects to recover from such Mortgage Loan, whichever
is the first to occur, or (ii) any Mortgage Loan other than an HLTV HELOC
Mortgage Loan as to which the Master Servicer has determined that it has
recovered all amounts it expects to recover from such Mortgage Loan. The Trust
will be entitled to recoveries from any Liquidated Mortgage Loan and any such
recoveries (i) in the case of HLTV Mortgage Loans, shall be treated as Interest
Collections and (ii) in the case of non HLTV Mortgage Loans, shall be treated as
Principal Collections or Interest Collections. A Mortgage Loan which is
reacquired from the Trust pursuant to Section 2.2(b), 3.3(c) or 3.4 of the Sale
and Servicing Agreement shall not be a "Liquidated Mortgage Loan."
"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, include, without limitation, legal fees
and expenses, and any unreimbursed Servicing Advances expended by the Master
Servicer or any Sub-Servicer pursuant to Section 4.10 and 4.13 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 Mortgage Insurance Policy but
excluding any amounts drawn on the Policy) recovered by the Master Servicer,
whether through trustee's sale, foreclosure sale, sale to a third party or
otherwise.
"Loan Reacquisition Price": With respect to any Mortgage Loan reacquired
from the Trust on a Remittance Date pursuant to Section 2.2(b), 3.3(c) or 3.4 of
the Sale and Servicing Agreement, an amount, without duplication, equal to (i)
the outstanding Principal Balance of such Mortgage Loan as of the date
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of reacquisition, (ii) one month's interest on (if not already deposited in the
Principal and Interest Account) the outstanding Principal Balance thereof as of
the beginning of the preceding Remittance Period computed at the Coupon Rate and
(iii) all Servicing Advances theretofore made with respect to such Mortgage Loan
and not subsequently recovered from the related Mortgage Loan, including
Nonrecoverable Advances.
"Managed Amortization Period": The period commencing on the Closing Date
and ending on the earlier to occur of (x) the end of the Remittance Period
related to the May 2003 Payment Date and (y) the end of the Remittance Period
related to the Payment Date which immediately precedes the occurrence of a Rapid
Amortization Event.
"Margin": With respect to each Mortgage Loan, the fixed percentage
amount set forth in the related Credit Line Agreement which amount is added to
the index specified in the related Credit Line Agreement to determine the Coupon
Rate for such Mortgage Loan, subject to any maximum or minimum.
"Master Servicer": Advanta Mortgage Corp. USA, a Delaware corporation,
and its permitted successors and assigns.
"Master Servicer Affiliate": A Person that is (i) controlling,
controlled by or under common control with the Master Servicer, (ii) qualified
to service residential mortgage loans, and (iii) subservicing the Mortgage
Loans.
"Master Servicer's Trust Receipt": The Master Servicer's trust receipt
in the form set forth as Exhibit F to the Sale and Servicing Agreement.
"Monthly Remittance Amount": With respect to each Remittance Date, the
sum of the Principal Remittance Amount and the Interest Remittance Amount.
"Moody's": Xxxxx'x Investors Service, Inc.
"Mortgage": The mortgage, deed of trust or other instrument creating a
first or junior lien in real property securing each Credit Line Agreement.
"Mortgage Files": For each Mortgage Loan:
(a) The original Credit Line Agreement, or a certified copy
thereof, bearing all intervening endorsements, endorsed either (i) "Pay to the
order of Bankers Trust Company of California, N.A., as custodian or trustee
under the applicable custody or trust agreement, without recourse" or (ii) "Pay
to the order of Bankers Trust Company of California, N.A., as custodian or
trustee under the applicable custody or trust agreement, without recourse,
Advanta as Master Servicer," or (iii) "Pay to the order of Bankers Trust Company
of California, N.A., as custodian or trustee" by [Seller, signature, name,
title] and signed in the name of the previous owner by an authorized officer (in
the event that the Mortgage Loan was acquired by the previous owner in a merger
the signature must be in the following form: "[the previous owner], successor by
merger to [name of predecessor]," in the event that the Mortgage Loan was
acquired
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or originated while doing business under another name, the signature must be in
the following form: "[the previous owner], formerly known as [previous name]",
or (iv) "Pay to the order of Bankers Trust Company of California, N.A., without
recourse" or (v)"Pay to the order of _________, without recourse". The original
Credit Line Agreement should be accompanied by any rider made in connection with
the origination of the related Mortgage Loan;
(b) The original of any guaranty executed in connection with the
Credit Line Agreement;
(c) The original Mortgage with evidence of recording thereon or
copies certified by the related recording office or if the original Mortgage has
not yet been returned from the recording office, a certified copy of the
Mortgage;
(d) The originals of any assumption, modification, consolidation
or extension agreements;
(e) The original Assignment of Mortgage of each Mortgage Loan to
(1) "Bankers Trust Company of California, N.A., as custodian or trustee," or (2)
"Bankers Trust Company of California, N.A., as trustee" or (3) in blank. In the
event that the Mortgage Loan was acquired by the previous owner in a merger, the
Assignment of Mortgage must be the "(previous owner), successor by merger to
(names of predecessor)"; and in the event that the Mortgage Loan was acquired or
originated by the previous owner while doing business under another name, the
Assignment of Mortgage must be by the "(previous owner), formerly known as
(previous name)"; and
(f) The originals of all intervening Assignments of Mortgage, if
applicable, showing a complete chain of assignment from origination to the
related Seller, with evidence of recording thereon (or, if an original
intervening assignment has not been returned from the recording office, a
certified copy thereof).
"Mortgage Insurance Policy": Any hazard, title or primary mortgage
insurance policy relating to a Mortgage Loan, but excluding any non-mortgage
related or credit life insurance policy. The term "Mortgage Insurance Policy"
shall not include the Policy.
"Mortgage Insurance Proceeds": Proceeds paid by any insurer pursuant to
any Mortgage 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 Liquidation 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.
"Mortgage Loan": Each mortgage loan transferred and assigned to the
Trust pursuant to Section 2.1 or Section 2.6 of the Sale and Servicing
Agreement, together with any Subsequent Mortgage Loans and any Qualified
Replacement Mortgage Loans substituted therefor in accordance with the Sale and
Servicing Agreement, which are held as a part of the Trust Estate. The term
"Mortgage Loan" includes any
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Mortgage Loan which is Delinquent, which relates to a foreclosure or which
relates to a Mortgaged Property that is REO Property prior to such Mortgaged
Property's disposition by the Trust and any Mortgage Loan the related Mortgagor
of which is in bankruptcy. Any mortgage loan which, although intended by the
parties hereto to have been, and which purportedly was, transferred and assigned
to the Trust by the Sponsor, in fact was not transferred and assigned to the
Trust for any reason whatsoever shall nevertheless be considered a "Mortgage
Loan" for all purposes of the Operative Documents.
"Mortgaged Property": The underlying property securing a Mortgage Loan.
"Mortgagor": The obligor under a Credit Line Agreement.
"Net Funds Cap Carry-Forward Amount": With respect to any Payment Date,
the sum of (i) the excess of the amount of interest accrued during the related
Interest Accrual Period based on the Formula Rate, over the interest accrued
during the related Interest Accrual Period based on the Net Funds Cap Rate, (ii)
any such amounts described in clause (i) for prior Payment Dates and not
previously paid and (iii) interest on the amounts described in clauses (i) and
(ii) at the then-applicable Formula Rate.
"Net Funds Cap Rate": The per annum rate equal to (x)(A) the product of
(i) twelve and (ii) the interest due on the Mortgage Loans at the applicable
Coupon Rate during the related Remittance Period minus the amount of aggregate
Prepayment Interest Shortfalls for the related Remittance Period and minus the
amount of aggregate Relief Act Shortfalls for the related Remittance Period (net
of the related Servicing Fee, the Indenture Trustee Fee, the Owner Trustee Fee
and the Premium Amount), divided by (B) the Pool Principal Balance as of the
opening of such related Remittance Period, less (y) 0.50%.
"Net Liquidation Proceeds": As to any Liquidated Mortgage Loan,
Liquidation Proceeds net of, without duplication, (i) Liquidation Expenses other
than any such expenses reflected in the calculation of Mortgage Insurance
Proceeds for such Liquidated Mortgage Loan, (ii) unreimbursed Servicing Advances
incurred in connection with such Liquidated Mortgage Loan and (iii) accrued and
unpaid Servicing Fees with respect to such Mortgage Loan through the date of
liquidation. 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 Remittance Period, the
excess of (i) Principal Collections over (ii) the aggregate amount of all
Additional Balances arising during such Remittance Period; provided, however,
that, in no event will Net Principal Collections be less than zero.
"Nonrecoverable Advance": With respect to any Mortgage Loan, any
Servicing Advance previously made and not reimbursed pursuant to Section 4.10 of
the Sale and Servicing Agreement or any Servicing Advance proposed to be made in
respect of a Mortgage Loan, either of which, in the good faith business judgment
of the Master Servicer would not be ultimately recoverable.
"Note": Any note executed and authenticated by the Indenture Trustee in
substantially the form set forth in Exhibit A to the Indenture.
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"Note Account": The Note Account established in accordance with Section
8.3 of the Indenture and maintained by the Indenture Trustee.
"Note Balance": As of any date of determination, the Original Note
Balance, less any amounts actually distributed as principal to the Noteholders
on all prior Payment Dates.
"Note Interest Rate": As to any Payment Date, the lesser of (i) the
Formula Rate and (ii) the Net Funds Cap Rate.
"Note Interest Shortfall": As of any Payment Date, the sum of (i) the
amount by which the Interest Distribution Amount for such Payment Date exceeds
the amount actually distributed to the Noteholders on such Payment Date and (ii)
any unreimbursed Note Interest Shortfalls from prior Payment Dates together with
interest accrued thereon at the Note Interest Rate for such Payment Date.
"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 of the Indenture and is authorized by the Trust to make payments to
and distributions from the Note Account, including payment of principal of or
interest on the Notes on behalf of the Trust.
"Note Register": The register maintained by the Indenture Trustee in
accordance with Section 2.3 of the Indenture, in which the names of the
Noteholders are set forth.
"Note Registrar": The Indenture Trustee, acting in its capacity as Note
Registrar appointed pursuant to Section 2.3 of the Indenture, or any duly
appointed and eligible successor thereto.
"Noteholder": A Person in whose name a Note is registered in the Note
Register.
"Officer's Certificate": A certificate signed by any Authorized Officer
of the Trust, under the circumstances described in, and otherwise complying
with, the applicable requirements of Section 11.1 of the Indenture and TIA
Section 314.
"Operative Documents": Collectively, the Indenture, the Guaranties, the
Trust Agreement, the Sale and Servicing Agreement, the Subsequent Transfer
Agreements, the Policy, the Notes, the Purchase Agreement, 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 the Indenture, be employees of or
counsel to the Trust or Sponsor and which shall comply with any applicable
requirements of Section 11.1 of the Indenture.
"Original Note Balance": $400,000,000.00.
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"Originators": Advanta Bank Corp., Advanta National Bank and Advanta
Finance Corp.
"Outstanding": As of any date of determination, all 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 Noteholders;
(iii) Notes in exchange for or in lieu of which other Notes have
been executed and delivered pursuant to this Indenture, 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 of the
Indenture;
provided, however, that to the extent of any payments made under the
Policy by the Insurer and not reimbursed, such Notes shall be deemed to be
"Outstanding" for all purposes, not defeased or otherwise satisfied and not be
considered paid by the Trust.
"Overcollateralization Amount": As of any Payment Date, the excess, if
any, of (x) the Pool Principal Balance at the end of the related Remittance
Period plus the Pre-Funded Amount over (y) the Note Balance (after taking into
account the payment of principal to the Noteholders on such Payment Date).
"Overcollateralization Deficiency Amount": With respect to any Payment
Date, the difference, if any, between (i) the Specified Overcollateralization
Amount and (ii) the Overcollateralization Amount.
"Overcollateralization Deficit": With respect to any Payment Date, the
amount, if any, by which (i) the Note Balance, after taking into account the
payment of principal to the Noteholders on such Payment Date, exceeds (ii) the
Pool Principal Balance plus the Pre-Funded Amount at the end of the related
Remittance Period.
"Overcollateralization Reduction Amount": With respect to any Payment
Date, the lesser of (i) the excess of (x) the Overcollateralization Amount,
after taking into account all payments of principal (without taking into account
any Overcollateralization Reduction Amount) that were applied as a reduction in
the Note Balance on such Payment Date, over (y) the Specified
Overcollateralization Amount for such Payment Date and (ii) the Scheduled
Principal Distribution Amount (without taking into account any
Overcollateralization Reduction Amount).
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"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.
"Owner Trustee Fee": With respect to any Payment Date, one-twelfth of
$3,000 per annum.
"Payment Date": Any date on which the Indenture Trustee is required to
make distributions to the 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 next succeeding Business Day.
"Percentage Interest": As to any Note and as of any date of
determination, that amount, expressed as a percentage, equal to a fraction, the
numerator of which is the then-outstanding principal balance of such Note and
the denominator of which is the Note Balance; and as to any Certificate, the
percentage interest set forth on such Certificate.
"Person": Any individual, corporation, partnership, joint venture,
limited liability company, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Policy": The certificate guaranty insurance policy (No. AB0358BE) with
respect to the Notes, dated April 27, 2000, issued by the Insurer to the
Indenture Trustee for the benefit of the Noteholders.
"Pool Certification": The certification of the Indenture Trustee as to
receipt of required documents that is required pursuant to Section 2.2 of the
Sale and Servicing Agreement, a form of which is attached thereto as Exhibit E.
"Pool Factor": A seven-digit decimal which the Indenture Trustee shall
compute monthly expressing the Note Balance as of each Payment Date (after
giving effect to any distribution of principal on such Payment Date) as a
proportion of the Original Note Balance. On the Closing Date, the Pool Factor
will be 1.0000000.
"Pool Principal Balance": With respect to any date of determination, the
aggregate of the Principal Balances of the Mortgage Loans as of such date.
"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 of the Indenture 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.
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"Pre-Funded Amount": The amount on deposit in the Pre-Funding Account,
which shall initially be $113,451,856.05.
"Pre-Funding Account": The Pre-Funding Account established in accordance
with Section 8.3 of the Indenture and maintained by the Indenture Trustee.
"Pre-Funding Earnings": With respect to each Payment Date during the
Pre-Funding Period, the investment earnings on the Pre-Funding Account during
the related Interest Accrual Period.
"Pre-Funding Period": The period commencing on the Closing Date and
ending on the earliest to occur of (i) the date on which the Pre-Funded Amount
(exclusive of any investment earnings) is less than $100,000, (ii) the date on
which any Event of Default or Rapid Amortization Event occurs, and (iii) August
31, 2000.
"Premium Amount": With respect to any Payment Date, the product of (x)
the actual number of days elapsed in the period from the prior Payment Date (or
with respect to the first Payment Date, the Closing Date) to and including the
day prior to the applicable Payment Date, divided by 360, (y) the Premium
Percentage (as defined in the Insurance Agreement) and (z) the Note Balance on
such Payment Date after taking into account any distributions of the Scheduled
Principal Distributions Amount to be made on such Payment Date.
"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.
"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). The proceeds of any Mortgage Insurance Policy or credit life
insurance which are to be applied as a payment of principal on the related
Mortgage Loan in advance of the scheduled payment shall be deemed to be
Prepayments for all purposes of this Agreement.
"Prepayment Interest Shortfalls": With respect to any Payment Date, for
each Mortgage Loan that was the subject of a Prepayment, the amount, if any, by
which (i) one month's interest at the applicable Coupon Rate on the Principal
Balance of such Mortgage Loan immediately prior to such Prepayment exceeds (ii)
the amount of interest paid or collected in connection with such Prepayment.
"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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"Principal and Interest Account": Collectively, each principal and
interest account created by the Master Servicer or any Sub-Servicer pursuant to
Section 4.9(a) of the Sale and Servicing Agreement, or pursuant to any
Sub-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, minus (ii) all collections credited as
principal against the Principal Balance of any Mortgage Loan prior to such day
in accordance with the Credit Line Agreement. 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": With respect to any Payment Date and any
Mortgage Loan, the sum of all payments by or on behalf of Mortgagors and any
other amounts constituting principal (including, but not limited to, any portion
of Mortgage Insurance Proceeds or Net Liquidation Proceeds allocable to
principal, but excluding Foreclosure Profits and any recoveries in respect of
Charged-Off Mortgage Loans) collected by the Master Servicer 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 and the priority of payment.
"Principal Remittance Amount": With respect to any Remittance Date, the
sum, without duplication, of (i) Principal Collections for such Remittance
Period, except that with respect to Prepaid Installments, principal shall be
remitted in the scheduled Remittance Period, (ii) the portion of the Loan
Reacquisition Price and the Substitution Amount relating to principal on the
Mortgage Loans reacquired, (iii) the proceeds of any liquidation of the Trust
Estate (to the extent such proceeds relate to principal) and (iv) any Pre-Funded
Amount deposited in the Note Account at the termination of the Pre-Funding
Period.
"Proceeding": Means any suit in equity, action at law or other judicial
or administrative proceeding.
"Prospectus": That certain Prospectus, dated December 28, 1999, naming
Advanta Conduit Receivables, Inc. as registrant 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 April
18, 2000, describing the Notes issued by the Trust.
"Purchase Agreement": Means the Purchase Agreement dated as of April 1,
2000 between the Originators and the Sponsor with respect to the Mortgage Loans.
"Qualified Replacement Mortgage Loan": As defined in Section 2.3 of the
Sale and Servicing Agreement.
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"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 Xxxxx'x and S&P. 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 Insurer, notice of which
designation shall be given by the Insurer to the Indenture Trustee, and the
Indenture Trustee shall give such notice to each of the Master Servicer and the
Sponsor. References herein to the highest short term unsecured rating category
of a Rating Agency shall mean A-1+ or better in the case of S&P and P-1 or
better in the case of Xxxxx'x, 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 S&P and "Aaa" in the case of Xxxxx'x, 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 of such Mortgage Loan as of the date of
liquidation is in excess of Net Liquidation Proceeds.
"Record Date": With respect to each Payment Date, so long as the Notes
are Book Entry Notes, the Business Day preceding such Payment Date, and if the
Notes are maintained as Definitive Notes, 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) of the Indenture, the Payment Date specified by the
Master Servicer or the Trust pursuant to Section 10.2(a) of the Indenture.
"Redemption Price": As defined in Section 10.1(b) of the Indenture.
"Reference Banks": Deutsche Bank AG, Xxxxxxx'x Bank PLC, and National
Westminster Bank PLC; or such banks as are selected by the Indenture Trustee
after consultation with the Master Servicer 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 Sponsors or any Affiliate thereof, (iii)
whose quotations appear on the Telerate Screen Page 3785 on the relevant
Interest Determination Date and (iv) which have been designated as such by the
Indenture Trustee.
"Registration Statement": The Registration Statement (No. 333-92669)
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 Notes.
"Reimbursement Amount": As defined in the Policy.
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"Relief Act Shortfall": With respect to any Remittance Period and any
Mortgage Loan for which there has been a reduction in the amount of interest
collectible thereon as a result of the application of the Civil Relief Act, the
amount by which (i) interest collectible on such Mortgage Loan is less than (ii)
one month's interest on the Principal Balance of such Mortgage Loan at the
Coupon Rate.
"Remittance Date": With respect to any Payment Date, the date on which
the Master Servicer is required to remit monies on deposit in the Principal and
Interest Account to the Indenture Trustee for deposit into the Note Account,
which shall be the 18th day of each month or, if such day is not a Business Day,
the next succeeding Business Day, commencing in the month following the Closing
Date.
"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 Loan, the first day of the calendar month in which such Qualified
Replacement Mortgage Loan is conveyed to the Trust.
"Reserve Interest Rate": Means the rate per annum that the Indenture
Trustee determines to be either the arithmetic mean, rounded to the nearest
whole multiple of 1/16%, of the one-month U.S. dollar lending rates which New
York City banks selected by the Indenture Trustee are quoting on the Interest
Determination Date to the principal London offices of lending banks in the
London interbank market or, in the event that the Indenture Trustee cannot
determine the arithmetic mean, the lowest one-month U.S. dollar lending rate
which New York City banks selected by the Indenture Trustee are quoting on the
Interest Determination Date to leading European banks.
"S&P": Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx
Companies, Inc.
"Sale and Servicing Agreement": Means the Sale and Servicing Agreement,
including the Exhibits thereto, dated as of April 1, 2000, among the Trust, the
Sponsor, the Master Servicer and the Indenture Trustee, as the same may be
amended or supplemented from time to time in accordance with the terms thereof.
"SAS 70": Means the Statement on Auditing Standards No. 70, Reports on
the Processing of Transactions by Service Organizations as in effect as of the
date hereof, which may be amended from time to time.
"Schedule of Mortgage Loans": The schedule of Mortgage Loans attached to
the Indenture as Schedule I, as the same may be supplemented or amended from
time to time in connection with substitutions of Qualified Replacement Mortgage
Loans and the addition of Subsequent Mortgage Loans.
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The information contained on the Schedule of Mortgage Loans may be delivered to
the Indenture Trustee in an electronic medium.
"Scheduled Principal Distribution Amount": On any Payment Date (A)
during the Managed Amortization Period, the excess of (x) the lesser of (i) the
Fixed Allocation Percentage of Principal Collections and (ii) the Net Principal
Collections over (y) the Overcollateralization Reduction Amount, if any, with
respect to such Payment Date and (B) during the Rapid Amortization Period, the
excess of (x) the Fixed Allocation Percentage of Principal Collections over (y)
the Overcollateralization Reduction Amount, if any, with respect to such Payment
Date. In no event will the Scheduled Principal Distribution Amount on any
Payment Date be (x) less than zero or (y) greater than the then outstanding Note
Balance.
"Securities Act": The Securities Act of 1933, as amended.
"Servicing Advance": As defined in Section 4.10 and Section 4.13 of the
Sale and Servicing Agreement.
"Servicing Fee": With respect to any Remittance Period, the product of
(i) Servicing Fee Rate and (ii) the aggregate Principal Balance of the Mortgage
Loans as of the opening of business on the first day of the related Remittance
Period.
"Servicing Fee Rate": 0.75% per annum.
"Servicing Officer": Any officer of the Master Servicer or a
Sub-Servicer.
"Specified Overcollateralization Amount": The amount specified in the
Insurance Agreement.
"Sponsor": Advanta Conduit Receivables, Inc., a Nevada corporation.
"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 such
Subsequent Mortgage Loan is transferred and assigned to the Trust.
"Subsequent Mortgage Loans": The Mortgage Loans transferred and assigned
to the Trust pursuant to Section 2.6 of the Sale and Servicing Agreement, which
shall be listed on the Schedule of Mortgage Loans attached to the Subsequent
Transfer Agreement.
"Subsequent Transfer Agreement": Each Subsequent Transfer Agreement
executed by the Owner Trustee and the Sponsor substantially in the form of
Exhibit H to the Sale and Servicing Agreement, by which Subsequent Mortgage
Loans are transferred and assigned to the Trust.
"Subsequent Transfer Date": Means, with respect to any Subsequent
Mortgage Loans transferred to the Trust, the date set forth in the related
Subsequent Transfer Agreement.
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"Sub-Servicer": Any Person with whom the Master Servicer has entered
into a Sub-Servicing Agreement in accordance with Section 4.5 of the Sale and
Servicing Agreement.
"Sub-Servicing Agreement": The written contract reasonably acceptable to
the Insurer between the Master Servicer and any Sub-Servicer (other than an
Affiliated Sub-Servicer) relating to the servicing and/or administration of
certain Mortgage Loans as permitted by Section 4.5 of the Sale and Servicing
Agreement.
"Substitution Amount": In connection with the delivery of any Qualified
Replacement Mortgage Loan, if the outstanding principal amount of such Qualified
Replacement Mortgage Loan as of the applicable Replacement Cut-Off Date is less
than the related Principal Balance of the Mortgage Loan being replaced, an
amount equal to such difference together with accrued and unpaid interest on
such amount calculated at the Coupon Rate, net of the Servicing Fee, 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 date on which the
termination of the Policy and the return of the Policy to the Insurer for
cancellation occurs, (ii) the date on which the Insurer shall have received
indefeasible payment of all amounts owed to it under the Insurance Agreement and
(iii) the date on which the Indenture Trustee and the Noteholders shall have
received payment of all amounts owed to them under the Indenture.
"Transfer Date": With respect to (i) a Qualified Replacement Mortgage
Loan, the date that such Mortgage Loan is delivered to the Indenture Trustee on
behalf of the Trust, (ii) a Mortgage Loan that is reassigned to the Sponsor
pursuant to Section 2.5 of the Sale and Servicing Agreement, the date that is
specified therein, and (iii) a Subsequent Mortgage Loan, the Subsequent Transfer
Date.
"Transfer Notice Date": As defined in Section 2.5 of the Sale and
Servicing Agreement.
"Trust": Advanta Revolving Home Equity Loan Trust 2000-A created by the
Trust Agreement.
"Trust Agreement": The Trust Agreement dated as of April 1, 2000 between
the Owner Trustee and the Sponsor relating to the formation of the Trust.
"Trust Estate": As defined in the Granting Clause of the Indenture.
"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": Unless the context otherwise requires, the Uniform Commercial
Code, as in effect in the relevant jurisdiction, as amended from time to time.
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"Underwriters": Bear, Xxxxxxx & Co. Inc., Xxxxxx Xxxxxxx & Co.
Incorporated, Prudential Securities Incorporated and Xxxxxxx Xxxxx Xxxxxx Inc.
"Unqualified Mortgage Loan": A Mortgage Loan which is subject to
repurchase or substitution pursuant to Section 2.1(b) or Section 3.4(b) of the
Sale and Servicing Agreement.
Annex 1-23
